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INDYMAC ABS, INC.,
Depositor
INDYMAC BANK, F.S.B.,
Seller and Servicer
And
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
DATED AS OF MARCH 1, 2006
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INDYMAC RESIDENTIAL MORTGAGE-BACKED TRUST, SERIES ▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇ MORTGAGE-BACKED CERTIFICATES, SERIES 2006-L1
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.01. Defined Terms.........................................................................
Section 1.02. Allocation of Certain Interest Shortfalls.............................................
Section 1.03. Accounting............................................................................
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans..........................................................
Section 2.02. Acceptance by Trustee.................................................................
Section 2.03. Repurchase or Substitution of Mortgage Loans by the Seller............................
Section 2.04. [Reserved]............................................................................
Section 2.05. Representations, Warranties and Covenants of the Servicer.............................
Section 2.06. Representations and Warranties of the Depositor.......................................
Section 2.07. Issuance of Certificates..............................................................
Section 2.08. Conveyance of REMIC 1 Regular Interests and Acceptance of REMIC 2 by Trustee..........
Section 2.09. Purposes and Powers of the Trust......................................................
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01. Servicer to Act as Servicer...........................................................
Section 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers; Special Servicing........
Section 3.03. Successor Sub-Servicers...............................................................
Section 3.04. Liability of the Servicer.............................................................
Section 3.05. No Contractual Relationship Between Sub-Servicers and the Trustee or
Certificateholders....................................................................
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee......................
Section 3.07. Collection of Certain Mortgage Loan Payments..........................................
Section 3.08. Sub-Servicing Accounts................................................................
Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts................
Section 3.10. Collection Account; Distribution Account..............................................
Section 3.11. Withdrawals from the Collection Account and Distribution Account......................
Section 3.12. Investment of Funds in the Collection Account and the Distribution Account............
Section 3.13. [Reserved]............................................................................
Section 3.14. Maintenance of Errors and Omissions and Fidelity Coverage.............................
Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................
Section 3.16. Realization Upon Defaulted Mortgage Loans.............................................
Section 3.17. Trustee to Cooperate; Release of Mortgage Files.......................................
Section 3.18. Servicing Compensation................................................................
Section 3.19. Reports to the Trustee; Collection Account Statements.................................
Section 3.20. Statement as to Compliance............................................................
Section 3.21. Assessments of Compliance and Attestation Reports.....................................
Section 3.22. Commission Reporting..................................................................
Section 3.23. Assessments of Compliance and Attestation Reports.....................................
Section 3.24. Access to Certain Documentation; Filing of Reports by Trustee.........................
Section 3.25. Title, Maintenance and Disposition of REO Property....................................
Section 3.26. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls..............
Section 3.27. [Reserved]............................................................................
Section 3.28. Obligations of the Servicer in Respect of Mortgage Rates and Monthly Payments.........
Section 3.29. Excess Reserve Fund Account...........................................................
ARTICLE IV FLOW OF FUNDS
Section 4.01. Distributions.........................................................................
Section 4.02. Statements............................................................................
Section 4.03. Remittance Reports; Advances..........................................................
Section 4.04. Distributions on the REMIC Regular Interests..........................................
Section 4.05. Allocation of Realized Losses.........................................................
Section 4.06. The Policy............................................................................
Section 4.07. Corridor Agreements...................................................................
ARTICLE V THE CERTIFICATES
Section 5.01. The Certificates......................................................................
Section 5.02. Registration of Transfer and Exchange of Certificates.................................
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.....................................
Section 5.04. Persons Deemed Owners.................................................................
Section 5.05. Appointment of Paying Agent...........................................................
ARTICLE VI THE SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Servicer and the Depositor...........................................
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or
the Depositor.........................................................................
Section 6.03. Limitation on Liability of the Servicer and Others....................................
Section 6.04. Servicer Not to Resign................................................................
Section 6.05. Delegation of Duties..................................................................
Section 6.06. Inspection............................................................................
ARTICLE VII DEFAULT
Section 7.01. Servicer Events of Termination........................................................
Section 7.02. Trustee to Act; Appointment of Successor..............................................
Section 7.03. Waiver of Defaults....................................................................
Section 7.04. Notification to Certificateholders....................................................
Section 7.05. Survivability of Servicer Liabilities.................................................
ARTICLE VIII THE TRUSTEE
Section 8.01. Duties of Trustee.....................................................................
Section 8.02. Certain Matters Affecting the Trustee.................................................
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.................................
Section 8.04. Trustee May Own Certificates..........................................................
Section 8.05. Trustee Fee and Expenses..............................................................
Section 8.06. Eligibility Requirements for Trustee..................................................
Section 8.07. Resignation or Removal of Trustee.....................................................
Section 8.08. Successor Trustee.....................................................................
Section 8.09. Merger or Consolidation of Trustee....................................................
Section 8.10. Appointment of Co-Trustee or Separate Trustee.........................................
Section 8.11. Limitation of Liability...............................................................
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.........................
Section 8.13. Suits for Enforcement.................................................................
Section 8.14. Waiver of Bond Requirement............................................................
Section 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.............................
Section 8.16. Reserved..............................................................................
Section 8.17. Access to Records of Trustee..........................................................
ARTICLE IX REMIC ADMINISTRATION
Section 9.01. REMIC Administration..................................................................
Section 9.02. Prohibited Transactions and Activities................................................
Section 9.03. Indemnification with respect to Certain Taxes and Loss of REMIC Status................
ARTICLE X TERMINATION
Section 10.01. Termination...........................................................................
Section 10.02. Additional Termination Requirements...................................................
ARTICLE XI MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.............................................................................
Section 11.02. Recordation of Agreement; Counterparts................................................
Section 11.03. Limitation on Rights of Certificateholders............................................
Section 11.04. Governing Law; Jurisdiction...........................................................
Section 11.05. Notices...............................................................................
Section 11.06. Severability of Provisions............................................................
Section 11.07. Article and Section References........................................................
Section 11.08. Notice to the Rating Agencies and the Certificate Insurer.............................
Section 11.09. Further Assurances....................................................................
Section 11.10. Benefits of Agreement.................................................................
Section 11.11. Acts of Certificateholders............................................................
Section 11.12. Grant of Security Interest............................................................
Section 11.13. Official Record.......................................................................
Section 11.14. Protection of Assets..................................................................
Section 11.15. Qualifying Special Purpose Entity.....................................................
Section 11.16. Rights of the Certificate Insurer.....................................................
EXHIBITS:
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M Certificate
Exhibit A-3 Form of Class B Certificate
Exhibit A-4 Form of Class C Certificate
Exhibit A-5 Form of Class R Certificate
Exhibit B Copy of Certificate Guaranty Insurance Policy with respect to the Insured Certificates
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G-1 Form of Class A Interest Rate Corridor
Exhibit G-1 Form of Subordinate Interest Rate Corridor
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Certification with respect to ERISA and the Code
Exhibit J Form of Investment Letter
Exhibit K Reserved
Exhibit L Form of Transferor Certificate
Exhibit M Form of Class R Certificate Transfer Affidavit
This Pooling and Servicing Agreement is dated as of March 1, 2006 (the
"Agreement"), among INDYMAC ABS, INC., as depositor (the "Depositor"), INDYMAC
BANK, F.S.B., as seller and servicer (the "Seller" and "Servicer", as
applicable) and DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which
Certificates in the aggregate will evidence the entire beneficial ownership
interest in the Trust Fund created hereunder. The Certificates will consist of
seven classes of certificates, designated as (i) the Class A-1 Certificates,
(ii) the Class A-2 Certificates, (iii) the Class A-3 Certificates, (iv) the
Class M Certificates, (v) the Class B Certificates, (vi) the Class C
Certificates and (vii) the Class R Certificates.
REMIC 1
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement (exclusive of the Excess Reserve
Fund Account and the Corridor Agreements) as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest represents the
sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions.
The following table irrevocably sets forth the designation,
the Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated
Principal Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
LT1AA Variable(2) $ 240,100,000.00 April 25, 2011
LT1A1 Variable(2) $ 1,392,520.00 April 25, 2011
LT1A2 Variable(2) $ 719,000.00 April 25, 2011
LT1A3 Variable(2) $ 282,130.00 April 25, 2011
LT1M Variable(2) $ 12,250.00 April 25, 2011
LT1B Variable(2) $ 44,100.00 April 25, 2011
LT1ZZ Variable(2) $ 2,450,000.00 April 25, 2011
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the earlier of (a) April 25, 2011 and (b) the expiration of 21 years from
the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late ambassador of the United States to the Court of St. James's, living on
the date hereof has been designated as the "latest possible maturity date"
for each Uncertificated REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the REMIC 1 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 2." The Class R-2 Interest represents the sole
class of "residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and initial Certificate Principal Balance for
each Class of Certificates that represents one or more of the "regular
interests" in REMIC 2 created hereunder:
Pass-Through Initial Certificate Principal Latest Possible
Designation Rate Balance Maturity Date(1)
Class A-1................. Variable(2) $ 139,252,000.00 April 25, 2011
Class A-2................. Variable(2) $ 71,900,000.00 April 25, 2011
Class A-3................. Variable(2) $ 28,213,000.00 April 25, 2011
Class M................... Variable(2) $ 1,225,000.00 April 25, 2011
Class B................... Variable(2) $ 4,410,000.00 April 25, 2011
Class C................... Variable(3) $ 0.00 April 25, 2011
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the earlier of (a) April 25, 2011 and (b) the expiration of 21 years from
the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late ambassador of the United States to the Court of St. James's, living on
the date hereof has been designated as the "latest possible maturity date"
for each Class of Certificates that represents one or more of the "regular
interests" in REMIC 2.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class C Certificates will accrue interest at its variable Pass-Through
Rate on its uncertificated Notional Amount outstanding from time to time
which shall equal the aggregate Uncertificated Principal Balance of the
REMIC 1 Regular Interests. The Class C Certificates will not accrue
interest on its Certificate Principal Balances.
As of the Cut-off Date, the Closing Date Mortgage Loans had an
aggregate Stated Principal Balance equal to $244,995,637.38.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINED TERMS.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates and the
Subordinated Certificates shall be made on the basis of a 360-day year and the
actual number of days elapsed, and all other calculations of interest described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. The Class R Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account or Distribution Account.
"Accrual Period": With respect to the Class A Certificates and the
Subordinated Certificates and each Distribution Date, the period commencing on
the preceding Distribution Date (or in the case of the first such Accrual
Period, commencing on the Closing Date) and ending on the day preceding the
current Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.
"Accrued Certificate Interest": With respect to the Class A
Certificates, the Subordinated Certificates and the Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, reduced by any Net
Interest Shortfalls allocated to such Class as set forth in Section 1.02.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which provides at any
period during the life of such loan for the adjustment of the Mortgage Rate
payable in respect thereto. The Adjustable-Rate Mortgage Loans are identified as
such on the Mortgage Loan Schedule.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage Loan,
each adjustment date on which the Mortgage Rate of such Mortgage Loans may
change pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth
in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Servicer in respect of any Distribution Date pursuant to Section 4.03.
"Adverse REMIC Event": As defined in Section 9.01 hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise, and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Subordinated Certificates, the sum of (i) the amount of any
Realized Losses allocated to such Class of Certificates on such Distribution
Date pursuant to Section 4.05(b) and (ii) the amount of any Allocated Realized
Loss Amount for such Class of Certificates remaining unpaid on the preceding
Distribution Date minus the amount of the increase in the related Certificate
Principal Balance due to the receipt of Subsequent Recoveries as provided in
Section 4.01.
"Applicable Regulations": As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage.
"Available Funds": With respect to any Distribution Date, an amount
equal to the excess, if any, of: (i) the sum of (a) the aggregate of the related
Monthly Payments received on or prior to the related Determination Date,
including any Subsequent Recoveries, (b) Liquidation Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Mortgage Loans during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Servicer in respect of Prepayment Interest Shortfalls for such
Distribution Date, (e) the aggregate of any Advances made by the Servicer for
such Distribution Date, (f) the aggregate of any related advances made by the
Trustee for such Distribution Date pursuant to Section 7.02, (g) the amounts, if
any, received pursuant to an Optional Termination and (h) the Initial Deposit;
over (ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to Section 3.11(a) or Section 3.18 or to the Trustee pursuant to
Section 3.06 or Section 3.11(b), (b) amounts deposited in the Collection Account
or the Distribution Account pursuant to clauses (i) (a) through (i)(f) above, as
the case may be, in error, (c) the Trustee Fee payable from the Distribution
Account pursuant to Section 4.01(a) and Section 8.05 and (d) any indemnification
payments or expense reimbursements made by the Trust Fund pursuant to Section
8.05.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of New York, the State of
California or in 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 Regular Certificate or Class R Certificate.
"Certificate Factor": With respect to any Class of the Regular
Certificates (other than the Class C Certificates) as of any Distribution Date,
a fraction, expressed as a decimal carried to six places, the numerator of which
is the aggregate Certificate Principal Balance of such Class of Certificates on
such Distribution Date (after giving effect to any distributions of principal
and allocations of Realized Losses in reduction of the Certificate Principal
Balance of the Certificates to be made on such Distribution Date), and the
denominator of which is the initial aggregate Certificate Principal Balance of
such Class of Certificates as of the Closing Date. With respect to the Class C
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Notional Amount
of such Class of Certificates on such Distribution Date (after giving effect to
reductions thereof to be made on such Distribution Date due to reductions of the
Pool Balance by scheduled principal due during the related Remittance Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period), and the denominator of which is
the initial aggregate Notional Amount of such Class of Certificates as of the
Closing Date.
"Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register (except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Class R Certificate for any
purpose hereof). Unless otherwise specified herein, whenever reference is made
herein to actions taken by the Trustee on behalf of the Certificateholders or
property held by the Trustee for the benefit of the Certificateholders, such
reference shall be deemed and construed as a reference to the Trustee acting on
behalf of or for the benefit of the Certificateholders.
"Certificate Insurer": Ambac Assurance Corporation, a Wisconsin stock
insurance corporation or its successors in interest.
"Certificate Insurer Default": The existence and continuance of any of
the following: (a) a failure by the Certificate Insurer to make a payment
required under the Policy in accordance with its terms; or (b) the Certificate
Insurer (i) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) makes a general assignment for the benefit of its
creditors, or (iii) has an order for relief entered against it under the
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is
final and nonappealable; or (c) a court of competent jurisdiction, the New York
insurance department or other competent regulatory authority enters a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Certificate Insurer or for all or any material portion
of its property or (ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of the Certificate Insurer (or the taking of
possession of all or any material portion of the property of the Certificate
Insurer).
"Certificate Margin": With respect to the Class A Certificates and each
Class of Subordinated Certificates and the Accrual Period for any Distribution
Date, the margin indicated as follows:
CERTIFICATE MARGIN (%) CERTIFICATE MARGIN (%) (ACCRUAL
(ACCRUAL PERIODS FOR DISTRIBUTION PERIODS FOR DISTRIBUTION DATES
DATES UP TO AND INCLUDING THE THAT OCCUR AFTER THE OPTIONAL
CLASS OPTIONAL TERMINATION DATE) TERMINATION DATE)
Class A-1 Certificates 0.075% 0.150%
Class A-2 Certificates 0.170% 0.340%
Class A-3 Certificates 0.250% 0.500%
Class M Certificates 2.500% 3.750%
Class B Certificates 2.000% 3.000%
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class C Certificates) immediately prior to any
Distribution Date, an amount equal to the initial Certificate Principal Balance
thereof (A) reduced by the sum of all amounts actually distributed in respect of
principal of such Class and (B) further reduced, in the case of a Subordinated
Certificate, by Realized Losses allocated thereto on all prior Distribution
Dates plus, with respect to the Subordinated Certificates, any increase in the
Certificate Principal Balance of such Certificate due to receipt of Subsequent
Recoveries pursuant to Section 4.01 (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to the Class C Certificates as of any date of
determination, an amount equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balances of the REMIC 1 Regular Interests over (B) the
then aggregate Certificate Principal Balances of the Class A Certificates and
the Subordinated Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificate": Any one of the Class A-1, Class A-2 or Class A-3
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇ or Exhibit A-3, respectively, and evidencing (i) a Regular Interest
in REMIC 2, and (ii) the right to receive the Net WAC Rate Carryover Amount.
"Class A Interest Rate Corridor": The corridor agreement between the
Trustee, on behalf of the Trust Fund, and the Corridor Provider, relating to the
Class A Certificates, a copy of which is attached as Exhibit G-1 to this
Agreement.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess, if any, of (x) the Certificate Principal Balance
of the Class A Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 91.40% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related
Remittance Period (after giving effect to scheduled payments of principal due
during the related Remittance Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) an amount, not less than zero, the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Remittance
Period (after giving effect to scheduled payments of principal due during the
related Remittance Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor Amount.
"Class A Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess of (i) the Certificate Principal Balance of the
Class A Certificates after giving effect to distributions of principal to be
made on such Distribution Date (without regard to any payments of principal
under the Policy) over (ii) the aggregate Stated Principal Balance of the
Mortgage Loans on the last day of the immediately preceding Remittance Period
(after giving effect to scheduled payments of principal due during the related
Remittance Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period).
"Class B Certificate": Any one of the Class B Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-5, and evidencing (i) a
Regular Interest in REMIC 2, and (ii) the right to receive the Net WAC Rate
Carryover Amount.
"Class B Principal Distribution Amount": With respect to any
Distribution Date, the excess, if any, of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M Certificates (after taking
into account the payment of the Class M Principal Distribution Amount on such
Distribution Date), and (iii) the Certificate Principal Balance of the Class B
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 96.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Remittance Period (after
giving effect to scheduled payments of principal due during the related
Remittance Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
an amount, not less than zero, the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Remittance Period (after giving
effect to scheduled payments of principal due during the related Remittance
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the
Overcollateralization Floor Amount.
"Class C Certificate": Any one of the Class C Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-6, and evidencing a
Regular Interest in REMIC 2.
"Class M Certificate": Any one of the Class M Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-4, and evidencing (i) a
Regular Interest in REMIC 2 and (ii) the right to receive the Net WAC Rate
Carryover Amount.
"Class M Principal Distribution Amount": With respect to any
Distribution Date, the excess, if any, of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 92.40% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Remittance Period (after giving
effect to scheduled payments of principal due during the related Remittance
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) an amount, not
less than zero, the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Remittance Period (after giving effect to
scheduled payments of principal due during the related Remittance Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor
Amount.
"Class R Certificate": Any one of the Class R Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-7 and evidencing the
ownership of the Class R-1 Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": March 17, 2006.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by
the Servicer pursuant to Section 3.10(a), which shall be entitled "Deutsche Bank
National Trust Company, as Trustee, in trust for registered Holders of IndyMac
Residential Mortgage-Backed Trust Certificates, Series 2006-L1," which must be
an Eligible Account.
"Compensating Interest": As defined in Section 3.26 hereof.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other addresses as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor,
the Servicer, the Certificate Insurer and the Seller.
"Corresponding Certificate": With respect to each REMIC 2 Regular
Interest, as follows:
REMIC 2 Regular Interest Class
REMIC 1 Regular Interest LT1A1 A-1
REMIC 1 Regular Interest LT1A2 A-2
REMIC 1 Regular Interest LT1A3 A-3
REMIC 1 Regular Interest LT1M M
REMIC 1 Regular Interest LT1B B
"Corridor Agreements": The Class A Interest Rate Corridor and the
Subordinate Interest Rate Corridor.
"Corridor Provider": Bear ▇▇▇▇▇▇▇ Financial Products, Inc..
"Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the aggregate
Certificate Principal Balance of the Subordinated Certificates and the Class C
Certificates, and the denominator of which is (y) the aggregate Stated Principal
Balance of the Mortgage Loans, calculated prior to taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Holders of the Certificates then entitled
to distributions of principal on such Distribution Date.
"Custodian": Deutsche Bank National Trust Company, as custodian of the
Mortgage Files, and any successor thereto.
"Cut-off Date": With respect to each Mortgage Loan, March 1, 2006. With
respect to all Qualified Substitute Mortgage Loans, their respective dates of
substitution. References herein to the "Cut-off Date," when used with respect to
more than one Mortgage Loan, shall be to the respective Cut-off Dates for such
Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficiency Amount": With respect to any Distribution Date and the
Insured Certificates, an amount, if any, equal to the sum of: (i) the aggregate
amount by which the Accrued Certificate Interest allocable to the Insured
Certificates for such Distribution Date exceeds the Interest Remittance Amount
available on such Distribution Date to distribute to the Insured Certificates in
accordance with Section 4.01(a)(ii); and (ii) (a) with respect to any
Distribution Date that is not the Final Distribution Date, the Class A
Overcollateralization Deficiency Amount, if any, for such Distribution Date and
(b) on the Final Distribution Date, the Certificate Principal Balance of the
Insured Certificates (after giving effect to all distributions of Available
Funds).
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding Stated Principal Balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Stated Principal Balance of Mortgage
Loans 60 days Delinquent or more or that are secured by Mortgaged Properties
that have become REO Properties by (y) the aggregate Stated Principal Balance of
the Mortgage Loans, in each case, as of the last day of the previous calendar
month.
"Delinquent": A Mortgage Loan is "Delinquent" if any Monthly Payment
due on a Due Date is not made by the Close of Business on the next scheduled Due
Date for such Mortgage Loan. A Mortgage Loan is "30 days Delinquent" if such
Monthly Payment has not been received by the Close of Business on the
corresponding day of the month immediately succeeding the month in which such
Monthly Payment was due. The determination of whether a Mortgage Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in a like manner.
"Depositor": IndyMac ABS, Inc., a Delaware corporation, or any
successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(5) of the Uniform Commercial Code of
the State of New York.
"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": With respect to any Distribution Date, the 18th
day of the calendar month in which such Distribution Date occurs, or, if such
18th day is not a Business Day, the Business Day immediately succeeding such
18th day, except that if the succeeding Business Day is less than two Business
Days before the related Distribution Date, then the Determination Date shall be
the Business Day preceding the 18th day of the month.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the REMIC other than through an
Independent Contractor; provided, however, that the Servicer on behalf of the
Trustee shall not be considered to Directly Operate an REO Property solely
because the Servicer on behalf of the Trustee establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code,
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code or (v) any other Person so designated by the Depositor based upon an
Opinion of Counsel provided by nationally recognized counsel to the Depositor
that the holding of an ownership interest in a Class R Certificate by such
Person may cause the Trust Fund or any Person having an ownership interest in
any Class of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in the Class R Certificate to such Person.
A corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof, if all of its activities are
subject to tax and, a majority of its board of directors is not selected by a
governmental unit. The term "United States", "state" and "international
organizations" shall have the meanings set forth in Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Deutsche Bank National Trust Company, as Trustee, in
trust for registered Holders of IndyMac Residential Mortgage-Backed Trust
Certificates, Series 2006-L1," and which must be an Eligible Account.
"Distribution Date": The 25th day of each month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in April 2006.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due (or, in the case of
any Mortgage Loan under the terms of which the Monthly Payment for such Mortgage
Loan was due on a day other than the first day of the calendar month in which
such Distribution Date occurs, the day during the related Remittance Period on
which such Monthly Payment was due) exclusive of any days of grace.
"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 short-term unsecured debt obligations of such holding company) are
rated "P-1" by ▇▇▇▇▇'▇ and "A-1" by S&P (or comparable ratings if ▇▇▇▇▇'▇ and
S&P are not the Rating Agencies) at the time any amounts are held on deposit
therein, (ii) with the prior written consent of the Certificate Insurer, an
account or accounts the deposits in which are fully insured by the FDIC (to the
limits established by such corporation), the uninsured deposits in which account
are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders will have a
claim with respect to the funds in such account or a perfected first priority
security interest against such collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, (iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution, national
banking association or trust company acting in its fiduciary capacity or (iv)
with the prior written consent of the Certificate Insurer, an account otherwise
acceptable to each Rating Agency without reduction or withdrawal of their then
current ratings of any Class of Certificates (without regard to the Policy) as
evidenced by a letter from each Rating Agency to the Trustee. Eligible Accounts
may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Overcollateralization Amount": With respect to any Distribution
Date, the excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date.
"Excess Reserve Fund Account": The reserve fund designated, established
and maintained pursuant to Section 3.27.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Adjustable-Rate Mortgage Loan, the then applicable Maximum Mortgage Rate thereon
minus the Expense Fee Rate. With respect to any Fixed-Rate Mortgage Loan, the
Expense Adjusted Mortgage Rate thereon.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage Loan or
REO Property, the then applicable Mortgage Rate thereon minus the Expense Fee
Rate.
"Expense Amount": For any Distribution Date, the sum of (i) product of
the Expense Fee Rate and the aggregate Stated Principal Balance of the Mortgage
Loans as of the Due Date occurring in the prior calendar month and (ii) the
Premium payable to the Certificate Insurer for that Distribution Date.
"Expense Fee Rate": As to each Mortgage Loan, the sum of the Servicing
Fee Rate and the Trustee Fee Rate.
"Extra Principal Distribution Amount": With respect to any Distribution
Date through the Distribution Date in June 2006, zero. With respect to any
Distribution Date on or after the Distribution Date in July 2006, the lesser of
(x) the Total Monthly Excess Spread for that Distribution Date and (y) the
Overcollateralization Deficiency Amount for that Distribution Date.
"▇▇▇▇▇▇ ▇▇▇": ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Final Distribution Date": The Distribution Date in April 2011.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller or the Servicer pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 10.01), a determination made by the Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
"Fixed-Rate Mortgage Loan": A Mortgage Loan whose Mortgage Rate is
fixed for the life of such Mortgage Loan at the fixed Mortgage Rate set forth in
the related Mortgage Note.
"Formula Rate": With respect to the Class A Certificates and
Subordinated Certificates and any Distribution Date, a per annum rate equal to
the lesser of (i) LIBOR plus the related Certificate Margin and (ii) the Maximum
Cap Rate.
"▇▇▇▇▇▇▇ Mac": ▇▇▇▇▇▇▇ Mac or any successor thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added on each
Adjustment Date to the Index, in accordance with the terms of the related
Mortgage Note, used to determine the Mortgage Rate for such Mortgage Loan.
"Highest Priority": As of any date of determination, the Class of
Subordinated Certificates then outstanding with a Certificate Principal Balance
greater than zero, with the highest priority for payments pursuant to Section
4.01, in the following order of decreasing priority: Class M Certificates and
Class B Certificates.
"Holder": A Certificateholder.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Servicer and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor or the Servicer or any
Affiliate thereof, and (c) is not connected with the Depositor or the Servicer
or any Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions; provided,
however, that a Person shall not fail to be Independent of the Depositor or the
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor or the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to any of the
REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if
such REMIC were a real estate investment trust (except that the ownership tests
set forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35% or more of any Class of Certificates), so long as
each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer), if the Trustee and the
Certificate Insurer have received an Opinion of Counsel to the effect that the
taking of any action in respect of any REO Property by such Person, subject to
any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor, will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Deposit": $ 4,387.24.
"Insurance Account": The account or accounts created and maintained
pursuant to Section 4.06, which shall be entitled "Deutsche Bank National Trust
Company, as Trustee, in trust for the registered holders of IndyMac Residential
Mortgage-Backed Trust Certificates, Series 2006-L1." The Insurance Account must
be an Eligible Account.
"Insurance Agreement": The Insurance and Indemnity Agreement, dated as
of March 17, 2006, among the Certificate Insurer, the Trustee, the Servicer, the
Seller and the Depositor.
"Insurance Proceeds": Proceeds of any title policy or other insurance
policy covering a Mortgage Loan, to the extent such proceeds are not to be
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Insured Amount": With respect to the Insured Certificates and (i) a
Distribution Date, any Deficiency Amount for such Distribution Date and (ii) any
date, any Preference Amount to be paid pursuant to the terms of the Policy on
such date.
"Insured Certificates": The Class A Certificates.
"Interest Determination Date": With respect to the Class A Certificates
and Subordinated Certificates and each Accrual Period, the second LIBOR Business
Day preceding the commencement of such Accrual Period.
"Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Funds for such Distribution Date attributable to
interest received or advanced on the Mortgage Loans or to amounts in respect of
Prepayment Interest Shortfalls paid by the Servicer.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Remittance Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Subsequent Recoveries, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent on a contractual basis for such Remittance Period and not
previously recovered.
"Late Payment Rate": With respect to the Policy, the lesser of (a) the
greater of (i) the per annum rate of interest published in the Wall Street
Journal from time to time as the "prime rate" plus 2%, and (ii) the then
applicable highest rate of interest on the Insured Certificates and (b) the
maximum rate permissible under applicable usury or similar laws limiting
interest rates, as determined by the Certificate Insurer. The Late Payment Rate
shall be computed on the basis of the actual number of days elapsed over a year
of 360 days.
"LIBOR": With respect to each Accrual Period for the Class A
Certificates and the Subordinated Certificates, the rate determined by the
Trustee on the related Interest Determination Date on the basis of the London
interbank offered rate for one-month United States dollar deposits, as such rate
appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date. If such rate does not appear on Telerate Page 3750,
LIBOR on such Interest Determination Date will be determined on the basis of the
offered rates of the Reference Banks for one-month United States dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date.
