IndyMac MBS, Inc.,
Depositor
[INDYMAC, INC.],
Seller and Master Servicer
and
[THE BANK OF NEW YORK],
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of [ ]
--------------------------------------
RESIDENTIAL ASSET SECURITIZATION TRUST [ ]
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES [ ]
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans...........................................................1
Section 2.02. Acceptance by the Trustee of the Mortgage Loans........................................4
Section 2.03. Representations, Warranties and Covenants of the Seller and the Master
Servicer...............................................................................5
Section 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans..............7
Section 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases............................................................................8
Section 2.06. Execution and Delivery of Certificates.................................................8
Section 2.07. REMIC Matters..........................................................................8
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans..............................................1
Section 3.02. Subservicing; Enforcement of the Obligations of Servicers..............................2
Section 3.03. Successor Servicers....................................................................2
Section 3.04. Liability of the Master Servicer.......................................................3
Section 3.05. No Contractual Relationship Between Servicers and the Trustee..........................3
Section 3.06. Rights of the Depositor and the Trustee in Respect of the Master Servicer..............3
Section 3.07. Trustee to Act as Master Servicer......................................................4
Section 3.08. Collection of Mortgage Loan Payments; Servicing Accounts; Collection Account;
Certificate Account; Distribution Account..............................................4
Section 3.09. Collection of Taxes, Assessments and Similar Items; Escrow Accounts....................8
Section 3.10. Access to Certain Documentation and Information Regarding the Mortgage Loans...........8
Section 3.11. Permitted Withdrawals from the Certificate Account,and the Distribution
Account................................................................................9
Section 3.12. Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies............10
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................12
Section 3.14. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans.................................................................................13
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.......................................16
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Section 3.16. Documents, Records and Funds in Possession of the Master Servicer to be Held
for the Trustee.......................................................................17
Section 3.17. Servicing Compensation................................................................18
Section 3.18. Annual Statement as to Compliance.....................................................18
Section 3.19. Annual Independent Public Accountants' Servicing Statement; Financial
Statements............................................................................19
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds........................................19
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances...............................................................................1
Section 4.02. Priorities of Distribution.............................................................1
Section 4.03. [Reserved].............................................................................4
Section 4.04. [Reserved].............................................................................4
Section 4.05. Allocation of Realized Losses..........................................................4
Section 4.06. Monthly Statements to Certificateholders...............................................5
Section 4.07. Determination of Pass-Through Rates for COFI Certificates..............................7
Section 4.08. Determination of Pass-Through Rates for LIBOR Certificates.............................9
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.......................................................................1
Section 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates............1
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates......................................6
Section 5.04. Persons Deemed Owners..................................................................6
Section 5.05. Access to List of Certificateholders' Names and Addresses..............................6
Section 5.06. Maintenance of Office or Agency........................................................7
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer........................1
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer........................1
Section 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer and
Others.................................................................................1
Section 6.04. Limitation on Resignation of the Master Servicer.......................................2
ARTICLE VII
DEFAULT
Section 7.01. Events of Default......................................................................1
Section 7.02. Trustee to Act; Appointment of Successor...............................................2
Section 7.03. Notification to Certificateholders.....................................................3
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee..................................................................1
Section 8.02. Certain Matters Affecting the Trustee..................................................2
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans..................................3
Section 8.04. Trustee May Own Certificates...........................................................3
Section 8.05. Trustee's Fees and Expenses............................................................3
Section 8.06. Eligibility Requirements for the Trustee...............................................4
Section 8.07. Resignation and Removal of the Trustee.................................................4
Section 8.08. Successor Trustee......................................................................5
Section 8.09. Merger or Consolidation of the Trustee.................................................5
Section 8.10. Appointment of Co-Trustee or Separate Trustee..........................................5
Section 8.11. Tax Matters............................................................................7
Section 8.12. Periodic Filings.......................................................................9
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all Mortgage Loans.........................1
Section 9.02. Final Distribution on the Certificates.................................................1
Section 9.03. Additional Termination Requirements....................................................2
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment..............................................................................1
Section 10.02. Recordation of Agreement; Counterparts.................................................2
Section 10.03. Governing Law..........................................................................2
Section 10.04. Intention of Parties...................................................................3
Section 10.05. Notices................................................................................3
Section 10.06. Severability of Provisions.............................................................4
Section 10.07. Assignment.............................................................................4
Section 10.08. Limitation on Rights of Certificateholders.............................................4
Section 10.09. Inspection and Audit Rights............................................................5
Section 10.10. Certificates Nonassessable and Fully Paid..............................................5
SCHEDULES
Schedule I: Mortgage Loan Schedule..............................................................S-I-1
Schedule II: Representations and Warranties of the Seller/Master Servicer.......................S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans...........................S-III-1
Schedule IV: [Reserved].........................................................................S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate............................................................A-1
Exhibit B: Form of Subordinated Certificate......................................................B-1
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Exhibit C: Form of Residual Certificate..........................................................C-1
Exhibit D: Form of Notional Amount Certificate...................................................D-1
Exhibit E: Form of Reverse of Certificates.......................................................E-1
Exhibit F: [Reserved]............................................................................F-1
Exhibit G: Form of Initial Certification of Trustee..............................................G-1
Exhibit H: Form of Final Certification of Trustee................................................H-1
Exhibit I: Form of Transfer Affidavit............................................................I-1
Exhibit J: Form of Transferor Certificate........................................................J-1
Exhibit K: Form of Investment Letter (Non-Rule 144A).............................................K-1
Exhibit L Form of Rule 144A Letter..............................................................L-1
Exhibit M: Form of Request for Release (for Trustee).............................................M-1
Exhibit N: Form of Request for Release (Mortgage Loan Paid in Full,
Repurchased and Released)............................................................N-1
Exhibit O: [Reserved]............................................................................O-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of [ ],
among [IndyMac MBS, Inc.], a Delaware corporation, as depositor (the
"Depositor"), [INDYMAC, INC. ("IndyMac")], a Delaware corporation, as seller
(in such capacity, the "Seller") and as master servicer (in such capacity, the
"Master Servicer"), and [THE BANK OF NEW YORK], a banking corporation organized
under the laws of the State of New York, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund for
federal income tax purposes will consist of a single REMIC. The Certificates
will represent the entire beneficial ownership interest in the Trust Fund. The
Regular Certificates will represent the "regular interests" in the Trust Fund
and the Residual Certificates will represent the single "residual interest" in
the Trust Fund. The "latest possible maturity date" for federal income tax
purposes of all interests created hereby will be the Latest Possible Maturity
Date.
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
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
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Class Pass-Through Minimum Integral
Certificate Rate Denomination Multiples
Balance in Excess
of Minimum
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Class A-1
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Class A-2
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Class A-3
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Class PO (3)
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Class X (1) (4) (2) (2)
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Class A-R
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Class B-1
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Class B-2
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Class B-3
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Class B-4
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Class B-5
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Class B-6
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(1) The Class X Certificates will be Notional Amount Certificates, will have
no principal balance and will bear interest on their respective Notional
Amounts (initially, $[ ])
(2) The minimum denomination is based on the Notional Amount.
(3) The Class PO Certificates will be Principal Only Certificates and will not
bear interest.
(4) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the weighted average of the
Adjusted Net Mortgage Rates of the Non-Discount Mortgage Loans over
(b) [ ]% per annum. The Pass-Through Rate for the Class X Certificates
for the first Distribution Date is approximately [ ]%.
2
Set forth below are designations of Classes of Certificates to
the categories used herein:
Accretion Directed
Certificates ................................... None.
Accrual Certificates................................. None.
Book-Entry Certificates.............................. All Classes of Certificates other than the Physical
Certificates.
COFI Certificates.................................... None.
Component Certificates............................... None.
Components........................................... For purposes of calculating distributions of
principal and/or interest, the Component
Certificates, if any, will be comprised of multiple
payment components having the designations, Initial
Component Balances or Notional Amounts and
Pass-Through Rates set forth below:
Initial
Component
Designation Notional Amount Pass-Through Rate
----------- --------------- -----------------
N/A N/A N/A
Delay Certificates................................... All interest-bearing Classes of Certificates other
than the Non-Delay Certificates, if any.
ERISA-Restricted
Certificates.................................... Class PO, Class X Certificates, Residual
Certificates and Subordinated Certificates.
Floating Rate Certificates........................... None.
Inverse Floating Rate
Certificates.................................... None.
LIBOR Certificates................................... None.
Non-Delay Certificates............................... None.
Notional Amount Certificates......................... Class [ ] and Class X Certificates.
Offered Certificates................................. All Classes of Certificates other than the Private
Certificates.
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Physical Certificates................................ Class A-R Certificates and Private Certificates.
Planned Principal Classes............................ None.
Primary Planned Principal
Classes......................................... None.
Principal Only Certificates.......................... Class PO Certificates.
Private Certificates................................. Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies......................................
Regular Certificates................................. All Classes of Certificates other than the Class
A-R Certificates.
Residual Certificates................................ Class A-R Certificates.
Scheduled Principal Classes.......................... None.
Secondary Planned
Principal Classes............................... None.
Senior Certificates.................................. Class A-1, Class X-0, Xxxxx X-0, Class PO, Class X
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.
With respect to any of the foregoing designations as to which
the corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Accretion Directed Certificates: As specified in the
Preliminary Statement.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary
Statement.
Accrual Termination Date: Not applicable.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the sum of the Master
Servicing Fee Rate and the related Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less the related Expense
Rate. For purposes of determining whether any Substitute Mortgage Loan is a
Discount Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of
calculating the applicable PO Percentage and applicable Non-PO Percentage, each
Substitute Mortgage Loan shall be deemed to have an Adjusted Net Mortgage Rate
equal to the Adjusted Net Mortgage Rate of the Deleted Mortgage Loan for which
it is substituted.
Advance: The payment required to be made by the Master
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such payment being equal to the aggregate of payments of principal
and interest (net of the Master Servicing Fee and the applicable Servicing Fee
and net of any net income in the case of any REO Property) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such delinquent payments that the Master Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage
Loan (i) with respect to the Class X Certificates, (a) the ratio that (x) the
excess, if any, of the Adjusted Net Mortgage Rate with respect to such Mortgage
Loan over the Required Coupon bears to (y) such Adjusted Net Mortgage Rate or
(b) if the Adjusted Net Mortgage Rate with respect to such Mortgage Loan does
not exceed the Required Coupon, zero, (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 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
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Amount (without giving effect to any reduction of such amount pursuant to
Section 4.02(d)) bears to the amount calculated with respect to such
Distribution Date for each Class of Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)).
Amount Available for Senior Principal: As to any Distribution
Date 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)(ii).
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 and Liquidation Proceeds 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 Refinancing Mortgage Loan, the lesser of (a) the
value of the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; (ii) with respect
to a Refinancing Mortgage Loan, the value of the Mortgaged Property based upon
the appraisal made at the time of the origination of such Refinancing Mortgage
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 net of the Amount Held for Future Distribution
and net of amounts permitted to be withdrawn from the Certificate Account
pursuant to clauses (i) - (viii), inclusive, of Section 3.11(a) and amounts
permitted to be withdrawn from the Distribution Account pursuant to clauses (i)
- (iii), inclusive, of Section 3.11(b), (b) the amount of the related Advance,
(c) in connection with Defective Mortgage Loans, as applicable, the aggregate of
the Purchase Prices and Substitution Adjustment Amounts deposited on the related
Distribution Account Deposit Date and (d) any amount deposited on the related
Distribution Account Deposit Date pursuant to Section 3.12.
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 hereunder so long as the
Master Servicer has notified the Trustee in writing that the Master 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 thereunder 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
I-2
advanced on a current basis by the Master Servicer, in either case without
giving effect to any Debt Service Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date,
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy 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 of the then current ratings assigned to the Classes of Certificates
rated by it.
Blanket Mortgage: The mortgage or mortgages encumbering the
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,
or the State of California or the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order to
be closed.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts
created and maintained by the Master Servicer pursuant to Section 3.08(e) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of Certificateholders and designated "[IndyMac, Inc.]" in
trust for the registered holders of [IndyMac MBS, Inc.] Mortgage Pass-Through
Certificates Series [ ].
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof (A)
minus the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Subordinated Certificates, all other reductions in Certificate Balance
previously allocated thereto pursuant to Section 4.05 and (B) in the case of any
Class of Accrual Certificates, increased by the Accrual Amount added to the
Class Certificate Balance of such Class prior to such date.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
I-3
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and
Class, the amount by which the amount described in clause (i) of the definition
of Class Optimal Interest Distribution Amount for such Class exceeds the amount
of interest actually distributed on such Class on such Distribution Date
pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to
any Distribution Date and interest-bearing Class, the sum of (i) one month's
interest accrued during the related Interest Accrual Period at the Pass-Through
Rate for such Class, on the related Class Certificate Balance or Notional
Amount, as applicable, subject to reduction pursuant to Section 4.02(d), and
(ii) any Class Unpaid Interest Amounts for such Class.
Class PO Deferred Amount: As to any Distribution Date, the
aggregate of the applicable PO Percentage of each Realized Loss, other than any
Excess Loss, 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 the Class PO Certificates and not yet paid to the Holders of the
Class PO Certificates.