The Trustee will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. On such Interest Determination Date,
LIBOR for the related Accrual Period will be established by the Trustee as
follows:
(i) If on such Interest Determination Date two or
more Reference Banks provide such offered quotations, LIBOR for the
related Accrual Period shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple
of 1/16 of 1%); and
(ii) If on such Interest Determination Date fewer
than two Reference Banks provide such offered quotations, LIBOR for the
related Accrual Period shall be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Servicer and approved
by the Certificate Insurer, at approximately 11:00 A.M. (New York City
time) on that day for loans in United States dollars to leading
European banks.
"LIBOR Business Day": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures and the Servicing Standard specified herein, as of the end
of the related Prepayment Period, that all Liquidation Proceeds which it expects
to recover with respect to the liquidation of the Mortgage Loan or disposition
of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or purchased
pursuant to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with: (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation; (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise; or (iii) the repurchase, substitution or sale of
a Mortgage Loan or an REO Property pursuant to or as contemplated by Section
2.03, Section 3.16(c), Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Stated
Principal Balance of the Mortgage Loan and the denominator of which is the Value
of the related Mortgaged Property.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1M, REMIC 1 Regular Interest LT1B and REMIC 1 Regular
Interest LT1ZZ, with the rate on each such REMIC 1 Regular Interest (other than
REMIC 1 Regular Interest LT1ZZ) subject to a cap equal to the lesser of (i)
LIBOR plus the related Certificate Margin and (ii) the Net WAC Rate for the
purpose of this calculation; and with the rate on REMIC 1 Regular Interest LT1ZZ
subject to a cap of zero for the purpose of this calculation; provided, however,
that for this purpose, calculations of the Uncertificated REMIC 1 Pass-Through
Rate and the related caps with respect to REMIC 1 Regular Interest LT1A1, REMIC
1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular
Interest LT1M and REMIC 1 Regular Interest LT1B shall be multiplied by a
fraction, the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.
"Maximum Cap Rate": For any Distribution Date, a per annum rate
(subject to adjustment based on the actual number of days elapsed in the related
Accrual Period) equal to the weighted average (weighted based on their Stated
Principal Balances as of the first day of the related Remittance Period,
adjusted to reflect unscheduled principal payments made thereafter that were
included in the Principal Distribution Amount on the immediately preceding
Distribution Date) of the Expense Adjusted Maximum Mortgage Rates of the
Mortgage Loans minus the Premium Rate on such Distribution Date (multiplied by a
fraction the numerator of which is the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of the first day of the related Remittance Period, adjusted to reflect
unscheduled principal payments made thereafter that were included in the
Principal Distribution Amount on the immediately preceding Distribution Date).
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1M and REMIC 1 Regular Interest LT1B, with the rate on each such REMIC 1
Regular Interest subject to a cap equal to the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Net WAC Rate for the purpose of this
calculation; provided, however, that for this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with respect to
REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1M and REMIC 1 Regular Interest LT1B
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Accrual Period and the denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any reduction in such payment due to
any Deficient Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest collectible from
the related Mortgagor pursuant to the Relief Act; (b) without giving effect to
any extension granted or agreed to by the Servicer pursuant to Section 3.01; and
(c) on the assumption that all other amounts, if any, due under such Mortgage
Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged 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 required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, regarding the transfer of the Mortgage Loans by the Seller to
or at the direction of the Depositor, substantially in the form attached hereto
as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in the Trust Fund on such date, attached hereto as Exhibit D, as
initially prepared by the Seller pursuant to the Mortgage Loan Purchase
Agreement. The Mortgage Loan Schedule shall set forth the following information
with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) [reserved];
(3) the state and zip code of the Mortgaged Property;
(4) the original months to maturity;
(5) the stated remaining months to maturity from the Cut-off Date
based on the original amortization schedule;
(6) the Loan-to-Value Ratio at origination;
(7) the Mortgage Rate in effect immediately following the Cut-off
Date;
(8) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(9) the stated maturity date;
(10) the amount of the Monthly Payment at origination;
(11) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
(12) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(13) the original principal amount of the Mortgage Loan;
(14) the Stated Principal Balance of the Mortgage Loan as of the
Close of Business on the Cut-off Date;
(15) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(16) the Mortgage Rate at origination;
(17) a code indicating the documentation program (i.e.,
full/alternate documentation, reduced documentation or no
ratio);
(18) the Value of the Mortgaged Property;
(19) the sale price of the Mortgaged Property, if applicable;
(20) the actual unpaid Stated Principal Balance of the Mortgage
Loan as of the Cut-off Date;
(21) a code indicating the lien priority for the Mortgage Loan; and
(22) in the case of each Adjustable-Rate Mortgage Loan, the Minimum
Mortgage Rate, the Maximum Mortgage Rate, the Gross Margin,
the next Adjustment Date and the Periodic Rate Cap.
The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current aggregate Stated Principal Balance
of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Servicer in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
"Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate in the case of each
Fixed-Rate Mortgage Loan is the fixed rate set forth in the related Mortgage
Note, and which rate in the case of each Adjustable-Rate Mortgage Loan (A) as of
any date of determination until the first Adjustment Date following the Cut-off
Date, shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage
Rate in effect immediately following the Cut-off Date, and (B) as of any date of
determination thereafter, shall be the rate as adjusted on the most recent
Adjustment Date, to equal the sum (rounded as provided in the Mortgage Note and
as specified by the Servicer) of the Index, determined as set forth in the
related Mortgage Note, plus the related Gross Margin, subject to the limitations
set forth in the related Mortgage Note. With respect to each Mortgage Loan that
is secured by a Mortgaged Property that becomes an REO Property, as of any date
of determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgaged Property became an REO
Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property.
"Mortgagor": The obligor on a Mortgage Note.
"Net Interest Shortfalls": As defined in Section 1.02.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of the related Mortgaged Property (including any
REO Property), the related Liquidation Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate and the Trustee Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate": With respect to any Distribution Date and the Class A
Certificates and the Subordinated Certificates, a per annum rate (subject to
adjustment based on the actual number of days elapsed in the related Accrual
Period) equal to weighted average (weighted based on the Stated Principal
Balances of the Mortgage Loans as of the first day of the related Remittance
Period, adjusted to reflect unscheduled principal payments made thereafter that
were included in the Principal Distribution Amount on the immediately preceding
Distribution Date) of the Net Mortgage Rates on the Mortgage Loans minus the
Premium Rate on such Distribution Date (multiplied by a fraction the numerator
of which is the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the related Remittance Period, adjusted to reflect unscheduled
principal payments made thereafter that were included in the Principal
Distribution Amount on the immediately preceding Distribution Date). For federal
income tax purposes, for any Distribution Date with respect to the REMIC 2
Regular Interests the ownership of which is represented by the Class A, Class M
or Class B Certificates, the Net WAC Rate shall be expressed as the weighted
average (adjusted for the actual number of days elapsed in the related Interest
Accrual Period) of the Uncertificated REMIC 1 Pass-Through Rates on the REMIC 1
Regular Interests, weighted on the basis of the Uncertificated Balance of each
such REMIC 1 Regular Interest.
"Net WAC Rate Carryover Amount": With respect to the Class A, Class M
and Class B Certificates and any Distribution Date, the sum of (A) the positive
excess, if any, of (i) the amount of interest that would have accrued on such
Class of Certificates for such Distribution Date if the Pass-Through Rate for
such Class of Certificates for such Distribution Date were calculated at the
related Formula Rate over (ii) the amount of interest accrued on such Class of
Certificates at the Net WAC Rate for such Distribution Date and (B) the related
Net WAC Rate Carryover Amount for the previous Distribution Date not previously
paid, together with interest thereon for the most recently ended related Accrual
Period at a rate equal to the related Formula Rate for such Class of
Certificates for such Distribution Date.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance previously made in respect of a
Mortgage Loan or REO Property that, in the good faith business judgment of the
Servicer, will not be ultimately recoverable from Late Collections, Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": Immediately prior to any Distribution Date, with
respect to REMIC 2 Regular Interest C, the aggregate Uncertificated Principal
Balances of the REMIC 1 Regular Interests.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer, acceptable
to the Trustee and the Certificate Insurer, except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The earliest Distribution Date on which
the Terminator would be permitted to exercise its option to terminate the Trust
pursuant to Section 10.01.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (assuming
that 100% of the Principal Remittance Amount is applied as a principal
distribution on such Distribution Date).
"Overcollateralization Floor Amount": With respect to any Distribution
Date, an amount equal to 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Overcollateralization Target Amount": With respect to any Distribution
Date (i) prior to July 2006, 0%, (ii) beginning in July 2006 and prior to the
Stepdown Date, 2.00% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date, (iii) on or after the Stepdown Date provided a
Trigger Event is not in effect, the greater of (x) 4.00% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related
Remittance Period (after giving effect to scheduled payments of principal due
during the related Remittance Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (y) the Overcollateralization Floor Amount, and (iv) on or after the
Stepdown Date and if a Trigger Event is in effect, the Overcollateralization
Target Amount for the immediately preceding Distribution Date. Notwithstanding
the foregoing, on and after any Distribution Date following the reduction of the
aggregate Certificate Principal Balance of the Class A, Class M and Class B
Certificates to zero, the Overcollateralization Target Amount shall be zero.
"Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the aggregate Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Remittance Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) exceeds (ii) the aggregate Certificate Principal Balance of the Class A
Certificates and the Subordinated Certificates as of such Distribution Date
after giving effect to distributions to be made on such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or security
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, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates and each
Class of the Subordinated Certificates and any Distribution Date, the lesser of
(x) the related Formula Rate for such Distribution Date and (y) the Net WAC Rate
for such Distribution Date. With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated pursuant
to clauses (a) through (g) below, and the denominator of which is the aggregate
of the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA,
REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1M, REMIC 1 Regular Interest LT1B and
REMIC 1 Regular Interest LT1ZZ. For purposes of calculating the Pass-Through
Rate for the Class C Certificates, the numerator is equal to the sum of the
following components:
(a) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AA minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1AA;
(b) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1A1;
(c) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1A2;
(d) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A3 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1A3;
(e) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M;
(f) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B; and
(g) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1ZZ minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, expressed as a percentage, the numerator of
which is the initial Certificate Principal Balance or initial Notional Amount
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or aggregate initial Notional Amount of
the related Class. With respect to a Class R Certificate, the portion of the
Class evidenced thereby, expressed as a percentage, as stated on the face of
such Certificate; provided, however, that the sum of all such percentages for
such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the Trustee or any
of their respective Affiliates or for which an Affiliate of the Trustee serves
as an advisor:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) (A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities; and (B) any other demand or time deposit or deposit which
is fully insured by the FDIC;
(iii) repurchase obligations with a term not to
exceed 30 days with respect to any security described in clause (i)
above and entered into with a depository institution or trust company
(acting as principal) rated "A2" or higher by Moody's and "A" by S&P;
provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market prices plus accrued
interest, (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Trustee in exchange for such
collateral and (C) be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) with the prior written consent of the
Certificate Insurer, securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by a
Rating Agency in its highest long-term unsecured rating category at the
time of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than 30
days after the date of acquisition thereof) that is rated by S&P (and
if rated by any other Rating Agency, also by such other Rating Agency)
in its highest short-term unsecured debt rating available at the time
of such investment;
(vi) units of money market funds that have been rated
"Aaa" by Moody's and "AAAm" by S&P, including any such funds that may
be managed or co-advised by the Trustee or an Affiliate of the Trustee;
and
(vii) if previously confirmed in writing to the
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies and the Certificate Insurer in writing as a permitted
investment of funds backing securities having ratings of "Aaa" by
Moody's and "AAA" by S&P;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Furthermore, any Permitted Investment shall be relatively risk free and no
options or voting rights shall be exercised with respect to any Permitted
Investment and no Permitted Investment may be sold or disposed of before its
maturity.
"Permitted Transferee": Any transferee of a Class R Certificate, other
than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, ▇▇▇▇▇
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Policy": The Certificate Guaranty Insurance Policy No. AB0977BE issued
by the Certificate Insurer in respect of the Insured Certificates, a copy of
which is attached hereto as Exhibit B.
"Pool Balance": As of any date of determination, the aggregate Stated
Principal Balance of the Mortgage Loans as of such date.
"Premium": The premium payable to the Certificate Insurer under the
Policy.
"Premium Rate": A rate, expressed as a per annum rate, at which the
Premium is payable to the Certificate Insurer under the Policy.
"Prepayment Assumption": A prepayment rate for the Mortgage Loans of
30% of the constant prepayment rate assumption (which represents an assumed
annualized rate of prepayment relative to the then-outstanding balance of a pool
of new mortgage loans).
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
"Prepayment Interest Excess": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day and the Determination Date of the calendar month in which such Distribution
Date occurs, an amount equal to interest at the applicable Net Mortgage Rate on
the amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the date on which such prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs, an amount equal to
one month's interest on the Mortgage Loan less any interest payments made by the
Mortgagor. The obligations of the Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the period
commencing on the 16th day in the calendar month preceding the calendar month in
which such Distribution Date occurs (or, in the case of the first Distribution
Date, commencing on the day after the Cut-Off Date) and ending on the 15th day
of the calendar month in which such Distribution Date occurs.
"Principal Distribution Amount": With respect to any Distribution Date,
an amount equal to the sum of (a) the excess of the Principal Remittance Amount
over the Excess Overcollateralization Amount, if any, for such Distribution Date
plus (b) the Extra Principal Distribution Amount.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing the full amount
of scheduled interest due on any Due Date in any month or months subsequent to
the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Servicer that was due during the related Remittance
Period, (ii) the principal portion of all partial and full Principal Prepayments
of the Mortgage Loans applied by the Servicer during the related Prepayment
Period, (iii) the principal portion of all related Net Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds received during such Prepayment
Period, (iv) that portion of the Purchase Price, representing principal of any
purchased or repurchased Mortgage Loan, deposited to the Collection Account
during such Prepayment Period, (v) the principal portion of any related
Substitution Adjustments deposited in the Collection Account during such
Prepayment Period and (vi) on the Distribution Date on which the Trust Fund is
to be terminated pursuant to Section 10.01, that portion of the Termination
Price, in respect of principal.
"Private Certificate": Any of the Class B, Class C and Class R
Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 10.01, and as confirmed by an Officers' Certificate from the Servicer to
the Trustee, an amount equal to the sum of (i) 100% of the Stated Principal
Balance thereof as of the date of purchase (or such other price as provided in
Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on
such Stated Principal Balance at the applicable Mortgage Rate in effect from
time to time from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an advance by the Servicer, which payment or advance
had as of the date of purchase been distributed pursuant to Section 4.01,
through the end of the calendar month in which the purchase is to be effected,
and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Servicer through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all Insurance Proceeds, Liquidation Proceeds and Advances that
as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 4.03, (iii) any unreimbursed Servicing Advances and
Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account in
respect of such Mortgage Loan or REO Property pursuant to Section 3.23, and (v)
in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Servicer, the
Certificate Insurer or the Trustee in respect of the breach or defect giving
rise to the purchase obligation, including any costs and damages incurred by the
Trust Fund in connection with any violation by such loan of any predatory or
abusive lending law.
"Qualified Insurer": Any insurance company acceptable to ▇▇▇▇▇▇ ▇▇▇
and/or ▇▇▇▇▇▇▇ Mac.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding Stated Principal Balance (or in the case of a substitution of
more than one mortgage loan for a Deleted Mortgage Loan, an outstanding
aggregate Stated Principal Balance), after application of all scheduled payments
of principal and interest due during or prior to the month of substitution, not
in excess of, and not more than 5% less than, the outstanding Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) if the Deleted Mortgage Loan is an Adjustable-Rate
Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage
Rate on the Deleted Mortgage Loan, (iv) if the Deleted Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the Deleted Mortgage
Loan is an Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or
greater than the Gross Margin of the Deleted Mortgage Loan, (vi) if the Deleted
Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a next Adjustment Date
not more than two months later than the next Adjustment Date on the Deleted
Mortgage Loan, (vii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (viii) be
current as of the date of substitution, (ix) have a Loan-to-Value Ratio as of
the date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (x) [reserved], (xi) have the same Due
Date as that of the Deleted Mortgage Loan and (xii) conform to each
representation and warranty set forth in Section 3.01 of the Mortgage Loan
Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate Stated Principal Balance, the Mortgage Rates described in
clauses (ii) through (vi) hereof shall be satisfied for each such mortgage loan,
the risk gradings described in clause (x) hereof shall be satisfied as to each
such mortgage loan, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining term to maturity (provided
that no such mortgage loan may have a remaining term to maturity longer than the
Deleted Mortgage Loan), the Loan-to-Value Ratios described in clause (ix) hereof
shall be satisfied as to each such mortgage loan and, except to the extent
otherwise provided in this sentence, the representations and warranties
described in clause (xii) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
"Rating Agency": ▇▇▇▇▇'▇ and S&P or their successors, in its capacity
as rating agency that has assigned ratings to the Class A Certificates and the
Subordinated Certificates. If such agency or its successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating agencies, or other comparable Persons, designated by the Depositor (and
if rating the Insured Certificates, consented to in writing by the Certificate
Insurer), notice of which designation shall be given to the Trustee and
Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Stated Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan. If the Servicer receives Subsequent Recoveries with respect
to any Mortgage Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be reduced to the extent such recoveries are applied to
principal distributions on any Distribution Date.
"Record Date": With respect to each Distribution Date and the Class A
Certificates and the Subordinated Certificates (other than any such Certificates
that are Definitive Certificates), the Business Day immediately preceding such
Distribution Date. With respect to each Distribution Date and the Class C
Certificates, the Class R Certificates and any Definitive Certificates, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, the
Closing Date).
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor, the Seller or the Servicer or any affiliate
thereof and (iii) which have been designated as such by the Depositor; provided,
however, that if fewer than two of such banks provide a LIBOR rate, then the
term "Reference Banks" shall refer to any leading banks selected by the
Depositor which are engaged in transactions in United States dollar deposits in
the international Eurocurrency market.
"Refinance Loan": Any Mortgage Loan the proceeds of which are used to
refinance an existing Mortgage Loan.
"Regular Certificates": Any of the Class A Certificates, the
Subordinated Certificates and the Class C Certificates.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be published by the Commission or its staff
from time to time.
"Reimbursement Amount": As to any Distribution Date, the sum of (x) (i)
all Insured Payments paid by the Certificate Insurer, but for which the
Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.01, plus (ii) interest accrued on such Insured Payments
not previously repaid, calculated at the Late Payment Rate from the date the
Trustee received the related Insured Payments or the date such Insured Payments
were made, and (y) without duplication (i) any amounts then due and owing to the
Certificate Insurer under the Insurance Agreement, as certified to the Trustee
by the Certificate Insurer plus (ii) interest on such amounts at the Late
Payment Rate.
"Relief Act": The Servicemembers Civil Relief Act or any similar state
or local laws.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Remittance
Period or (without duplication) any earlier Remittance Period as a result of the
application of the Relief Act or any similar state laws, the amount by which (i)
interest collectible on such Mortgage Loan during each such Remittance Period is
less than (ii) one month's interest on the Stated Principal Balance of such
Mortgage Loan at the Mortgage Rate for such Mortgage Loan before giving effect
to the application of the Relief Act or any similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made, consisting of: (i) such Mortgage Loans
and Prepayment Charges as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof; (ii) any REO Property, together with
all collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies, required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under this Agreement (including any security interest created
thereby) to the extent conveyed pursuant to Section 2.01; and (v) the Collection
Account, the Distribution Account and such assets that are deposited therein
from time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, REMIC I specifically excludes the Excess Reserve Fund Account, the
Corridor Agreements, all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date and all
Prepayment Charges payable in connection with Principal Prepayments made before
the Cut-off Date.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M, REMIC 1
Regular Interest LT1B and REMIC 1 Regular Interest LT1ZZ, in each case as of
such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1M and REMIC 1 Regular Interest LT1B, and the denominator of
which is the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1M, REMIC 1 Regular Interest LT1B and REMIC 1
Regular Interest LT1ZZ.
"REMIC 1 Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. Each REMIC 1 Regular Interest shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
following is a list of each of the REMIC 1 Regular Interests: REMIC 1 Regular
Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2,
REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M, REMIC 1 Regular
Interest LT1B and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AA shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1A1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A1 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1A2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A2 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1A3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A3 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1M": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1ZZ shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Target Overcollateralized Amount": 1% of the
Overcollateralization Target Amount.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificate (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Remittance Report": A report prepared by the Servicer and delivered to
the Trustee pursuant to Section 4.03.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of
such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/16 of 1%) of the one-month United States dollar lending rates which banks in
the City of New York selected by the Depositor are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (ii) in the event that the Trustee can determine
no such arithmetic mean, in the case of any Interest Determination Date after
the initial Interest Determination Date, the lowest one-month United States
dollar lending rate which such New York banks selected by the Depositor are
quoting on such Interest Determination Date to leading European banks.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any
director, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and, with respect to a particular matter, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor in interest.
"Seller": IndyMac Bank, F.S.B. in its capacity as seller under the
Mortgage Loan Purchase Agreement.
"Servicer": IndyMac Bank, F.S.B., a federal savings bank, or any
successor Servicer appointed as herein provided, in its capacity as Servicer
hereunder.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
"Servicer Remittance Date": With respect to any Distribution Date, the
Business Day prior to such Distribution Date.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the maintenance and
liquidation of the REO Property and (iv) compliance with the obligations under
Sections 3.01, 3.09, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. A
portion of such Servicing Fee may be retained by any Sub-Servicer as its
servicing compensation.
"Servicing Fee Rate": 0.25% per annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee, the Certificate Insurer and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Servicing Standard": Shall mean the standards set forth in Section
3.01.
"Servicing Transfer Costs": Shall mean all reasonable costs and
expenses (including without limitation, legal fees and expenses) incurred by the
Trustee in connection with the transfer of servicing from a predecessor
Servicer, including, without limitation, any reasonable costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee or another successor Servicer to service the
Mortgage Loans properly and effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as
of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the outstanding Stated Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Servicer and distributed pursuant to Section 4.01 on or
before such date of determination, (ii) all Principal Prepayments received after
the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Remittance
Period for the most recent Distribution Date coinciding with or preceding such
date of determination; and (b) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The later to occur of (a) the Distribution Date in
April 2009 and (b) the first Distribution Date on which the Credit Enhancement
Percentage for the Class A Certificates (calculated for this purpose only after
taking into account distributions of principal on the Mortgage Loans on the last
day of the related Remittance Period but prior to any application of the
Principal Distribution Amount to the Certificates) is greater than or equal to
8.60%.
"Subordinated Certificate": Any Class M Certificate or Class B
Certificate.
"Subordinate Interest Rate Corridor": The corridor agreement between
the Trustee, on behalf of the Trust Fund, and the Corridor Provider, relating to
the Subordinate Certificates, a copy of which is attached as Exhibit G-2 to this
Agreement.
"Subsequent Recoveries": As of any Distribution Date, amounts received
by the Servicer (net of any related expenses permitted to be reimbursed pursuant
to Section 3.05) specifically related to a Mortgage Loan that was the subject of
a liquidation or an REO Disposition prior to the related Prepayment Period that
resulted in a Realized Loss.
"Sub-Servicer": Any Person with which the Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer
and a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01 hereof.
"Total Monthly Excess Spread": With respect to any Distribution Date,
the sum of (i) any Excess Overcollateralization Amount for such Distribution
Date and (ii) the excess, if any, of (x) the Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the amount
required to be distributed pursuant to Section 4.01(a) and (B) the Principal
Remittance Amount for such Distribution Date.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": A Trigger Event is in effect if:
(i) with respect to any Distribution Date occurring
from and including April 2009 to, but not including, April 2011, the
Mortgage Loans 60 or more days Delinquent, in bankruptcy, in
foreclosure or that are secured by Mortgaged Properties that have
become REO Properties exceed 3.00% of the aggregate Stated Principal
Balance of the Mortgage Loans on such Distribution Date;
(ii) with respect to any Distribution Date occurring
on or after April 2011, the Mortgage Loans 60 or more days Delinquent
or that are secured by Mortgaged Properties that have become REO
Properties exceed 4.50% of the aggregate Stated Principal Balance of
the Mortgage Loans on such Distribution Date; or
(iii) for any Distribution Date on or after the
Stepdown Date, the cumulative amount of Realized Losses incurred on the
Mortgage Loans from the Cut-Off Date through the last day of the
related Remittance Period (reduced by the aggregate amount of
Subsequent Recoveries received from the Cut-Off Date through the last
day of the related Remittance Period) exceeds (a) 1.00% of the
aggregate Stated Principal Balance of the Mortgage Loans with respect
to the Distribution Date in April 2008, plus an additional 1/12th of
0.75% of the aggregate Stated Principal Balance of the Mortgage Loans
for each Distribution Date occurring in each month thereafter to and
including the Distribution Date in March 2009 (b) 1.75% of the
aggregate Stated Principal Balance of the Mortgage Loans with respect
to the Distribution Date in April 2009, plus an additional 1/12th of
0.75% of the aggregate Stated Principal Balance of the Mortgage Loans
for each Distribution Date occurring in each month thereafter to and
including the Distribution Date in March 2010 (c) 2.50% of the
aggregate Stated Principal Balance of the Mortgage Loans with respect
to the Distribution Date occurring in April 2010, plus an additional
1/12th of 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for each Distribution Date occurring in each month
thereafter to and including the Distribution Date in March 2011 and (d)
3.00% of the aggregate Stated Principal Balance of the Mortgage Loans
with respect to the Distribution Date occurring in April 2011 and each
month thereafter.
"Trust": The trust created hereunder.
"Trustee": Deutsche Bank National Trust Company, a national banking
association, or its successor in interest, or any successor Trustee appointed as
herein provided.
"Trustee Fee": The amount payable to the Trustee on each Distribution
Date pursuant to Section 4.01(a) and Section 8.05 as compensation for all
services rendered by it in the execution of the Trust and in the exercise and
performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one month's interest at the Trustee Fee Rate on the aggregate
Stated Principal Balance of the Mortgage Loans and any REO Properties as of the
first day of the calendar month prior to the month of such Distribution Date
(or, in the case of the initial Distribution Date, as of the Cut-off Date).
"Trustee Fee Rate": 0.01% per annum.
"Trustee Float Period": With respect to each Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
"Trust Fund": All of the assets of the trust created hereunder
consisting of REMIC 1, REMIC 2, the Excess Reserve Fund Account, the Insurance
Account and the Corridor Agreements.
"Trust REMIC": REMIC 1 or REMIC 2.
"Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated REMIC Pass-Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated
to such REMIC Regular Interest as set forth in Section 1.02).
"Uncertificated Principal Balance": With respect to each REMIC Regular
Interest, the amount of such REMIC Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.04 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.05, and the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ shall be
increased by interest deferrals as provided in Section 4.05. The Uncertificated
Principal Balance of each REMIC Regular Interest that has an Uncertificated
Principal Balance shall never be less than zero.
"Uncertificated REMIC Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to each REMIC
1 Regular Interest and any Distribution Date, a per annum rate equal to the
weighted average (weighted based on the Stated Principal Balances of the
Mortgage Loans as of the first day of the related Remittance Period, adjusted to
reflect unscheduled principal payments made thereafter that were included in the
Principal Distribution Amount on the immediately preceding Distribution Date) of
the Net Mortgage Rates on the Mortgage Loans minus the Premium Rate on such
Distribution Date (multiplied by a fraction the numerator of which is the
aggregate Certificate Principal Balance of the Class A Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Remittance Period, adjusted to reflect unscheduled principal payments
made thereafter that were included in the Principal Distribution Amount on the
immediately preceding Distribution Date).
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
insurance policies required to be maintained pursuant to Section 3.14.
"United States Person": A citizen or resident of the United States, a
corporation, partnership (or other entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations); provided, that for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless (a) all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons or (b) the partnership treats
all income as effectively connected income within the meaning of Section 864 of
the Code, or an estate the income of which from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions. The term "U.S. Person" refers
to a United States Person.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and any Class of Subordinated Certificates and (i) the first
Distribution Date, zero, and (ii) any Distribution Date after the first
Distribution Date, the amount, if any, by which (a) the sum of (1) the Accrued
Certificate Interest for such Class for the immediately preceding Distribution
Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such
Class for such preceding Distribution Date exceeds (b) the aggregate amount
distributed to such Class in respect of interest pursuant to clause (a) of this
definition on such preceding Distribution Date, plus interest on the amount of
interest due but not paid on the Certificates of such Class on such preceding
Distribution Date, to the extent permitted by law, at the Pass-Through Rate for
such Class for the related Accrual Period.
"Value": With respect to a Mortgage Loan other than a Refinance Loan,
the lesser of (a) the value of the Mortgaged Property based upon the appraisal
made at the time of the origination of such Mortgage Loan and (b) the sales
price of the Mortgaged Property at the time of the origination of such Mortgage
Loan; with respect to a Refinance Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such Refinance
Loan.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times, the Class A
Certificates, the Subordinated Certificates and the Class C Certificates shall
have 99% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Subordinated Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), and the Class R Certificates shall have 1% of the
Voting Rights. The Voting Rights allocated to any Class of Certificates (other
than the Class R Certificates) shall be allocated among all Holders of each such
Class in proportion to the outstanding Certificate Principal Balance or Notional
Amount of such Certificates; provided, that any Certificate registered in the
name of the Seller, the Depositor or its Affiliate shall not be eligible to vote
or be considered outstanding and the Percentage Interest evidenced thereby shall
not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect a consent has been obtained unless the
Seller, the Depositor or its Affiliates own 100% of the related Class of such
Certificates. The Voting Rights allocated to the Class R Certificates shall be
allocated among all Holders of such Class in proportion to such Holders'
respective Percentage Interests in the Class R Certificates; provided, however,
that when none of the Regular Certificates are outstanding, 100% of the Voting
Rights shall be allocated among Holders of the Class R Certificates in
accordance with such Holders' respective Percentage Interests in the Class R
Certificates.
Section 1.02. ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of the Accrued Certificate
Interest for the Class A Certificates, the Subordinated Certificates and the
Class C Certificates for any Distribution Date, the aggregate amount of any Net
Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred
in respect of the Mortgage Loans for any Distribution Date (together, "Net
Interest Shortfalls") shall be allocated first, to reduce the interest accrued
on the Class C Certificates in the related Accrual Period up to an amount equal
to one month's interest at the then applicable Pass-Through Rate on the Notional
Amount of such Certificates and, thereafter, to reduce the interest accrued
during the related Accrual Period on the Class A Certificates and the
Subordinated Certificates on a PRO RATA basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance of each such Certificate.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1M, REMIC 1 Regular Interest LT1B and
REMIC 1 Regular Interest LT1ZZ PRO RATA based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such REMIC 1 Regular Interest.
Section 1.03. ACCOUNTING.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are required to be taken into account, such definition or
calculation, and any related definitions or calculations, shall be determined
without duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse, in trust for the benefit of the Certificateholders and the
Certificate Insurer, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to: (i) each Mortgage Loan identified on the Mortgage Loan Schedule, including
the related Stated Principal Balance as of the Cut-off Date, all interest and
principal received thereon after the Cut-off Date (other than interest and
principal due on such Mortgage Loans on or before the Cut-off Date); (ii)
property which secured each such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance
policies in respect of the Mortgage Loans; (iv) all proceeds of any of the
foregoing; (v) the rights of the Depositor under the Mortgage Loan Purchase
Agreement; and (vi) all other assets included or to be included in the Trust
Fund. The Depositor hereby directs the Trustee to execute the Corridor
Agreements.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, the Trustee or its designated agent (the
"Custodian"), the following documents or instruments with respect to each
Mortgage Loan so transferred and assigned (with respect to each Mortgage Loan, a
"Mortgage File"):
(i) the original Mortgage Note, endorsed either (A)
in blank or (B) in the following form: "Pay to the order of Deutsche
Bank National Trust Company, as Trustee, without recourse", or with
respect to any lost Mortgage Note, an original Lost Note Affidavit
stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note; provided,
however, that such substitutions of Lost Note Affidavits for original
Mortgage Notes may occur only with respect to Mortgage Loans, the
aggregate Stated Principal Balance of which is less than or equal to
2.0% of the Pool Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the Mortgage
was executed pursuant to a power of attorney, with evidence of
recording thereon or, if such Mortgage or power of attorney has been
submitted for recording but has not been returned from the applicable
public recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in
blank or (B) to "Deutsche Bank National Trust Company, as Trustee,
without recourse";
(iv) an original copy of any intervening Assignment,
showing a complete chain of assignments;
(v) the original or a certified copy of the lender's
title insurance policy; and
(vi) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any.
With respect to up to 30% of the Mortgage Loans, the Depositor may
deliver all or a portion of each related Mortgage File to the Trustee not later
than five Business Days after the Closing Date (such Mortgage Loans, the
"Delayed Delivery Mortgage Loans").
If any of the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Servicer, in its
capacity as Seller, in the case of (x) above or the applicable public recording
office in the case of (y) above to be a true and complete copy of the original
that was submitted for recording and (2) if such copy is certified by the
Servicer, in its capacity as Seller, delivery to the Trustee or the Custodian,
promptly upon receipt thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true and complete
copy of the original. If the original lender's title insurance policy, or a
certified copy thereof, was not delivered pursuant to Section 2.01(v) above, the
Depositor shall deliver or cause to be delivered to the Trustee or the
Custodian, the original or a copy of a written commitment or interim binder or
preliminary report of title issued by the title insurance or escrow company,
with the original or a certified copy thereof to be delivered to the Trustee or
the Custodian, promptly upon receipt thereof. The Servicer or the Depositor
shall deliver or cause to be delivered to the Trustee or the Custodian promptly
upon receipt thereof any other documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Servicer,
in its capacity as Seller, shall have 90 days to cure such defect or deliver
such missing document to the Trustee or the Custodian, to the extent required
pursuant to Section 2.03. If the Seller does not cure such defect or deliver
such missing document within such time period, the Servicer, in its capacity as
Seller, shall either repurchase or substitute for such Mortgage Loan in
accordance with Section 2.03, to the extent required pursuant to Section 2.03.
The Depositor (at the expense of the Seller) shall cause the
Assignments which were delivered in blank to be completed and shall cause all
Assignments referred to in Section 2.01(iii) hereof and, to the extent
necessary, in Section 2.01(iv) hereof to be recorded. The Depositor shall
furnish the Trustee, or its designated agent, with a copy of each Assignment
submitted for recording. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Depositor shall promptly
have a substitute Assignment prepared or have such defect cured, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments shall
not be required to be submitted for recording (except with respect to any
Mortgage Loan located in Maryland) unless such failure to record would result in
a withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates (with respect to the Class A Certificates only, without regard to
the Certificate Policy; provided further, however, each Assignment shall be
submitted for recording by the Originator (or by the Servicer at the expense of
the Originator in the case of clauses (v) and (vi) below) in the manner
described above, at no expense to the Trust Fund, the Servicer or the Trustee,
upon the earliest to occur of: (i) direction by Holders of Certificates entitled
to at least 25% of the Voting Rights, (ii) [reserved], (iii) the occurrence of a
bankruptcy or insolvency relating to the Originator, (iv) the occurrence of a
servicing transfer as described in Section 7.02 hereof, (v) with respect to any
one Assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage and (vi) with respect to
any Assignments, the payment in full of the related Mortgage Note if required in
the applicable jurisdiction. Notwithstanding the foregoing, if the Originator is
unable to pay the cost of recording the Assignments, such expense shall be paid
by the Trustee and shall be reimbursable to the Trustee as an Extraordinary
Trust Fund Expense.
The Depositor herewith delivers to the Trustee an executed original of
the Mortgage Loan Purchase Agreement.
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 270 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 270 day period, the Servicer shall deliver to the
Custodian, within such 270 day period, an Officer's Certificate of the Servicer
which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (C) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation, if known, and (D) specify the date the applicable recorded document
is expected to be delivered to the Custodian, and, upon receipt of a copy of
such document certified by the public recording office, the Servicer shall
immediately deliver such document to the Custodian. In the event the appropriate
public recording office will not certify as to the accuracy of such document,
the Servicer shall deliver a copy of such document certified by an officer of
the Servicer to be a true and complete copy of the original to the Custodian.
Notwithstanding anything to the contrary in this Agreement, within five
Business Days after the Closing Date, the Depositor shall either:
(x) deliver to the Trustee the Mortgage File as required pursuant to
this Section 2.01 for each Delayed Delivery Mortgage Loan; or
(y)(A) cause the Seller to repurchase the Delayed Delivery Mortgage
Loan or (B) substitute a Qualified Substitute Mortgage Loan for a Delayed
Delivery Mortgage Loan, which repurchase or substitution shall be accomplished
in the manner and subject to the conditions in Section 2.03 (treating each such
Delayed Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes of such
Section 2.03);
provided, however, that if the Depositor fails to deliver a Mortgage File for
any Delayed Delivery Mortgage Loan within the period specified herein, the
Depositor shall cause the Seller to use its best reasonable efforts to effect a
substitution, rather than a repurchase of, such Delayed Delivery Mortgage Loan;
provided, further, that the cure period provided for in Section 2.02 or in
Section 2.03 shall not apply to the initial delivery of the Mortgage File for
such Delayed Delivery Mortgage Loan, but rather the Seller shall have five (5)
Business Days to cure such failure to deliver. At the end of such period, the
Trustee shall send a certification for the Delayed Delivery Mortgage Loans
delivered during such period in accordance with the provisions of Section 2.02.
Section 2.02. ACCEPTANCE BY TRUSTEE.
Subject to the provisions of Section 2.01 and subject to the review
described below and any exceptions noted on the exception report described in
the next paragraph below, the Trustee acknowledges receipt of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders and the Certificate Insurer.
The Trustee agrees, for the benefit of the Certificateholders and the
Certificate Insurer, to execute and deliver (or cause the Custodian to execute
and deliver) to the Depositor on or prior to the Closing Date an acknowledgment
of receipt of the original Mortgage Notes (with any exceptions noted),
substantially in the form attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders and the
Certificate Insurer, to review, or that it has reviewed pursuant to Section 2.01
(or to cause the Custodian to review or that it has caused the Custodian to have
reviewed), each Mortgage File on or prior to the Closing Date, with respect to
each Mortgage Loan (or, with respect to any document delivered after the Startup
Day, within 45 days of receipt and with respect to any Qualified Substitute
Mortgage Loan, within 45 days after the assignment thereof). The Trustee further
agrees, for the benefit of the Certificateholders and the Certificate Insurer,
to certify in substantially the form attached hereto as Exhibit F-1, within 45
days after the Closing Date, with respect to each Mortgage Loan (or, with
respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.01 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1) and (2) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File. It
is herein acknowledged that, in conducting such review, the Trustee (or the
Custodian, as applicable) is under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.
Within the year commencing on the Closing Date and ending on the first
anniversary date of the Closing Date, the Trustee shall deliver (or cause the
Custodian to deliver) to the Depositor, the Seller, the Certificate Insurer and
the Servicer a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) finds any document or documents constituting a
part of a Mortgage File to be missing or to not meet the requirements of Section
2.01, at the conclusion of its review the Trustee shall indicate such on the
exception report annexed to the final certification sent to the Seller, the
Depositor, the Certificate Insurer and the Servicer. In addition, upon the
discovery by the Seller, the Depositor, the Certificate Insurer or the Servicer
(or upon receipt by the Trustee of written notification of such breach) of a
breach of any of the representations and warranties made by the Seller in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties to this Agreement.
Section 2.03. REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE
SELLER.
(a) Upon discovery or receipt of written notice of any document which
does not conform to the requirements of Section 2.01, or that a document is
missing from a Mortgage File, or of the breach by the Seller of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which in any such case materially adversely
affects the value of such Mortgage Loan or the interest therein of the
Certificateholders or the Certificate Insurer, the Trustee shall promptly notify
the Seller, the Depositor, the Certificate Insurer and the Servicer of such
defect, missing document or breach and request that the Seller, if and to the
extent required under the Mortgage Loan Purchase Agreement, deliver such missing
document or cure such defect or breach within 90 days from the date the Seller
was notified of such missing document, defect or breach, and if the Seller does
not deliver such missing document or cure such defect or breach in all material
respects during such period, if and to the extent required under the Mortgage
Loan Purchase Agreement, the Servicer or the Trustee, in accordance with Section
3.02(b), shall enforce the Seller's obligation under the Mortgage Loan Purchase
Agreement and cause the Seller to repurchase such Mortgage Loan from the Trust
Fund at the Purchase Price on or prior to the Determination Date following the
expiration of such 90 day period; provided, that in connection with any such
breach that could not reasonably have been cured within such 90 day period, if
the Seller shall have commenced to cure such breach within such 90 day period,
the Seller shall be permitted to proceed thereafter diligently and expeditiously
to cure the same within the additional period provided under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release to the Seller the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Seller shall furnish to it
and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto and the Trustee shall have no further responsibility with regard
to such Mortgage File (it being understood that the Trustee shall have no
responsibility for determining the sufficiency of such assignment for its
intended purpose). In lieu of repurchasing any such Mortgage Loan as provided
above, the Seller may cause such Mortgage Loan to be removed from the Trust Fund
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d). It is understood and agreed (i) that
the obligation of the Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders and the Certificate Insurer and (ii) that the Seller shall
not have any obligation to provide any such cure, repurchase or substitution
remedy with respect to any such defect or breach to the extent such defect or
breach occurred as a result of the problem associated with the related Mortgage
Loan that is identified on Schedule II to the Mortgage Loan Purchase Agreement.
(b) As promptly as practicable following the earlier of discovery by
the Depositor or receipt of notice by the Depositor of the breach of any
representation, warranty or covenant of the Depositor set forth in Section 2.06
which materially and adversely affects the interests of the Certificateholders
or the Certificate Insurer in any Mortgage Loan, the Depositor shall cure such
breach in all material respects.
(c) As promptly as practicable following the earlier of discovery by
the Servicer or receipt of notice by the Servicer of the breach of any
representation, warranty or covenant of the Servicer set forth in Section 2.05
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the Servicer shall cure such breach in all material
respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the
last Business Day that is two years after the Closing Date. The final maturity
date of such Qualified Substitute Mortgage Loan must be on or before March 2011.
As to any Deleted Mortgage Loan for which the Seller substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Seller delivering to the Trustee, for such Qualified Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage and the Assignment to the Trustee, and
such other documents and agreements, with all necessary endorsements thereon, as
are required by Section 2.01, together with an Officers' Certificate providing
that each such Qualified Substitute Mortgage Loan satisfies the definition
thereof and specifying the Substitution Adjustment (as described below), if any,
in connection with such substitution. The Trustee shall acknowledge receipt for
such Qualified Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review such documents as specified in Section 2.02 and deliver
to the Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit F-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Servicer a certification
substantially in the form of Exhibit F-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
reflect the collections and recoveries in respect of such Deleted Mortgage Loan
in the Remittance Period ending in the month of substitution and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Trustee shall give written notice to
the Certificateholders and the Certificate Insurer that such substitution has
taken place, and the Servicer shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution by the Seller, such Qualified Substitute Mortgage Loan or Loans
shall constitute part of the Mortgage Pool and shall be subject in all respects
to the terms of this Agreement and the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof included in the
Mortgage Loan Purchase Agreement as of the date of substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate, as to each such Qualified Substitute Mortgage Loan, of the Stated
Principal Balance thereof as of the date of substitution, together with one
month's interest on such Stated Principal Balance at the applicable Net Mortgage
Rate. On the date of such substitution, the Seller will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account, to the extent
required under the Mortgage Loan Purchase Agreement, an amount equal to the
Substitution Adjustment, if any, and the Trustee, upon receipt of the related
Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of
such deposit, shall release to the Seller the Mortgage File or Files with
respect to the applicable Deleted Mortgage Loan(s), and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall deliver to it and as shall be necessary to vest
therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee and the Certificate Insurer an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by the Depositor, the Certificate Insurer or the Servicer or
receipt of written notice by 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, within two Business Days, give
written notice thereof to the other parties hereto. In connection therewith, the
Servicer or the Trustee, in accordance with Section 3.02(b), shall enforce the
obligations of the Seller to repurchase or, subject to the limitations set forth
in Section 2.03(d), substitute one or more Qualified Substitute Mortgage Loans
for the affected Mortgage Loan within 90 days of the earlier of discovery or
receipt of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by the Seller if the affected Mortgage
Loan's status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Seller under the Mortgage Loan
Purchase Agreement. Any such repurchase or substitution shall be made in the
same manner as set forth in Section 2.03(d). The Trustee shall reconvey to the
Seller, as the case may be, 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 pursuant to Section 2.03(a).
Section 2.04. [RESERVED].
Section 2.05. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER.
The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of each of the Trustee, the Certificate Insurer and the
Certificateholders, and to the Depositor that as of the Closing Date or as of
such date specifically provided herein:
(i) The Servicer is duly organized, validly existing
and in good standing under the laws of the United States and has all
licenses necessary to carry on its business as now being conducted and
is licensed, qualified and in good standing in the states where each
Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type
conducted by the Servicer or to ensure the enforceability or validity
of each Mortgage Loan; the Servicer has the power and authority to
execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of
the Servicer, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and all requisite corporate
action has been taken by the Servicer to make this Agreement valid and
binding upon the Servicer in accordance with its terms;
(ii) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business
of the Servicer and will not result in the breach of any term or
provision of the charter or by-laws of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under,
any agreement, indenture or loan or credit agreement or other
instrument to which the Servicer or its property is subject, or result
in the violation of any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject;
(iii) The execution and delivery of this Agreement by
the Servicer and the performance and compliance with its obligations
and covenants hereunder do not require the consent or approval of any
governmental authority or, if such consent or approval is required, it
has been obtained;
(iv) This Agreement, and all documents and
instruments contemplated hereby which are executed and delivered by the
Servicer, constitute and will constitute valid, legal and binding
obligations of the Servicer, enforceable in accordance with their
respective terms, except as the enforcement thereof may be limited by
applicable bankruptcy laws and general principles of equity;
(v) [Reserved];
(vi) The Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vii) There is no action, suit, proceeding or
investigation pending or, to its knowledge, threatened against the
Servicer that, either individually or in the aggregate, (A) may result
in any change in the business, operations, financial condition,
properties or assets of the Servicer that might prohibit or materially
and adversely affect the performance by such Servicer of its
obligations under, or validity or enforceability of, this Agreement, or
(B) may result in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted,
or (C) may result in any material liability on the part of the
Servicer, or (D) would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein,
or (E) would otherwise be likely to impair materially the ability of
the Servicer to perform under the terms of this Agreement;
(viii) Neither this Agreement nor any information,
certificate of an officer, statement furnished in writing or report
delivered to the Trustee by the Servicer in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact; and
(ix) The Servicer covenants that its computer and
other systems used in servicing the Mortgage Loans operate in a manner
such that the Servicer can service the Mortgage Loans in accordance
with the terms of this Agreement.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor, the Certificate Insurer and the Certificateholders. Upon discovery by
any of the Depositor, the Servicer, the Seller, the Certificate Insurer or the
Trustee of a breach of any of the foregoing representations, warranties and
covenants which materially and adversely affects the value of any Mortgage Loan,
or the interests therein of the Certificateholders and the Certificate Insurer,
the party discovering such breach shall give prompt written notice (but in no
event later than two Business Days following such discovery) to the Servicer,
the Seller, the Certificate Insurer and the Trustee.
Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor represents and warrants to the Trust and to the Trustee,
for the benefit of each of the Trustee, the Certificateholders and the
Certificate Insurer, that as of the Closing Date or as of such date specifically
provided herein:
(i) This Agreement constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the Depositor
in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by
the Depositor to the Trustee on behalf of the Trust of each Mortgage
Loan, the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has
transferred all right, title and interest in the Mortgage Loans to the
Trustee on behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage
Loans to the Trustee on behalf of the Trust with any intent to hinder,
delay or defraud any of its creditors;
(v) The Depositor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
Delaware, with full corporate power and authority to own its assets and
conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its
articles of incorporation or by-laws or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is a
party or by which it or its properties may be bound, which default
might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor or the ability of the Depositor to perform
its obligations under this Agreement;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Depositor is a party or
by which the Depositor is bound or to which any of the property or
assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation or by-laws
of the Depositor or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such
conflicts, breaches, violations and defaults as would not have a
material adverse effect on the ability of the Depositor to perform its
obligations under this Agreement and as would not have a material
adverse effect on the validity of this Agreement or the Certificates);
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under state securities or Blue
Sky laws, (b) have been previously obtained or (c) the failure of which
to obtain would not have a material adverse effect on the performance
by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or
investigations pending before or, to the Depositor's knowledge,
threatened by any court, administrative agency or other tribunal to
which the Depositor is a party or of which any of its properties is the
subject: (a) which if determined adversely to the Depositor would have
a material adverse effect on the business, results of operations or
financial condition of the Depositor; (b) asserting the invalidity of
this Agreement or the Certificates; (c) seeking to prevent the issuance
of the Certificates or the consummation by the Depositor of any of the
transactions contemplated by this Agreement, as the case may be; or (d)
which might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability
of, this Agreement. It is understood and agreed that the
representations and warranties set forth in this Section 2.06 shall
survive delivery of the Mortgage Files to the Trustee and shall inure
to the of the Certificateholders and the Certificate Insurer
notwithstanding any restrictive or qualified endorsement or assignment.
Upon discovery by any of the Depositor, the Servicer, the Certificate
Insurer or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders and the Certificate Insurer, the party discovering
such breach shall give prompt written notice to the other parties
hereto, and in no event later than two Business Days from the date of
such discovery. Unless such breach shall not be susceptible of cure
within 90 days, the obligation of the Depositor set forth in Section
2.03(b) to cure breaches shall constitute the sole remedy against the
Depositor available to the Certificateholders, the Servicer and the
Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section
2.06.
Section 2.07. ISSUANCE OF CERTIFICATES.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Mortgage Files, subject to the provisions of Sections
2.01 and 2.02, together with the assignment to it of all other assets included
in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with
such assignment and delivery and in exchange therefor, the Trustee, pursuant to
the written request of the Depositor executed by an officer of the Depositor,
has executed, authenticated and delivered to or upon the order of the Depositor,
the Certificates in authorized denominations. The interests evidenced by the
Certificates, constitute the entire beneficial ownership interest in the Trust
Fund. The rights of the Certificateholders to receive distributions from the
proceeds of the Trust Fund in respect of the Certificates, and all ownership
interests evidenced or constituted by the Certificates, shall be as set forth in
this Agreement.
Section 2.08. CONVEYANCE OF REMIC 1 REGULAR INTERESTS AND ACCEPTANCE OF
REMIC 2 BY TRUSTEE.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the assets described in the definition of REMIC 1 for the benefit of the
holders of the REMIC 1 Regular Interests (which are uncertificated) and the
Class R Certificates (in respect of the Class R-1 Interest). The Trustee
acknowledges receipt of the assets described in the definition of REMIC 1 and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the REMIC 1 Regular Interests and the Class R
Certificates (in respect of the Class R-1 Interest). The interests evidenced by
the Class R-1 Interest, together with the REMIC 1 Regular Interests, constitute
the entire beneficial ownership interest in REMIC 1.
(b) Reserved.
(c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests (which are uncertificated) for the benefit
of the Holders of the REMIC 2 Regular Interests (which are uncertificated) and
the Class R Certificates (in respect of the Class R-2 Interest). The Trustee
acknowledges receipt of the REMIC 1 Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of the Holders
of the Regular Certificates and the Class R Certificates (in respect of the
Class R-2 Interest). The interests evidenced by the Class R-2 Interest, together
with the Regular Certificates, constitute the entire beneficial ownership
interest in REMIC 2.
(d) Reserved.
(e) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.08(a), (ii) [reserved] and (iii) the assignment and delivery to the Trustee of
REMIC 2 (including the Residual Interest therein represented by the Class R-2
Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.08(c), the Trustee, pursuant to the written request of the Depositor executed
by an officer of the Depositor, has executed, authenticated and delivered to or
upon the order of the Depositor, the Class R Certificates in authorized
denominations evidencing the Class R-1 Interest and the Class R-2 Interest.
Section 2.09. PURPOSES AND POWERS OF THE TRUST.
The purpose of the common law trust, as created hereunder, is to engage
in the following activities:
(i) to acquire and hold the Mortgage Loans and the
other assets of the Trust Fund and the proceeds therefrom;
(ii) to issue the Certificates sold to the Depositor
in exchange for the Mortgage Loans;
(iii) to make payments on the Certificates;
(iv) to engage in those activities that are
necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(v) subject to compliance with this Agreement, to
engage in such other activities as may be required in connection with
conservation of the Trust Fund and the making of distributions to the
Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities.
The Trustee and the Servicer shall not cause the Trust to engage in any activity
other than in connection with the foregoing or other than as required or
authorized by the terms of this Agreement while any Certificate is outstanding,
and this Section 2.10 may not be amended, without the consent of the
Certificateholders evidencing 66 2/3% or more of the aggregate Voting Rights of
the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01. SERVICER TO ACT AS SERVICER.
The Servicer shall service and administer the Mortgage Loans on behalf
of the Trust and in the best interests of and for the benefit of the
Certificateholders and the Certificate Insurer (as determined by the Servicer in
its reasonable judgment) in accordance with the terms of this Agreement and the
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any
Sub-Servicer or any Affiliate of the Servicer or any Sub-Servicer may
have with the related Mortgagor;
(ii) the ownership or non-ownership of any
Certificate by the Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction.
Subject only to the above-described servicing standards and the terms
of this Agreement and of the Mortgage Loans, the Servicer shall have full power
and authority, acting alone or through Sub-Servicers as provided in Section
3.02, to do or cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer in its own name or in the
name of a Sub-Servicer is hereby authorized and empowered by the Trustee, when
the Servicer believes it appropriate in its best judgment in accordance with the
servicing standards set forth above, to execute and deliver, on behalf of the
Certificateholders, the Certificate Insurer and the Trustee, and upon notice to
the Trustee and the Certificateholders, 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 the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Servicer shall service and administer the Mortgage Loans
in accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. Subject to
Section 3.17, the Trustee shall execute, at the written request of the Servicer,
and furnish to the Servicer and any Sub-Servicer any special or limited powers
of attorney and other documents necessary or appropriate to enable the Servicer
or any Sub-Servicer to carry out their servicing and administrative duties
hereunder; provided, such limited powers of attorney or other documents shall be
prepared by the Servicer and submitted to the Trustee for execution. The Trustee
shall not be liable for the actions of the Servicer or any Sub-Servicers under
such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the servicing
standards of the preceding paragraphs, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11. Any cost incurred by the Servicer or by Sub-Servicers in effecting the
timely payment of taxes and assessments on a Mortgaged Property shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid Stated Principal Balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.03) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the Stated Principal Balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury regulations promulgated thereunder) and (B) any REMIC created hereunder
to fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions. The Servicer shall also not permit extensions beyond the Final
Distribution Date.
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN SERVICER AND
SUB-SERVICERS; SPECIAL SERVICING.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates
(without regard to the Policy).
Each Sub-Servicer shall be (i) authorized and licensed to transact
business in the state or states where the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-Servicing Agreement and (ii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Sub-Servicing Agreement and will be familiar with
the terms thereof. The terms of any Sub-Servicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub-Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders or the
Certificate Insurer without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights (excluding any Certificates held by the
Seller, the Servicer or any Affiliate thereof) and the Certificate Insurer
(unless the Policy has been canceled upon the payment in full of the Insured
Certificates or a Certificate Insurer Default has occurred and is continuing);
provided, further, that the consent of the Holders of Certificates entitled to
at least 66% of the Voting Rights (excluding any Certificates held by the
Seller, the Servicer or any Affiliate thereof) or the Certificate Insurer shall
not be required (i) to cure any ambiguity or defect in a Sub-Servicing
Agreement, (ii) to correct, modify or supplement any provisions of a
Sub-Servicing Agreement, or (iii) to make any other provisions with respect to
matters or questions arising under a Sub-Servicing Agreement, which, in each
case, shall not be inconsistent with the provisions of this Agreement. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights (excluding any Certificates held by the Seller,
the Servicer or any Affiliate thereof) and the Certificate Insurer (unless the
Policy has been canceled upon the payment in full of the Insured Certificates or
a Certificate Insurer Default has occurred and is continuing) from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Servicer's execution and delivery of
such instruments.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee, the Certificate Insurer and the Certificateholders,
shall enforce the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement and of the Seller under the Mortgage Loan Purchase
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a Mortgage Loan on account of missing or defective documentation or on
account of a breach of a representation, warranty or covenant, as described in
Section 2.03(a). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-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 Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The 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 Loans, or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed. Enforcement of the Mortgage Loan Purchase Agreement
against the Seller shall be effected by the Servicer to the extent it is not the
Seller, and otherwise by the Trustee in accordance with the foregoing provisions
of this paragraph.
Section 3.03. SUCCESSOR SUB-SERVICERS.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement
and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement. In the event of termination of any Sub-Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Sub-Servicer or the Servicer, and
the Servicer either shall service directly the related Mortgage Loans or shall
enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Servicer or the Trustee (if the
Trustee is acting as Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Servicer (or the Trustee, if such party is then
acting as Servicer) shall, for any reason, no longer be the Servicer (including
termination due to a Servicer Event of Termination).
Section 3.04. LIABILITY OF THE SERVICER.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee, the
Certificate Insurer and the 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
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
The Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for indemnification of the Servicer by such Sub-Servicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND THE
TRUSTEE OR CERTIFICATEHOLDERS.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and neither the Trustee nor the Certificateholders shall be
deemed parties thereto, and neither the Trustee nor the Certificateholders shall
have any claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer except as set forth in Section 3.06. The Servicer shall be solely
liable for all fees owed by it to any Sub-Servicer, irrespective of whether the
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.
Section 3.06. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
TRUSTEE.