Class Subordination Percentage: With respect to any
Distribution Date and each Class of Subordinated Certificates, the fraction
(expressed as a percentage) the numerator of which is the Class Certificate
Balance of such Class of Subordinated Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Class
Certificate Balances of all Classes of Certificates immediately prior to such
Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of interest-bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to clause
(ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: [ ].
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
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COFI: The Monthly Weighted Average Cost of Funds Index for the
Eleventh District Savings Institutions published by the Federal Home Loan Bank
of San Francisco.
COFI Certificates: As specified in the Preliminary Statement.
Collection Account: The Eligible Account or Accounts
established and maintained by the Master Servicer in accordance with Section
3.08(c).
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any
Distribution Date, the Initial Component Balance thereof on the Closing Date,
less all amounts applied in reduction of the principal balance of such Component
and Realized Losses allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary
Statement.
Cooperative Corporation: The entity that holds title (fee or
an acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Component Notional Amount: Not applicable.
Cooperative Loan: Any Mortgage Loan secured by Cooperative
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 Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a 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 New York at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at [101 Xxxxxxx Xxxxxx,
00X, Xxx Xxxx, Xxx Xxxx 00000 (Attn: Mortgage-Backed Securities Group, [IndyMac
MBS, Inc.] Series [ ]), facsimile no. (000) 000-0000] and which is the address
to which notices to and correspondence with the Trustee should be directed.
Cut-off Date: [ ].
Cut-off Date Pool Principal Balance: $[ ].
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
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Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required
to be repurchased pursuant to Section 2.02 or 2.03.
Deficient Valuation: With respect to 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 such court which 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.
Deleted Mortgage Loan: As defined in Section 2.03(c).
Delinquent: A Mortgage Loan is "Delinquent" if any regularly
scheduled monthly payment due thereon is not made by the close of business on
the day such monthly payment is due. A Mortgage Loan is "30 days Delinquent" if
such monthly payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
monthly payment was due. The determination of whether a Mortgage Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in like manner.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof 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 thereof.
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(3) of the Uniform Commercial Code of
the State of New York.
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Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 18th day
of each month or if such 18th day is not a Business Day the next succeeding
Business Day; provided, however, that if such next succeeding Business Day is
less than two Business Days prior to the related Distribution Date, then the
Determination Date shall be the next Business Day preceding the 18th day of such
month.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.08(f) in the name of the
Trustee for the benefit of the Certificateholders and designated "[The Bank of
New York] in trust for registered holders of [IndyMac MBS, Inc.] Mortgage
Pass-Through Certificates, Series [ ]". 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 immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a Business
Day, the next succeeding Business Day, commencing in [ ].
Due Date: With respect to any Distribution Date, the first day
of the month in which the related Distribution Date occurs.
Duff & Xxxxxx: Xxxx & Xxxxxx Credit Rating Co., or any
successor thereto. If Duff & Xxxxxx is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for notices
to Duff & Xxxxxx shall be Duff & Xxxxxx Credit Rating Co., 00 X. Xxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: MBS Monitoring, or such other
address as Duff & Xxxxxx may hereafter furnish to the Depositor and the Master
Servicer.
Eligible Account: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company, but only if Xxxxx'x is
not a Rating Agency) have the highest short-term ratings of each Rating Agency
at the time any amounts are held on deposit therein, or (ii) an account or
accounts in a depository institution or trust company in which such accounts are
insured by the FDIC or the SAIF (to the limits established by the FDIC or the
SAIF) 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
I-7
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution or trust company, acting in its fiduciary capacity or (iv) any other
account acceptable to each Rating Agency. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(a).
Event of Default: As defined in Section 7.01.
Excess Loss: The amount of any (i) Fraud Loss realized after
the Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized
after the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss
realized after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds of such
Mortgage Loan received in the calendar month in which such Mortgage Loan became
a Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the 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
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred.
Expense Fees: As to each Mortgage Loan, the sum of the related
Servicing Fee, Master Servicing Fee, and Trustee Fee.
Expense Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate, Master Servicing Fee Rate and 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.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
Fitch: Fitch IBCA, 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
I-8
notices to Fitch shall be Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group, or such
other address as Fitch may hereafter furnish to the Depositor and the Master
Servicer.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud
Loss has occurred.
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.
Fraud Loss Coverage Amount: As of the Closing Date, $[ ]
subject to reduction from time to time, by the amount of Fraud Losses allocated
to the Certificates. 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 Pool Principal Balance and (ii) the excess of the
Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off Date
(or, in the case of the first such anniversary, as of the Cut-off Date) over the
cumulative amount of Fraud Losses allocated to the Certificates since such
preceding anniversary or the Cut-off Date, as the case may be, 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.
Index: With respect to any Interest Accrual Period for the
COFI Certificates, the then applicable index used by the Trustee pursuant to
Section 4.07 to determine the applicable Pass-Through Rate for such Interest
Accrual Period for the COFI Certificates.
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: $[ ].
Initial Component Balance: As specified in the Preliminary
Statement.
Initial LIBOR Rate: Not applicable.
Insurance Policy: With respect to 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.
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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.
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.
Last Scheduled Distribution Date: The Distribution Date in the
month immediately following the month of the latest scheduled maturity date for
any of the Mortgage Loans.
Latest Possible Maturity Date: The Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR: The London interbank offered rate for one-month United
States dollar deposits calculated in the manner described in Section 4.08.
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Master Servicer has certified (in accordance with this
Agreement) that it has received all amounts it expects to receive in connection
with the liquidation of such Mortgage Loan including the final disposition of an
REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
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 Master Servicing Fees, Servicing
Advances and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as
to any date of determination, the fraction (expressed as a percentage) the
numerator of which is the principal balance of the related Mortgage Loan at such
date of determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
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Maintenance: With respect to any Cooperative Unit, the rent
paid by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
Majority in Interest: As to any Class of Regular Certificates,
the Holders of Certificates of such Class evidencing, in the aggregate, at least
51% of the Percentage Interests evidenced by all Certificates of such Class.
Master Servicer: [IndyMac, Inc.], a Delaware corporation, and
its successors and assigns, in its capacity as master servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date,
12:30 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the related Master
Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan or, in
the event of any payment of interest which accompanies a Principal Prepayment in
Full, interest at the Master Servicing Fee Rate on the Stated Principal Balance
of such Mortgage Loan for the period covered by such payment of interest,
subject to reduction as provided in Section 3.17.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
[ ]% per annum.
Modified Mortgage Loan: Any Mortgage Loan which the Master
Servicer has modified pursuant to Section 3.14(c).
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 Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof 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 in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
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Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the addition of
Substitute Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to
the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the
Mortgaged Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling, (b) a dwelling in a PUD,
(c) a condominium unit, (d) a two- to four-unit residential property,
or (e) a Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the Servicing Fee Rate and the Master Servicing Fee Rate;
(xiii) the purpose for the Mortgage Loan; and
(xiv) the type of documentation program pursuant to which the
Mortgage Loan was originated.
Such 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
indebtedness evidencing 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.
Mortgaged Property: The underlying property securing a
Mortgage Loan, which, with respect to a Cooperative Loan, is the related
Cooperative Shares and Proprietary Lease.
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Mortgagor: The obligor(s) on a Mortgage Note.
Net Prepayment Interest Shortfalls: As to any Distribution
Date, the amount by which the aggregate of Prepayment Interest Shortfalls during
the related Prepayment Period exceeds an amount equal to the aggregate Master
Servicing Fee for such Distribution Date before reduction of the Master
Servicing Fee in respect of such Prepayment Interest Shortfalls.
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 the applicable Non-PO Percentage of (a) all monthly payments of
principal due on each Mortgage Loan on the related Distribution 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, (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.
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 or Servicer
Advance previously made or proposed to be made by the Master Servicer or the
related Servicer, as the case may be, that, in the good faith judgment of the
Master Servicer or such Servicer, will not be ultimately recoverable by the
Master Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
Notional Amount: With respect to the Class X Certificates and
any Distribution Date, the aggregate of the Stated Principal Balances of the
Non-Discount Mortgage Loans as of the Due Date in the month preceding the month
of such Distribution Date. With respect to the Class [ ] Certificates and any
Distribution Date, the Class Certificate Balance of the Class [ ] Certificates.
Notional Amount Certificates: As specified in the Preliminary
Statement.
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Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii) if provided for in
this Agreement, signed by a Servicing Officer, as the case may be, and delivered
to the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, including in-house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Master Servicer, (ii) not have
any direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01(a).
Original Applicable Credit Support Percentage: With respect to
each of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class B-1 %
Class B-2 %
Class B-3 %
Class B-4 %
Class B-5 %
Class B-6 %
Original Mortgage Loan: The Mortgage Loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Subordinated Principal Balance: The aggregate of the
Class Certificate Balances of the Subordinated Certificates as of the Closing
Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: As to any Interest Accrual Period for
the COFI Certificates, the close of business on the tenth day thereof.
Outstanding: With respect to 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
I-14
(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 which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
Pass-Through Rate: For any 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, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are 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 such lower
rating as will not result in the downgrading 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 which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading 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
and/or state banking authorities, provided that the commercial paper
and/or long-term unsecured debt obligations of such 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 such 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 such securities, or such lower
I-15
ratings as will not result in the downgrading 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
such 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 such agreements, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of [ ]% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest ratings of each Rating Agency (except if the Rating Agency
is Moody's such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not
result in the downgrading 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;
(ix) units of a taxable money-market portfolio having the
highest rating assigned by each Rating Agency (except (i) if Fitch or
Duff & Xxxxxx 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-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) such other investments bearing interest or sold at a
discount acceptable to each Rating Agency as will not result in the
downgrading 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;
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.
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) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax
I-16
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) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
citizen or resident of the United States, a corporation, partnership, or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust whose income from sources
without the United States is includible in gross income for federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States unless such Person has furnished the transferor and the
Trustee with a duly completed Internal Revenue Service Form 4224, and (vi) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Residual Certificate to such
Person may cause the REMIC hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth 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.
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, 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 Master Servicer pursuant to this Agreement as
of such Distribution Date, (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 with respect to such Mortgage Loan and (f) all partial and full Principal
Prepayments on Mortgage Loans received during the related Prepayment Period;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to a Discount Mortgage Loan that is not a Liquidated Mortgage Loan,
the PO Formula Principal Amount will be reduced on the related Distribution Date
by the applicable PO Percentage of the principal portion of such Bankruptcy
Loss.
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Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the excess of the Required
Coupon over the Adjusted Net Mortgage Rate of such Discount Mortgage Loan and
the denominator of which is the Required Coupon. As to any Non-Discount Mortgage
Loan, 0%.
Prepayment Interest Shortfall: As to any Distribution Date,
Mortgage Loan and Principal Prepayment, the amount, if any, by which one month's
interest at the related Mortgage Rate (net of the related Master Servicing Fee)
on such Principal Prepayment exceeds the amount of interest paid in connection
with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar
month preceding the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Only Certificates: As specified in the Preliminary
Statement.
Principal Prepayment: Any payment of principal on a Mortgage
Loan (including the Purchase Price of any Modified Mortgage Loan purchased
pursuant to Section 3.14(c)) that is received in advance of its scheduled Due
Date and is not accompanied by an amount representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Master Servicer in
accordance with the terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by
a Mortgagor or made pursuant to Section 3.14(c) of the entire principal balance
of a Mortgage Loan.
Private Certificates: As specified in the Preliminary
Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated
Principal Distribution Amount and any Class of Subordinated Certificates, the
portion of the Subordinated Principal Distribution Amount allocable to such
Class, equal to the product of the Subordinated Principal Distribution Amount on
such Distribution Date and a fraction, the numerator of which is the related
Class Certificate Balance thereof and the denominator of which is the aggregate
of the Class Certificate Balances of the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a
lease or occupancy agreement between a Cooperative Corporation and a holder of
related Cooperative Shares.
Prospectus Supplement: The Prospectus Supplement dated
[ ] relating to the Offered Certificates.
PUD: Planned Unit Development.
I-18
Purchase Price: With respect to any Modified Mortgage Loan or
any Mortgage Loan required to be purchased by the Seller pursuant to Section
2.02 or 2.03 or purchased at the option of the Master Servicer pursuant to
Section 3.14(b), an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan on the date of such purchase, and (ii) accrued
interest thereon at the applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if the
purchaser is the Seller and the Seller is the Master Servicer) from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders;
provided, however, that if such Mortgage Loan is a Modified Mortgage Loan, 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 such Modified Mortgage Loan is assigned to the Master Servicer pursuant
to Section 3.14(c).
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 such insurer in connection with the
insurance policy issued by such 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 either such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Adjusted Net Mortgage Rate from the Due
Date as to which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation Proceeds
are required to be distributed on the Stated Principal Balance of such
Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation occurred,
to the extent applied as recoveries of interest at the Adjusted Net Mortgage
Rate and to principal of the Liquidated Mortgage Loan. With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
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Recognition Agreement: With respect to any Cooperative Loan,
an agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.
Record Date: With respect to any Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.08.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary
Statement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
Relief Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final
regulation, revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Request for Release: The Request for Release submitted by the
Master Servicer to the Trustee, substantially in the form of Exhibits M and N,
as appropriate.