In the event the Servicer shall for any reason no longer be the
servicer (including by reason of the occurrence of a Servicer Event of
Termination), the successor Servicer or the Trustee if it becomes successor
Servicer shall thereupon assume all of the rights and obligations of the
Servicer under each Sub-Servicing Agreement that the Servicer may have entered
into, unless the Trustee elects to terminate any Sub-Servicing Agreement in
accordance with its terms as provided in Section 3.03. Upon such assumption, the
Trustee (or the successor Servicer appointed pursuant to Section 7.02) shall be
deemed, subject to Section 3.03, to have assumed all of the departing Servicer's
interest therein and to have replaced the departing Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the departing Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Servicer and (ii)
neither the Trustee nor any successor Servicer shall be deemed to have assumed
any liability or obligation of the Servicer that arose before it ceased to be
the Servicer.
The Servicer at its expense shall, upon request of the Trustee, deliver
to the assuming party all documents and records relating to each Sub-Servicing
Agreement and the Mortgage Loans then being serviced and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party. All Servicing Transfer Costs shall be paid by
the predecessor Servicer (or, if the predecessor Servicer is the Trustee, the
Servicer that immediately preceded the Trustee) upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case, the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust Fund).
Section 3.07. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing, the
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) subject to the last sentence of
Section 3.02, extend the due dates for the Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided, however, that any
extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.03 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangement. Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth in Section
3.01, may also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"); provided, however, that (i) the Servicer
shall determine that such forbearance is not materially adverse to the interests
of the Certificateholders (taking into account any estimated loss that might
result absent such action) and is expected to minimize the loss on such Mortgage
Loan, (ii) the Servicer shall not initiate any new lending to such Mortgagor
through the Trust Fund and (iii) in no event shall the Servicer grant any such
forbearance (other than as permitted by the second sentence of this Section)
with respect to any one Mortgage Loan more than once in any 12 month period or
more than three times over the life of such Mortgage Loan. The Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of Section 3.01 shall be reflected in writing in the
Mortgage File.
Section 3.08. SUB-SERVICING ACCOUNTS.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
Section 3.09. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS.
The Servicer shall establish and maintain, or cause to be established
and maintained, one or more accounts (the "Servicing Accounts"), into which all
Escrow Payments shall be deposited and retained. Servicing Accounts shall be
Eligible Accounts. The Servicer shall deposit in the clearing account in which
it customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, all Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
timely payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to: (i) effect
payment of taxes, assessments and comparable items in a manner and at a time
that assures that the lien priority of the Mortgage is not jeopardized (or, with
respect to the payment of taxes, in a manner and at a time that avoids the loss
of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien); (ii) reimburse the Servicer (or a Sub-Servicer to the extent provided
in the related Sub-Servicing Agreement) out of related collections for any
Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; (v) to pay the Servicer excess interest on
funds in the Servicing Accounts to the extent permitted as provided below; or
(vi) clear and terminate the Servicing Account at the termination of the
Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article X. In the event the Servicer
shall deposit in a Servicing Account any amount not required to be deposited
therein, it may at any time withdraw such amount from such Servicing Account,
any provision herein to the contrary notwithstanding. The Servicer will be
responsible for the administration of the Servicing Accounts and will be
obligated to make Servicing Advances to such accounts when and as necessary to
avoid the lapse of insurance coverage on the Mortgaged Property, or which the
Servicer knows, or in the exercise of the required standard of care of the
Servicer hereunder should know, is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien. If any
such payment has not been made and the Servicer receives notice of a tax lien
with respect to the Mortgage being imposed, the Servicer will, within 10
Business Days of such notice, advance or cause to be advanced funds necessary to
discharge such lien on the Mortgaged Property. As part of its servicing duties,
the Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in
the Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. The
Servicer may pay to itself any excess interest on funds in the Servicing
Accounts, to the extent such action is in conformity with the Servicing
Standard, is permitted by law and such amounts are not required to be paid to
Mortgagors or used for any of the other purposes set forth above.
Section 3.10. COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT.
(a) On behalf of the Trust Fund, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee, the Certificate Insurer and the Certificateholders. The Collection
Account shall be an Eligible Account. On behalf of the Trust Fund, the Servicer
shall deposit or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the Servicer's receipt thereof, as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it subsequent to the Cut-off Date (other than in respect of principal or
interest on the Mortgage Loans due on or before the Cut-off Date) or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date, but allocable to a Remittance Period subsequent thereto:
(i) all payments on account of principal, including
Principal Prepayments (but not Prepayment Charges), on the Mortgage
Loans;
(ii) all payments on account of interest (net of the
related Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds
(other than proceeds collected in respect of any particular REO
Property and amounts paid in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 10.01) and Subsequent
Recoveries;
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the
Servicer pursuant to the second paragraph of Section 3.14(a) in respect
of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03, Section 3.16(c) or Section
10.01; and
(vii) all amounts required to be deposited in
connection with Substitution Adjustments pursuant to Section 2.03.
The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Servicing Fees, late
payment charges, assumption fees, modification fees, insufficient funds charges
and ancillary income need not be deposited by the Servicer in the Collection
Account and may be retained by the Servicer as additional compensation. In the
event the Servicer shall deposit in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee, the Certificate Insurer
and the Certificateholders. The Distribution Account will be an Eligible
Account. On behalf of the Trust Fund, the Servicer shall deliver to the Trustee
in immediately available funds for deposit in the Distribution Account on or
before 3:00 p.m. New York time (i) on the Servicer Remittance Date, that portion
of the Available Funds (calculated without regard to the references in the
definition thereof to amounts that may be withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the Collection
Account and any other amounts deposited hereunder that are required to be
deposited in the Distribution Account funds reimbursable pursuant to Section
3.27, and (ii) on each Business Day as of the commencement of which the balance
on deposit in the Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such excess, but only if
the Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account." If the balance on deposit in the
Collection Account exceeds $75,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Servicer
shall, on or before 3:00 p.m. New York time on such Business Day, withdraw from
the Collection Account any and all amounts payable or reimbursable to the
Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11
and shall pay such amounts to the Persons entitled thereto.
(c) Funds in the Collection Account and the Distribution Account shall
be invested in Permitted Investments in accordance with the provisions set forth
in Section 3.12. The Servicer shall give notice to the Trustee and the
Certificate Insurer of the location of the Collection Account maintained by it
when established and prior to any change thereof. The Trustee shall give notice
to the Servicer, the Certificate Insurer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the Distribution Account
as set forth in the definition thereof) and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account; provided, however, that
the Trustee shall have the sole authority to withdraw any funds held pursuant to
this subsection (d). In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request in writing that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section
4.03;
(ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a
purchase of Mortgage Loans and REO Properties pursuant to Section
10.01;
(iv) any Compensating Interest to be deposited
pursuant to Section 3.24 in connection with any Prepayment Interest
Shortfall;
(v) any amounts required to be paid or reimbursed to
the Trustee pursuant to the Agreement (to the extent required to be
paid by the Servicer), including, but not limited to Section 3.06 and
Section 7.02 (to the extent required to be paid by the Servicer); and
(vi) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on Permitted
Investments with respect to funds held in the Distribution Account
(other than any such losses incurred during the Trustee Float Period).
Section 3.11. WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION
ACCOUNT.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.03:
(i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted pursuant to
Section 3.10(b) or permitted to be so remitted pursuant to the first
sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the
Servicer for (a) any unreimbursed Advances to the extent of amounts
received which represent Late Collections (net of the related Servicing
Fees) of Monthly Payments, Liquidation Proceeds and Insurance Proceeds
on Mortgage Loans with respect to which such Advances were made in
accordance with the provisions of Section 4.03 or (b) any unreimbursed
Advances with respect to the final liquidation of a Mortgage Loan that
are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds, Subsequent Recoveries and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient
to reimburse the Servicer for such unreimbursed Advances;
(iii) subject to Section 3.16(d), to pay the Servicer
or any Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan, and (c) any
Servicing Advances with respect to the final liquidation of a Mortgage
Loan that are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the
Servicer or any Sub-Servicer for Servicing Advances;
(iv) to pay to the Servicer as servicing compensation
(in addition to the Servicing Fee) on the Servicer Remittance Date any
interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Seller or the Servicer, as the case
may be, with respect to each Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Servicer for any Advance or
Servicing Advance previously made which the Servicer has determined to
be a Nonrecoverable Advance in accordance with the provisions of
Section 4.03;
(vii) to pay, or to reimburse the Servicer for
Servicing Advances in respect of, expenses incurred in connection with
any Mortgage Loan pursuant to Section 3.16(b);
(viii) to reimburse the Servicer or the Depositor for
expenses incurred by or reimbursable to the Servicer or the Depositor
pursuant to Section 6.03;
(ix) to reimburse the Servicer or the Trustee, as the
case may be, for expenses reasonably incurred in connection with any
breach or defect giving rise to the purchase obligation under Section
2.03 of this Agreement, including any expenses arising out of the
enforcement of the purchase obligation (other than with respect to a
breach caused by the Servicer);
(x) to pay itself any Prepayment Interest Excess;
(xi) to pay itself to the extent permitted under
Section 3.06;
(xii) to withdraw any funds deposited in the
Collection Account in error; and
(xiii) to clear and terminate the Collection Account
pursuant to Section 10.01.
The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. In the event the Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan-by-Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The Servicer shall
provide written notification to the Trustee, on or prior to the next succeeding
Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclause (vi) above; provided that an Officer's Certificate
in the form described under Section 4.03(d) shall suffice for such written
notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions in accordance with Section
4.01;
(ii) to pay itself the Trustee Fee pursuant to
Section 4.01 and Section 8.05;
(iii) to pay any amounts in respect of taxes pursuant
to Section 9.01(g);
(iv) to clear and terminate the Distribution Account
pursuant to Section 10.01;
(v) to pay any amounts required to be paid to the
Trustee pursuant to this Agreement, including but not limited to funds
required to be paid pursuant to Section 2.01, Section 3.06, Section
7.02, Section 8.05 and Section 9.01(c);
(vi) to pay to itself as additional compensation any
interest or investment income earned on funds on deposit in the
Distribution Account during the Trustee Float Period to the extent
provided in Section 3.12(b);
(vii) to pay to the Servicer as servicing
compensation any interest or investment income earned on funds on
deposit in the Distribution Account (other than during the Trustee
Float Period) to the extent provided in Section 3.12(b); and
(viii) to withdraw any funds deposited in the
Distribution Account in error;
Section 3.12. INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE
DISTRIBUTION ACCOUNT.
(a) The Servicer shall direct any depository institution maintaining
the Collection Account (except with respect to the Trustee Float Period) and the
Distribution Account, and the Trustee may direct any depository institution
maintaining (during the Trustee Float Period) the Distribution Account (each
such account, for purposes of this Section 3.12, an "Investment Account") to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Trustee is the obligor thereon or if such investment
is managed or advised by a Person other than the Trustee or an Affiliate of the
Trustee, and (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Trustee is the
obligor thereon. Funds in the Distribution Account may also be held uninvested.
All such Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account shall be made in the
name of the Trustee (in its capacity as such), or in the name of a nominee of
the Trustee. The Trustee shall be entitled to sole possession (except with
respect to investment direction of funds held in the Collection Account and,
other than with respect to the Trustee Float Period, the Distribution Account
and any income realized thereon) over each such investment, and any certificate
or other instrument evidencing any such investment shall be delivered directly
to the Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account, it being understood and agreed that the
Trustee shall have no duty to monitor investments in the
Investment Accounts.
(b) All income realized from the investment of funds on deposit in the
Collection Account, the Distribution Account (except with respect to the Trustee
Float Period), and any REO Account held by or on behalf of the Servicer shall be
for the benefit of the Servicer and shall be subject to its withdrawal in
accordance with Section 3.11 or Section 3.23, as applicable. All income realized
from the investment of funds on deposit in the Distribution Account during the
Trustee Float Period held by or on behalf of the Trustee shall be for the
benefit of the Trustee and shall be subject to its withdrawal in accordance with
Section 3.12. The Servicer shall deposit in the Collection Account, the
Distribution Account (except with respect to the Trustee Float Period) or any
REO Account, as applicable, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss. The Trustee shall deposit in the
Distribution Account the amount of any loss of principal incurred in respect of
any such Permitted Investment made with funds in such account during the Trustee
Float Period immediately upon realization of such loss. The Trustee or its
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's economic self-interest for (i) serving as investment
adviser, administrator, shareholder, servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. The Trustee does not guarantee
the performance of any Permitted Investment.
Section 3.13. [RESERVED].
Section 3.14. MAINTENANCE OF ERRORS AND OMISSIONS AND FIDELITY
COVERAGE.
The Servicer shall keep in force during the term of this Agreement a
policy or policies of insurance covering errors and omissions for failure in the
performance of the Servicer's obligations under this Agreement, which policy or
policies shall be in such form and amount that would meet the requirements of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from the Rating
Agencies. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the
Servicer has obtained a waiver of such requirements from the Rating Agencies.
The Servicer shall be deemed to have complied with this provision if an
Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee. The Servicer shall also cause
each Sub-Servicer to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements.
Section 3.15. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if the Person to whom the
related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the conditions contained in the Mortgage Note and the Mortgage related
thereto and the consent of the mortgagee under the Mortgage Note or the Mortgage
is not otherwise so required under the Mortgage Note or the Mortgage as a
condition to the transfer. The Servicer shall not exercise any such rights if
prohibited by law from doing so. If the Servicer reasonably believes it is
unable under applicable law to enforce such "due-on-sale" clause, or if any of
the other conditions set forth in the proviso to the preceding sentence apply,
the Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Servicer is also authorized 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 the Mortgagor and
becomes liable under the Mortgage Note; provided, that no such substitution
shall be effective unless such person satisfies the underwriting criteria of the
Servicer and has a credit risk rating at least equal to that of the original
Mortgagor. In connection with any assumption or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. Any fee collected by the
Servicer in respect of an assumption, modification or substitution of liability
agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Monthly Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document 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.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.16. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Servicer shall use reasonable efforts, in accordance with the
Servicing Standard, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07. The Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicer as contemplated in Section 3.11 and
Section 3.23. The foregoing is subject to the provision that, in any case in
which a Mortgaged Property shall have suffered damage from an Uninsured Cause,
the Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as
are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required under any federal, state or local law or regulation,
or that if any such materials are present for which such
action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials affecting any such Mortgaged Property, then the
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund; provided, that any amounts disbursed by the Servicer pursuant
to this Section 3.16(b) shall constitute Servicing Advances, subject to Section
4.03(d). The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(iii) and (a)(vii), such right of reimbursement being prior to the rights
of Certificateholders to receive any amount in the Collection Account received
in respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Servicer may agree to a modification of any Mortgage Loan (a
"Modified Mortgage Loan") at the request of the related Mortgagor if (i) the
modification is in lieu of a refinancing and the Mortgage Rate on the Modified
Mortgage Loan, as modified, is approximately a prevailing market rate for
newly-originated Mortgage Loans having similar terms and (ii) the Servicer
purchases the Modified Mortgage Loan from the Trust Fund as described below.
Effective immediately after the deposit of the Purchase Price by the Servicer,
all interest of the Trustee in the Modified Mortgage Loan shall automatically be
deemed transferred and assigned to the Servicer and all benefits and burdens of
ownership thereof, including the right to accrued interest thereon from the date
of the deposit of the Purchase Price and the risk of default thereon, shall pass
to the Servicer. The Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of this
paragraph have been satisfied with respect to the Modified Mortgage Loan.
The Servicer shall deposit the Purchase Price for any Modified Mortgage
Loan in the Collection Account pursuant to Section 3.10(a)(vii) within one
Business Day after the purchase of the 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 Servicer the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Servicer any
Modified Mortgage Loan previously transferred and assigned pursuant hereto. The
Servicer covenants and agrees to indemnify the Trustee and the Trust Fund
against any liability for any "prohibited transaction" taxes and any related
interest, additions, and penalties imposed on the Trust Fund established
hereunder as a result of any modification of a Mortgage Loan effected pursuant
to this Section 3.16(c), any holding of a Modified Mortgage Loan by the Trust
Fund or any purchase of a Modified Mortgage Loan by the Servicer (but such
obligation shall not prevent the Servicer or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Servicer from withholding payment of such tax, but not any related
indemnification, if permitted by law, pending the outcome of such proceedings).
The Servicer shall have no right of reimbursement for any amount paid pursuant
to the foregoing indemnification, except to the extent that the amount of any
tax, interest, and penalties, together with interest thereon, is refunded to the
Trust Fund. In no event shall the Servicer have the discretion to sell a
delinquent or defaulted Mortgage Loan.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to the Servicer or any Sub-Servicer for any
related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due Date prior to the Distribution Date on which such amounts are to be
distributed if not in connection with a Final Recovery Determination; and
fourth, as a recovery of principal of the Mortgage Loan. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
Section 3.17. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer shall deliver to the Trustee
two executed copies of a Request for Release in the form of Exhibit E (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) signed by a Servicing Officer (or in a mutually agreeable
electronic format that will, in lieu of a signature on its face, originate from
a Servicing Officer) and shall request delivery to it of the Mortgage File. Upon
receipt of such certification and request, the Trustee shall, within five
Business Days, release and send by overnight mail, at the expense of the
Servicer, the related Mortgage File to the Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Servicer and delivery to the Trustee of two
copies of a Request for Release in the form of Exhibit E signed by a Servicing
Officer (or in a mutually agreeable electronic format that will, in lieu of a
signature on its face, originate from a Servicing Officer), release the related
Mortgage File to the Servicer, and the Trustee shall, at the direction of the
Servicer, execute such documents as shall be necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Servicer to return
each and every document previously requested from the Mortgage File to the
Trustee when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Servicer has delivered, or caused
to be delivered, to the Trustee an additional Request for Release certifying as
to such liquidation or action or proceedings. Upon the request of the Trustee,
the Servicer shall provide notice to the Trustee of the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of two copies of a Request
for Release from a Servicing Officer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation that are required to be deposited into the Collection Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
one copy of such Request for Release with respect to such Mortgage Loan shall be
released by the Trustee to the Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer or the Sub-Servicer, as the case may
be, copies of, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Section 3.18. SERVICING COMPENSATION.
As compensation for the activities of the Servicer hereunder, the
Servicer shall be entitled to the Servicing Fee with respect to each Mortgage
Loan payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.24. In addition, the Servicer shall be entitled to recover
unpaid Servicing Fees out of Insurance Proceeds, Subsequent Recoveries or
Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii). The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of the Servicer's responsibilities and
obligations under this Agreement; provided, however, that the Servicer may pay
from the Servicing Fee any amounts due to a Sub-Servicer pursuant to a
Sub-Servicing Agreement entered into under Section 3.02.
Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges, Prepayment Charges, ancillary
income or otherwise shall be retained by the Servicer only to the extent such
fees or charges are received by the Servicer. The Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account
and pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12 and Section 3.24. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer
and servicing compensation of each Sub-Servicer) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
In addition, the Servicer shall be entitled to any Prepayment Interest
Excess, which it may withdraw from the Collection Account pursuant to Section
3.11(a)(x).
Section 3.19. REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.
Not later than twenty days after each Distribution Date, the Servicer
shall forward, upon request, to the Trustee, the Certificate Insurer and the
Depositor, the most current available bank statement for the Collection Account.
Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner, to the Certificate Insurer and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party; provided, that such
statement is delivered by the Servicer to the Trustee.
Section 3.20. STATEMENT AS TO COMPLIANCE.
The Servicer shall deliver to the Trustee via electronic mail
(▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇), the Depositor, the Certificate Insurer and the
Rating Agencies on or before March 15 of each year, commencing in 2007, an
officer's certificate, certifying that with respect to the period ending
December 31st of the prior year: (i) the Servicer or such Servicing Officer, as
applicable, has reviewed the activities of the Servicer during the preceding
calendar year or portion thereof and its performance under this Agreement and
(ii) to the best of the Servicer's or such Servicing Officer's knowledge, as
applicable, based on such review, the Servicer has performed and fulfilled its
duties, responsibilities and obligations under this Agreement in all material
respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such Servicing Officer and the nature and status thereof.
Copies of any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee. In
addition to the foregoing, the Servicer will, to the extent reasonable, give any
other servicing information required by the Commission pursuant to applicable
law.
Section 3.21. ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS.
The Servicer shall service and administer the Mortgage Loans in
accordance with all applicable requirements of the Servicing Criteria (as set
forth in Exhibit R hereto). Pursuant to Rules 13a-18 and 15d-18 of the Exchange
Act and Item 1122 of Regulation AB, the Servicer shall deliver to the Trustee
via electronic mail (▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇), the Certificate Insurer and
the Depositor prior to (x) March 15, 2007 and (y) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15th of each year
thereafter, a report regarding the Servicer's assessment of compliance (an
"Assessment of Compliance") with the Servicing Criteria during the preceding
calendar year. The Assessment of Compliance must be reasonably satisfactory to
the Depositor, and as set forth in Regulation AB, the Assessment of Compliance
must contain the following:
a. A statement by such officer of its responsibility for
assessing compliance with the Servicing Criteria applicable to
the Servicer;
b. A statement by such officer that such officer used the
Servicing Criteria, and which will also be attached to the
Assessment of Compliance, to assess compliance with the
Servicing Criteria applicable to the Servicer;
c. An assessment by such officer of the Servicer's compliance
with the applicable Servicing Criteria for the period
consisting of the preceding calendar year, including
disclosure of any material instance of noncompliance with
respect thereto during such period, which assessment shall be
based on the activities it performs with respect to
asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type
as the Mortgage Loans;
d. A statement that a registered public accounting firm has
issued an attestation report on the Servicer's Assessment of
Compliance for the period consisting of the preceding calendar
year; and
e. A statement as to which of the Servicing Criteria, if any,
are not applicable to the Servicer, which statement shall be
based on the activities it performs with respect to
asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type
as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit R hereto which are indicated as applicable to the Servicer.
Prior to (x) March 15, 2007 and (y) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15th of each year
thereafter, the Servicer shall furnish to the Trustee and the Depositor a report
(an "Attestation Report") by a registered public accounting firm that attests
to, and reports on, the Assessment of Compliance made by the Servicer, as
required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of
Regulation AB, which Attestation Report must be made in accordance with
standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board.
The Servicer shall cause and any sub-servicer, and each subcontractor
determined by the Servicer to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, to deliver to the Trustee and
the Depositor an Assessment of Compliance and Attestation Report as and when
provided above.
Such Assessment of Compliance, as to any Sub-Servicer, shall at a
minimum address each of the Servicing Criteria specified on Exhibit R hereto
which are indicated as applicable to any "primary servicer." Notwithstanding the
foregoing, as to any subcontractor, an Assessment of Compliance is not required
to be delivered unless it is required as part of a Form 10-K with respect to the
Trust Fund.
If the Servicer cannot deliver any Assessment of Compliance or
Attestation Report by March 15th of such year, the Depositor, at its sole
option, may permit a cure period for the Servicer to deliver such Assessment of
Compliance or Attestation Report, but in no event later than March 25th of such
year.
Failure of the Servicer to timely comply with this Section 3.21 may be
deemed an Event of Default. The Trustee shall, with the consent of the
Depositor, in addition to whatever rights the Trustee may have under this
Agreement and at law or equity or to damages, including injunctive relief and
specific performance, give notice to Certificateholders that they have ten
Business Days to object. If no such objection is received and so long as no
Certificate Insurer Default is continuing, if the Certificate Insurer consents
in writing, the Trustee shall immediately terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Servicer for the same.
This paragraph shall supersede any other provision in this Agreement or any
other agreement to the contrary.
The Trustee shall, prior to (x) March 15, 2007 and (y) unless and until
a Form 15 Suspension Notice shall have been filed, prior to March 15th of each
year thereafter, shall also provide an Assessment of Compliance and Attestation
Report, as and when provided above, which shall at a minimum address each of the
Servicing Criteria specified on Exhibit R hereto which are indicated as
applicable to the "trustee."
The Servicer shall indemnify and hold harmless the Depositor and its
officers, directors and Affiliates from and against any actual losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses that such Person may sustain based
upon a breach of the Servicer's obligations under this Section 3.21.
Section 3.22. COMMISSION REPORTING.
(i) Unless and until a Form 15 Suspension Notice
shall have been filed, the Trustee shall, within 15 days after each
Distribution Date and in accordance with industry standards, file with
the Commission via the Electronic Data Gathering and Retrieval System
("▇▇▇▇▇"), a Distribution Report on Form 10-D (the "Distribution
Report") with a copy of the Monthly Statement to be furnished by the
Trustee to the Certificateholders for such Distribution Date and, if
applicable, including the information required by each of the items set
forth in Part II thereof, subject to the receipt of the information set
forth in (f) below, in the case of information not required to be
provided by the Trustee.
(ii) Except with respect to the Distribution Report
to be filed following the first Distribution Date, the Trustee shall
prepare each Distribution Report and, no later than 5 Business Days
prior to the date on which such Distribution Report is required to be
filed, deliver a copy of such Distribution Report to the Depositor for
review. No later than the Business Day following the receipt thereof,
the Depositor shall notify the Trustee of any changes to be made to the
Distribution Report. The Trustee shall make any changes thereto
requested by the Depositor and deliver the final Distribution Report to
the Depositor for signature no later than three Business Days prior to
the date on which such Distribution Report must be filed by the Trustee
in accordance with clause (i) above. The Depositor shall execute the
final Distribution Report and deliver the same to the Trustee via
electronic mail (▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇) or facsimile no later than
the Business Day following receipt of the same (which, unless not
received within such time frame from the Trustee, shall be no later
than two Business Days prior to the date on which the Distribution
Report is required to be filed), with an original executed hard copy to
follow by overnight mail. With respect to the Distribution Report to be
filed following the first Distribution Date, the Depositor shall
prepare and execute such Distribution Report and, no later than 5
Business Days prior to the date on which such Distribution Report is
required to be filed, deliver a copy of such Distribution Report to the
Trustee. The Trustee shall attach thereto the Monthly Statement
furnished by the Trustee to the Certificateholders for such
Distribution Date and file such Distribution Report in accordance with
clause (a) above.
(iii) The Depositor shall prepare and file Current
Reports on Form 8-K, as and when required.
(iv) Prior to January 30th of the first year in which
the Trustee is able to do so under applicable law, the Trustee shall,
in accordance with industry standards, file a Form 15 Suspension Notice
with respect to the Trust Fund.
(v) Prior to (x) March 15, 2007 and (y) unless and
until a Form 15 Suspension Notice shall have been filed, prior to March
15th of each year thereafter, the Servicer shall provide the Trustee
with an Annual Compliance Statement, together with a copy of the
Assessment of Compliance and Attestation Report to be delivered by the
Servicer pursuant to Sections 3.20 and 3.21. Prior to (x) March 31,
2007 and (y) unless and until a Form 15 Suspension Notice shall have
been filed, March 31st of each year thereafter, the Trustee shall,
subject to subsection (e) below, file a Form 10-K, with respect to the
Trust Fund. The Trustee shall prepare each Form 10-K and, no later than
5 Business Days prior to the date on which such Form 10-K is required
to be filed, deliver a copy of such Form 10-K to the Depositor for
review. No later than the Business Day following the receipt thereof,
the Depositor shall notify the Trustee of any changes to be made to the
Form 10-K. The Trustee shall make any changes thereto requested by the
Depositor and deliver the final Form 10-K to the Depositor for
signature no later than three Business Days prior to the date on which
such Form 10-K must be filed by the Trustee in accordance with this
clause (iv). The Depositor shall execute the final Form 10-K and
deliver the same to the Trustee via electronic mail
(▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇) or facsimile no later than Business Day
following receipt of the same (which, unless not received within such
time frame from the Trustee, shall be no later than two Business Days
prior to the date on which the Form 10-K is required to be filed), with
an original executed hard copy to follow by overnight mail. Such Form
10-K shall include the Assessment of Compliance, Attestation Report,
Annual Compliance Statements and other documentation provided by the
Servicer pursuant to Sections 3.20 and 3.21 and a certification in the
form attached hereto as Exhibit O-1 (the "Depositor Certification"),
which shall be signed by the senior officer of the Depositor in charge
of securitization.
(vi) As to each item of information required to be
included in any Form 10-D, Form 8-K or Form 10-K, the Trustee's or
Depositor's obligation to include the information in the applicable
report is subject to receipt from the entity that is indicated in
Exhibit S as the responsible party for providing that information, if
other than the Trustee or the Depositor, as applicable, as and when
required as described above. Each of the Trustee, the Servicer and the
Depositor, as applicable, hereby agree to notify and provide to the
Trustee and the Depositor all information that is required to be
included in any Form 10-D, Form 8-K or Form 10-K, with respect to which
that entity is indicated in Exhibit S as the responsible party for
providing that information. In the case of information to be included
in the Form 10-D, such information shall be delivered to the Trustee no
later than no later than 5 calendar days following each Distribution
Date. In the case of information to be included in the Form 8-K, such
information shall be delivered to the Depositor no later than 2
Business Days following the occurrence of a reportable event. In the
case of information to be included in the Form 10-K, such information,
other than the documentation provided pursuant to Sections 3.20, 3.21
and 3.22, shall be delivered to the Trustee no later than (x) March 1,
2007 and (y) unless and until a Form 15 Suspension Notice shall have
been filed, March 1st of each year thereafter. The Servicer shall be
responsible for determining the pool concentration applicable to any
subservicer or originator at any time, for purposes of disclosure as
required by Items 1117 and 1119 of Regulation AB. The Trustee shall
provide electronic or paper copies of all Form 10-D, 8-K and 10-K
filings free of charge to any Certificateholder upon request.
(vii) The Trustee shall sign a certification (in the
form attached hereto as Exhibit O-2) for the benefit of the Depositor
and its officers, directors and Affiliates. The Trustee's certification
shall be delivered to the Depositor no later than March 18th of each
year (or if such day is not a Business Day, the immediately preceding
Business Day) and the Depositor shall deliver the Depositor
Certification to the Trustee for filing no later than March 20th of
each year (or if such day is not a Business Day, the immediately
preceding Business Day).
(viii) The Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon (i) a breach of the Trustee's
obligations under this Section 3.22, Section 3.21 or (ii) any material
misstatement or omission contained in any information provided by the
Trustee including, without limitation, in the certification provided by
the Trustee in the form of Exhibit O-2 or the Assessment of Compliance
provided pursuant to Section 3.21. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Depositor,
then the Trustee, in connection with (i) a breach of the Trustee's
obligations under this Section 3.22, Section 3.21 or (ii) any material
misstatement or omission contained in any information provided by the
Trustee including, without limitation, in the certification provided by
the Trustee in the form of Exhibit O-2, or in the Assessment of
Compliance or Attestation report provided pursuant to Section 3.21,
agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of
the Depositor in such proportion as is appropriate to reflect the
relative fault of the Depositor on the one hand and the Trustee on the
other. This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
The Servicer shall indemnify and hold harmless the Depositor, the
Trustee, the Certificate Insurer and their respective officers, directors and
Affiliates from and against any actual losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain based upon (i) a
breach of the Servicer's obligations under Sections 3.20, 3.21 or 3.22 or (ii)
any material misstatement or omission contained in any information provided by
the Servicer including, without limitation, in the information provided pursuant
to Sections 3.20 and 3.21. This indemnification shall survive the termination of
this Agreement or the termination of any party to this Agreement.
The Depositor shall indemnify and hold harmless the Servicer, the
Trustee, the Certificate Insurer and their respective officers, directors and
Affiliates from and against any actual losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain based upon (i) a
breach of the Depositor's obligations under this Section 3.22 or (ii) any
material misstatement or omission contained in any information provided by the
Depositor.
(ix) The Trustee will have no duty or liability to
verify the accuracy or sufficiency of any information not prepared by
it included in any Form 10-D, Form 10-K or Form 8-K. The Trustee shall
have no liability with respect to any failure to properly prepare or
file any Form 10-D or Form 10-K resulting from or relating to the
Trustee's inability or failure to obtain any information in a timely
manner from the party responsible for delivery of such disclosure
information. The Trustee shall have no liability with respect to any
failure to properly file any Form 10-D or 10-K resulting from or
relating to the Depositor's failure to timely comply with the
provisions of this section. Nothing herein shall be construed to
require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-D, Form 10-K or Form 8-K. Copies of all reports filed
by the Trustee under the Exchange Act shall be sent to the Depositor
electronically or at the addressed set forth in Section 11.05. Fees and
expenses incurred by the Trustee in connection with this Section 3.24
shall not be reimbursable from the Trust Fund.
(x) Upon any filing with the Commission, the Trustee
shall promptly deliver to the Depositor a copy of any executed report,
statement or information.
(xi) To the extent that, following the Closing Date,
the Depositor certifies that reports and certifications differing from
those required under this Section 3.22 are necessary to comply with the
reporting requirements under the Exchange Act, the parties hereto
hereby agree that each will reasonably cooperate to amend the
provisions of this Section 3.22 in order to comply with such amended
reporting requirements and such amendment of this Section 3.22. Any
such amendment may result in the reduction of the reports executed by
and filed on behalf of the Depositor under the Exchange Act.
Notwithstanding the foregoing, the Trustee shall not be obligated to
enter into any amendment pursuant to this Section that adversely
affects its obligations and immunities under this Agreement.
Each of the parties acknowledges and agrees that the purpose of
Sections 3.20, 3.21 and this Section 3.22 of this Agreement is to facilitate
compliance by the Depositor with the provisions of Regulation AB. Therefore,
each of the parties agree that (a) the obligations of the parties hereunder
shall be interpreted in such a manner as to accomplish that purpose, (b) the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance in
respect of the requirements of Regulation AB, (c) the parties shall comply with
reasonable requests made by the Depositor for delivery of additional or
different information as the Depositor may determine in good faith is necessary
to comply with the provisions of Regulation AB, and (d) no amendment of this
Agreement shall be required to effect any such changes in the parties'
obligations as are necessary to accommodate evolving interpretations of the
provisions of Regulation AB.
Section 3.23. RESERVED.
Section 3.24. ACCESS TO CERTAIN DOCUMENTATION.
The Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder or Certificate Owner,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and reasonable advance notice and during normal business
hours at the offices of the Servicer designated by it. In addition, access to
the documentation regarding the Mortgage Loans will be provided to any
Certificateholder or Certificate Owner, the Certificate Insurer, the Trustee and
any Person identified to the Servicer as a prospective transferee of a
Certificate, upon reasonable request and reasonable advance notice during normal
business hours at the offices of the Servicer designated by it at the expense of
the Person requesting such access.
Section 3.25. TITLE, MAINTENANCE AND DISPOSITION OF REO PROPERTY.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders and the Certificate Insurer. If the Trust Fund acquires any
Mortgaged Property as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the REO Property shall only be held
temporarily, shall be actively marketed for sale, and the Servicer shall dispose
of the Mortgaged Property as soon as practicable, and in any case before the end
of the third calendar year following the calendar year in which the Trust Fund
acquires the property. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause the Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC
to the imposition of any federal, state, or local income taxes on the proceeds
received from the Mortgaged Property under Section 860G(c) of the Code or
otherwise, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of the
foreclosure would exceed the costs and expenses of bringing a foreclosure
proceeding. The proceeds received from the maintenance of any REO Properties,
net of reimbursement to the Servicer for costs incurred (including any property
or other taxes) in connection with maintenance of the REO Properties and net of
unreimbursed Servicing Fees, Advances, and Servicing Advances, shall be applied
to the payment of principal of and interest on the related defaulted Mortgage
Loans (with interest accruing as though the Mortgage Loans were still current
and adjustments, if applicable, to the Mortgage Rate were being made in
accordance with the Mortgage Note) and all such proceeds shall be deemed, for
all purposes in this Agreement, to be payments on account of principal and
interest on the related Mortgage Notes and shall be deposited into the
Distribution Account.
(b) The Servicer shall separately account for any funds collected in
connection with any REO Property and shall establish and maintain, or cause to
be established and maintained, with respect to REO Properties an account held in
trust for the Trustee for the benefit of the Certificateholders and the
Certificate Insurer (the "REO Account"), which shall be an Eligible Account. The
Servicer shall be permitted to allow the Collection Account to serve as the REO
Account, subject to separate ledgers for each REO Property. The Servicer shall
be entitled to retain or withdraw any interest income paid on funds deposited in
the REO Account.
(c) The Servicer shall deposit, or cause to be deposited in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, and shall thereafter deposit in the REO Account, in no event
more than two Business Days after the Servicer's receipt thereof, any amounts
collected in respect of an REO Property and shall withdraw therefrom funds
necessary for the proper maintenance and preservation of such REO Property
including, without limitation:
(i) all insurance premiums due and payable in respect
of such REO Property;
(ii) all real estate taxes and assessments in respect
of such REO Property that may result in the imposition of a lien
thereon; and
(iii) all costs and expenses necessary to maintain
such REO Property.
To the extent that amounts on deposit in the REO Account with respect
to an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Servicer would make such advances if the Servicer owned the REO
Property and if in the Servicer's judgment, the payment of such amounts will be
recoverable from the proceeds of the REO Property.
Notwithstanding the foregoing, following the date of acquisition by the
Trust Fund, neither the Servicer nor the Trustee shall knowingly:
(i) authorize the Trust Fund to enter into,
renew or extend any New Lease with respect to any REO
Property;
(ii) authorize any amount to be received or
accrued under any New Lease other than amounts that
will constitute Rents from Real Property;
(iii) authorize any construction on any REO
Property; or
(iv) authorize any Person to Directly
Operate any REO Property on any date more than 90
days after its date of acquisition by the Trust Fund.
(d) In addition to the withdrawals permitted under Section 3.23(c), the
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.10(d)(ii), for
distribution on the related Distribution Date in accordance with Section 4.01,
any proceeds from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).
(e) [Reserved].
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Servicer or any Sub-Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.10(d)(ii) on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance with
Section 4.01. Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 3.26. OBLIGATIONS OF THE SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS.
Not later than 3:00 p.m. New York time on each Servicer Remittance
Date, the Servicer shall remit from its own funds to the Distribution Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B)
one-half of its aggregate Servicing Fee received in the related Remittance
Period. The Servicer shall not have the right to reimbursement for any amounts
remitted to the Trustee in respect of Compensating Interest. Such amounts so
remitted shall be included in the Available Funds and distributed therewith on
the next Distribution Date. The Servicer shall not be obligated to pay any
compensating amounts with respect to Relief Act Interest Shortfalls.
Section 3.27. [Reserved].
Section 3.28. OBLIGATIONS OF THE SERVICER IN RESPECT OF MORTGAGE RATES
AND MONTHLY PAYMENTS.
In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deposit in the Collection Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor, the Certificate Insurer and
any successor Servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.26 shall not limit the ability of the Servicer to seek
recovery of any such amounts from the related Mortgagor under the terms of the
related Mortgage Note, as permitted by law.
Section 3.29. EXCESS RESERVE FUND ACCOUNT.
(a) No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Excess
Reserve Fund Account, Deutsche Bank National Trust Company, as Trustee, in trust
for registered Holders of IndyMac Residential Mortgage-Backed Trust
Certificates, Series 2006-L1." The Excess Reserve Fund Account shall be an
Eligible Account. On the Closing Date, the Depositor will deposit, or cause to
be deposited, into the Excess Reserve Fund Account, $5,000.
On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount that will remain unpaid to the Holders of the Class A Certificates or the
Subordinated Certificates, the Trustee has been directed by the Class C
Certificateholders to, and therefore will, deposit into the Excess Reserve Fund
Account the amounts described in Section 4.01(d)(vii), rather than distributing
such amounts to the Class C Certificateholders. On each such Distribution Date,
the Trustee shall hold all such amounts for the benefit of the Holders of the
Class A Certificates and the Subordinated Certificates, and will distribute such
amounts to the Holders of the Class A Certificates and the Subordinated
Certificates in the amounts and priorities set forth in Section 4.01(e). If no
unpaid Net WAC Rate Carryover Amounts are payable from the Excess Reserve Fund
Account on a Distribution Date, the Trustee shall deposit into the Excess
Reserve Fund Account on behalf of the Class C Certificateholders, from amounts
otherwise distributable to the Class C Certificateholders, an amount such that
when added to other amounts already on deposit in the Excess Reserve Fund
Account, the aggregate amount on deposit therein is equal to $5,000.
It is the intention of the parties hereto that, for federal and state
income and state and local franchise tax purposes, the Excess Reserve Fund
Account be disregarded as an entity separate from the Holder of the Class C
Certificates unless and until the date when either (a) there is more than one
Class C Certificateholder or (b) any Class of Certificates in addition to the
Class C Certificates is recharacterized as an equity interest in the Excess
Reserve Fund Account for federal income tax purposes, in which case it is the
intention of the parties hereto that, for federal and state income and state and
local franchise tax purposes, the Excess Reserve Fund Account be treated as a
partnership. All amounts deposited into the Excess Reserve Fund Account (other
than the initial deposit therein of $5,000) shall be treated as amounts
distributed by REMIC 2 to the Holders of the Class C Certificates. The Excess
Reserve Fund Account will be an "outside reserve fund" within the meaning of
Treasury regulation Section 1.860G-2(h). Upon the termination of the Trust Fund,
or the payment in full of the Class A Certificates and the Subordinated
Certificates, all amounts remaining on deposit in the Excess Reserve Fund
Account will be released by the Trust Fund and distributed to the Class C
Certificateholders or their designees. The Excess Reserve Fund Account will be
part of the Trust Fund but not part of any REMIC, and any payments to the
Holders of the Class A Certificates or the Subordinated Certificates of Net WAC
Rate Carryover Amounts from the Excess Reserve Fund Account will not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Excess Reserve Fund Account the amounts described above on each
Distribution Date as to which there is any Net WAC Rate Carryover Amount that
will remain unpaid to the Holders of the Class A Certificates or the
Subordinated Certificates, rather than distributing such amounts to the Class C
Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
such acceptance.
The Servicer shall direct any depository institution maintaining the
Excess Reserve Fund Account to invest the funds in such account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee or an
Affiliate manages or advises such investment, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee or an Affiliate manages or advises such investment. If
no investment direction of the Servicer with respect to the Excess Reserve Fund
Account is received by the Trustee, the Trustee shall invest the funds in
Deutsche Bank Institutional Cash Management Fund No. 541. The Trustee shall not
be responsible for any losses incurred with respect to any investment of funds
pursuant to this Section 3.27(a), except to the extent that the Trustee is the
obligor on such Permitted Investment. All income realized from investment of
funds in the Excess Reserve Fund Account shall be distributed to the Holders of
the Class C Certificates.
For federal tax return and information reporting, the right of the
Holders of the Class A Certificates and the Subordinated Certificates to receive
payments from the Excess Reserve Fund Account in respect of any unpaid Net WAC
Rate Carryover Amount shall be assigned a value of $19,000, which value the
Trustee shall identify to any Certificateholder that requests such information
by contacting the Trustee in writing.
ARTICLE IV
FLOW OF FUNDS
Section 4.01. DISTRIBUTIONS.
(a) On each Distribution Date, prior to making any distributions on the
Certificates, the Trustee shall withdraw from the Distribution Account, from
amounts on deposit therein, amounts representing the Trustee Fee payable for
such Distribution Date and any and all expenses owing to it under the terms of
this Agreement, which the Trustee shall pay to itself. Following such payments,
on each Distribution Date the Trustee shall withdraw from the Distribution
Account that portion of Available Funds for such Distribution Date, consisting
of the Interest Remittance Amount for such Distribution Date, and shall make the
following disbursements and transfers in the order of priority described below,
in each case to the extent of the Interest Remittance Amount remaining for such
Distribution Date:
(i) to the Certificate Insurer, the amount owing to
the Certificate Insurer under the Insurance Agreement for the Premium
payable in respect of the Insured Certificates;
(ii) to the Holders of the Class A-1, Class A-2 and
Class A-3 Certificates, PRO RATA, based on the entitlement of each such
Class, the Accrued Certificate Interest and the Unpaid Interest
Shortfall Amount, if any, related to such Class for such Distribution
Date;
(iii) to the Certificate Insurer, the amount owing to
the Certificate Insurer under the Insurance Agreement for reimbursement
for prior claims paid under the Policy and any other amounts owing to
the Certificate Insurer under the Insurance Agreement;
(iv) to the Holders of the Class M Certificates, the
Accrued Certificate Interest for such Class for such Distribution Date;
and
(v) to the Holders of the Class B Certificates, the
Accrued Certificate Interest for such Class for such Distribution Date.
(b) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:
(i) sequentially, to the Holders of the Class A-1,
Class A-2 and Class A-3 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced to
zero;
(ii) to the Certificate Insurer, the amount owing to
the Certificate Insurer under the Insurance Agreement for reimbursement
for prior claims paid under the Policy and any other amounts owing to
the Certificate Insurer under the Insurance Agreement, to the extent
not paid pursuant to clause Section 4.01(a) above and to the extent of
the Principal Distribution Amount remaining after the distribution in
Section 4.01(b)(i) above;
(iii) to the Holders of the Class M Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iv) to the Holders of the Class B Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero.
(c) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:
(i) sequentially, to the Holders of the Class A-1,
Class A-2 and Class A-3 Certificates, the Class A Principal
Distribution Amount for such Distribution Date, in that order, until
the aggregate Certificate Principal Balance of such Class has been
reduced to zero;
(ii) to the Certificate Insurer, the amount owing to
the Certificate Insurer under the Insurance Agreement for reimbursement
for prior claims paid under the Policy and any other amounts owing to
the Certificate Insurer under the Insurance Agreement, to the extent
not paid pursuant to Section 4.01(a) above and to the extent of the
Principal Distribution Amount remaining after the distribution in
Section 4.01(c)(i) above;
(iii) to the Holders of the Class M Certificates, the
Class M Principal Distribution Amount for such Distribution Date, until
the Certificate Principal Balance thereof has been reduced to zero;
(iv) to the Holders of the Class B Certificates, the
Class B Principal Distribution Amount for such Distribution Date, until
the Certificate Principal Balance thereof has been reduced to zero.
(d) On each Distribution Date, the Total Monthly Excess Spread shall be
distributed as follows:
(i) in the case of each Distribution Date up to and
including the Distribution Date in June 2006, to the holders of the
Class C Certificates, 100% of the Total Monthly Excess Spread;
(ii) beginning on the Distribution Date in July 2006,
to the Holders of the Certificates then entitled to distributions of
principal, the Extra Principal Distribution Amount payable to such
Holders as part of the Principal Distribution Amount to the extent of
their respective entitlements to principal as set forth in Section
4.01(b) and Section 4.01(c) above;
(iii) to the Holders of the Class M Certificates, in
an amount equal to the Unpaid Interest Shortfall Amount for such
Distribution Date and such Class of Certificates;
(iv) to the Holders of the Class M Certificates, in
an amount equal to the Allocated Realized Loss Amount for such
Distribution Date and such Class of Certificates;
(v) to the Holders of the Class B Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount for such
Distribution Date and such Class of Certificates;
(vi) to the Holders of the Class B Certificates, in
an amount equal to the Allocated Realized Loss Amount for such
Distribution Date and such Class of Certificates;
(vii) to the Excess Reserve Fund Account, for
distribution therefrom to the Holders of the Class A Certificates and
the Subordinated Certificates, after taking into account any amounts
received under the Corridor Agreements, the amount of any Net WAC Rate
Carryover Amounts for such Distribution Date, to the extent of their
respective entitlements as set forth in Section 4.01(e);
(viii) reserved;
(ix) to the Holders of the Class C Certificates, (a)
the Accrued Certificate Interest for such Class and any Excess
Overcollateralization Amount for such Distribution Date and (b) on any
Distribution Date on which the Certificate Principal Balances of the
Class A Certificates and the Subordinated Certificates have been
reduced to zero, any remaining Available Funds; and
(x) any remaining amounts to the Holders of the Class
R Certificates (in respect of the Class R-2 Interest).
On each Distribution Date, following the foregoing distributions, an
amount equal to the amount of Subsequent Recoveries deposited into the
Collection Account pursuant to Section 3.05 and included in the Available Funds
for such Distribution Date shall be applied to increase the Certificate
Principal Balance of the Class of Subordinated Certificates with the Highest
Priority up to the extent of such Realized Losses previously allocated to that
Class of Certificates pursuant to Section 4.04. An amount equal to the amount of
any remaining Subsequent Recoveries shall be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next Highest Priority,
up to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.04, and so on. Holders of such Certificates
will not be entitled to any distribution in respect of interest on the amount of
such increases for any Accrual Period preceding the Distribution Date on which
such increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Certificate of such Class in accordance with its
respective Percentage Interest.
(e) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a), Section 4.01(b) or Section 4.01(c), as applicable,
and Section 4.01(d), the Trustee shall withdraw from the Excess Reserve Fund
Account the lesser of (A) the amount on deposit therein and (B) the aggregate of
any Net WAC Rate Carryover Amounts for such Distribution Date and shall
distribute the amount so withdrawn to the Holders of the Class A Certificates
and the Subordinated Certificates in the following order of priority, in each
case to the extent of the amount withdrawn:
From payments, if any, received under the Corridor Agreements as
follows, subject to the provisions set forth in this subsection (e) below:
(a) From payments, if any, received under the Class A Interest
Rate Corridor, concurrently, to the Class A-1, Class A-2 and Class A-3
Certificates, PRO RATA, based on entitlement, the amount of the Net WAC Rate
Carryover Amount for each such Class; and
(b) From payments, if any, received under the Subordinate
Interest Rate Corridor, sequentially, to the Class M and Class B Certificates,
in that order, the amount of Net WAC Rate Carryover Amount for each such Class;
and
(c) From other amounts on deposit in the Excess Reserve Fund
Account as follows:
(i) concurrently, to the Class A-1, Class A-2 and
Class A-3 Certificates, PRO RATA, based on entitlement, the Net WAC
Rate Carryover Amount for each such Class, after taking into account
any amounts received under the related Corridor Agreement; and
(ii) sequentially, to the Class M and Class B
Certificates, in that order, the Net WAC Rate Carryover Amount for each
such Class, after taking into account any amounts received under the
related Corridor Agreement.
Notwithstanding anything to the contrary herein, for so long as any
Class A or Subordinated Certificates are held by the Seller or its Affiliates,
the Trustee shall not knowingly distribute any amounts received under the
related Corridor Agreement in respect of any Class of such Certificates held by
the Seller or any of its Affiliates, and any such amounts shall instead be
distributed in accordance with this Section 4.01(e) excluding those Certificates
held by the Seller or its Affiliates. At least six (6) Business Days prior to
the related Distribution Date, the Seller shall make available to the Trustee a
statement containing (i) the aggregate Certificate Balances of each of the Class
A Certificates and Subordinated Certificates owned by the Seller or any of its
Affiliates during the immediately preceding Interest Accrual Period and/or as of
the date of such statement to the Trustee and (ii) the names of the Sellers
and/or any of its Affiliates that own any of the Class A Certificates or
Subordinated Certificates during the immediately preceding Interest Accrual
Period and/or as of the date of such statement to the Trustee. The Seller and
its Affiliates hereby agree that (i) the Seller and its Affiliates shall own not
less than 100% of any Class of Class A or Subordinated Certificates and all
transfers of Class A Certificates or Subordinated Certificates that the Seller
and/or is Affiliates may undertake shall be restricted to 100% of such Class and
(ii) neither the Seller nor any of its Affiliates shall undertake to sell any
Class A Certificates or Subordinated Certificates held by such entities or
purchase any additional Class A Certificates or Subordinated Certificates from
the date of such statement to the Trustee until the first day following the
related Distribution Date. Any amounts received by the Seller or any of its
Affiliates under the Corridor Agreements in respect of such Certificates owned
by the Seller or any of its Affiliates, or in error or otherwise, shall be
immediately returned by the Seller to the Trustee and then distributed by the
Trustee to other entitled Certificateholders of such Class in accordance with
this Section 4.01(e), and if no such other Certificateholders, to the Corridor
Provider.
(f) All distributions made with respect to the Certificates of each
Class on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates of such Class based on their respective Percentage
Interests. Payments in respect of the Certificates of each Class on each
Distribution Date will be made to the Holders of record on the related Record
Date (except as otherwise provided in this Section 4.01(f), in Section 4.01(h)
or in Section 10.01, respecting the final distribution on the Certificates),
based on the aggregate Percentage Interest represented by their respective
Certificates in such Class, and shall be made by wire transfer of immediately
available funds to the account of any such Holder at a bank or other entity
having appropriate facilities therefor, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register,
if such Holder shall have so notified the Trustee in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date. The final distribution on each Certificate will be made in like manner,
but only upon presentment and surrender of such Certificate at the Corporate
Trust Office of the Trustee or such other location specified in the notice to
Certificateholders of such final distribution.
(g) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. In no event shall the
Holders of any Class of Certificates, the Trustee, the Depositor or the Servicer
in any way be responsible or liable to the Holders of any other Class of
Certificates in respect of amounts properly previously distributed on the
Certificates.
Except as otherwise provided in Section 10.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Trustee shall, no later than
four days prior to the related Distribution Date, send, by overnight delivery or
by registered mail, to each Holder on such date of such Class of Certificates
and the Certificate Insurer a notice to the effect that:
(i) the Trustee expects that the final distribution
with respect to the Certificates of such Class will be made on such
Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates
from and after the end of the calendar month preceding such final
Distribution Date.
Any funds not distributed to any Holder or Holders of any Class of
Certificates on such final Distribution Date because of the failure of such
Holder or Holders to tender their Certificates shall, on such date, be set aside
and held in trust by the Trustee and credited to the account of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(h) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to the remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust funds. If within one year
after the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to ▇▇▇▇▇▇ Brothers Inc. all such amounts,
and ▇▇▇▇▇▇ Brothers Inc. shall be entitled to all unclaimed funds and other
assets which remain subject hereto, and the Trustee upon transfer of such funds
shall be discharged of any responsibility for such funds, and the
Certificateholders shall look only to ▇▇▇▇▇▇ Brothers Inc. for payment. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(h). Any such amounts held in trust by the Trustee shall be held in
an Eligible Account and shall be held uninvested.
Section 4.02. STATEMENTS.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Servicer, the Trustee shall prepare and make available to
each Holder of the Regular Certificates, the Servicer, the Certificate Insurer
and the Rating Agencies, a statement as to the distributions made on such
Distribution Date:
(i) the amount of the distribution made on such
Distribution Date to the Holders of each Class of the Certificates
allocable to principal;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of each Class of the Certificates
allocable to interest;
(iii) reserved;
(iv) the aggregate amount of servicing compensation
received by the Servicer with respect to the related Remittance Period
(separately identifying Servicing Fees and other servicing
compensation) and such other customary information as the Trustee
reasonably deems necessary or desirable, or which a Certificateholder
reasonably requests, to enable Certificateholders to prepare their tax
returns;
(v) the aggregate amount of Advances for the related
Remittance Period;
(vi) the Pool Balance at the Close of Business at the
end of the related Remittance Period;
(vii) the number, aggregate Stated Principal Balance,
weighted average remaining term to maturity and weighted average
Mortgage Rate of the Mortgage Loans as of the related Determination
Date;
(viii) the number and aggregate unpaid Stated
Principal Balance of Mortgage Loans (a) that were (A) Delinquent
(exclusive of Mortgage Loans in bankruptcy or foreclosure and REO
Properties) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, (B) as to which foreclosure proceedings have been commenced and
Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, (C) in bankruptcy and Delinquent (1) 30 to 59 days, (2) 60 to 89
days and (3) 90 or more days, in each preceding case as of the Close of
Business on the last day of the calendar month preceding such
Distribution Date, and (b) the related Mortgaged Properties of which
are REO Properties;
(ix) the total number and cumulative Stated Principal
Balance of all REO Properties as of the Close of Business of the last
day of the preceding Prepayment Period;
(x) the aggregate amount of Principal Prepayments
made during the related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred
during the related Prepayment Period and the cumulative amount of
Realized Losses;
(xii) the aggregate amount of Subsequent Recoveries
received during the related Prepayment Period and the cumulative amount
of Subsequent Recoveries received since the Closing Date
(xiii) the aggregate Certificate Principal Balance of
each Class of Regular Certificates after giving effect to the
distributions, and allocations of Realized Losses, made on such
Distribution Date separately identifying any reduction thereof due to
allocations of Realized Losses (in the case of the Subordinated
Certificates and the Class C Certificates);
(xiv) the Certificate Factor for each Class of the
Regular Certificates applicable to such Distribution Date;
(xv) the Accrued Certificate Interest for the Class A
Certificates, the Subordinated Certificates and the Class C
Certificates for such Distribution Date and Unpaid Interest Shortfall
Amount, if any, with respect to the Class A Certificates and the
Subordinated Certificates for such Distribution Date;
(xvi) the aggregate amount of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(xvii) the aggregate amount of any Relief Act
Interest Shortfalls for such Distribution Date;
(xviii) the Overcollateralized Amount and the Excess
Overcollateralization Amount for such Distribution Date;
(xix) the Credit Enhancement Percentage for such
Distribution Date;
(xx) the Net WAC Rate Carryover Amount for the Class
A Certificates and the Subordinated Certificates, if any, for such
Distribution Date and the amount remaining unpaid after payments from
the Excess Reserve Fund Account are made pursuant to Section 4.01(e);
(xxi) when the Stepdown Date has occurred and when a
Trigger Event is in effect;
(xxii) the deposits to and withdrawals from the
Excess Reserve Fund Account on such Distribution Date;
(xxiii) the Available Funds for such Distribution
Date;
(xxiv) the respective Pass-Through Rates applicable
to the Class A Certificates, the Subordinated Certificates and the
Class C Certificates for such Distribution Date and the respective
Pass-Through Rates applicable to the Class A Certificates and the
Subordinated Certificates for the immediately succeeding Distribution
Date;
(xxv) the aggregate Notional Amount of the Class C
Certificates, in each case after giving effect the reductions thereof
to occur on such Distribution Date;
(xxvi) the amount of the Reimbursement Amount for
such Distribution Date and the amount received by the Certificate
Insurer in respect thereof on such Distribution Date;
(xxvii) reserved; and
(xxviii) the amount due under the Corridor Agreements
and the amounts received under the related Corridor Agreement.