Required Coupon: [ ]% per annum.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary
Statement.
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Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, 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 and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Restricted Classes: As defined in Section 4.02(e).
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The 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, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to any Cooperative Loan, the
agreement between the owner of the related Cooperative Shares and the originator
of the related Mortgage Note, which defines the terms of the security interest
in such Cooperative Shares and the related Proprietary Lease.
Seller: [IndyMac, Inc.], a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Seller/Servicer Guide: The Seller/Servicer Guide for [IndyMac,
Inc.]'s mortgage loan purchase and conduit servicing program and all amendments
and supplements thereto.
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 Depletion Date: The Distribution Date on which the
Class Certificate Balance of the Senior Certificates has been reduced to zero.
Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the aggregate of the Class
Certificate Balances of each Class
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of Senior Certificates (other than the Class PO Certificates) as of such date
and the denominator of which is the aggregate of the Class Certificate Balances
of all Classes of Certificates (other than the Class PO Certificates) as of such
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 herein, 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
of the foregoing Distribution Dates the Senior Percentage exceeds the initial
Senior Percentage, in which case such Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the foregoing, no
decrease in the Senior Prepayment Percentage will occur if, as of the first
Distribution Date as to which any such decrease applies more than an average of
2% of the dollar amount of all monthly payments on the Mortgage Loans in the
Mortgage Pool, due in each of the preceding twelve months were delinquent 60
days or more (including for this purpose any such Mortgage Loans in foreclosure
and Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) or (ii) cumulative Realized Losses with respect to
the Mortgage Loans in the Mortgage Pool, exceed (a) with respect to the
Distribution Date on the fifth anniversary of the first Distribution Date, 30%
of the Original Subordinated Principal Balance, (b) with respect to the
Distribution Date on the sixth anniversary of the first Distribution Date, 35%
of the Original Subordinated Principal Balance, (c) with respect to the
Distribution Date on the seventh anniversary of the first Distribution Date, 40%
of the Original Subordinated Principal Balance, (d) with respect to the
Distribution Date on the eighth anniversary of the first Distribution Date, 45%
of the Original Subordinated Principal Balance and (e) with respect to the
Distribution Date on the ninth anniversary of the first Distribution Date, 50%
of the Original Subordinated Principal Balance.
Senior Principal Distribution Amount: As to any Distribution
Date, the sum of (i) the Senior Percentage of the applicable Non-PO Percentage
of all amounts described in clauses (a) through (d) of the definition of "Non-PO
Formula Principal Amount" for such Distribution Date, (ii) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the lesser of (x) the Senior
Percentage of the applicable Non-PO Percentage of the Stated Principal Balance
of such Mortgage Loan and (y) either (A) the Senior Prepayment Percentage, or
(B) if an Excess Loss was sustained with respect to such Liquidated Mortgage
Loan during such prior calendar month, the Senior Percentage, of the applicable
Non-PO Percentage of the amount of the Liquidation Proceeds allocable to
principal received with respect to such Mortgage Loan, and (iii) the Senior
Prepayment Percentage of the applicable Non-PO Percentage of the amounts
described in clause (f) 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
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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.
Servicer: Any person with which the Master Servicer has
entered into a Servicing Agreement for the servicing of all or a portion of the
Mortgage Loans pursuant to Section 3.02.
Servicer Advance: The meaning ascribed to such term in Section
3.08(d).
Servicing Account: The separate Eligible Account or Accounts
created and maintained pursuant to Section 3.08(b).
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the cost
of (i) (a) the preservation, restoration and protection of a Mortgaged Property,
(b) expenses reimbursable to the Master Servicer pursuant to Section 3.14 and
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 3.12; and (ii) reasonable compensation to the Master
Servicer or its affiliates for acting as broker in connection with the sale of
foreclosed Mortgaged Properties and for performing certain default management
and other similar services (including, but not limited to, appraisal services)
in connection with the servicing of defaulted Mortgage Loans; provided, however,
that for purposes of this clause (ii), 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 Agreement: The Seller/Servicer Contract as
contemplated by the Seller/Servicer Guide between the Master Servicer and any
Servicer relating to servicing and/or administration of certain Mortgage Loans
as provided in Section 3.02.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the applicable Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan.
Servicing Fee Rate: With respect to any Mortgage Loan, the per
annum rate set forth in the Mortgage Loan Schedule for such Mortgage Loan.
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
Servicing Standard: That degree of skill and care exercised by
the Master Servicer with respect to mortgage loans comparable to the Mortgage
Loans serviced by the Master Servicer for itself or others.
Special Hazard Coverage Termination Date: The point in time at
which the Special Hazard Loss Coverage Amount is reduced to zero.
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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 Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then
only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure or de
facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority
or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority, or risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $[ ]. 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
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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 any previous partial Principal
Prepayments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Mortgage Loan) and to the payment of principal due on
such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Distribution, 100% minus
the Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution,
100% minus the Senior Prepayment Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: With respect to
any Distribution Date, (A) the sum of (i) the Subordinated Percentage of the
applicable Non-PO Percentage of all amounts described in clauses (a) through (d)
of the definition of "Non-PO Formula Principal Amount", with respect to such
Mortgage Loans for such Distribution Date, (ii) with respect to each such
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the Liquidation Proceeds
allocable to principal received with respect to such Mortgage Loan after
application of such amounts pursuant to clause (ii) of the definition of Senior
Principal Distribution Amount and (iii) the Subordinated Prepayment Percentage
of the applicable Non-PO Percentage of amounts described in clause (f) of the
definition of "Non-PO Formula Principal Amount" for such Distribution Date,
reduced by (B) the amount of any payments in respect of Class PO Deferred
Amounts to the Class PO Certificates on such Distribution Date. Any such payment
in respect of Class PO Deferred Amounts will be deducted first from the amounts
described in clauses (i) and (ii) above and then from clause (iii) above.
Subservicer: Any Person to which the Master Servicer has
contracted for the servicing of all or a portion of the Mortgage Loans pursuant
to Section 3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such 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; (ii) be accruing interest (net of the related Servicing Fee) at a
rate no lower than
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and not more than 1% per annum higher than, that of the Deleted Mortgage Loan;
(iii) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (iv) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; (v) not be a Cooperative
Loan unless the Deleted Mortgage Loan was a Cooperative Loan and (vi) comply
with each representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03.
Targeted Balance: Not applicable.
Targeted Principal Classes: As specified in the Preliminary
Statement.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation 'SS' 1.860F-4(d) and
temporary Treasury regulation 'SS' 301.6231(a)(7)-1T. Initially, the Tax Matters
Person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with
a Denomination of $0.05.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received on
or with respect thereto after the Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the Cut-off Date; (ii) the
Certificate Account and the Distribution Account and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure or otherwise; and (iv) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
Trustee: [The Bank of New York] and its successors and, if a
successor trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
[ ] of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum rate agreed upon in writing on or prior to the Closing Date by the Trustee
and the Depositor.
Voting Rights: The portion of the voting rights of all of the
Certificates which 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, if any (such Voting Rights to be allocated among
the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount Certificates) shall
be allocated among Holders of
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the remaining Classes of Certificates in proportion to the Certificate Balances
of their respective Certificates on such date.
Withdrawal Date: The [ ] day of each month, or if such day
is not a Business Day, the next preceding Business Day.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Seller, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse, all the right, title and interest of the Seller in
and to the Mortgage Loans, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal and interest
due and payable on the Mortgage Loans on or before the Cut-off Date. On or prior
to 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. Such
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 Net Mortgage Rate on the Cut-off Date Principal Balance of such
Mortgage Loan. If the Seller shall fail to deposit such amount by the first
Distribution Account Deposit Date, the Trustee shall deposit such amount.
(b) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the Trust
Fund, together with the Depositor's right to require the Seller to cure any
breach of a representation or warranty made herein by the Seller or to
repurchase or substitute for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth
in clause (b) above, the Depositor has delivered or caused to be delivered to
the Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) (A) 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 such endorsement being sufficient to
transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note); or
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(B) with respect to any Lost Mortgage Note,
a lost note affidavit from the Seller stating that the
original Mortgage Note was lost or destroyed, together with a
copy of such Mortgage Note;
(ii) except as provided below, the original recorded Mortgage
or a copy of such Mortgage certified by the Seller (or, in the case of a
Mortgage for which the related Mortgaged Property is located in the Commonwealth
of Puerto Rico, a copy of such Mortgage certified by the applicable notary) as
being a true and complete copy of the Mortgage;
(iii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with, except as
provided below, all interim recorded assignments of such mortgage (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further that such assignment of
Mortgage need not be delivered in the case of a Mortgage for which the related
Mortgage Property is located in the Commonwealth of Puerto Rico.
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate
original lender's title policy and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
(A) The Cooperative 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 assignment of Recognition Agreement;
(F) The executed UCC-1 financing statement with evidence
of recording thereon which have been filed in all places required to perfect the
Seller's interest in the Cooperative Shares and the Proprietary Lease; and
(G) 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).
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In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim
recorded assignments or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (ii) or (iii) above, or because the title
policy has not been delivered to either the Master Servicer or the Depositor by
the applicable title insurer in the case of clause (v) above, the Depositor
shall promptly deliver to the Trustee, in the case of clause (ii) or (iii)
above, such original Mortgage or such interim assignment, as the case may be,
with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery of the
original Mortgage Loan and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, 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; provided, however, that in the event
the Depositor is unable to deliver by such date each Mortgage and each such
interim assignment by reason of the fact that any such documents have not been
returned by the appropriate recording office, or, in the case of each such
interim assignment, because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver such documents to the
Trustee as promptly as possible upon receipt thereof and, in any event, within
720 days following the Closing Date. The Depositor shall forward or cause to be
forwarded to the Trustee (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor or the Master Servicer to
the Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Master
Servicer shall execute and deliver or cause to be executed and delivered such a
document to the public recording office. In the case where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, the Seller shall deliver to
the Trustee a copy of such Mortgage certified by such public recording office to
be a true and complete copy of the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (i) affix the Trustee's name to each assignment of Mortgage, as the
assignee thereof, (ii) cause such assignment to be in proper form for recording
in the appropriate public office for real property records within thirty (30)
days after receipt thereof and (iii) 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, with respect to any assignment of a
Mortgage as to which the Trustee has not received the information required to
prepare such assignment in recordable form, the Trustee's obligation to do so
and to deliver the same for such recording shall be as soon as practicable after
receipt of such information and in any event within thirty (30) days after the
receipt thereof, and the Trustee need not cause to be recorded any assignment
which relates to a Mortgage Loan (a) the Mortgaged Property and Mortgage File
relating to which are located in California or (b) in any other jurisdiction
(including Puerto Rico) under the laws of which, as evidenced by an Opinion of
Counsel delivered by the Seller (at the Seller's expense) to the Trustee, the
recordation of such
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assignment is not necessary to protect the Trustee's and the Certificateholders'
interest in the related Mortgage Loan.
In the case of Mortgage Loans that 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 such
payment that is required to be deposited in the Certificate Account pursuant to
Section 3.08.
(d) The Seller intends to treat the transfer of the Mortgage
Loans to the Depositor as a sale for all tax, accounting and regulatory
purposes.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified
in the Initial Certification in the form annexed hereto as Exhibit G and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, 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 Mortgage Notes in the State
of California, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and the Seller an Initial Certification in
the form annexed hereto as Exhibit G. 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 Loan. The Trustee shall be under no duty or obligation to inspect,
review or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real estate
records or that they are other than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller a Final
Certification in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
If, in the course of such review, the Trustee finds any
document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01, the Trustee shall list such as an exception in the
Final Certification; provided, however, that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to 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 or cure such defect within 90 days from the date it was so
notified of such defect and, if the Seller does not correct or cure such defect
within such period, the Seller shall either (a) substitute for the related
Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of such defect in writing at the Purchase Price
of such Mortgage Loan;
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provided, however, that in no event shall such substitution or purchase occur
more than 540 days from the Closing Date, except that if the substitution or
purchase of a Mortgage Loan pursuant to this provision is required by reason of
a delay in delivery of any documents by the appropriate recording office, and
there is a dispute between either the Master Servicer or the Seller and the
Trustee over the location or status of the recorded document, then such
substitution or purchase shall occur within 720 days from the Closing Date. The
Trustee shall deliver written notice to each Rating Agency within 270 days from
the Closing Date indicating each Mortgage Loan (a) which has not been returned
by the appropriate recording office or (b) as to which there is a dispute as to
location or status of such Mortgage Loan. Such notice shall be delivered every
90 days thereafter until the related Mortgage Loan is returned to the Trustee.
Any such substitution pursuant to (a) above or purchase pursuant to (b) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05, if any, and any substitution pursuant to (a)
above shall not be effected prior to 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 such
month. The Purchase Price for any such Mortgage Loan shall be deposited by the
Seller in the Certificate Account on or prior to the Distribution Account
Deposit Date for the Distribution Date in the month following the month of
repurchase and, upon receipt of such deposit and certification with respect
thereto in the form of Exhibit N hereto, the Trustee shall release the related
Mortgage File to the Seller and shall execute and deliver at the Seller's
request such instruments of transfer or assignment prepared by the Seller, in
each case without recourse, as shall be necessary to vest in the Seller, or a
designee, the Trustee's interest in any Mortgage Loan released pursuant hereto.
The Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Master Servicer shall promptly deliver to the Trustee, upon
the execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File as come into the possession of the
Master Servicer from time to time.
It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder against
the Seller.
Section 2.03. Representations, Warranties and Covenants of the
Seller and the Master Servicer.
(a) [IndyMac MBS], in its capacities as Seller and Master
Servicer, hereby makes the representations and warranties set forth in Schedule
II hereto, and by this reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date.
(b) The Seller, in its capacity as Seller, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
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(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to the
other parties. The Seller hereby 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 such 90 day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in 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; provided, however, that any such
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05, if any, and a
Request for Release substantially in the form of Exhibit N, and the Mortgage
File for any such Substitute Mortgage Loan; and provided, further, that,
anything to the contrary herein notwithstanding, Seller shall have no obligation
to cure any such breach or to repurchase or substitute for such affected
Mortgage Loan if the substance of such breach constitutes fraud in the
origination of such affected Mortgage Loan and the Seller, at the time of such
origination and on the Closing Date, did not have actual knowledge of such
fraud. The Seller shall promptly reimburse the Master Servicer and the Trustee
for any expenses reasonably incurred by the Master Servicer or the Trustee in
respect of enforcing the remedies for such 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 Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Master Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, the Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement in all respects, and the Seller shall be
deemed to have made with respect to such Substitute Mortgage Loan or Loans, as
of the date of substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such substitution
and the deposit to the Certificate Account of the amount required to be
deposited therein in connection with such substitution as described in the
following paragraph, the Trustee shall release the Mortgage File held for the
benefit of the Certificateholders relating to such 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,
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in each case without recourse, as shall be necessary to vest title in the
Seller, or its designee, the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus 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 on
or before 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.
In the event that the Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.08 on or before 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 such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.05 and receipt of a Request for Release in the form of
Exhibit N hereto, 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. It is understood and agreed that
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 such Persons respecting such breach available
to Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as to
the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the date hereof or such other date set
forth herein that as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, defenses or
counterclaims.
The Depositor hereby assigns, transfers and conveys to the
Trustee all of its rights with respect to the Mortgage Loans including, without
limitation, the representations and warranties of the Seller made pursuant to
Section 2.03(b), together with all rights of the Depositor to require the Seller
to cure any breach thereof or to repurchase or substitute for any affected
Mortgage Loan in accordance with this Agreement.
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It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee.
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
no substitution pursuant to Section 2.02 or 2.03 shall be made more than 90 days
after the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master
Servicer, or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Seller, at the Seller's
option, to either (i) substitute, if the conditions in Section 2.03(c) with
respect to substitutions are satisfied, a Substitute Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty made pursuant to Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has executed
and delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire ownership
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
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 hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. The "tax matters person" with respect to the REMIC hereunder
shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. The REMIC's fiscal year shall be the calendar year.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with the
terms of this Agreement and the Servicing Standard. In connection with such
servicing and administration, the Master Servicer shall have full power and
authority, acting alone and/or through Servicers as provided in Section 3.02, to
do or cause to be done any and all things that it may deem necessary or
desirable in connection with such servicing and administration, including but
not limited to, the power and authority, subject to the terms hereof, (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages (but only in the manner provided in this Agreement),
(iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv)
to effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan. The Master Servicer shall not make or
permit any modification, waiver or amendment of any term of any Mortgage Loan
which would cause the REMIC to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer, in its
own name or in the name of any Servicer or the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Master Servicer or the Servicer, as the case may be, 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 and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
either or both of them as are necessary or appropriate to enable the Master
Servicer to service and administer the Mortgage Loans to the extent that the
Master Servicer is not permitted to execute and deliver such documents pursuant
to the preceding sentence. Upon receipt of such documents, the Depositor and/or
the Trustee shall execute such documents and deliver them to the Master
Servicer.
In accordance with and to the extent of the Servicing
Standard, the Master Servicer shall advance or cause to be advanced funds as
necessary for the purpose of effecting 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 3.09,
and further as provided in Section 3.11. The costs incurred by the Master
Servicer, if any, 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 terms of such Mortgage Loans so permit.
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Section 3.02. Subservicing; Enforcement of the Obligations of
Servicers.
(a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a Servicer pursuant to a Servicing Agreement; provided,
however, that such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans in
a manner consistent with the servicing arrangements contemplated hereunder. Each
Servicer of a Mortgage Loan shall be entitled to receive and retain, as provided
in the related Servicing Agreement and in Section 3.17, the related Servicing
Fee from payments of interest received on such Mortgage Loan after payment of
all amounts required to be remitted to the Master Servicer in respect of such
Mortgage Loan. Unless the context otherwise requires, references in this
Agreement to actions taken or to be taken by the Master Servicer in servicing
the Mortgage Loans include actions taken or to be taken by a Servicer on behalf
of the Master Servicer. Each Servicing Agreement will be based upon such terms
and conditions as are generally required or permitted by the Seller/Servicer
Guide and are not inconsistent with this Agreement and as the Master Servicer
and the Servicer have agreed. With the approval of the Master Servicer, a
Servicer may delegate its servicing obligations to third-party servicers, but
such Servicer will remain obligated under the related Servicing Agreement. The
Master Servicer and Servicer may enter into amendments to the related Servicing
Agreement or a different form of Servicing Agreement; provided, however, that
any such amendments or different forms shall be consistent with and not violate
the provisions of either this Agreement or the Seller/Servicer Guide in a manner
which would materially and adversely affect the interests of the
Certificateholders.
(b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a Servicer regardless of whether such
payments are remitted by the Servicer to the Master Servicer.
(c) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall use
its best reasonable efforts to enforce the obligations of each Servicer under
the related Servicing Agreement, to the extent that the non-performance of any
such obligation would have material and adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys fees against the party against whom such enforcement is directed.
Section 3.03. Successor Servicers.
The Master Servicer shall be entitled to terminate any
Servicing Agreement that may exist in accordance with the terms and conditions
of such Servicing Agreement and without any limitation by virtue of this
Agreement; provided, however, that in the event of termination of any Servicing
Agreement by the Master Servicer or the Servicer, the Master Servicer shall
either
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act as servicer of the related Mortgage Loan or enter into a Servicing
Agreement with a successor Servicer which will be bound by the terms of the
related Servicing Agreement. If the Master Servicer or any affiliate of the
Master Servicer acts as servicer, it will not assume liability for the
representations and warranties of the Servicer which it replaces. If the Master
Servicer enters into a Servicing Agreement with a successor Servicer, the Master
Servicer shall use reasonable efforts to have the successor Servicer assume
liability for the representations and warranties made by the terminated Servicer
in respect of the related Mortgage Loans and, in the event of any such
assumption by the successor Servicer, the Master Servicer may, in the exercise
of its business judgment, release the terminated Servicer from liability for
such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Servicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer or a Servicer or references to actions taken through a Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the Trustee
and Certificateholders for the servicing and administering of the Mortgage Loans
in accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Servicing Agreements or arrangements
or by virtue of indemnification from the Servicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master Servicer shall be
entitled to enter into any agreement with a Servicer or Seller for
indemnification of the Master Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Servicers and the
Trustee.
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an originator shall be deemed to be between the
Servicer and the Master Servicer alone and the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Servicer in its capacity
as such except as set forth in Section 3.07.
Section 3.06. Rights of the Depositor and the Trustee in Respect of
the Master Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer hereunder and in connection with any such defaulted obligation to
exercise the related rights of the Master Servicer hereunder; provided that the
Master Servicer shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Depositor or its designee. Neither the Trustee
nor the Depositor shall have any responsibility or liability for any action or
failure to act by the Master Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
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Section 3.07. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its successor shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.12 or any acts or omissions of the predecessor Master Servicer
hereunder), (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.02 or 2.03, (iv) responsible for expenses of
the Master Servicer pursuant to Section 2.03 or (v) deemed to have made any
representations and warranties of the Master Servicer hereunder. Any such
assumption shall be subject to Section 7.02. If the Master Servicer shall for
any reason no longer be the Master Servicer (including by reason of any Event of
Default), the Trustee or its successor shall succeed to any rights and
obligations of the Master Servicer under each Servicing Agreement. The Trustee
or the successor servicer for the Trustee shall be deemed to have assumed all of
the Master Servicer's interest therein and to have replaced the Master Servicer
as a party to any Servicing Agreement entered into by the Master Servicer as
contemplated by Section 3.02 to the same extent as if the Servicing Agreement
had been assigned to the assuming party except that the Master Servicer shall
not be relieved of any liability or obligations under any such Servicing
Agreement.
The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each Servicing Agreement or substitute servicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the substitute Servicing
Agreement to the assuming party.
Section 3.08. Collection of Mortgage Loan Payments; Servicing
Accounts; Collection Account; Certificate Account;
Distribution Account.
(a) In accordance with and to the extent of the Servicing
Standard, the Master Servicer shall make reasonable efforts in accordance with
the customary and usual standards of practice of prudent mortgage servicers to
collect all payments called for under the terms and provisions of the Mortgage
Loans to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Required Insurance Policy. Consistent
with the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in connection with
the prepayment of a Mortgage Loan and (ii) extend the due dates for payments due
on a Mortgage Note for a period not greater than 125 days; provided, however,
that the Master Servicer cannot extend the maturity of any such Mortgage Loan
past the date on which the final payment is due on the latest maturing Mortgage
Loan as of the Cut-off Date. In the event of any such arrangement, the Master
Servicer shall make Advances on the related Mortgage Loan in accordance with the
provisions of Section 4.01 during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that
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enforcing the provision of the Mortgage or other instrument pursuant to which
such payment is required is prohibited by applicable law.
(b) In those cases where a Servicer is servicing Mortgage
Loans pursuant to a Servicing Agreement, the Master Servicer shall cause the
Servicer, pursuant to the Servicing Agreement, to establish and maintain one or
more Servicing Accounts, each of which shall be an Eligible Account. The
Servicer will be required under its Servicing Agreement to deposit into the
Servicing Account on a daily basis no later than the Business Day following
receipt, all proceeds of Mortgage Loans received by the Servicer, less its
Servicing Fees and unreimbursed Servicer Advances and expenses, to the extent
permitted by the Servicing Agreement. The Servicer shall not be required to
deposit in the Servicing Account payments or collections in the nature of
prepayment charges or late charges.
(c) The Master Servicer shall establish and maintain a
Collection Account into which the Master Servicer shall deposit or cause to be
deposited on or before each Withdrawal Date payments, collections and Servicer
Advances remitted by Servicers in respect of the Mortgage Loans.
(d) On or before the Withdrawal Date in each calendar month,
the Master Servicer shall cause the Servicer, pursuant to the Servicing
Agreement, to remit to the Master Servicer for deposit in the Collection Account
all funds held in the Servicing Account with respect to each Mortgage Loan
serviced by such Servicer that are required to be remitted to the Master
Servicer. The Servicer will also be required, pursuant to the Servicing
Agreement, to advance on or before each such Withdrawal Date amounts equal to
any Scheduled Payments (net of its Servicing Fees with respect thereto) not
received on any Mortgage Loans by the Servicer (such amount, a "Servicer
Advance"). The Servicer's obligation to advance with respect to each Mortgage
Loan will continue up to and including the first day of the month following the
date on which the related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or otherwise. All such
Servicer Advances received by the Master Servicer shall be deposited promptly by
it in the Collection Account or the Certificate Account, as appropriate.
Within five Business Days after the receipt by a Servicer of a
Principal Prepayment in Full or any Liquidation Proceeds or Insurance Proceeds
(not required to be applied to the restoration or repair of the related
Mortgaged Property), the Master Servicer shall cause such Servicer, pursuant to
the related Servicing Agreement, to remit such amounts to the Master Servicer
for deposit in the Collection Account.
(e) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to be
deposited on a daily basis within one Business Day of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Servicers or received by it in respect of Mortgage Loans subsequent
to the Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before 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 and the principal component of
any Servicer Advance;
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(ii) all payments on account of interest on the
Mortgage Loans, net of the sum of the related Master Servicing Fee and related
Servicing Fee, and the interest component of any Servicer Advance;
(iii) all Insurance Proceeds and Liquidation Proceeds
(net of any related expenses of the related Servicer), other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the
Master Servicer pursuant to Section 3.08(g) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the
Master Servicer pursuant to Sections 3.12 and 3.14;
(vi) all Purchase Prices from the Master Servicer or
Seller and all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer
pursuant to Section 4.01; and
(viii) any other amounts required to be deposited
hereunder.
In addition, with respect to any Mortgage Loan that is subject
to a buydown agreement, on each Due Date for such Mortgage Loan, in addition to
the monthly payment remitted by the Mortgagor, the Master Servicer shall cause
funds to be deposited into the Certificate Account in an amount required to
cause an amount of interest to be paid with respect to such Mortgage Loan equal
to the amount of interest that has accrued on such Mortgage Loan from the
preceding Due Date at the Mortgage Rate net of the Master Servicing Fee on such
date.
The foregoing requirements for remittance by the Master
Servicer shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of prepayment
penalties, late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall
remit any amount not required to be remitted, it may at any time withdraw or
direct the institution maintaining the Certificate Account to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by delivering
written notice thereof to the Trustee or such other institution maintaining the
Certificate Account which describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section 3.08. All funds
deposited in the Certificate Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.11.
(f) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
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(i) the aggregate amount remitted by the Master
Servicer to the Trustee pursuant to Section 3.11(a);
(ii) any amount deposited by the Master Servicer
pursuant to Section 3.08(g) in connection with any losses on Permitted
Investments; and
(iii) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount
not required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.11. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.
(g) Each institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds therein as directed in
writing by the Master Servicer in Permitted Investments, which shall mature not
later than (i) in the case of the Certificate Account, the second Business Day
next preceding the related Distribution Account Deposit Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such account, then such Permitted Investment shall mature not later than the
Business Day next preceding such Distribution Account Deposit Date) and (ii) in
the case of the Distribution Account, the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an obligation of
the institution that maintains such account, then such Permitted Investment
shall mature not later than such Distribution Date) and, in each case, shall not
be sold or disposed of prior to its maturity. All such Permitted Investments
shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain (net of any losses) realized from any
such investment of funds on deposit in the Certificate Account or the
Distribution Account shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any realized losses in the Certificate Account or the Distribution
Account incurred in any such account in respect of any such investments shall
promptly be deposited by the Master Servicer in the Certificate Account or paid
to the Trustee for deposit into the Distribution Account, as applicable.
(h) The Master Servicer shall give notice to the Trustee, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account not later than 30 days and not more than 45
days prior to any change thereof. The Trustee shall give notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account not later than 30 days and
not more than 45 days prior to any change thereof.
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Section 3.09. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) To the extent required by the related Mortgage Note and
not violative of current law, the Master Servicer shall cause each Servicer to
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Master Servicer or any 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 the Master Servicer or the related Servicer out of related collections
for any payments made pursuant to Sections 3.12 (with respect to taxes and
assessments and insurance premiums) and 3.13 (with respect to hazard insurance),
to refund to any Mortgagors any sums determined to be overages, to pay interest,
if required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01. The Escrow Accounts shall not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to
in Section 3.09(a) that are not timely paid by the Mortgagors or advanced by the
Servicers on the date when the tax, premium or other cost for which such payment
is intended is due, but the Master Servicer shall be required so to advance only
to the extent that such advances, in the good faith judgment of the Master
Servicer, will be recoverable by the Master Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise.
Section 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford, or shall cause the Servicers
to afford, the Depositor and the Trustee reasonable access to all records and
documentation regarding the Mortgage Loans and all accounts, insurance
information and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable request and during normal
business hours at the office designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer
will provide, or will cause the Servicers to provide, to each Certificateholder
which 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 such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer and any
Servicer shall be entitled to be reimbursed by each such Certificateholder for
actual expenses incurred by the Master Servicer or such Servicer in providing
such reports and access.
The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation
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regarding the Mortgage Loans required by applicable regulations of the OTS and
the FDIC. Such access shall be afforded only upon reasonable and prior written
request and during normal business hours at the offices designated by the Master
Servicer. Unless prohibited by applicable laws or regulations, the Master
Servicer and any Servicer shall be entitled to be reimbursed by the related
Certificateholders for actual expenses incurred by the Master Servicer or such
Servicer in providing such access. Nothing in this Section 3.10 shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the Master
Servicer or any Servicer to provide access as provided in this Section 3.10 as a
result of such obligation shall not constitute a breach of this Section 3.10.
Section 3.11. Permitted Withdrawals from the Certificate Account,
and the Distribution Account.
(a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer or the related
Servicer (to the extent not previously retained), the servicing compensation to
which it is entitled pursuant to Section 3.17, and to pay to the Master
Servicer, as additional master servicing compensation, earnings on or investment
income with respect to funds in or credited to the Certificate Account;
(ii) to reimburse the Master Servicer or the related
Servicer for unreimbursed Advances or Servicer Advances made by it, such right
of reimbursement pursuant to this subclause (ii) being limited to amounts
received on the Mortgage Loan(s) in respect of which any such Advance or
Servicer Advance was made;
(iii) to reimburse the Master Servicer for any
Nonrecoverable Advance previously made;
(iv) to reimburse the Master Servicer for Insured
Expenses from the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a)
unreimbursed Servicing Advances, the Master Servicer's right to reimbursement
pursuant to this clause (a) with respect to any Mortgage Loan being limited to
amounts received on such Mortgage Loan(s) which represent late recoveries of the
payments for which such advances were made pursuant to Section 3.01 or Section
3.09 and (b) for unpaid Master Servicing Fees as provided in Section 3.14;
(vi) to pay to the purchaser, with respect to each
Mortgage Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03, 3.14(a), 3.14(b) or 3.14(c), all amounts
received thereon after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer or
the Depositor for expenses incurred by any of them and reimbursable pursuant to
Section 6.03;
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(viii) to withdraw any amount deposited in the
Certificate Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit
Date, to withdraw an amount equal to the related Available Funds and the Trustee
Fee for such Distribution Date, to the extent on deposit, and remit such amount
to the Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account
upon termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to such
subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal from
the Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s) and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distributions to Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn the amount of any taxes
that it is authorized to withhold pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to pay to the Master Servicer as additional
servicing compensation earnings on or investment income with respect to funds in
the Distribution Account;
(iii) to withdraw and return to the Master Servicer
any amount deposited in the Distribution Account and not required to be
deposited therein; and
(iv) to clear and terminate the Distribution Account
upon termination of the Agreement pursuant to Section 9.01.
Section 3.12. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Master Servicer shall cause to be maintained, 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 such Mortgage Loan or (ii) the greater of (y) the outstanding principal
balance of the Mortgage Loan and (z) an amount such that the proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the mortgagee from
becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. To the extent it may do so without breaching the related Servicing
Agreement, the Master Servicer shall replace any Servicer that does not cause
such insurance, to the extent it is available, to be maintained. Any
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amounts collected by the Master Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the related Mortgaged
Property or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Certificate
Account or the related Servicing Account, as applicable. Any cost incurred by
the Master Servicer or any Servicer in maintaining any such 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 terms of the Mortgage
Loan so permit. Such costs shall be recoverable by the Master Servicer out of
late payments by the related Mortgagor or out of Liquidation Proceeds to the
extent permitted by Section 3.11. It is understood and agreed that 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 such
applicable laws and regulations as shall at any time be in force and as shall
require such 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 such area is participating in the national flood insurance
program, the Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such 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 which are part of such Mortgaged
Property, and (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the national flood insurance program.
In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section 3.12, it being understood and agreed
that such policy may contain a deductible clause on terms substantially
equivalent to those commercially available and maintained by comparable
servicers. If such policy contains a deductible clause, the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property a policy complying with the first sentence of this Section
3.12, and there shall have been a loss that would have been covered by such
policy, deposit in the Certificate Account the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as Master Servicer of the Mortgage Loans, the Master Servicer
agrees to present, on behalf of itself, the Depositor, and the Trustee for the
benefit of the Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall not take, or permit any Servicer
to take, any action which would result in non-coverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of the Master
Servicer or any Servicer, would have been covered thereunder. The Master
Servicer shall not cancel or refuse to renew any such 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 such canceled or non-renewed policy is maintained with a Qualified
Insurer. The Master Servicer shall not be required to maintain any Primary
Insurance Policy (i) with respect to any Mortgage Loan with a Loan-to-Value
Ratio less than or equal to 80% as of any date of determination or, based on a
new appraisal, the principal balance of such Mortgage Loan represents 80% or
less of the new Appraised Value or (ii) if maintaining such Primary Insurance
Policy is prohibited by applicable law. The Master Servicer agrees, to the
extent permitted by applicable law, to effect the timely
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payment of the premiums on each Primary Insurance Policy, and such costs not
otherwise recoverable shall be recoverable by the Master Servicer from the
related liquidation proceeds.
In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present, or cause the related
Servicer 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 such reasonable action in accordance with the
Servicing Standard as shall be necessary to permit recovery under any Primary
Insurance Policies respecting defaulted Mortgage Loans. Any amounts collected by
a Servicer or the Master Servicer under any Primary Insurance Policies shall be
deposited in the Servicing Account, the Collection Account or the Certificate
Account, as applicable.
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.13, when
any property subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer or the related Servicer shall, to the extent that it has
knowledge of such 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 such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing,
neither the Master Servicer nor the related Servicer is required to exercise
such 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
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that (i) the Master Servicer or the related Servicer
is prohibited by law from enforcing any such due-on-sale clause, (ii) coverage
under any Required Insurance Policy would be adversely affected, (iii) the
Mortgage Note does not include a due-on-sale clause or (iv) nonenforcement is
otherwise permitted hereunder, the Master Servicer is authorized, subject to
Section 3.13(b), to take or enter into an assumption and modification agreement
from or with the person to whom such property has been or is about to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters such agreement) by the applicable
Required Insurance Policies. The Master Servicer, subject to Section 3.13(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 such
Person, pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the Mortgage
Note. Notwithstanding the foregoing, the Master Servicer shall not be deemed to
be in default under this Section 3.13 by reason of any transfer or assumption
which the Master Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.13(a), in any case in
which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and
such 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
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the Mortgagor from liability on the Mortgage Loan, the Master Servicer
shall prepare and deliver or cause to be prepared and delivered to the Trustee
for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the Master Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of this
subsection have been met in connection therewith. The Master Servicer shall
notify, or cause the related Servicer to notify, the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such 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 such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer or any Servicer for entering into an assumption
or substitution of liability agreement will be retained by the Master Servicer
as additional master servicing compensation.
Section 3.14. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts in
accordance with the Servicing Standard to foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties in respect of which the related
Mortgage Loans come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with such foreclosure or other conversion, the Master Servicer shall follow the
Servicing Standard and shall follow the requirements of the insurer under any
Required Insurance Policy; provided, however, that the Servicer may enter into,
and shall give the Rating Agencies notice of, a special servicing agreement with
an unaffiliated holder of 100% Percentage Interest of one or more Classes of
Subordinated Certificates or a holder of a class of securities representing
interests in one or more Classes of Subordinated Certificates and provided,
further, that entering into such special servicing agreement shall not result in
the downgrading or withdrawal of the respective ratings when assigned to the
Certificates. Any such agreement may contain provisions whereby such holder may
instruct the Servicer to commence or delay foreclosure proceedings with respect
to delinquent Mortgage Loans and will contain provisions for the deposit of cash
by the holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Servicer
acted in accordance with its normal procedures. Notwithstanding the foregoing,
the Master Servicer shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan after reimbursement to itself of
such expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Certificate
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Account). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the liquidation proceeds with
respect to the related Mortgaged Property, as provided in the definition of
Liquidation Proceeds. If the Master Servicer has knowledge that a Mortgaged
Property which the Master Servicer is contemplating acquiring in foreclosure or
by deed in lieu of foreclosure is located within a 1 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
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such 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 such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Master Servicer shall
ensure that the title to such REO Property references the Pooling and Servicing
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in
accordance with the Servicing Standard and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or any
part thereof, as the Master Servicer deems to be in the best interest of the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master 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 such tax and
information returns as may be required, in the form required, and delivering the
same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property prior to three years after its acquisition by the Trust Fund unless the
Trustee shall have been supplied with an Opinion of Counsel to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" on the REMIC as defined in section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
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
in such a manner or pursuant to any
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terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject the REMIC to the imposition of any federal, state or local income
taxes on the income earned from such Mortgaged Property under Section 860G(c) of
the Code or otherwise, unless the Master Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management of
any REO Properties, net of reimbursement to the Master Servicer for expenses
incurred (including any property or other taxes) in connection with such
management and net of unreimbursed Master Servicing Fees, Servicing Fees,
Advances, Servicer 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 such Mortgage Loans were still current and
adjustments, if applicable, to the Mortgage Rate were being made in accordance
with the terms of the Mortgage Note) and all such income 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 income received during any calendar
month is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan for
such calendar month, such 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 income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer or the related Servicer for
any related unreimbursed Servicing Advances, Master Servicing Fees and Servicing
Fees, as applicable; second, to reimburse the Master Servicer or the related
Servicer for any unreimbursed Advances or Servicer Advances, as applicable, and
to reimburse the Certificate Account for any Nonrecoverable Advances (or
portions thereof) that were previously withdrawn by the Master Servicer pursuant
to Section 3.11(a)(iii) that related to such Mortgage Loan; third, to accrued
and unpaid interest (to the extent no Advance or Servicer Advance has been made
for such amount or any such Advance or Servicer 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. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the Master Servicer as additional servicing compensation pursuant to
Section 3.17.
(b) The Master Servicer, in its sole discretion, shall have
the right to purchase for its own account from the Trust Fund any Mortgage Loan
which is 91 days or more delinquent at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit N hereto, 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
III-15
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.