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Servicer, the Trustee, the
Certificate Insurer and the Rating Agencies via the Trustee's internet website.
The Trustee's internet website shall initially be located at
▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇. Assistance in using the website can be obtained by
calling the Trustee's customer service desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. Parties that are
unable to use the above distribution options are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the way such
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Trustee shall provide timely
and adequate notification to all above parties regarding any such changes.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each hypothetical Certificate having an initial
Certificate Principal Balance or Notional Amount (in the case of the Class C
Certificates) equal to $1,000.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to each Person who at any
time during the calendar year was a Certificateholder of a Regular Certificate,
if requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set
forth in subclauses (i) and (ii) above, 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 prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.
On each Distribution Date, the Trustee shall make available to the
Class R Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall deliver to each Person who at any time during the calendar
year was a Class R Certificateholder, if requested in writing by such Person,
such information as is reasonably necessary to provide to such Person a
statement containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Class R Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Certificateholders by
the Trustee pursuant to any requirements of the Code as from time to time in
force.
The Trustee shall maintain at its Corporate Trust Office and shall make
available free of charge during normal business hours for review by any
Certificateholder, Certificate Owner or any Person identified to the Trustee as
a prospective transferee of a Certificate, originals or copies of the following
items: (i) the private placement memorandum or other disclosure document
relating to such Certificates, if any, in the form most recently provided to the
Trustee; and (ii) in all cases, (A) this Agreement and any amendments hereof
entered into pursuant to Section 11.01, (B) all monthly statements required to
be delivered to Certificateholders of the relevant Class pursuant to this
Section 4.02 since the Closing Date, and all other notices, reports, statements
and written communications delivered to the Certificateholders of the relevant
Class pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 9.01(h) and (D) any and all Officers' Certificates delivered
to the Trustee by the Servicer since the Closing Date to evidence the Servicer's
determination that any Advance or Servicing Advance was, or if made, would be a
Nonrecoverable Advance or Nonrecoverable Servicing Advance, respectively. Copies
and mailing of any and all of the foregoing items will be available from the
Trustee upon request at the expense of the person requesting the same.
Section 4.03. REMITTANCE REPORTS; ADVANCES.
(a) By each Determination Date, the Servicer shall provide to the
Trustee and the Certificate Insurer in electronic form the information needed to
determine the distributions to be made pursuant to Section 4.01 and any other
information on which the Servicer and the Trustee mutually agree. On or before
the fifth Business Day following the end of each Prepayment Period (but in no
event later than the third Business Day prior to the related Distribution Date),
the Servicer shall deliver to the Trustee and the Certificate Insurer (which
delivery may be by electronic data transmission) a report in substantially the
form agreed to by the Servicer and the Trustee. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.03(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Remittance Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the Close of
Business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Remittance Period and as to which REO Property an REO Disposition did not occur
during the related Remittance Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.
On or before 3:00 p.m. New York time on the Servicer Remittance Date,
the Servicer shall remit in immediately available funds to the Trustee for
deposit in the Distribution Account an amount equal to the aggregate amount of
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.03, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties. Any amounts held for future distribution used by the
Servicer to make an Advance as permitted in the preceding sentence shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Certificateholders pursuant to Section 4.01 on such Distribution Date if such
amounts held for future distributions had not been so used to make Advances. The
Trustee will provide notice to the Servicer by telecopy by the Close of Business
on any Servicer Remittance Date in the event that the amount remitted by the
Servicer to the Trustee on such date is less than the Advances required to be
made by the Servicer for the related Distribution Date, as set forth in the
related Remittance Report.
(c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan, shall continue until a Final Recovery
Determination in connection therewith or the removal thereof from the Trust Fund
pursuant to any applicable provisions of this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate of the Servicer delivered to the Depositor, the Certificate Insurer
and the Trustee.
Section 4.04. DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS.
On each Distribution Date, the Trustee shall cause the Available Funds
from the Distribution Account to make the following disbursements and transfers,
in the following order of priority, to be distributed by REMIC 1 to REMIC 2 on
account of the REMIC 1 Regular Interests or withdrawn from the Distribution
Account and distributed to the Holders of the Class R Certificates (in respect
of the Class R-1 Interest), as the case may be:
(i) first, to the extent of Available Funds, to
Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1M, REMIC 1 Regular Interest LT1B and REMIC
1 Regular Interest LT1ZZ, PRO RATA, in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC 1 Regular Interest LT1ZZ shall be reduced when the
REMIC 1 Overcollateralized Amount is less than the REMIC 1 Target
Overcollateralized Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum LT1ZZ Uncertificated Accrued Interest
Deferral Amount and such amount will be payable to the Holders of REMIC
1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular
Interest LT1M and REMIC 1 Regular Interest LT1B, in the same proportion
as the Overcollateralization Deficiency Amount is allocated to the
Corresponding Certificates and the Uncertificated Principal Balance of
the REMIC 1 Regular Interest LT1ZZ shall be increased by such amount;
and
(ii) second, to the Holders of REMIC 1 Regular
Interests, in an amount equal to the remainder of the Available Funds
for such Distribution Date after the distributions made pursuant to
clause (i) above, allocated as follows:
(a) 98.00% of such remainder to the Holders
of REMIC 1 Regular Interest LT1AA, until the
Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest is reduced to
zero;
(b) 2.00% of such remainder, first, to the
Holders of REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1M and REMIC 1
Regular Interest LT1B, 1.00% of such remainder, in
the same proportion as principal payments are
allocated to the Corresponding Certificates, until
the Uncertificated Principal Balances of such REMIC 1
Regular Interests are reduced to zero; and second, to
the Holders of REMIC 1 Regular Interest LT1ZZ, 1.00%
of such remainder, until the Uncertificated Principal
Balance of such REMIC 1 Regular Interest is reduced
to zero; then
(c) any remaining amount to the Holders of
the Class R Certificates (in respect of the Class R-1
Interest).
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Excess Overcollateralization Amount shall be allocated to
Holders of REMIC 1 Regular Interest LT1AA and REMIC 1 Regular Interest LTZZ,
respectively.
If the Trustee becomes aware that interest and principal collections
that it receives in respect of the Mortgage Loans are not flowing from (a) REMIC
1 to REMIC 2 and (b) from REMIC 2 to each Class of Certificates, then the
Trustee shall notify the Servicer and cooperate in consulting with the
Servicer's tax counsel. The advice or any opinion of said counsel shall be full
and complete authorization and protection to the Trustee in respect of any
action taken or omitted by it hereunder in good faith and in accordance with
such advice or opinion of counsel. All parties hereby agree to resolve such
issues within 30 days of notice thereof. Furthermore, to the extent any
provisions of this document are inconsistent with (a) above, such provisions
will be amended in accordance with Section 11.01 of this Agreement.
Notwithstanding anything herein to the contrary, the Trustee shall incur no
liability for any payments made in accordance with the provisions of this
Agreement.
Notwithstanding the distributions described in this Section 4.04,
distribution of funds shall be made so that the Uncertificated Principal Balance
of each of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC
1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M and REMIC 1 Regular
Interest LT1B remains equal to 1% of the Certificate Principal Balance of the
related Corresponding Certificate and for REMIC 1 Regular Interest LT1ZZ to
equal the sum of (i) 1% of the Mortgage Pool and (ii) 1% of the
Overcollateralized Amount for such Distribution Date.
Section 4.05. ALLOCATION OF REALIZED LOSSES.
For each Distribution Date, the Servicer shall calculate the amount of
Realized Losses on the Mortgage Loans that occurred during the preceding
Prepayment Period, and shall include such calculation in its Remittance Report.
If on any Distribution Date, the aggregate Certificate Principal
Balance of the Class A Certificates and the Subordinated Certificates,
determined after all distributions pursuant to Section 4.01 have been made,
exceed the aggregate Stated Principal Balance of all of the Mortgage Loans as of
such Distribution Date after all distributions pursuant to Section 4.01 have
been made, such excess shall be allocated by the Trustee as follows: first, to
the Class B Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and second, to the Class M Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be so allocated to the Certificate Principal Balance of any such Class
on any Distribution Date shall be so allocated after the actual distributions to
be made on such date as provided herein. No allocations of any Realized Losses
shall be made to the Certificate Principal Balance of the Class A Certificates.
All references in Section 4.01 to the Certificate Principal Balance of any Class
of Certificates, unless otherwise stated, shall be to the Certificate Principal
Balance of such Class immediately prior to the relevant Distribution Date,
before reduction thereof by any Realized Losses as provided in this Section
4.05, in each case to be allocated to such Class of Certificates, on such
Distribution Date.
Any allocation of Realized Losses to a Subordinated Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated.
All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date, in the specified percentages, as follows:
first, to Uncertificated Accrued Interest payable to the REMIC 1 Regular
Interest LT1AA and REMIC 1 Regular Interest LT1ZZ up to an aggregate amount
equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1AA and REMIC 1 Regular Interest LT1ZZ up to an aggregate amount equal to the
REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1B and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1B has been reduced to zero; and fourth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1M and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M has been
reduced to zero.
All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date among the REMIC 1 Regular Interests in the
same manner and priority as such amounts are allocated with respect to the
Corresponding Certificates.
Section 4.06. THE POLICY.
(a) If the Trustee determines that a Deficiency Amount to be covered by
the Policy will exist for the related Distribution Date, the Trustee shall
complete the notice in the form of Exhibit A to the Policy (the "Notice") and
submit such Notice in accordance with the Policy to the Certificate Insurer no
later than 12:00 P.M., New York City time, on the second Business Day
immediately preceding such Distribution Date, as a claim for the amount of such
Insured Amount.
(b) The Trustee shall establish and maintain the Insurance Account on
behalf of the Holders of the Insured Certificates over which the Trustee shall
have the exclusive control and sole right of withdrawal. Upon receipt of an
Insured Amount from the Certificate Insurer on behalf of the Holders of the
Insured Certificates, the Trustee shall deposit such Insured Amount in the
Insurance Account and distribute such amount only for purposes of payment to the
Insured Certificates of the Insured Amount for which a claim was made and such
amount may not be applied to satisfy any costs, expenses or liabilities of the
Servicer, the Seller, the Depositor, the Trustee or the Trust Fund or to pay any
other Class of Certificates. Amounts paid under the Policy, to the extent needed
to pay the Insured Amount, shall be transferred to the Distribution Account on
the related Distribution Date and disbursed by the Trustee to the holders of the
Insured Certificates in accordance with Section 4.01. It shall not be necessary
for such payments to be made by checks or wire transfers separate from the
checks or wire transfers used to pay other distributions to the holders of the
Insured Certificates with other funds available to make such payment. However,
the amount of any payment of principal or of interest on the Insured
Certificates to be paid from funds transferred from the Insurance Account shall
be noted as provided in paragraph (d) below and in the statement to be furnished
to holders of the Insured Certificates pursuant to Section 4.02. Funds held in
the Insurance Account shall not be invested. Any funds remaining in the
Insurance Account on the first Business Day following the later of (i) the
related Distribution Date or (ii) the date received by the Trustee, shall be
returned to the Certificate Insurer pursuant to the written instructions of the
Certificate Insurer by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Insured Certificate from moneys
received under the Policy. The Certificate Insurer shall have the right to
inspect such records at reasonable times during normal business hours upon one
Business Day's prior notice to the Trustee.
(d) In the event that the Trustee has received a certified copy of an
order of the appropriate court that any Insured Amount has been voided in whole
or in part as a preference payment under applicable bankruptcy law, the Trustee
shall so notify the Certificate Insurer, shall comply with the provisions of the
Policy to obtain payment by the Certificate Insurer of such Preference Amount in
the amount of such voided Insured Amount, and shall, at the time it provides
notice to the Certificate Insurer, notify, by mail the holders of the affected
Insured Certificates that, in the event any holder's Insured Amount is so
recovered, such holder of an Insured Certificate will be entitled to payment
pursuant to the Policy, a copy of which shall be made available through the
Trustee or the Certificate Insurer, and the Trustee shall furnish to the
Certificate Insurer, its records evidencing the payments which have been made by
the Trustee and subsequently recovered from the holders of the Insured
Certificates, and dates on which such payments were made.
(e) The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"PREFERENCE CLAIM") of any distribution made with respect to the Insured
Certificates. Each holder of an Insured Certificate, by its purchase of such
Insured Certificate, the Servicer, the Depositor and the Trustee agree that the
Certificate Insurer (so long as no Certificate Insurer Default exists) may at
any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety or performance bond pending
any such appeal. In addition and without limitation of the foregoing, the
Certificate Insurer shall be subrogated to, and each holder of an Insured
Certificate and the Trustee hereby delegates and assigns to the Certificate
Insurer, to the fullest extent permitted by law, the rights of the Trustee and
each holder of an Insured Certificate in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with
any such Preference Claim.
(f) The Trustee shall, upon retirement of the Insured Certificates,
furnish to the Certificate Insurer a notice of such retirement, and, upon
retirement of the Insured Certificates and the expiration of the term of the
Policy, surrender the Policy to the Certificate Insurer for cancellation.
(g) The Trustee will hold the Policy in trust as agent for the holders
of the Insured Certificates for the purpose of making claims thereon and
distributing the proceeds thereof. Neither the Policy nor the amounts paid on
the Policy will constitute part of the Trust Fund created by this Agreement.
Each Holder of the Insured Certificates, by accepting its Insured Certificates,
appoints the Trustee as attorney in fact for the purpose of making claims on the
Policy.
(h) Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Insured Certificates which is made
with moneys received pursuant to the terms of the Policy shall not be considered
payment of the Insured Certificates from the Trust Fund. The Depositor, the
Servicer and the Trustee acknowledge, and each holder by its acceptance of an
Insured Certificate agrees, that without the need for any further action on the
part of the Certificate Insurer, the Depositor, the Servicer or the Trustee (a)
to the extent the Certificate Insurer makes payments, directly or indirectly, on
account of principal of or interest on the Insured Certificates to the holders
of such Insured Certificates, the Certificate Insurer will be fully subrogated
to, and each holder of an Insured Certificate, the Servicer and the Trustee
hereby delegate and assign to the Certificate Insurer, to the fullest extent
permitted by law, the rights of such holders to receive such principal and
interest from the Trust Fund, including, without limitation, any amounts due to
the holders of the Insured Certificates in respect of securities law violations
arising from the offer and sale of the Insured Certificates, and (b) the
Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in this
Agreement. The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or enforce
the Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the holders as otherwise set
forth herein.
(i) By accepting its Insured Certificate, each holder of an Insured
Certificate agrees that, unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the holder of the Insured Certificate
for all purposes (other than with respect to the receipt of payment on the
Insured Certificates) and shall have the right to exercise all rights
(including, without limitation, voting rights) of the holders of the Insured
Certificates under this Agreement and under the Insured Certificates without any
further consent of the holders of the Insured Certificates. All notices,
statement reports, certificates or opinions required by this Agreement to be
sent to any holders of Insured Certificates shall also be sent to the
Certificate Insurer.
Section 4.07. CORRIDOR AGREEMENTS.
(a) On or prior to the Closing Date, the Trustee, on behalf of the
Trust Fund, is hereby authorized to, and will enter into two Corridor Agreements
for the benefit of the Holders of the Class A Certificates and the Subordinated
Certificates. The Corridor Agreements will be assets of the Trust Fund but will
not be assets of any REMIC.
(b) The Trustee will prepare and deliver any notices required to be
delivered by it to the Corridor Provider under the Corridor Agreements.
(c) The Trustee shall terminate the Corridor Provider upon the
occurrence of an event of default under the Corridor Agreements of which a
Responsible Officer of the Trustee has actual knowledge. Upon such termination,
the Corridor Provider may be required to pay an amount to the Trustee in respect
of market quotations for the replacement cost of the Corridor Agreements. Any
such amounts shall be held in the Excess Reserve Fund Account and applied as
necessary until the related Corridor Agreement termination date.
(d) The Trustee shall deposit any amounts received on each Corridor
Agreement into the Excess Reserve Fund and distribute such amounts as provided
in Section 4.01(e)(except as otherwise provided therein).
ARTICLE V
THE CERTIFICATES
Section 5.01. THE CERTIFICATES.
Each of the Class A Certificates, the Subordinated Certificates, the
Class C Certificates and the Class R Certificates shall be substantially in the
forms annexed hereto as exhibits, and shall, on original issue, be executed,
authenticated and delivered by the Trustee to or upon the order of the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. The
Class A Certificates and the Subordinated Certificates shall be initially
evidenced by one or more Certificates representing a Percentage Interest with a
minimum dollar denomination of $100,000 initial Certificate Principal Balance
and integral dollar multiples of $1,000.00 in excess thereof, except that one
Certificate of each such Class of Certificates may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Certificate Principal Balance of such
Class on the Closing Date. The Class C Certificates and the Class R Certificates
are issuable in any Percentage Interests; provided, however, that the sum of all
such percentages for each such Class totals 100% and no more than ten
Certificates of each such Class may be issued.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of 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 such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Subordinated Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at the
Trustee's offices located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Transfer Department, at the offices of the Trustee's agent
located at DB Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ or at such other office designated by the Trustee for such purposes
and, in the case of a Class R Certificate, upon satisfaction of the conditions
set forth below, the Trustee on behalf of the Trust shall execute, authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee on behalf of the Trust shall execute on behalf of the
Trust and 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 (if so required by
the Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied
by a written instrument of transfer satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing. In addition, with respect to each Class R Certificate,
the holder thereof may exchange, in the manner described above, such Class R
Certificate for two separate certificates, each representing such holder's
respective Percentage Interest in the Class R-1 Interest and the Class R-2
Interest, respectively, in each case that was evidenced by the Class R
Certificate being exchanged.
(b) Except as provided in paragraph (c) 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 such 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 Certificates; (iii) ownership
and transfers of registration of such 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 for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may conclusively 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; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
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 Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor or (ii) after the occurrence of a
Servicer Event of Termination, the Certificate Owners of the Book-Entry
Certificates representing Percentage Interests of such Classes aggregating not
less than 51% advise the Trustee and Depository through the applicable financial
intermediaries and the Depository Participants in writing that the continuation
of a book-entry system through the Depository to the exclusion of definitive,
fully registered certificates (the "Definitive Certificates") to Certificate
Owners is no longer in the best interests of the Certificate Owners. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Servicer's expense, execute on behalf of
the Trust and authenticate the Definitive Certificates. Neither the Depositor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Servicer, any Paying Agent and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) No transfer, sale, pledge or other disposition of any Private
Certificate or any Ownership Interest therein shall be made unless such
disposition is exempt from the registration requirements of the 1933 Act, and
any applicable state securities laws or is made in accordance with the 1933 Act
and such state securities laws.
In the event of any such transfer of any Ownership Interest in any
Private Certificate that is a Definitive Certificate, except with respect to the
initial transfer of any Private Certificate by the Depositor (i) unless such
transfer is made in reliance upon Rule 144A under the 1933 Act (as evidenced by
the investment letter delivered to the Trustee, in substantially the form of the
Form of Rule 144A Investment Letter included as part of Exhibit J hereto), the
Trustee and the Depositor shall require a written Opinion of Counsel (which may
be in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall not be an expense of the Trustee or the Depositor or
(ii) the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached hereto as Exhibit L) and the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit J) acceptable to and in form and substance reasonably
satisfactory to the Depositor and the Trustee certifying to the Depositor and
the Trustee the facts surrounding such transfer, which transferor certificate
and investment letter shall not be an expense of the Trustee or the Depositor.
The Holder of such Private Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee and the Depositor 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.
In the event of any such transfer of any Ownership Interest in any
Private Certificate that is a Book-Entry Certificate, except with respect to the
initial transfer of any such Certificate by the Depositor, such transfer shall
be required to be made in reliance upon Rule 144A under the 1933 Act, and the
transferor will be deemed to have made each of the representations and
warranties set forth on Exhibit L hereto in respect of such interest as if it
was evidenced by such Private Certificate and the transferee will be deemed to
have made each of the representations and warranties set forth in the Form of
Rule 144A Investment Letter included as part of Exhibit J hereto in respect of
such interest as if it was evidenced by a Definitive Certificate. The
Certificate Owner of any such Ownership Interest in any such Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor 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 any Certificate or any interest therein shall be made to
any Plan subject to ERISA or Section 4975 of the Code, any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as
certified by such transferee in the form of Exhibit I, unless the Trustee is
provided with an Opinion of Counsel on which the Depositor, the Trustee, the
Certificate Insurer and the Servicer may rely, which is satisfactory to the
Trustee, that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Servicer, the
Trustee, the Certificate Insurer or the Trust Fund to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Servicer, the Trustee, the
Certificate Insurer or the Trust Fund. Neither a certification nor an Opinion of
Counsel will be required in connection with the initial transfer of any such
Certificate by the Depositor to an affiliate of the Depositor (in which case,
the Depositor or any affiliate thereof shall have deemed to have represented
that such affiliate is not a Plan or a Person investing Plan Assets) and the
Trustee shall be entitled to conclusively rely upon a written representation
from the Depositor of the status of such transferee as an affiliate of the
Depositor.
In the event of any such transfer of any Ownership Interest in any
Book-Entry Certificate, except with respect to the initial transfer of any such
Certificate by the Depositor, the transferee will be deemed to have made each of
the representations and warranties set forth on Exhibit I hereto.
If any Certificate subject to the restrictions set forth in the
preceding paragraph or any interest therein is acquired or held in violation of
the provisions of the preceding paragraph, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Servicer, the
Trustee and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.
Each Person who has or who acquires any Ownership Interest in a Class R
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Class R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R 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 Person shall acquire an Ownership Interest in
a Class R Certificate unless such Ownership Interest is a PRO RATA
undivided interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
(x) an affidavit in the form of Exhibit M
hereto from the proposed transferee to the effect
that such transferee is a Permitted Transferee and
that it is not acquiring its Ownership Interest in
the Class R Certificate that is the subject of the
proposed transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee; and
(y) a covenant of the proposed transferee to
the effect that the proposed transferee agrees to be
bound by and to abide by the transfer restrictions
applicable to the Class R Certificates.
(iv) Any attempted or purported transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section shall be absolutely null and void and shall
vest no rights in the purported transferee. If any purported transferee
shall, in violation of the provisions of this Section, become a Holder
of a Class R Certificate, then the prior Holder of such Class R
Certificate that is a Permitted Transferee shall, upon discovery that
the registration of transfer of such Class R Certificate was not in
fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of such
Class R Certificate. The Trustee shall be under no liability to any
Person for any registration of transfer of a Class R Certificate that
is in fact not permitted by this Section or for making any
distributions due on such Class R 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 Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time such distributions were made all
distributions made on such Class R Certificate. Any such distributions
so recovered by the Trustee shall be distributed and delivered by the
Trustee to the prior Holder of such Class R Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Class R Certificate in violation
of the restrictions in this Section, then the Trustee shall have the
right but not the obligation, without notice to the Holder of such
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Class
R Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Class R
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Class R Certificate
may be liable for any amount due under this Section or any other
provisions of this Agreement, the Trustee may withhold a corresponding
amount from such remittance as security for such claim.
(vi) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Class R Certificate in violation
of the restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section which are applicable solely to
the Class R Certificates shall cease to apply to transfers occurring on or after
the date on which there shall have been delivered to the Trustee, in form and
substance satisfactory to the Trustee, (i) written notification from each Rating
Agency that the removal of the restrictions on Transfer which are applicable
solely to the Class R Certificates set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Certificate Registrar may require 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. All Certificates
surrendered for registration of transfer or exchange shall be cancelled by the
Certificate Registrar and disposed of pursuant to its standard procedures.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar 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 and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
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 Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Servicer, the Depositor, the Trustee, the
Certificate Registrar or any Paying Agent may treat the Person, including the
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
Section 5.05. APPOINTMENT OF PAYING AGENT.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders and the Certificate Insurer entitled thereto
until such sums shall be paid to such Certificateholders and shall agree that it
shall comply with all requirements of the Code regarding the withholding of
payments in respect of Federal income taxes due from Certificate Owners and
otherwise comply with the provisions of this Agreement applicable to it.
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01. LIABILITY OF THE SERVICER AND THE DEPOSITOR.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein. The Depositor shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Depositor
herein.
Section 6.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER OR THE DEPOSITOR.
Any entity into which the Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, 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 Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
Section 6.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer or the Depositor nor any of the directors or
officers or employees or agents of the Servicer or the Depositor shall be under
any liability to the Trust or the Certificateholders for any action taken or for
refraining from the taking of any action by the Servicer or the Depositor in
good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the Servicer or the Depositor, as the case may be, or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor, as the case may be, hereunder; provided, further, that this provision
shall not be construed to entitle the Servicer to indemnity in the event that
amounts advanced by the Servicer to retire any senior lien exceed Liquidation
Proceeds (in excess of related liquidation expenses) realized with respect to
the related Mortgage Loan. The Servicer and any director or officer or employee
or agent of the 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 Servicer and the Depositor, and any director or officer
or employee or agent of the Servicer or the Depositor, shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to 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 its willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. None of the Depositor, the Seller or the
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 Servicer may in its discretion
undertake any such legal action that it may deem appropriate in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder or with respect to the Mortgage
Loans including, without limitation, any rights or causes of action arising out
of the origination of the Mortgage Loans. In such event, unless the Depositor,
the Servicer or the Seller, as applicable, acts without the consent of the
Certificate Insurer (unless the Policy has been canceled upon the payment in
full of the Insured Certificates or a Certificate Insurer Default has occurred
and is continuing), 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 Servicer shall be entitled to
be reimbursed therefor out of the Certificate Account. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.
Section 6.04. SERVICER NOT TO RESIGN.
Subject to the provisions of Section 7.01 and Section 7.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor Servicer to the Trustee and the Certificate Insurer in writing and
such proposed successor Servicer is reasonably acceptable to the Trustee and the
Certificate Insurer; and (b) each Rating Agency shall have delivered a letter to
the Trustee prior to the appointment of the successor Servicer stating that the
proposed appointment of such successor Servicer as Servicer hereunder will not
result in the reduction or withdrawal of the then current rating of any of the
Certificates (without regard to the Policy); provided, however, that no such
resignation by the Servicer shall become effective until such successor Servicer
or the Trustee, if it becomes successor Servicer, shall have assumed the
Servicer's responsibilities and obligations hereunder or the Trustee shall have
designated a successor Servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer pursuant to clause (i) above shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee and the
Certificate Insurer.
Section 6.05. DELEGATION OF DUTIES.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04.
Except as provided in Section 3.02, no such delegation is permitted that results
in the delegate subservicing any Mortgage Loans. The Servicer shall provide the
Trustee with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
Section 6.06. INSPECTION.
The Servicer, in its capacity as Seller and Servicer, shall afford the
Trustee and the Certificate Insurer, upon reasonable advance notice, during
normal business hours, access to all records maintained by the Servicer in
respect of its rights and obligations hereunder and access to officers of the
Servicer responsible for such obligations. Upon request, the Servicer shall
furnish to the Trustee and/or the Certificate Insurer, as applicable, its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.
ARTICLE VII
DEFAULT
Section 7.01. SERVICER EVENTS OF TERMINATION.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any
Advance; or (B) any other failure by the Servicer to deposit in the
Collection Account or Distribution Account any deposit required to be
made under the terms of this Agreement which continues unremedied for a
period of five (5) Business Days after the date upon which written
notice of such failure shall have been given to the Servicer by the
Trustee, or to the Servicer, the Certificate Insurer and the Trustee by
the Holders of Certificates evidencing at least 25% of the Voting
Rights; or
(ii) The failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Certificates evidencing at least 25% of the
Voting Rights or (B) actual knowledge of such failure by a Servicing
Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a trustee, conservator, receiver
or liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) The Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to all or substantially all
of its property; or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person 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
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
(b) then, in each and every such case, so long as a Servicer Event of
Termination shall not have been remedied within the applicable grace period, or
with respect solely to clause (i)(A) above, if such Advance is not made by 5:00
P.M., New York time, on the Business Day immediately following the Servicer
Remittance Date (provided, that the Trustee shall give the Servicer notice of
such failure to advance by 5:00 P.M. New York time on the Servicer Remittance
Date), the Trustee may, and at the direction of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51%, by notice then
given in writing to the Servicer, the Certificate Insurer and to the Trustee or,
if no Certificate Insurer Default has occurred and is continuing, at the
direction of the Certificate Insurer, the Trustee shall, terminate all of the
rights and obligations of the Servicer as servicer under this Agreement but only
upon consent of the Certificate Insurer if no Certificate Insurer Default has
occurred and is continuing. Any such notice to the Servicer shall also be given
to each Rating Agency, the Certificate Insurer, the Depositor and the Seller. On
or after the receipt by the Servicer (and by the Trustee if such notice is given
by the Holders) of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee (or if another
successor Servicer shall at such time have already been appointed in accordance
with Section 7.02, such successor Servicer) pursuant to and under this Section
(subject to Section 7.02); and, without limitation, the Trustee (or such other
successor Servicer appointed in accordance with Section 7.02) is hereby
authorized and empowered to execute and deliver, on behalf of the 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 of each Mortgage Loan and related documents or otherwise. The
Servicer agrees to cooperate with the Trustee (or such other successor Servicer
appointed in accordance with Section 7.02) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee (or such other successor Servicer
appointed in accordance with Section 7.02) of all documents, funds, information
and records requested by it to enable it to assume the Servicer's functions
under this Agreement within ten Business Days subsequent to such notice, the
transfer within one Business Day subsequent to such notice to the Trustee (or
such other successor Servicer appointed in accordance with Section 7.02) for the
administration by it of all cash amounts that shall at the time be held by the
Servicer and to be deposited by it in the Collection Account, the Distribution
Account, any REO Account or any Servicing Account or that have been deposited by
the Servicer in such accounts or thereafter received by the Servicer with
respect to the Mortgage Loans or any REO Property received by the Servicer. All
reasonable costs and expenses (including attorneys' fees) incurred in connection
with transferring the Mortgage Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section shall
be paid by the predecessor Servicer (or if the predecessor Servicer is the
Trustee, the Servicer that immediately preceded the Trustee) upon presentation
of reasonable documentation of such costs and expenses and to the extent not
paid by such Servicer, by the Trust.