(c) The Master Servicer may agree to a modification of any
Mortgage Loan (the "Relevant Mortgage Loan") upon the request of the related
Mortgagor, provided that the modification is in lieu of a refinancing and the
Mortgage Rate on the Relevant Mortgage Loan, as modified, is approximately a
prevailing market rate for newly-originated mortgage loans having similar terms
and (ii) the Master Servicer purchases the Relevant Mortgage Loan from the Trust
Fund as described below. Effective immediately after such modification, and, in
any event, on the same Business Day on which the modification occurs, all right,
title and interest of the Trustee in and to the Modified Mortgage Loan shall
automatically be deemed transferred and assigned to the Master Servicer and all
benefits and burdens of ownership thereof, including without limitation the
right to accrued interest thereon from and including the date of modification
and the risk of default thereon, shall pass to the Master Servicer. The Master
Servicer shall promptly deliver to the Trustee a certification of a Servicing
Officer to the effect that all requirements of the first paragraph of this
subsection (c) have been satisfied with respect to such Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any
Modified Mortgage Loan in the Certificate Account pursuant to Section 3.08(e)
within one Business Day after the purchase of such Modified 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 Master Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Master Servicer any Modified Mortgage Loan previously transferred and assigned
pursuant hereto.
The Master Servicer covenants and agrees to indemnify the
REMIC against any and all liability for any "prohibited transaction" taxes and
any related interest, additions and penalties imposed on the REMIC established
hereunder as a result of any modification of a Mortgage Loan effected pursuant
to this subsection (c), any holding of a Modified Mortgage Loan by the REMIC or
any purchase of a Modified Mortgage Loan by the Master Servicer (but such
obligation shall not prevent the Master Servicer or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Master Servicer from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). The Master 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 REMIC or the
Master Servicer.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering, or causing to be delivered, a "Request for
Release" substantially in the form of Exhibit N. Upon receipt of such request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer, and
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the Trustee shall at the Master Servicer's direction execute and deliver to the
Master 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 Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. 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 Master Servicer or, at the Master Servicer's
direction, to the related Servicer. Subject to the further limitations set forth
below, the Master Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Certificate Account, in which case the
Master Servicer shall deliver to the Trustee a Request for Release in the form
of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered 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 3.16. Documents, Records and Funds in Possession of the
Master Servicer to be Held for the Trustee.
The Master Servicer shall account fully to the Trustee for any
funds received by the Master Servicer or which otherwise are collected by the
Master Servicer 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 Master Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master 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 Master 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 Servicing 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 Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.
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Section 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled out of each payment of interest on a Mortgage Loan
(or portion thereof) included in the Trust Fund to retain or withdraw from the
Certificate Account an amount equal to the Master Servicing Fee for such
Distribution Date.
Additional master servicing compensation in the form of Excess
Proceeds, prepayment penalties, assumption fees, late payment charges and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.08. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including 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.
As compensation for its activities under its Servicing
Agreement, each Servicer shall be entitled to retain out of each payment of
interest on a Mortgage Loan (or portion thereof) included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of prepayment
penalties, assumption fees and late payment charges shall be retained by the
Servicers to the extent not required to be deposited in the Servicing Accounts
pursuant to the related Servicing Agreement. Each Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
under its Servicing Agreement (including payment of any premium for hazard
insurance and any Primary Insurance Policy and maintenance of the other forms of
insurance coverage required by this Agreement and its Servicing Agreement) and
shall not be entitled to reimbursement therefor except as specifically provided
in its Servicing Agreement and not inconsistent with this Agreement.
In the event of any Prepayment Interest Shortfall, the
aggregate Master Servicing Fee for such Distribution Date shall be reduced (but
not below zero) by an amount equal to such Prepayment Interest Shortfall.
Section 3.18. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 1999 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Servicer has
III-18
fulfilled all its obligations under its Servicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency.
Section 3.19. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 120 days after the end of the Master Servicer's
fiscal year, commencing with its [ ] fiscal year, the Master Servicer at its
expense shall cause a nationally or regionally recognized firm of independent
public accountants (who may also render other services to the Servicer, the
Seller or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement or
of mortgage loans under pooling and servicing agreements substantially similar
to this Agreement (such statement to have attached thereto a schedule setting
forth the pooling and servicing agreements covered thereby) and that, on the
basis of such examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FNMA and FHLMC, such servicing has been conducted in
compliance with such pooling and servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program
for Mortgages serviced for FNMA and FHLMC requires it to report. In rendering
such statement, such firm may rely, as to matters relating to direct servicing
of mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided that such statement is delivered by
the Master Servicer to the Trustee.
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall obtain and maintain in force, and
shall cause each Servicer to obtain and maintain in force, (a) a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Master Servicer hereunder or as Servicer under its Servicing
Agreement, as the case may be, and (b) a fidelity bond in respect of its
officers, employees and agents. Each such policy or policies 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. In
the event that any such policy or bond ceases to be in effect, the Master
Servicer shall obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement.
III-19
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
The Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master 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 Master Servicer in
discharge of its obligation to make any such Advance. Any funds so applied shall
be replaced by the Master Servicer by deposit in the Certificate Account no
later than the close of business on the next Master Servicer Advance Date. The
Master 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 3.11. 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 related Mortgaged Property has not been liquidated. The
Master Servicer shall inform the Trustee of the amount of the Advance to be made
on each Master Servicer Advance Date no later than the second Business Day
before the related Distribution Date.
The Master Servicer shall deliver to the Trustee on the
related Master Servicer Advance Date an Officer's Certificate of a Servicing
Officer indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02. Priorities of Distribution.
(a) The Trustee shall withdraw such Available Funds from the
Distribution Account and apply such funds to distributions on the specified
Classes of Senior Certificates in the following order and priority and, in each
case, to the extent of such funds remaining:
(i) 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 pro rata 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;
(ii) to each Class of Senior Certificates
concurrently as follows:
(x) to the Class PO Certificates an amount
allocable to principal equal to the PO Formula
Principal Amount, up to the outstanding Class
Certificate Balance of the Class PO Certificates;
(y) on each Distribution Date prior to the
Senior Credit Support Depletion Date, the related
Non-PO Formula Principal Amount, up to the
IV-1
amount of the applicable Senior Principal
Distribution Amount for such Distribution Date, will
be distributed as principal as follows:
(1) to the Class A-R
Certificates, until the Class
Certificate Balance thereof has been
reduced to zero; and
(2) concurrently, to the Class
A-1 and Class A-3 Certificates, pro
rata, until the respective Class
Certificate Balances thereof have been
reduced to zero;
(iii) to the Class PO Certificates an amount
allocable to principal equal to the PO Formula Principal Amount, up to the
outstanding Class Certificate Balance of the Class PO Certificates;
(iv) to each Class of Subordinated Certificates,
subject to paragraph (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;
(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;
IV-2
(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; and
(v) to the Class A-R Certificates, any remaining
Available Funds.
On any Distribution Date, amounts distributed in respect of
Class PO Deferred Amounts will not reduce the Class Certificate Balance of the
related 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 clause (iii)(x) above, (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 the 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) the Amount Available for Senior Principal and (2) a fraction, the
numerator of which is the Senior Principal Distribution Amount and the
denominator of which is the sum of the Senior Principal Distribution Amount and
the PO Formula Principal Amount.
(b) [Reserved];
(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)(iii)(y), the portion of Available Funds available to be
distributed as principal of the Senior Certificates (other than the Class PO
Certificates) shall be distributed concurrently, as principal, on such Classes,
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
such Class' Optimal Interest Distribution Amount for such Distribution Date
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,
IV-3
with respect to each 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 related 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 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 incurred during the calendar month
preceding the month of such Distribution Date and (D) after the Fraud Coverage
Termination Date, with respect to each 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 related 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.
(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 which 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 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)(vi).
Section 4.03. [Reserved]
Section 4.04. [Reserved]
Section 4.05. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Trustee shall
determine the total amount of Realized Losses, including Excess Losses, with
respect to the related 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 the Class Certificate Balance thereof is reduced to zero; and
(ii) (A) the applicable Non-PO Percentage of any
Realized Loss (other than an Excess Loss) shall be allocated first, to the
Subordinated Certificates in reverse order of their respective numerical Class
designations, until the respective Class Certificate Balance of each such Class
is reduced to zero and second, to the Senior Certificates (other than the Class
PO
IV-4
and Class X Certificates), pro rata, on the basis of their respective Class
Certificate Balances, in each case immediately prior to the related Distribution
Date, until the respective Class Certificate Balance of each such Class is
reduced to zero;
(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 and Class X Certificates) and the
Subordinated Certificates then outstanding, pro rata, on the basis of their
respective Class Certificate Balances in each case 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 amount, if any, by which the
aggregate of the Class Certificate Balances of all outstanding Classes of
Certificates exceeds the Pool Stated Principal Balance 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 to
any Component or any reduction in the Certificate Balance of a Certificate
pursuant to Section 4.05(b) shall be accomplished by reducing the Certificate
Balance or Component Balance thereof, as applicable, immediately following the
distributions made on the related Distribution Date in accordance with the
definition of "Certificate Balance" or "Component Balance," as the case may be.
Section 4.06. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Certificateholder,
the Master Servicer, the Depositor and each Rating Agency a statement setting
forth with respect to the related distribution:
(i) the amount thereof allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any
Class Unpaid Interest Shortfall included in such distribution
and any remaining Class Unpaid Interest Shortfall after giving
effect to such distribution;
(iii) if the distribution to the Holders of such
Class of Certificates is less than the full amount that would
be distributable to such Holders if there were sufficient
funds available therefor, the amount of the shortfall and the
allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of
principal on such Distribution Date;
IV-5
(v) the Pool Stated Principal Balance for the
following Distribution Date;
(vi) the Senior Percentage and Subordinated
Percentage for the following Distribution Date;
(vii) the amount of the Master Servicing Fees and
Servicing Fees paid to or retained by the Master Servicer and
the Servicers (with respect to the Servicers, in the
aggregate) with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the
distribution on such Distribution Date and the aggregate
amount of Advances outstanding as of the close of business on
such Distribution Date;
(x) the number and aggregate principal amounts of
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days and (B) in foreclosure and
delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days, as of the close of business on
the last day of the calendar month preceding such Distribution
Date;
(xi) 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 each of the Due Dates in
each such month and (B) delinquent 60 days or more on each of
the Due Dates in each such month;
(xii) with respect to any Mortgage Loan that became
an REO Property during the preceding calendar month, the loan
number and Stated Principal Balance of such Mortgage Loan as
of the close of business on the Determination Date preceding
such Distribution Date and the date of acquisition thereof;
(xiii) 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 such
Distribution Date;
(xiv) the Senior Prepayment Percentage for the
following Distribution Date;
(xv) the aggregate amount of Realized Losses incurred
during the preceding calendar month and aggregate Realized
Losses through such Distribution Date; and
(xvi) 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 Date.
IV-6
(b) 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 Master Servicer.
(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)(i), (a)(ii) and (a)(vii) 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. Determination of Pass-Through Rates for COFI
Certificates.
The Pass-Through Rate for each Class of COFI Certificates for
each Interest Accrual Period after the initial Interest Accrual Period shall be
determined by the Trustee as provided below on the basis of the Index and the
applicable formulae appearing in footnotes corresponding to the COFI
Certificates in (1) to the table relating to the Certificates in the Preliminary
Statement.
Except as provided below, with respect to each Interest
Accrual Period following the initial Interest Accrual Period, the Trustee shall
not later than two Business Days following the publication of the applicable
Index determine the Pass-Through Rate at which interest shall accrue in respect
of the COFI Certificates during the related Interest Accrual Period.
Except as provided below, the Index to be used in determining
the respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month preceding
such Interest Accrual Period. If at the Outside Reference Date for any Interest
Accrual Period, COFI for the second calendar month preceding such Interest
Accrual Period has not been published, the Trustee shall use COFI for the third
calendar month preceding such Interest Accrual Period. If COFI for neither the
second nor third calendar months preceding any Interest Accrual Period has been
published on or before the related Outside Reference Date, the Index for such
Interest Accrual Period and for all subsequent Interest Accrual Periods shall be
the National Cost of Funds Index for the third calendar month preceding such
Interest Accrual Period (or the fourth preceding calendar month if such National
Cost of Funds Index for the third preceding calendar month has not been
published by such Outside Reference Date). In the event that the National Cost
of Funds Index for neither the third nor fourth calendar months preceding an
Interest Accrual Period has been published on or before the related Outside
Reference Date, then for such Interest Accrual Period and for each succeeding
Interest Accrual Period, the Index shall be LIBOR, determined in the manner set
forth below.
On each Interest Determination Date so long as the COFI
Certificates are outstanding and the applicable Index therefor is LIBOR, 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 Interest Determination Date or (ii) in lieu of
making any such request, rely on such Reference Bank quotations that appear at
such time on the
IV-7
Reuters Screen LIBO Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for Swaps,
1986 Edition), to the extent available.
With respect to any Interest Accrual Period for which the
applicable Index is LIBOR, LIBOR for such Interest Accrual Period will be
established by the Trustee on the related Interest Determination Date as
follows:
(a) If on any Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the next Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounding
such arithmetic mean upwards if necessary to the nearest whole multiple of
1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest 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 Interest 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 Interest Determination Date to leading European banks.
From such time as the applicable Index becomes LIBOR until all
of the COFI Certificates are paid in full, the Trustee will at all times retain
at least four Reference Banks for the purposes of determining LIBOR with respect
to each Interest Determination Date. The Master 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
Master 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.
In determining LIBOR and any Pass-Through Rate for the COFI
Certificates 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 Reuters Screen) from the Reference Banks or the New York City banks as
to LIBOR 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 Reference Banks
or the New York City banks or to determine such arithmetic mean, all as provided
for in this Section 4.07.
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The establishment of LIBOR and each Pass-Through Rate for the
COFI 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.
Section 4.08. Determination of Pass-Through Rates for LIBOR
Certificates.
On each Interest Determination Date so long as the LIBOR
Certificates are outstanding, 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 to leading
banks in the London interbank market, as of 11:00 a.m. (London time) on such
Interest 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 Screen
LIBO Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and provisions for Swaps, 1986 Edition), to the
extent available.
LIBOR for the next Interest Accrual Period will be established
by the Trustee on each Interest Determination Date as follows:
(a) If on any Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the next Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounding
such arithmetic mean upwards if necessary to the nearest whole multiple of
1/32%).
(b) If on any Interest Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest 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 Interest 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 Interest Determination Date to leading European banks.
(c) If on any Interest 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 Interest Determination Date, or, in the case of the first Interest
Determination Date, the Initial LIBOR Rate.
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 Interest Determination Date. The
Master 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 Master Servicer should
IV-9
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.
The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each Interest
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.
In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates 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 Reuters Screen) from the Reference Banks or the New York City banks as
to LIBOR 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 Reference Banks
or the New York City banks or to determine such arithmetic mean, all as provided
for in this Section 4.08.
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.
IV-10
ARTICLE V
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 in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of 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 (i) such Holder
has so notified the Trustee at least five Business Days prior to the related
Record Date and (ii) such Holder shall hold (A) a Notional Amount Certificate,
(B) 100% of the Class Certificate Balance of any Class of Certificates or (C)
Certificates of any Class with aggregate principal Denominations of not less
than $1,000,000 or (y) by check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by 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 prior to 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, or cause to be provided, to the
Trustee on a continuous basis, 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, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of 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.
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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 which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
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 said Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such 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 (i) deliver a letter
in substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Master 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 shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor, the Seller and the Master 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 (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by the
Trustee's receipt of
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a representation letter from the transferee substantially in the form of Exhibit
K or Exhibit L), to the effect that such 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, nor a person acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such transfer, or
(ii) if the purchaser is an insurance company, a representation that the
purchaser is an insurance company which is purchasing such Certificates 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 Certificates are covered
under PTCE 95-60 or (iii) in the case of any such 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 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 either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee 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 Private Certificate or
a Residual Certificate, in the event the representation letter referred to in
the preceding sentence is not furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of the ERISA-Restricted Certificates. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the delivery to the Trustee of an Opinion of
Counsel satisfactory to the Trustee as described above shall be void and of no
effect.
To the extent permitted under applicable law (including, but
not limited to, 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 the provisions of 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
V-3
have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as 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
the provisions 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 the provisions 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 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 the provisions of
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 Master Servicer, to the effect that the elimination of such
restrictions will not cause the REMIC hereunder 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
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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 participating
firms 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 participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
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 such 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, (y) the Depositor at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) 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 Master Servicer, the Depositor nor the Trustee shall
be liable for any delay in delivery of
V-5
such instruction and each may conclusively rely on, and shall be protected in
relying on, such instructions. The Master 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 the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Master Servicer and the Trustee such security or indemnity as may be required by
them to hold each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, 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 shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
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 Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the contrary.
Section 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
V-6
Section 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
V-7
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the
Master Servicer.
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.
The Depositor and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may
be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC.
Section 6.03. Limitation on Liability of the Depositor, the Seller,
the Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any
of the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Seller, the Master Servicer
or any such Person against any breach of representations or warranties made by
it herein or protect the Depositor, the Seller, the Master Servicer or any such
Person from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to
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any specific Mortgage Loan or Mortgage Loans (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement)
and any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. None of the
Depositor, the Seller or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
respective duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that any of the Depositor, the Seller
or the Master Servicer may in its discretion undertake any such action that it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account.
Section 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor servicer
and receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates, or (b) upon determination that its duties hereunder are
no longer permissible under applicable law. Any such determination under clause
(b) permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor master servicer shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.
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ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in
the Certificate Account or remit to the Trustee any payment
required to be made under the terms of this Agreement, which
failure shall continue unremedied for five days after the date
upon which written notice of such failure shall have been
given to the Master Servicer by the Trustee or the Depositor
or to the Master Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in
this Agreement that materially affects the rights of
Certificateholders, which failure shall continue unremedied
for a period of 60 days after the date on which written notice
of such failure shall have been given to the Master Servicer
by the Trustee or the Depositor, or to the Master Servicer and
the Trustee by the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates;
or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for
the appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days;
or
(iv) the Master Servicer shall consent to the
appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or
all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file
a petition to take advantage of, or commence a voluntary case
under, any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations.
If an Event of Default described in clauses (i) to (v) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 66 2/3% of the
Voting Rights evidenced by the Certificates, the Trustee shall by notice in
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writing to the Master Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its rights
as a Certificateholder hereunder. On and after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall make any Advance which the
Master Servicer failed to make subject to Section 3.04, whether or not the
obligations of the Master Servicer have been terminated pursuant to this
Section. The Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Certificate Account, or thereafter be received with
respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive, out
of any late collection of a Scheduled Payment on a Mortgage Loan which was due
prior to the notice terminating such Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which such Master Servicer would have been entitled pursuant to Sections
3.11(a)(i) through (viii), and any other amounts payable to such Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee shall, subject to and to the
extent provided in Section 3.07, be the successor to the Master Servicer in its
capacity as master servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make Advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans that the Master Servicer
would have been entitled to charge to the Certificate Account or Distribution
Account if the Master Servicer had continued to act hereunder. Notwithstanding
the foregoing, if the Trustee has become the successor to the Master Servicer in
accordance with Section 7.01, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution the appointment of which does not adversely affect
the then current rating of the Certificates, by each Rating Agency, as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any successor to the Master Servicer shall be an institution which is a FNMA and
FHLMC approved seller/servicer in good standing, which has a net worth of at
least $15,000,000, which is willing to service the Mortgage Loans and which
executes and
VII-2
delivers to the Depositor and the Trustee an agreement accepting such delegation
and assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities of the Master Servicer under Section 6.03 incurred prior
to termination of the Master Servicer under Section 7.01), with like effect as
if originally named as a party to this Agreement; provided that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced as a
result of such assignment and delegation. Pending appointment of a successor to
the Master Servicer hereunder, the Trustee, unless the Trustee is prohibited by
law from so acting, shall, subject to Section 3.07, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Master Servicing
Fee permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
master servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall
give notice to the Mortgagors of such change of servicer and shall, during the
term of its service as master servicer, maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 6.05.
Section 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee
shall have occurred and be continuing, the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
finally proven that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of
Certificates evidencing not less than 25% of the Voting Rights
of Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement.
VIII-1
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall
be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or
confirm the genuineness of any signature of any such party or
parties;
(ii) the Trustee may consult with counsel, financial
advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do
by Holders of Certificates evidencing not less than 25% of the
Voting Rights allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, accountants or attorneys;
(vi) the Trustee shall not be required to risk or
expend its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is
not assured to it;
(vii) the Trustee shall not be liable for any loss on
any investment of funds pursuant to this Agreement (other than
as issuer of the investment security);
(viii) the Trustee shall not be deemed to have
knowledge of an Event of Default until a Responsible Officer
of the Trustee shall have received written notice thereof; and
(ix) the Trustee shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by
this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request,
order or
VIII-2
direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be
incurred therein or thereby.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Seller, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and countersignature of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Master Servicer of any funds paid to the Depositor or the Master Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Certificate
Account by the Depositor or the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Distribution Account on each Distribution
Date an amount equal to the Trustee Fee for such Distribution Date. The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(including reasonable attorney's fees) (i) incurred in connection with any claim
or legal action relating to (a) this Agreement, (b) the Certificates, or (c) the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder or
incurred by reason of any action of the Trustee taken at the direction of the
Certificateholders and (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Master Servicer covenants and
agrees, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any such expense, disbursement or advance as may arise
from the Trustee's negligence, bad faith or willful misconduct, to pay or
reimburse the Trustee, for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement with respect to (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage such persons to perform acts
or services hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates. Except as otherwise provided herein, the
Trustee shall not be entitled to payment or reimbursement for any
VIII-3
routine ongoing expenses incurred by the Trustee in the ordinary course of its
duties as Trustee, Registrar, Tax Matters Person or Paying Agent hereunder or
for any other expenses.
Section 8.06. Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or the Master Servicer and its affiliates; provided, however,
that such entity cannot be an affiliate of the Seller, the Depositor or the
Master Servicer other than the Trustee in its role as successor to the Master
Servicer.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor,
the Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which shall be delivered to the Trustee, one copy to the
Master Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or
VIII-4
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which shall be delivered by the successor
Trustee to the Master Servicer, one complete set to the Trustee so removed and
one complete set to the successor so appointed. Notice of any removal of the
Trustee shall be given to each Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
Section 8.09. Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust
VIII-5
Fund or property securing any Mortgage Note may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the
purposes of this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee, except for
the obligation of the Trustee under this Agreement to advance
funds on behalf of the Master Servicer, shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the
holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee
hereunder and such appointment shall not, and shall not be
deemed to, constitute any such separate trustee or co-trustee
as agent of the Trustee;
(iii) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee;
and
(iv) The Master Servicer, and not the Trustee, shall
be liable for the payment of reasonable compensation,
reimbursement and indemnification to any such separate trustee
or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
VIII-6
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Tax Matters.
It is intended that the assets with respect to which the REMIC
election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of the REMIC and that in such capacity it shall: (a) prepare
and file, or cause to be prepared and filed, in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor
form adopted by the Internal Revenue Service) and prepare and file or cause to
be prepared and filed with the Internal Revenue Service and applicable state or
local tax authorities income tax or information returns for each taxable year
with respect to the REMIC, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code; (c) make or cause to be made an
election that such assets be treated as a REMIC on the federal tax return for
its first taxable year (and, if necessary, under applicable state law); (d)
prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax); (f) to the extent that they are under its control, conduct matters
relating to
VIII-7
such assets at all times that any Certificates are outstanding so as to maintain
the status as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC's status; (h) pay, from the sources specified in the
last paragraph of this Section 8.11, the amount of any federal or state tax,
including prohibited transaction taxes as described below, imposed on the REMIC
prior to its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) ensure that federal, state or local income tax
or information returns shall be signed by the Trustee or such other person as
may be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to the REMIC, including but
not limited to the income, expenses, assets and liabilities thereof and the fair
market value and adjusted basis of the assets determined at such intervals as
may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and (k) as and when necessary and
appropriate, represent the REMIC in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of the REMIC, enter
into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the REMIC, and otherwise act
on behalf of the REMIC in relation to any tax matter or controversy involving
it.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited
transactions" of the REMIC as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of the REMIC as defined in Section
860G(c) of the Code, on any contribution to the REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any minimum tax imposed upon the REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee, if any
such other tax arises out of or results from a breach by the Trustee of any of
its obligations under this Agreement, (ii) the Master Servicer or the Seller, in
the case of any such minimum tax, if such tax arises out of or results from a
breach by the Master Servicer or Seller of any of their obligations under this
Agreement or (iii) the Seller, if any such tax arises out of or results from the
Seller's obligation to repurchase a Mortgage Loan pursuant to Section 2.02 or
2.03 or (iv) in all other cases, or in the event that the Trustee, the Master
Servicer or the Seller fails to honor its obligations under the preceding
VIII-8
clauses (i), (ii) or (iii), any such tax will be paid with amounts otherwise to
be distributed to the Certificateholders, as provided in Section 3.11(b).
Section 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the
Trustee shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to issuers similar to the Trust Fund. In connection with the preparation
and filing of such periodic reports, the Depositor and the Master Servicer shall
timely provide to the Trustee all material information available to them which
is required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
VIII-9
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Master Servicer and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Master Servicer of all Mortgage Loans (and REO Properties) remaining in
the Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan (other than in respect of REO Property) plus one
month's accrued interest thereon at the applicable Adjusted Mortgage Rate and
(ii) the lesser of (x) the appraised value of any REO Property as determined by
the higher of two appraisals completed by two independent appraisers selected by
the Master Servicer at the expense of the Master Servicer and (y) the Stated
Principal Balance of each Mortgage Loan related to any REO Property, in each
case plus accrued and unpaid interest thereon at the applicable Adjusted
Mortgage Rate and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date. The right to purchase all Mortgage Loans and REO Properties
pursuant to clause (a) above shall be conditioned upon the Pool Stated Principal
Balance, at the time of any such repurchase, aggregating less than ten percent
of the Cut-off Date Pool Principal Balance.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders the Master Servicer
shall notify the Depositor and the Trustee of the date the Master Servicer
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 15th
day and not later than the 10th day of the month next preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of such final distribution, (c) the location of the office or agency at which
such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The
IX-1
Master Servicer will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Certificateholders of each Class,
in each case on the final Distribution Date and in the order set forth in
Section 4.02, in the case of the Certificateholders, in proportion to their
respective Percentage Interests, with respect to Certificateholders of the same
Class, an amount equal to (i) as to each Class of Regular Certificates, the
Certificate Balance thereof plus accrued interest thereon (or on their Notional
Amount, if applicable) and (ii) as to the Residual Certificates, the amount, if
any, which remains on deposit in the Distribution Account (other than the
amounts retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class A-R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase
option as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Master Servicer,
to the effect that the failure to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited transactions"
on the REMIC as defined in Section 860F of the Code, or (ii) cause the REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final
Distribution Date set forth in the notice given by the Master
Servicer under Section 9.02, the Master Servicer shall prepare
and the Trustee, at the expense of the "tax matters person",
shall adopt a plan of complete liquidation within the meaning
of Section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion shall not be an expense of
the Trustee, the Tax Matters Person or the Trust Fund), meets
the requirements of a qualified liquidation; and
(2) Within 90 days after the time of
adoption of such a plan of complete liquidation, the Trustee
shall sell all of the assets of the Trust Fund to the Master
Servicer for cash in accordance with Section 9.01.