Section 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer (and the Trustee, if notice is
sent by the Holders) receives a notice of termination pursuant to Section 6.04
or Section 7.01, the Certificate Insurer shall have the right to appoint a
successor Servicer and if the Certificate Insurer does not exercise such right,
the Trustee shall be the successor in all respects to the Servicer in its
capacity as 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 Servicer (except for any
representations or warranties of the Servicer under this Agreement, the
responsibilities, duties and liabilities contained in Section 2.03(c) and the
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof arising on and after its succession including,
without limitation, the Servicer's obligations to make Advances pursuant to
Section 4.03; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.03; provided further, that any failure to perform such duties or
responsibilities during the period following the termination of the Servicer
reasonably necessary for the Trustee as successor to the Servicer hereunder to
assume the duties and responsibilities of the Servicer or caused by the
Servicer's failure to provide information, documents or funds (or any other
items reasonably requested by the Trustee in order to succeed to the Servicer's
responsibilities, duties and liabilities hereunder) required by Section 7.01
shall not be considered a default by the Trustee as successor to the Servicer
hereunder and shall not result in any liability to the Trustee, and the Trustee,
in its capacity as successor Servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts.
As compensation therefor, the Trustee (or such other successor Servicer as may
be appointed as provided herein) shall be entitled to such compensation as the
Servicer would have been entitled to hereunder if no such notice of termination
had been given. Notwithstanding the above, (i) if the Trustee is unwilling to
act as successor Servicer or (ii) if the Trustee is legally unable so to act,
the Trustee shall appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution, bank or other
mortgage loan or home equity loan servicer having a net worth of not less than
$50,000,000 as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder and such successor Servicer must be acceptable to the Certificate
Insurer; provided, that the appointment of any such successor Servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
any of the Certificates by the Rating Agencies as evidenced by a letter to such
effect from each Rating Agency (without regard to the Policy). Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Servicer would otherwise
have received pursuant to Section 3.18 (or such other compensation as the
Trustee and such successor shall agree, not to exceed the Servicing Fee). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer to pay any deductible under an insurance policy pursuant
to Section 3.14 or to indemnify the Trustee pursuant to Section 8.05, nor shall
any successor Servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by such Servicer of any of its representations or
warranties contained herein or in any related document or agreement. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. All Servicing Transfer
Costs shall be paid by the predecessor Servicer (or, if the predecessor Servicer
is the Trustee, the Servicer that preceded the Trustee) upon presentation of
reasonable documentation of such costs, and if such predecessor Servicer
defaults in its obligation to pay such costs, such costs shall be paid by the
successor Servicer or the Trustee (in which case the successor Servicer or the
Trustee, as applicable, shall be entitled to reimbursement therefor from the
assets of the Trust Fund). If no Certificate Insurer Default has occurred and is
continuing, the Certificate Insurer shall have the right to consent to any
successor Servicer which the Trustee may propose to appoint.
(b) Any successor to the Servicer, including the Trustee, shall during
the term of its service as servicer continue to service and administer the
Mortgage Loans for the benefit of Certificateholders and the Certificate
Insurer, and maintain in force a policy or policies of insurance covering errors
and omissions in the performance of its obligations as Servicer hereunder and a
fidelity bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.14.
Section 7.03. WAIVER OF DEFAULTS.
The Majority Certificateholders (excluding any Certificates held by the
Seller, the Servicer or any Affiliate thereof) may, on behalf of all
Certificateholders and the Certificate Insurer, waive any events permitting
removal of the Servicer as servicer pursuant to this Article VII; provided,
however, that the Majority Certificateholders (excluding any Certificates held
by the Servicer or any Affiliate thereof) may not waive a default in making a
required distribution on a Certificate without the consent of the Holder of such
Certificate. Upon any waiver of a past default, such default shall cease to
exist and any Servicer Event of Termination arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Trustee to the Rating Agencies.
Section 7.04. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination or appointment of a successor to the Servicer
pursuant to Section 6.04 or this Article VII, the Trustee shall give prompt
written notice thereof to the Certificateholders and the Certificate Insurer at
their respective addresses appearing in the Certificate Register and to each
Rating Agency.
(b) No later than the later of (i) 60 days after the occurrence of any
event which constitutes or which, with notice or a lapse of time or both, would
constitute a Servicer Event of Termination and (ii) five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Servicer Event of Termination shall have
been waived or cured.
Section 7.05. SURVIVABILITY OF SERVICER LIABILITIES.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01. DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer of the
Trustee has actual knowledge, 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 his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner, the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
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 misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of
Termination, and after the curing of all such Servicer Events of
Termination which may have occurred, 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, in the absence of bad faith on the
part of the Trustee, 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;
(ii) the Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Majority
Certificateholders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
or omitting to exercise any trust or power conferred upon the Trustee,
under this Agreement; and
(iv) the Trustee shall not be charged with knowledge
of any failure by the Servicer to comply with the obligations of the
Servicer referred to in clauses (i) and (ii) of Section 7.01(a) unless
a Responsible Officer of the Trustee at the Corporate Trust Office
obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Servicer or the Majority
Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers (other than
expenses, disbursements and advances incurred or made by the Trustee, including
the compensation and the expenses and disbursements of its agents and counsel,
in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement), if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
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,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties, and the manner of obtaining consents and
of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe;
(ii) the Trustee may consult with counsel 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 be under no obligation to
exercise any of the 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 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 against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Servicer Event of Termination (which has not been cured
or waived), to exercise such of the rights and powers vested in it by
this Agreement, and to 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;
(iv) the Trustee shall not be personally 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;
(v) prior to the occurrence of a Servicer Event of
Termination and after the curing of all Servicer Events of Termination
which may have occurred, 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 documents, unless
requested in writing to do so by the Majority Certificateholder
(provided, however, that no Certificates held by the Servicer, the
Seller, the Depositor or any Affiliate thereof shall be given effect
for the purpose of calculating any such aggregation of Voting Rights);
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability from such
Certificateholders as a condition to making such investigation. Nothing
in this clause (v) shall derogate from the obligation of the Servicer
to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors;
(vi) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian;
(vii) the Trustee shall not be accountable, shall
have no liability and makes no representation as to any acts or
omissions hereunder of the Servicer until such time as the Trustee may
be required to act as Servicer pursuant to Section 7.02 and thereupon
only for the acts or omissions of the Trustee as successor Servicer;
(viii) the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for its action or
inaction other than its negligence or willful misconduct in the
performance of such act; and
(ix) the Trustee shall not be personally liable for
any loss resulting from the investment of funds held in the Collection
Account or the Distribution Account at the direction of the Servicer
pursuant to Section 3.12.
In order to comply with its duties under the U.S. Patriot Act,
the Trustee shall obtain and verify certain information and documentation from
the other parties hereto, including, but not limited to, such parties' name,
address and other identifying information.
In order to comply with laws, rules and regulations applicable to
banking institutions, including those relating to the funding of terrorist
activities and money laundering, the Trustee is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Trustee. Accordingly, each of the parties agrees
to provide to the Trustee upon its request from time to time such party's
complete name, address, tax identification number and such other identifying
information together with copies of such party's constituting documentation,
securities disclosure documentation or such other identifying documentation as
may be available for such party.
Section 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02 and in such case only to the extent of the Servicer's obligations
hereunder); the compliance by the Depositor, the Seller, the Seller or the
Servicer with any warranty or representation made under this Agreement or in any
related document or the accuracy of any such warranty or representation prior to
the Trustee's receipt of notice or other discovery of any non-compliance
therewith or any breach thereof; any investment of moneys by or at the direction
of the Servicer or any loss resulting therefrom, it being understood that the
Trustee shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Servicer (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02 and
in such case only to the extent of the Servicer's obligations hereunder), any
Sub-Servicer or any Mortgagor; any action of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02 and in
such case only to the extent of the Servicer's obligations hereunder), or any
Sub-Servicer taken in the name of the Trustee; the failure of the Servicer or
any Sub-Servicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02 and in such case only to the extent of the Servicer's
obligations hereunder); provided, however, that the foregoing shall not relieve
the Trustee of its obligation to perform its duties under this Agreement,
including, without limitation, the Trustee's duty to review the Mortgage Files
pursuant to Section 2.01. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer and in such case only to the extent of the Servicer's obligations
hereunder).
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 Trustee and may transact any banking and trust business with the
Seller, the Servicer, the Depositor or their Affiliates.
Section 8.05. TRUSTEE FEE AND EXPENSES.
As compensation for its activities under this Agreement, on each
Distribution Date the Trustee may withdraw from the Distribution Account and pay
to itself the Trustee Fee for that Distribution Date. The Trustee and any
director, officer, employee, or agent of the Trustee shall be indemnified by the
Servicer against any loss, liability, or expense (including reasonable
attorney's fees) (i) resulting from any error in any tax or information return
prepared by the Servicer or (ii) 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 under this
Agreement, other than any loss, liability or expense incurred because 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 under this Agreement.
This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement. Without limiting the
foregoing, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misconduct, the Servicer shall pay
or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement with
respect to:
(i) the reasonable compensation, expenses, and
disbursements of its counsel not associated with the closing of the
issuance of the Certificates;
(ii) 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 them to perform services under this Agreement; and
(iii) printing and engraving expenses in connection
with preparing any Definitive Certificates.
Except as otherwise provided in this Agreement, the Trustee shall not
be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee,
Certificate Registrar or Paying Agent under this Agreement or for any other
expenses.
Section 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority and has a credit rating which would
not cause any Rating Agency to reduce its current rating of the Certificates. If
such entity 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
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time such
Trustee is appointed Trustee to the effect that the Trust will not be a taxable
entity under the laws of such state. 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.
Section 8.07. RESIGNATION OR REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer,
the Certificate Insurer and each Rating Agency. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee, the Certificate Insurer and one copy to the successor
Trustee. If no successor Trustee shall have been so appointed and having
accepted appointment within 30 days after the giving of such notice of
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 therefor by the Depositor or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a 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, then the Depositor or
the Servicer may remove the Trustee but only upon consent of the Certificate
Insurer if no Certificate Insurer default has occurred and is continuing. If the
Depositor or the Servicer removes the Trustee under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor Trustee.
The Trustee that is the subject of such removal shall deliver a copy of such
instrument to the Certificateholders, the Certificate Insurer and the Servicer.
If no successor Trustee shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, then
the Certificate Insurer may appoint a successor Trustee.
The Majority Certificateholders (excluding any Certificates held by the
Seller, the Servicer or any Affiliate thereof) may at any time remove the
Trustee by written instrument or instruments delivered to the Servicer, the
Depositor, the Certificate Insurer and the Trustee but only upon consent of the
Certificate Insurer if no Certificate Insurer Default has occurred and is
continuing; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee in accordance with this Section. The Trustee that is the
subject of such removal shall deliver a copy of such instrument to the
Certificateholders and the Servicer.
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
not become effective until 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, the Servicer, the Certificate
Insurer and to its predecessor Trustee 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 like effect as if
originally named as Trustee. The Depositor, the Servicer and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for 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 the appointment of such
successor Trustee shall not result in a downgrading of any Class of the
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates and the Certificate
Insurer at their addresses as shown in the Certificate Register and to each
Rating Agency.
Notwithstanding anything to the contrary contained herein, so long as
no Certificate Insurer Default exists, the appointment of any successor Trustee
pursuant to any provision of this Agreement will be subject to the prior written
consent of the Certificate Insurer.
Section 8.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, 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.
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 or any Mortgaged Property may at the time be located, the
Depositor 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, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders and the Certificate Insurer, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. Any such co-trustee or separate trustee
shall be subject to the written approval of the Servicer. If the Servicer shall
not have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in the case a Servicer Event of Termination 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. The Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed hereunder.
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) all rights, powers, duties and obligations
conferred or imposed upon the Trustee 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 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 Trust 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
(iii) the Servicer and the Trustee, acting jointly,
may at any time accept the resignation of or remove any separate
trustee or co-trustee except that following the occurrence of a
Servicer Event of Termination, the Trustee acting alone may accept the
resignation or remove any 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 then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this 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
Depositor and the Servicer.
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. LIMITATION OF LIABILITY.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
Section 8.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates and the Certificate Insurer, subject to the
provisions of this Agreement. Any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursement and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Certificateholders in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable notice during normal business hours,
access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. Upon request, the Trustee shall furnish the Depositor, the Servicer and
any requesting Certificateholder with its most recent financial statements. The
Trustee shall cooperate fully with the Seller, the Servicer, the Depositor and
such Certificateholder and shall make available to the Seller, the Servicer, the
Depositor and such Certificateholder for review and copying such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
Section 8.13. SUITS FOR ENFORCEMENT.
In case a Servicer Event of Termination or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the direction of the Majority Certificateholders, or may, proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 8.14. WAIVER OF BOND REQUIREMENT.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15. WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL
REQUIREMENT.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16. RESERVED.
Section 8.17. ACCESS TO RECORDS OF TRUSTEE.
The Trustee shall afford the Seller, the Depositor, the Servicer, the
Certificate Insurer and each Certificateholder or Certificate Owner, upon
reasonable notice during normal business hours, access to all records maintained
by the Trustee in respect of its duties under this Agreement and access to
officers of the Trustee responsible for performing its duties. Upon request, the
Trustee shall furnish the Depositor, the Servicer, the Certificate Insurer and
any requesting Certificateholder or Certificate Owner with its most recent
financial statements. The Trustee shall cooperate fully with the Seller, the
Servicer, the Depositor, the Certificate Insurer and the Certificateholder or
Certificate Owner for review and copying any books, documents or records
requested with respect to the Trustee's duties under this Agreement at the
expense of the requesting party. The Seller, the Depositor, the Servicer and the
Certificateholder or Certificate Owner shall not have any responsibility or
liability for any action for failure to act by the Trustee and are not obligated
to supervise the performance of the Trustee under this Agreement or otherwise.
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01. REMIC ADMINISTRATION.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement. For the purposes of
the REMIC election in respect of REMIC 1, (i) the REMIC 1 Regular Interests
shall be designated as the Regular Interests in REMIC 1 and the Class R-1
Interest shall be designated as the Residual Interest in REMIC 1, and (ii) the
Regular Certificates (exclusive of the right to receive payments from the Excess
Reserve Fund Account) shall be designated as the Regular Interests in REMIC 2
and the Class R-2 Interest shall be designated as the Residual Interest in REMIC
2. The Trustee shall not permit the creation of any "interests" in any Trust
REMIC (within the meaning of Section 860G of the Code) other than the REMIC 1
Regular Interests, the Class R-1 Interest, the Class R-2 Interest, and the
interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Trustee in fulfilling its duties hereunder. The Trustee shall
be entitled to reimbursement of expenses to the extent provided in clause (i)
above from the Distribution Account.
(d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns as the direct representative of
each REMIC created hereunder. The expenses of preparing and filing such returns
shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the "Tax Matters Person") with respect to each REMIC
and shall act as Tax Matters Person for each REMIC. The Trustee, as agent for
the Tax Matters Person, shall perform on behalf of each REMIC all reporting and
other tax compliance duties that are the responsibility of such REMIC under the
Code, the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the Treasury
or other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Class R Certificate to any
disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer nor the Holder of any Class R Certificate shall
knowingly take any action, cause any REMIC created hereunder to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee, the Certificate Insurer and the Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action but in no event at the expense of the Trustee) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of a Class R Certificate will consult with the Servicer and the
Certificate Insurer, or its respective designees, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any REMIC, and no such Person shall take any such action or cause any REMIC to
take any such action as to which the Servicer or the Certificate Insurer has
advised it in writing that an Adverse REMIC Event could occur.
(g) Each Holder of a Class R Certificate shall pay when due any and all
taxes imposed on each REMIC created hereunder by federal, state or local
governmental authorities. To the extent that such Trust taxes are not paid by a
Class R Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the Class
R Certificate in the REMICs or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of regular interests in the related REMIC. If any tax is
imposed on "prohibited transactions" (as defined in Section 860F(a)(2) of the
Code) of any REMIC created hereunder, on the "net income form foreclosure
property" of any REMIC created hereunder as defined in Section 860G(c) of the
Code, on any contribution to any REMIC created hereunder after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on any REMIC created hereunder pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee, if any
such other tax arises out of or results from negligence of the Trustee in the
performance of its obligations under this Agreement, (ii) the 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 Servicer or Seller of any of their obligations
under this Agreement, (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
2.03, or (iv) in all other cases, or if the Trustee, the Servicer, or the Seller
fails to honor its obligations under the preceding 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).
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
(k) On or before April 15th of each calendar year beginning in 2006,
the Servicer shall deliver to the Trustee and each Rating Agency an Officers'
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities and shall complete and timely file the Form 8811.
Section 9.02. PROHIBITED TRANSACTIONS AND ACTIVITIES.
None of the Depositor, the Servicer or the Trustee shall sell, dispose
of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II or
Section 3.10 of this Agreement or (v) a repurchase of Mortgage Loans pursuant to
Article II of this Agreement, or acquire any assets for any REMIC, sell or
dispose of any investments in the Distribution Account, or accept any
contributions to either REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale, disposition,
acquisition, substitution or acceptance) acceptable to the Certificate Insurer
that such sale, disposition, acquisition, substitution or acceptance will not
(a) affect adversely the status of any REMIC created hereunder as a REMIC or of
the interests therein other than the Class R Certificates as the regular
interests therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this
Agreement), (d) cause any REMIC created hereunder to be subject to a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions or (e) disqualify the Trust from being a qualifying special purpose
entity under generally accepted accounting principles.
Section 9.03. INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS.
(a) In the event that any REMIC created hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein or due to the location of the Servicer, the
Servicer shall indemnify the Trustee and the Holder of the related Class R
Certificate against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such Losses attributable to the action or inaction
of the Trustee, the Depositor or the Holder of such Class R Certificate, as
applicable, or for any such Losses resulting from misinformation provided by the
Holder of such Class R Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Class R Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
(b) In the event that any REMIC created hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Trust Fund against
any and all Losses resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Servicer, the Depositor or the Holder of such Class R
Certificate, as applicable, or for any such Losses resulting from misinformation
provided by the Holder of such Class R Certificate on which the Trustee has
relied. The foregoing shall not be deemed to limit or restrict the rights and
remedies of the Holder of such Class R Certificate now or hereafter existing at
law or in equity. Notwithstanding the foregoing, however, in no event shall the
Trustee have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Trustee of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
ARTICLE X
TERMINATION
Section 10.01. TERMINATION.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Certificates have been reduced to zero and any amounts owed to
the Certificate Insurer have been paid in full, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust and any amounts owed to the
Certificate Insurer have been paid in full and (iii) the optional purchase by
the Terminator of the Mortgage Loans as described below. Notwithstanding the
foregoing, in no event shall the trust created hereby continue beyond the
earlier of (i) the Latest Possible Maturity Date and (ii) the expiration of 21
years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
Either (i) the Servicer, or (ii) if the Servicer fails to exercise such
option and any portion of the Class A Certificates remain outstanding, the
Certificate Insurer (either the Servicer or the Certificate Insurer, as
applicable, the "Terminator"), shall have the right to terminate this Agreement
on any Distribution Date following the date on which the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the related Remittance Period is less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans on the Cut-off Date, by purchasing, on or before
such Distribution Date, all of the outstanding Mortgage Loans and REO Properties
at a price (the "Termination Price") equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan (other than in respect of a Delinquent
Mortgage Loan or REO Property) as of such date of purchase (assuming for this
purpose that all amounts on deposit in the Collection Account, net of amounts
payable or reimbursable to the Servicer, have been distributed pursuant to
Section 4.01 on or before such date of purchase) plus one month's accrued
interest thereon at the applicable Mortgage Rate (or if the Terminator is the
Servicer, at the applicable Mortgage Rate less the Servicing Fee Rate), (ii) the
lesser of (x) the appraised value of any Delinquent Mortgage Loan or REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer
and (y) the Stated Principal Balance of each such Delinquent Mortgage Loan or
Mortgage Loan related to such REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Mortgage Rate (or if the Terminator is the
Servicer, at the applicable Mortgage Rate less the Servicing Fee Rate) and (iii)
any related Net WAC Rate Carryover Amount and any outstanding amounts owed to
the Certificate Insurer; provided that the purchase of the Mortgage Loans by the
Terminator will not be permitted unless the total proceeds of such sale will be
an amount sufficient to pay all principal and interest owed on the Class A
Certificates and all amounts owed to the Certificate Insurer.
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall remit to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account
(after paying itself or reimbursing itself for unreimbursed Advances and
Servicing Advances and unpaid Servicing Fees and withdrawing any other amounts
payable to itself that it is permitted to withdraw from the Collection Account),
which deposit shall be deemed to have occurred immediately preceding such
purchase. Any such purchase shall be accomplished by deposit of the Termination
Price into the Distribution Account on the Business Day before the date of final
distribution pursuant to Section 10.01(c).
Upon the termination of the Trust Fund, any amounts remaining on
deposit in the Excess Reserve Fund Account shall be released by the Trust Fund
and distributed by the Trustee to the Class C Certificateholders or their
designees. Upon termination of the Trust Fund, the Trustee will return the
original Policy to the Certificate Insurer.
With such repurchase by the Servicer, the Servicer shall acquire any
rights or potential rights of the Certificateholders or the Trustee to causes of
action against any Person relating to the Mortgage Loans or the origination of
the Mortgage Loans, including, without limitation, the right to enforce any
breach of a representation or warranty made at any time with respect to the
Mortgage Loans.
(b) Notice of any termination, specifying the date upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Servicer, by
letter to the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution specifying (1) the date upon which final distribution of the
Certificates will be made upon presentation and surrender of such Certificates
at the office or agency of the Trustee therein designated, (2) the amount of any
such final distribution and (3) that the Record Date otherwise applicable to
such date of final distribution is not applicable, distributions being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Holders of the Certificates on the date for
such final distribution (which date may be but is not required to be a
Distribution Date), in proportion to the Percentage Interests of their
respective Certificates and to the extent that funds are available for such
purpose, an amount equal to the amount required to be distributed to such
Holders in accordance with the provisions of Section 4.01 as if such date was
the immediately following Distribution Date, plus any residual amounts in excess
thereof that are available for such final distribution. By acceptance of the
Class R Certificates, the Holders of the Class R Certificates agree, in
connection with any termination hereunder, to assign and transfer any amounts in
excess of the par value of the Mortgage Loans, and to the extent received in
respect of such termination, to pay any such amounts to the Holders of the Class
C Certificates.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
distribution, the Trustee shall take the actions set forth in Section 4.01(h).
Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event that the Terminator exercises its purchase option as
provided in Section 10.01, each REMIC shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution
Date, the Servicer shall adopt and the Trustee shall sign a plan of
complete liquidation of each REMIC created hereunder meeting the
requirements of a "Qualified Liquidation" under Section 860F of the
Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan
of complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust Fund to the
Servicer for cash pursuant to the terms of the plan of complete
liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan
of complete liquidation (and the Certificateholders hereby appoint the Trustee
as their attorney in fact to sign such plan) as appropriate; and (ii) to take
such other action in connection therewith as may be reasonably required to carry
out such plan of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. AMENDMENT.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the Certificate Insurer but
without the consent of the Certificateholders, (i) to cure any ambiguity, (ii)
to correct or supplement any provisions herein which may be defective or
inconsistent with any other provisions herein, (iii) to make or modify any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement or (iv) to
modify, eliminate or add to any provisions of this Agreement to such extent as
shall be necessary or desirable to maintain the qualification of the Trust Fund
as a REMIC at all times that any Certificate is outstanding or to avoid or
minimize the risk of the imposition of any federal income tax on the Trust Fund
pursuant to the Code that would be a claim against the Trust Fund; provided;
that (1) such action shall not, as evidenced by either (a) an Opinion of Counsel
delivered to the Trustee and the Certificate Insurer or (b) written notice to
the Depositor, the Servicer and the Trustee from each Rating Agency that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency
(without regard to the Policy), adversely affect in any material respect the
interests of any Certificateholder and (2) in the case of an amendment pursuant
to clause (iv) above, such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any such
federal income tax, as evidenced by an Opinion of Counsel delivered to the
Trustee and the Certificate Insurer.
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders and with the consent of the Certificate Insurer 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 on the
Certificates without the consent of the Holder of such Certificate, (ii) amend,
modify, add to, rescind, or alter in any respect Section 11.15, notwithstanding
any contrary provision of this Agreement, without the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66 2/3%
(provided, however, that no Certificates held by the Servicer, the Seller, the
Depositor or any Affiliate thereby shall be given effect for the purpose of
calculating any such aggregation of Percentage Interests), (iii) modify, add to,
rescind, alter, or amend in any respect any provision of this Agreement
restricting the Trust Fund from holding any property or engaging in any activity
that would disqualify the Trust Fund from being a qualifying special purpose
entity under generally accepted accounting principles without the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66 2/3% (provided, however, that no Certificates held by the Servicer, the
Seller, the Depositor or any Affiliate thereby shall be given effect for the
purpose of calculating any such aggregation of Percentage Interests), or (iv)
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. Upon approval of an amendment, a copy of
such amendment shall be sent to each Rating Agency.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to or enter into any amendment to this Agreement unless it
shall have first received an Opinion of Counsel (addressed to the Trustee and
the Certificate Insurer) to the effect that such amendment or the exercise of
any power granted to the Servicer, the Depositor or the Trustee in accordance
with such amendment (i) is authorized or permitted by the Agreement and (ii)
will not result in the imposition of a tax on any REMIC created hereunder
constituting part of the Trust Fund pursuant to the REMIC Provisions or cause
any REMIC created hereunder constituting part of the Trust to fail to qualify as
a REMIC at any time that any Certificates are outstanding and that the amendment
is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 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.
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 11.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise; provided however, that such consent shall not be
unreasonably withheld.
Section 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, 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
Servicer at the expense of the Trust, but only upon direction of
Certificateholders and the Certificate Insurer accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders or the Certificate Insurer.
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 together constitute but
one and the same instrument.
Section 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, 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 person 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 of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee and the Certificate Insurer a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates entitled to at least 25% of the Voting Rights
(excluding any Certificates held by the Seller, the Servicer or any Affiliate)
thereof shall have made written request upon 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 15 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 is understood and intended, and 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 of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04. GOVERNING LAW; JURISDICTION.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05. NOTICES.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile (with confirmation of receipt)
or by express delivery service, to (a) in the case of the Seller, the Seller
and/or Servicer, IndyMac Bank, F.S.B., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secondary Marketing, or such other address or
telecopy number as may hereafter be furnished to the Depositor and the Trustee
in writing by the Servicer, (b) in the case of the Trustee, Deutsche Bank
National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration-IN06L1 (telecopy number: (714)
247-6285), or such other address or telecopy number as may hereafter be
furnished to the Depositor and the Servicer in writing by the Trustee; (c) in
the case of the Depositor, IndyMac ABS, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secondary Marketing, and (d) in the case of the
Certificate Insurer, Ambac Assurance Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Risk Management, Asset-Backed Securities
(telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇) (confirmation: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to
General Counsel, or such other address or telecopy number as may be furnished to
the Servicer, the Certificate Insurer and the Trustee in writing by the
Depositor. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Notice of any Servicer Event of
Termination shall be given by telecopy and by certified mail. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
Section 11.06. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be 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 or the
rights of the Certificate Insurer.
Section 11.07. ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08. NOTICE TO THE RATING AGENCIES AND THE CERTIFICATE
INSURER.