(b) The Trustee as agent for the REMIC hereby agrees to adopt
and sign such a plan of complete liquidation upon the written request of the
Master Servicer, and the receipt of
IX-2
the Opinion of Counsel referred to in Section 9.03(a)(1) and to take such other
action in connection therewith as may be reasonably requested by the Master
Servicer.
(c) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to prepare and the Trustee to adopt
and sign a plan of complete liquidation.
IX-3
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or the Master Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; provided, however, that
no such Opinion of Counsel shall be required if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating.
The Trustee, the Depositor and the Master Servicer also may at
any time and from time to time amend this Agreement without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of the
REMIC as a REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on the REMIC pursuant to the Code that would be a claim at
any time prior to the final redemption of the Certificates or (iii) comply with
any other requirements of the Code, provided that the Trustee has been provided
an Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of a Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating 66%, or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
X-1
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on the REMIC or the Certificateholders or cause
the REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense, but only
upon direction by the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
X-2
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance (i) of the Mortgage Loans by the Seller to the Depositor and (ii) of
the Trust Fund by the Depositor to the Trustee each be, and be construed as, an
absolute sale thereof. It is, further, not the intention of the parties that
such conveyances be deemed a pledge thereof. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or Depositor, as the case may be, or if for any other
reason this Agreement is held or deemed to create a security interest in either
such assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant (i) by the Seller to the Depositor or (ii) by the
Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets transferred, whether now owned or
hereafter acquired.
The Seller and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Trust Fund, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement. The
Depositor shall arrange for filing any Uniform Commercial Code continuation
statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant
to Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in
Section 4.06;
2. Each annual statement as to compliance described
in Section 3.16;
3. Each annual independent public accountants'
servicing report described in Section 3.17; and
X-3
4. Any notice of a purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, [IndyMac MBS, Inc.], 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, (b) in the case of the Master
Servicer, [IndyMac, Inc.], 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000,
Attention: Secondary Marketing or such other address as may be hereafter
furnished to the Depositor and the Trustee by the Master Servicer in writing,
(c) in the case of the Trustee, [The Bank of New York], 000 Xxxxxxx Xxxxxx, 00X,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage-Backed Securities Group Series
[ ], or such other address as the Trustee may hereafter furnish to the Depositor
or Master Servicer, and (d) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and Depositor.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon
X-4
or under or with respect to this Agreement, unless such Holder previously shall
have given to the Trustee a written notice of an Event of Default and of the
continuance thereof, as herein provided, and unless the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
shall also have made written request to the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice,
it will permit and will cause each Subservicer to permit any representative of
the Depositor or the Trustee during the Master Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes said accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor or the Trustee of any right under this Section 10.09
shall be borne by the party requesting such inspection; all other such expenses
shall be borne by the Master Servicer or the related Subservicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
* * * * * *
X-5
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and
the Master Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
[IndyMac MBS, Inc.],
as Depositor
By:_____________________________________
Name:
Title:
[THE BANK OF NEW YORK],
as Trustee
By:_____________________________________
Name:
Title:
[INDYMAC, INC.],
as Seller and Master Servicer
By:_____________________________________
Name:
Title:
X-6
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
SCHEDULE II
[IndyMac MBS, Inc.]
Mortgage Pass-Through Certificates
Series [ ]
Representations and Warranties of the Seller/Master Servicer
[IndyMac, Inc. ("IndyMac")] hereby makes the representations
and warranties set forth in this Schedule II to the Depositor and the Trustee,
as of the Closing Date, or if so specified herein, as of the Cut-off Date.
Capitalized terms used but not otherwise defined in this Schedule II shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") relating to the above-referenced Series,
among [IndyMac], as seller and master servicer, [IndyMac MBS, Inc.], as
depositor, and [The Bank of New York], as trustee.
(1) [IndyMac], is duly organized as a Delaware
corporation and is validly existing and in good standing under the laws
of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by the Pooling and Servicing
Agreement to be conducted by [IndyMac] in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of the
Pooling and Servicing Agreement and to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance
with the terms thereof.
(2) [IndyMac] has the full corporate power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by the Pooling and Servicing Agreement and has duly
authorized by all necessary corporate action on the part of [IndyMac]
the execution, delivery and performance of the Pooling and Servicing
Agreement; and the Pooling and Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of
[IndyMac], enforceable against [IndyMac] in accordance with its terms,
except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and
Servicing Agreement by [IndyMac] , the sale and servicing of the
Mortgage Loans by [IndyMac] under the Pooling and Servicing Agreement,
the consummation of any other of the transactions contemplated by the
Pooling and Servicing Agreement, and the fulfillment of
S-II-1
or compliance with the terms thereof are in the ordinary course of
business of [IndyMac] and will not (A) result in a material breach of
any term or provision of the charter or by-laws of [IndyMac] or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which [IndyMac] is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to [IndyMac]
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over [IndyMac MBS]; and [IndyMac] is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair [IndyMac's] ability to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of
[IndyMac's] knowledge, threatened against [IndyMac] that would prohibit
the execution or delivery of, or performance under, the Pooling and
Servicing Agreement by [IndyMac].
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SCHEDULE III
[IndyMac MBS, Inc.]
Mortgage Pass-Through Certificates
Series [ ]
Representations and Warranties as to the Mortgage Loans
[IndyMac, Inc. ("IndyMac")] hereby makes the representations
and warranties set forth in this Schedule III to the Depositor and the Trustee,
as of the Closing Date, or if so specified herein, as of the Cut-off Date or
date of origination of the Mortgage Loan. Capitalized terms used but not
otherwise defined in this Schedule III shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among [IndyMac], as seller and master
servicer, [IndyMac MBS], as depositor, and [The Bank of New York], as trustee.
(1) The information set forth on Schedule I to the
Pooling and Servicing Agreement with respect to each Mortgage Loan is
true and correct in all material respects as of the Closing Date.
(2) As of the Closing Date, all regularly scheduled
monthly payments due with respect to each Mortgage Loan up to and
including the Due Date immediately prior to the Cut-off Date have been
made; and as of the Cut-off Date, no Mortgage Loan had a regularly
scheduled monthly payment that was 60 or more days Delinquent during
the twelve months prior to the Cut-off Date.
(3) With respect to any Mortgage Loan that is not a
Cooperative Loan, each Mortgage is a valid and enforceable first lien
on the Mortgaged Property subject only to (a) the lien of nondelinquent
current real property taxes and assessments and liens or interests
arising under or as a result of any federal, state or local law,
regulation or ordinance relating to hazardous wastes or hazardous
substances and, if the related Mortgaged Property is a unit in a
condominium project or planned unit development, any lien for common
charges permitted by statute or homeowner association fees, (b)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being generally
acceptable to mortgage lending institutions in the area wherein the
related Mortgaged Property is located or specifically reflected in the
appraisal made in connection with the origination of the related
Mortgage Loan, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of
the security intended to be provided by such Mortgage.
(4) Immediately prior to the assignment of the
Mortgage Loans to the Depositor, the Seller had good title to, and was
the sole owner of, each Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
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(5) As of the date of origination of each Mortgage
Loan, there was no delinquent tax or assessment lien against the
related Mortgaged Property.
(6) There is no valid offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(7) There are no mechanics' liens or claims for work,
labor or material affecting any Mortgaged Property which are or may be
a lien prior to, or equal with, the lien of such Mortgage, except those
which are insured against by the title insurance policy referred to in
item (11) below.
(8) To the best of the Seller's knowledge, no
Mortgaged Property has been materially damaged by water, fire,
earthquake, windstorm, flood, tornado or similar casualty (excluding
casualty from the presence of hazardous wastes or hazardous substances,
as to which the Seller makes no representation) so as to affect
adversely the value of the related Mortgaged Property as security for
such Mortgage Loan.
(9) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws or any
noncompliance does not have a material adverse effect on the value of
the related Mortgage Loan.
(10) As of the Closing Date, the Seller has not
modified the Mortgage in any material respect (except that a Mortgage
Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and which has been delivered to the
Trustee); satisfied, cancelled or subordinated such Mortgage in whole
or in part; released the related Mortgaged Property in whole or in part
from the lien of such Mortgage; or executed any instrument of release,
cancellation, modification or satisfaction with respect thereto.
(11) A lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and
effect.
(12) Each Mortgage Loan was originated (within the
meaning of Section 3(a)(41) of the Securities Exchange Act of 1934, as
amended) by an entity that satisfied at the time of origination the
requirements of Section 3(a)(41) of the Securities Exchange Act of
1934, as amended.
(13) To the best of the Seller's knowledge, all of
the improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the
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Mortgaged Property, unless such failure to be wholly within such
boundaries and restriction lines or such encroachment, as the case may
be, does not have a material effect on the value of such Mortgaged
Property.
(14) To the best of the Seller's knowledge, as of the
date of origination of each Mortgage Loan, no improvement located on or
being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation unless such violation would not have a
material adverse effect on the value of the related Mortgaged Property.
To the best of the Seller's knowledge, all inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities, unless the lack thereof
would not have a material adverse effect on the value of such Mortgaged
Property.
(15) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law.
(16) The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances
thereunder.
(17) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case of
a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure.
(18) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law to serve
as such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor.
(19) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are
customarily required by institutional single family mortgage lenders in
the area where the Mortgaged Property is located, and the Seller has
received no notice that any premiums due and payable thereon have not
been paid; the Mortgage obligates the Mortgagor thereunder to maintain
all such insurance including flood insurance at the Mortgagor's cost
and expense. Anything to the contrary in this item (19)
notwithstanding, no breach of this item (19) shall be deemed to give
rise to any obligation of the Seller to repurchase or substitute for
such affected Mortgage Loan or Loans so long as the Master Servicer
maintains a blanket policy pursuant to the second paragraph of Section
3.12(a) of the Pooling and Servicing Agreement.
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(20) If at the time of origination of each Mortgage
Loan, the related Mortgaged Property was in an area then identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the then-current requirements of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier.
(21) To the best of the Seller's knowledge, there is
no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring.
(22) To the best of the Seller's knowledge, there is
no material event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a material
non-monetary default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and the Seller has not
waived any material non-monetary default, breach, violation or event of
acceleration.
(23) Each Mortgage File contains an appraisal of the
related Mortgaged Property in a form acceptable to FNMA or FHLMC.
(24) Any leasehold estate securing a Mortgage Loan
has a stated term at least as long as the term of the related Mortgage
Loan.
(25) Each Mortgage Loan was selected from among the
outstanding fixed-rate one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the representations
and warranties made with respect to the Mortgage Loans set forth in
this Schedule III can be made. No such selection was made in a manner
intended to adversely affect the interests of the Certificateholders.
(26) No more than [ ]% of the Mortgage Loans (by
aggregate Stated Principal Balance of the Mortgage Loans) are
Cooperative Loans.
(27) Each Cooperative Loan is secured by a valid,
subsisting and enforceable perfected first lien and security interest
in the related Mortgaged Property, subject only to (i) the rights of
the Cooperative Corporation to collect Maintenance and assessments from
the Mortgagor, (ii) the lien of the Blanket Mortgage, if any, on the
Cooperative Property and of real property taxes, water and sewer
charges, rents and assessments on the Cooperative Property not yet due
and payable, and (iii) other matters to which like Cooperative Units
are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Security
Agreement or the use, enjoyment, value or marketability of the
Cooperative Unit. Each original UCC financing statement, continuation
statement or other governmental filing or recordation necessary to
create or preserve the perfection and priority of the first priority
lien and security interest in the Cooperative Shares and Proprietary
Lease has been timely and properly made. Any security agreement,
chattel mortgage or equivalent document related to the Cooperative Loan
and delivered to the Sponsor or its designee establishes in the Seller
a valid and subsisting perfected first lien on and security interest in
the property described therein, and the Seller has full right to sell
and assign the same.
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(28) Each Cooperative Corporation qualifies as a
"cooperative housing corporation" as defined in Section 216 of the Code.
S-III-5