(a) Each of the Trustee and the Servicer shall be obligated to use its
best reasonable efforts promptly to provide notice to each Rating Agency and the
Certificate Insurer with respect to each of the following of which a Responsible
Officer of the Trustee or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this
Agreement;
(ii) the occurrence of any Servicer Event of
Termination that has not been cured or waived;
(iii) the resignation or termination of the Servicer
or the Trustee;
(iv) the final payment to Holders of any Class of the
Certificates;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, the Trustee shall promptly make available to each
Rating Agency and the Certificate Insurer copies of each Statement to
Certificateholders described in Section 4.02 hereof and the Servicer shall
promptly furnish to each Rating Agency and the Certificate Insurer copies of the
following:
(i) each annual statement as to compliance described
in Section 3.20 hereof;
(ii) each annual independent public accountants'
servicing report described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section
7.01(a) hereof which relates to the fact that the Servicer has not made
an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: MBS
Monitoring/IndyMac Residential Mortgage-Backed Trust Certificates, Series
2006-L1 and to Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10041-0003, Attention: ABS
Surveillance Group- New Assets, or such other addresses as the Rating Agencies
may designate in writing to the parties hereto.
Section 11.09. FURTHER ASSURANCES.
Notwithstanding any other provision of this Agreement, neither the
Certificateholders nor the Trustee shall have any obligation to consent to any
amendment or modification of this Agreement unless they have been provided
reasonable security or indemnity against their out-of-pocket expenses (including
reasonable attorneys' fees) to be incurred in connection therewith.
Section 11.10. BENEFITS OF AGREEMENT.
Except as set forth in Section 11.12 and Section 11.16, nothing in this
Agreement or in the Certificates, expressed or implied, shall give to any
Person, other than the Certificateholders, the Certificate Insurer and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement. The Certificate Insurer
shall be an express third-party beneficiary of this Agreement.
Section 11.11. ACTS OF CERTIFICATEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
Section 11.12. GRANT OF SECURITY INTEREST.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee, be, and be construed as, a
sale of the Mortgage Loans by the Depositor and not a pledge of the Mortgage
Loans to secure a debt or other obligation of the Depositor. However, in the
event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a security interest in
the Mortgage Loans and all other property described in clause (2) of the
preceding sentence, for the purpose of securing to the Trustee the performance
by the Depositor of the obligations described in clause (3) of the preceding
sentence. Notwithstanding the foregoing, the parties hereto intend the
conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.
Section 11.13. OFFICIAL RECORD.
The Seller agrees that this Agreement is and shall remain at all times
before the time at which this Agreement terminates an official record of the
Seller as referred to in Section 13(e) of the Federal Deposit Insurance Act.
Section 11.14. PROTECTION OF ASSETS.
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this agreement, the Trust created
by this Agreement is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell
assets;
(3) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until at least one year and one
day after the Certificates have been paid in full.
Section 11.15. QUALIFYING SPECIAL PURPOSE ENTITY.
Notwithstanding any contrary provision of this Agreement, the Trust
Fund shall not hold any property or engage in any activity that would disqualify
the Trust Fund from being a qualifying special purpose entity under generally
accepted accounting principles.
Section 11.16. RIGHTS OF THE CERTIFICATE INSURER.
(a) The Certificate Insurer is an express third-party beneficiary of
this Agreement.
(b) The Trustee or the Depositor, as applicable, shall provide to the
Certificate Insurer copies of any report, notice, Opinion of Counsel, Officers'
Certificate, request for consent or request for amendment to any document
related hereto promptly upon the Trustee's or the Depositor's production or
receipt thereof, but only to the extent that such item is required to be
delivered to the Certificate Insurer hereunder.
(c) Unless a Certificate Insurer Default exists, the Trustee, the
Servicer and the Depositor shall not agree to any amendment to this Agreement
without first having obtained the prior written consent of the Certificate
Insurer.
(d) So long as there does not exist a failure by the Certificate
Insurer to make a required payment under the Policy, the Certificate Insurer
shall have the right to exercise all rights of the Holders of the Insured
Certificates under this Agreement without any consent of such Holders, and such
Holders may exercise such rights only with the prior written consent of the
Certificate Insurer, except as provided herein.
(e) The Certificate Insurer shall not be entitled to exercise any of
its rights hereunder so long as there exists a failure by the Certificate
Insurer to make a required payment under the Policy.
IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
INDYMAC ABS, INC.,
as Depositor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
INDYMAC BANK, F.S.B.
as Seller and Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
STATE OF ) California
) ss.:
COUNTY OF ) Los Angeles
On the __ day of March, 2006 before me, a notary public in and for said
State, personally appeared __________ known to me to be a __________ of IndyMac
ABS Inc., a Delaware corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________________
Notary Public
STATE OF ) California
) ss.:
COUNTY OF ) Los Angeles
On the ___ day of March, 2006 before me, a notary public in and for
said State, personally appeared __________ known to me to be a __________ of
IndyMac Bank, F.S.B. that executed the within instrument, and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________________
Notary Public
STATE OF ) California
) ss.:
COUNTY OF ) Orange
On the ___ day of March, 2006 before me, a notary public in and for
said State, personally appeared __________ to be an __________ of Deutsche Bank
National Trust Company that executed the within instrument, and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________________
Notary Public
STATE OF ) California
) ss.:
COUNTY OF ) Orange
On the ___ day of March, 2006 before me, a notary public in and for
said State, personally appeared __________ to be an __________ of Deutsche Bank
National Trust Company that executed the within instrument, and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________________
Notary Public
EXHIBIT A-1
FORM OF CLASS A CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : March 27, 2006
Initial Certificate Balance of this Certificate
("Denomination") : $[ __ ]
Initial Certificate Balances of all Certificates of
this Class : $[ __ ]
CUSIP : [ __ ]
Interest Rate : Variable
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Class A
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
stated herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate of the Denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among IndyMac ABS, Inc., as
depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller (in such capacity,
the "Seller") and as servicer (in such capacity, the "Servicer"), and Deutsche
Bank National Trust Company, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: March __, 2006
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but solely as Trustee
By:____________________________________
Countersigned:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity,
but solely as Trustee
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed Trust, of
the Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is (i) with respect to each Class A Certificates, the
Subordinated Certificates and any Book-Entry Certificate, the Business Day
immediately preceding such Distribution Date and (ii) the Class C Certificates,
the Class R Certificates and any Definitive Certificate, the last Business Day
of the month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, the Closing Date).
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the
Certificate Insurer and the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date on which the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties as of the last
day of the related Remittance Period is less than 10% of the sum of the Stated
Principal Balances of the Closing Date Mortgage Loans and REO Properties on the
Cut-off Date, the Servicer or if the Servicer fails to exercise such option and
any portion of the Class A Certificates remain outstanding, the Certificate
Insurer, will have the right to repurchase, in whole, from the Trust all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
Signature by or on behalf of assignor
_____________________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to_____________________________________________________________,
for the account
of_____________________________________________________________________________,
account number___________, or, if mailed by check,
to_____________________________________________________________, Applicable
statements should be mailed
to_________________________________________________________________________,
_______________________________________________________________________________.
________________________________________________________________________________
This information is provided by________________________________________________,
the assignee named above, or___________________________________________________,
as its agent.
STATE OF____________ )
) ss.:
COUNTY OF___________ )
On the __th day of , 20 before me, a notary public in and for
said State, personally appeared , known to me who, being by me duly sworn, did
depose and say that he executed the foregoing instrument.
_______________________________
Notary Public
[Notarial Seal]
EXHIBIT A-2
FORM OF CLASS M CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : March 27, 2006
Initial Certificate Balance of this Certificate
("Denomination") : $[ __ ]
Initial Certificate Balances of all Certificates of
this Class : $[ __ ]
CUSIP : [ __ ]
Interest Rate : Variable
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Class M
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
stated herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this Certificate by the aggregate of the Denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among IndyMac ABS, Inc., as
depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller (in such capacity,
the "Seller") and as servicer (in such capacity, the "Servicer"), and Deutsche
Bank National Trust Company, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: March __, 2006
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but solely as Trustee
By:___________________________________
Countersigned:
By:______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity,
but solely as Trustee
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is (i) with respect to each Class A Certificates, the
Subordinated Certificates and any Book-Entry Certificate, the Business Day
immediately preceding such Distribution Date and (ii) the Class C Certificates,
the Class R Certificates and any Definitive Certificate, the last Business Day
of the month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, the Closing Date).
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the
Certificate Insurer and the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date on which the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties as of the last
day of the related Remittance Period is less than 10% of the sum of the Stated
Principal Balances of the Closing Date Mortgage Loans and REO Properties on the
Cut-off Date, the Servicer or if the Servicer fails to exercise such option and
any portion of the Class A Certificates remain outstanding, the Certificate
Insurer, will have the right to repurchase, in whole, from the Trust all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
Signature by or on behalf of assignor
_____________________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to_____________________________________________________________,
for the account of_____________________________________________________________,
account number___________, or, if mailed by check, to__________________________,
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
________________________________________________________________________________
This information is provided by________________________________________________,
the assignee named above, or___________________________________________________,
as its agent.
STATE OF____________ )
) ss.:
COUNTY OF___________ )
On the __th day of , 20 before me, a notary public in and for
said State, personally appeared , known to me who, being by me duly sworn, did
depose and say that he executed the foregoing instrument.
_______________________________
Notary Public
[Notarial Seal]
EXHIBIT A-3
FORM OF CLASS B CERTIFICATES
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
CLASS M CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : March 27, 2006
Initial Certificate Balance of this Certificate
("Denomination") : $[ __ ]
Initial Certificate Balances of all Certificates of
this Class : $[ __ ]
CUSIP : [ __ ]
Interest Rate : Variable
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Class B
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class B
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof. This Class B Certificate does not evidence
an obligation of, or an interest in, and is not guaranteed by the Depositor, the
Servicer, or the Trustee referred to below or any of their respective
affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the Denomination of this Class B Certificate by the Initial Certificate
Principal Balance of this Class) in certain monthly distributions with respect
to a Trust consisting primarily of the Mortgage Loans deposited by IndyMac ABS,
Inc. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of March 1, 2006 (the "Agreement") among the
Depositor, IndyMac Bank, F.S.B., as seller (the "Seller") and servicer (the
"Servicer") and Deutsche Bank National Trust Company, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class B Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class B Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event of any such transfer of
any Ownership Interest in any Private Certificate that is a Book-Entry
Certificate, except with respect to the initial transfer of any such Certificate
by the Depositor, such transfer shall be required to be made in reliance upon
Rule 144A under the 1933 Act, and the transferor will be deemed to have made
each of the representations and warranties set forth on Exhibit L hereto in
respect of such interest as if it was evidenced by such Private Certificate and
the transferee will be deemed to have made each of the representations and
warranties set forth in the Form of Rule 144A Investment Letter included as part
of Exhibit J hereto in respect of such interest as if it was evidenced by a
Definitive Certificate. The Certificate Owner of any such Ownership Interest in
any such Private Certificate desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee and the Depositor 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 this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class B Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: March __, 2006
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but solely as Trustee
By:___________________________________
Countersigned:
By:_______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity,
but solely as Trustee
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed Trust
2006-L1, Mortgage Backed Certificates, Series 2006-L1 (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date on which the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties as of the last
day of the related Remittance Period is less than 10% of the sum of the Stated
Principal Balances of the Closing Date Mortgage Loans and REO Properties on the
Cut-off Date, the Servicer or if the Servicer fails to exercise such option and
any portion of the Class A Certificates remain outstanding, the Certificate
Insurer, will have the right to repurchase, in whole, from the Trust all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
______________________________________________________________________________.
Dated:
Signature by or on behalf of assignor
_____________________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to_____________________________________________________________,
for the account of_____________________________________________________________,
account number___________, or, if mailed by check, to__________________________,
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
________________________________________________________________________________
This information is provided by________________________________________________,
the assignee named above, or___________________________________________________,
as its agent.
STATE OF____________ )
) ss.:
COUNTY OF___________ )
On the __th day of , 20 before me, a notary public in and for
said State, personally appeared , known to me who, being by me duly sworn, did
depose and say that he executed the foregoing instrument.
_______________________________
Notary Public
[Notarial Seal]
EXHIBIT A-4
FORM OF CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.
ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF
UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
M CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : March 27, 2006
Percentage Interest of this Certificate
("Denomination") : [ __ ]
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Class C
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
The Certificate Principal Balance of this Class C Certificate at any
time may be greater than or less than the Initial Certificate Principal Balance
set forth on the face hereof. The Notional Amount of this Class C Certificate at
any time may be less than the Initial Notional Amount set forth on the face
hereof. This Class C Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that IndyMac Bank, F.S.B. is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the Denomination of this Class C Certificate by the Initial Notional Amount of
this Class) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by IndyMac ABS, Inc. (the
"Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date (the "Agreement") among the Depositor,
IndyMac Bank, F.S.B., as seller (the "Seller") and servicer (the "Servicer") and
Deutsche Bank National Trust Company, as Trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class C Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class C Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event of any such transfer (i)
unless such transfer is made in reliance upon Rule 144A under the 1933 Act (as
evidenced by the investment letter delivered to the Trustee, in substantially
the form of the Form of Rule 144A Investment Letter included as part of Exhibit
J to the Agreement), the Trustee and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, form the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form of Exhibit L of the Agreement)
and the transferee to execute an investment letter (in substantially the form
attached hereto as Exhibit J of the Agreement) acceptable to and in form and
substance reasonably satisfactory to the Depositor and the Trustee certifying to
the Depositor and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Depositor. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor 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 this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: March __, 2006
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but solely as Trustee
By:_____________________________________
Countersigned:
By:________________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity,
but solely as Trustee
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed Trust
2006-L1, Mortgage Backed Certificates, Series 2006-L1 (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date on which the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties as of the last
day of the related Remittance Period is less than 10% of the sum of the Stated
Principal Balances of the Closing Date Mortgage Loans and REO Properties on the
Cut-off Date, the Servicer or if the Servicer fails to exercise such option and
any portion of the Class A Certificates remain outstanding, the Certificate
Insurer, will have the right to repurchase, in whole, from the Trust all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
Signature by or on behalf of assignor
_____________________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to_____________________________________________________________,
for the account of_____________________________________________________________,
account number___________, or, if mailed by check, to__________________________,
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
________________________________________________________________________________
This information is provided by________________________________________________,
the assignee named above, or___________________________________________________,
as its agent.
STATE OF_____________ )
) ss.:
COUNTY OF___________ )
On the __th day of , 20 before me, a notary public in and for said
State, personally appeared , known to me who, being by me duly sworn, did depose
and say that he executed the foregoing instrument.
_______________________________
Notary Public
[Notarial Seal]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.
ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF
UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR
INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN
ACCORDANCE WITH THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ Percentage Interest of the Class R
Certificates as of the Issue Date : 100.00%
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Class R
evidencing the distributions allocable to the Class R Certificates with
respect to a Trust consisting primarily of a pool of fixed and
adjustable-rate, residential lot mortgage loans (the "Mortgage Loans")
secured by parcels of land that have been improved for residential use.
IndyMac ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Bear ▇▇▇▇▇▇▇ Securities Corporation is the
registered owner of the Percentage Interest evidenced by this Certificate
specified above in the interest represented by all Certificates of the Class to
which this Certificate belongs in a Trust consisting primarily of the Mortgage
Loans deposited by IndyMac ABS, Inc. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date (the
"Agreement") among the Depositor, IndyMac Bank, F.S.B., as seller (the "Seller")
and Servicer (the "Servicer") and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event of any such transfer (i)
unless such transfer is made in reliance upon Rule 144A under the 1933 Act (as
evidenced by the investment letter delivered to the Trustee, in substantially
the form of the Form of Rule 144A Investment Letter included as part of Exhibit
J to the Agreement), the Trustee and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, form the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form of Exhibit L of the Agreement)
and the transferee to execute an investment letter (in substantially the form
attached hereto as Exhibit J of the Agreement) acceptable to and in form and
substance reasonably satisfactory to the Depositor and the Trustee certifying to
the Depositor and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Depositor. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor 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 this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each Person holding or acquiring any Ownership Interest in
this Certificate must 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 Person shall acquire an Ownership Interest in this
Certificate unless such Ownership Interest is a pro rata undivided interest;
(iii) in connection with any proposed transfer of any Ownership Interest in this
Certificate, the Trustee shall as a condition to registration of the transfer,
require delivery to it, in form and substance satisfactory to it, of each of the
following: (a) an affidavit in the form of Exhibit O to the Agreement from the
proposed transferee to the effect that such transferee is a Permitted Transferee
and that it is not acquiring its Ownership Interest in the Class R Certificate
that is the subject of the proposed transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee; and (b) a covenant of the proposed
transferee to the effect that the proposed transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the Class R Certificates;
(iv) any attempted or purported transfer of any Ownership Interest in this
Certificate in violation of the provisions of this Section shall be absolutely
null and void and shall vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Class R
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: March __, 2006
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity, but solely as Trustee
By:
Countersigned:
By:
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity,
but solely as Trustee
INDYMAC ABS, INC.
IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., IndyMac Residential Mortgage Backed Trust
2006-L1, Mortgage Backed Certificates, Series 2006-L1 (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date on which the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties as of the last
day of the related Remittance Period is less than 10% of the sum of the Stated
Principal Balances of the Closing Date Mortgage Loans and REO Properties on the
Cut-off Date, the Servicer or if the Servicer fails to exercise such option and
any portion of the Class A Certificates remain outstanding, the Certificate
Insurer, will have the right to repurchase, in whole, from the Trust all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts to Minors Act
JT TEN - as joint tenants with _____________
right of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
Signature by or on behalf of assignor
_____________________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to_____________________________________________________________,
for the account of_____________________________________________________________,
account number___________, or, if mailed by check, to__________________________,
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
________________________________________________________________________________
This information is provided by________________________________________________,
the assignee named above, or___________________________________________________,
as its agent.
STATE OF_____________ )
) ss.:
COUNTY OF___________ )
On the __th day of , 20 before me, a notary public in and for said
State, personally appeared , known to me who, being by me duly sworn, did depose
and say that he executed the foregoing instrument.
_______________________________
Notary Public
[Notarial Seal]
B-1
EXHIBIT B
COPY OF CERTIFICATE GUARANTY INSURANCE POLICY WITH RESPECT TO THE INSURED
CERTIFICATES
CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT
Attached to and forming part of Effective Date of Endorsement:
Certificate Guaranty Insurance Policy March 17, 2006
No. AB0977BE issued to:
Deutsche Bank National Trust Company
as Trustee for the Holders of
IndyMac Residential Mortgage-Backed Trust, Series 2006-L1
For all purposes of the Policy, the following terms shall have the
following meanings:
"Affiliate" shall mean with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall mean, for purposes of the Policy, the Pooling and
Servicing Agreement, dated as of March 1, 2006, among Indymac ABS, Inc., as the
Depositor, Indymac Bank, F.S.B., as the Seller and Servicer, and Deutsche Bank
National Trust Company as the Trustee.
"Business Day" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which banking institutions in the state of New York or the
state of California or the city in which the Corporate Trust Office or the
office of the Insurer is located are required or authorized by law or executive
order to be closed.
"Class A Certificates" shall mean any one of the IndyMac Residential
Mortgage-Backed Certificates, Series 2006-L1, substantially in the form set
forth as Exhibits ▇-▇, ▇-▇ and A-3 to the Agreement.
"Deficiency Amount" shall mean for any Distribution Date, an amount
equal to the sum of (1) the aggregate amount by which the Accrued Certificate
Interest payable to the Class A Certificates for such Distribution Date exceeds
the Interest Remittance Amount available on such Distribution Date to pay the
Class A Certificates, and (2) (i) with respect to any Distribution Date other
than the Final Distribution Date, the aggregate amount, if any, by which the
aggregate Certificate Principal Balances of the Class A Certificates (after
giving effect to all distributions of Available Funds on such Distribution Date)
exceeds the aggregate Stated Principal Balance of the Mortgage Loans on the last
day of the related Remittance Period and (ii) with respect to the Final
Distribution Date, the aggregate Certificate Principal Balances of the Class A
Certificates (after giving effect to all distributions of Available Funds on
such Distribution Date). Notwithstanding anything to the contrary contained
herein, the aggregate Deficiency Amount described above which may be paid under
the Policy shall not exceed the Maximum Insured Amount.
"Distribution Date" shall mean the 25th day of each month (or if such
day is not a Business Day the next Business Day immediately following) beginning
with the First Distribution Date.
"Due for Payment" shall mean, (i) with respect to an Insured Amount,
the Distribution Date on which Insured Amounts are due and payable pursuant to
the terms of the Agreement and (ii) with respect to a Preference Amount, the
Business Day on which the documentation required by the Insurer has been
received by the Insurer.
"Final Distribution Date" shall mean the Distribution Date occurring in
April 2011.
"First Distribution Date" shall mean April 25, 2006.
"Holder" shall mean the registered owner or beneficial owner of a Class
A Certificate, other than the Depositor, the Seller, the Master Servicer or the
Trustee or any of their Affiliates.
"Insurance Account" shall mean the account created and maintained with
the Trustee for the benefit of the Holders and the Insurer pursuant to Section
4.06 of the Agreement.
"Insurance Agreement" shall mean the Insurance and Indemnity Agreement,
dated as of March 17, 2006, among IndyMac ABS, Inc., as the Depositor, IndyMac
Bank, F.S.B., as the Sponsor, the Seller and the Servicer and Deutsche Bank
National Trust Company, as Trustee, the Insurer, as such agreement may be
amended, modified or supplemented from time to time.
"Insured Amount" shall mean, with respect to any Distribution Date, the
Deficiency Amount for such Distribution Date.
"Insured Payments" shall mean, with respect to any Distribution Date,
the aggregate amount actually paid by the Insurer to, or at the direction of,
the Trustee in respect of (i) Insured Amounts for a Distribution Date and (ii)
Preference Amounts for any given Business Day.
"Insurer" shall mean Ambac Assurance Corporation, or any successor
thereto, as issuer of the Policy.
"Late Payment Rate" shall mean for any Distribution Date, the lesser of
(i) the greater of (a) the rate of interest, as it is publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in such prime rate of interest to be effective on the date such
change is announced by Citibank, N.A.) plus 2% and (b) the then applicable
highest rate of interest on the Class A Certificates and (ii) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.
"Maximum Insured Amount" shall mean $239,365,000 in respect of
principal, plus interest thereon calculated at the Pass-Through Rate for the
Class A Certificates.
"Nonpayment" shall mean, with respect to any Distribution Date, an
Insured Amount is Due for Payment but has not been paid pursuant to the
Agreement.
"Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A to the
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Amount or Preference
Amount which shall be due and owing on the applicable Distribution Date.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Policy" shall mean the Certificate Guaranty Insurance Policy No.
AB0977BE together with each and every endorsement hereto.
"Pooling and Servicing Agreement" shall mean the Pooling and Servicing
Agreement, dated as of March 17, 2006 by and among IndyMac Bank, F.S.B., as
Sponsor, the Seller and the Master Servicer, IndyMac ABS, Inc., as Depositor and
Deutsche Bank National Trust Company, as Trustee.
"Preference Amount" shall mean any payment of principal or interest
previously distributed to a Holder on a Class A Certificate, which would have
been covered under the Policy as an Insured Amount, which has been deemed a
preferential transfer and was previously recovered from its owner pursuant to
the United States Bankruptcy Code in accordance with a final, non-appealable
order a court of competent jurisdiction.
"Reimbursement Amount" shall mean, as to any Distribution Date, the sum
of (x) (i) all Insured Payments paid by the Insurer, but for which the Insurer
has not been reimbursed prior to such Distribution Date pursuant to the
Agreement, plus (ii) interest accrued on such Insured Payments not previously
repaid, calculated at the Late Payment Rate from the date the Trustee received
the related Insured Payments, and (y) without duplication (i) any amounts then
due and owing to the Insurer under the Insurance Agreement, as certified to the
Trustee by the Insurer plus (ii) interest on such amounts at the Late Payment
Rate.
"Relief Act Shortfalls" shall mean interest shortfalls resulting from
the application of the Servicemembers Relief Act, as amended, or any similar
state law.
"Trustee" shall mean Deutsche Bank National Trust Company, or its
successor-in-interest, in its capacity as Trustee under the Agreement, or if any
successor trustee shall be appointed as provided therein, then "Trustee" shall
also mean such successor trustee, subject to the provisions thereof.
Capitalized terms used herein as defined terms and not otherwise
defined herein shall have the meaning assigned to them in the Insurance
Agreement and the Agreement, without regard to any amendment or modification
thereof, unless such amendment or modification has been approved in writing by
the Insurer.
Notwithstanding any other provision of the Policy, the Insurer will pay
any Insured Amount payable hereunder no later than 12:00 noon, New York City
time, on the later of (i) the second Business Day following receipt in New York,
New York on a Business Day by the Insurer of a Notice at the address and in the
manner provided in Section 6.02 of the Insurance Agreement and (ii) the
Distribution Date on which the related Insured Amount is Due for Payment;
provided that, if such Notice is received after 12:00 noon, New York City time,
on such Business Day, it shall be deemed to be received on the following
Business Day. If any such Notice is not in proper form or is otherwise
insufficient for the purpose of making a claim under the Policy, it shall be
deemed not to have been received for purposes of this paragraph, and the Insurer
shall promptly so advise the Trustee and the Trustee may submit an amended or
corrected Notice.
If such an amended or corrected Notice is in proper form and is
otherwise sufficient for the purpose of making a claim under the Policy, it will
be deemed to have been timely received on the business day of such resubmission,
provided, that if such Notice is received after 12:00 noon, New York City time,
on such Business Day, it will be deemed to be received before 12:00 noon on the
following Business Day.
The Insurer's obligations under the Policy with respect to Insured
Amounts will be discharged to the extent funds are transferred to the Trustee as
provided in the Policy, whether or not the funds are properly applied by the
Trustee.
The Insurer will pay any Preference Amount when due to be paid pursuant
to the Order (as defined below), but in any event no earlier than the third
Business Day following receipt by the Insurer of (i) a certified copy of a
final, non-appealable order of a court or other body exercising jurisdiction in
such insolvency proceeding to the effect that the Trustee, or Holder, as
applicable, is required to return such Preference Amount paid during the term of
the Policy because such payments were avoided as a preferential transfer or
otherwise rescinded or required to be restored by the Trustee and/or Holder, as
applicable (the "Order"), (ii) an opinion of counsel satisfactory to the
Insurer, stating that such Order has been entered and is final and not subject
to any stay, (iii) an assignment, in form and substance satisfactory to the
Insurer, duly executed and delivered by the Trustee or Holder, irrevocably
assigning to the Insurer all rights and claims of the Trustee and/or such Holder
relating to or arising under the Agreement or otherwise with respect to such
Preference Amount, (iv) appropriate instruments in form satisfactory to the
Insurer to effect the appointment of the Insurer as agent for the Trustee and
such Holder in any legal proceeding relating to such Preference Amount and (v) a
Notice (in the form attached hereto as Exhibit A) appropriately completed and
executed by the Trustee; provided, that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day; provided, further, that the Insurer
shall not be obligated to make any payment in respect of any Preference Amount
representing a payment of principal on the Class A Certificates prior to the
time the Insurer would have been required to make a payment in respect of such
principal pursuant to the first paragraph of the face of the Policy; provided,
further, that any Preference Amount that constitutes interest will be limited to
the amount of interest on the outstanding principal amount of the Class A
Certificates (calculated at the related Pass-Through Rate) accrued as of the
last day of the applicable interest accrual period and will not, in any event,
include any interest on the Class A Certificates accrued after such date or any
interest on such interest amount. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, and not to the Holder directly, unless the Holder has made a payment
of the Preference Amount to the court or such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which case
the Insurer will pay the Holder, subject to the delivery of (a) the items
referred to in clauses (i), (ii), (iii), (iv) and (v) above to the Insurer and
(b) evidence satisfactory to the Insurer that payment has been made to such
court or receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Order.
Upon any payment under the Policy, in furtherance and not in limitation
of the Insurer's equitable right of subrogation and the Insurer's rights under
the Insurance Agreement, the Insurer will, to the extent of such payment by the
Insurer under the Policy, be subrogated to the rights of any Holder, to receive
any and all amounts due in respect of such Class A Certificates as to which such
payment under the Policy was made, to the extent of any payment by the Insurer
under the Policy.
The Insurer hereby agrees that if it shall be subrogated to the rights
of Holders by virtue of any payment under the Policy, no recovery of such
payment will occur unless the full amount of the Holders' allocable
distributions for such Distribution Date can be made. In so doing, the Insurer
does not waive its rights to seek full payment of all Reimbursement Amounts owed
to it under the Insurance Agreement and the Agreement.
The Policy does not cover Net WAC Cap Carry Forward Amounts, Net
Interest Shortfalls, default interest, premiums, if any, allocated to or payable
in respect of the Class A Certificates, nor does the Policy guarantee to the
Holders any particular rate of principal payment. In addition, the Policy does
not cover shortfalls, if any, attributable to the liability of the Issuer, the
Trustee or any Holder for withholding taxes, if any, (including interest and
penalties in respect of any liability for withholding taxes) or any risk other
than Nonpayment, including the failure of the Trustee or any Paying Agent to
make any payment required under the Agreement to the Holders.
The terms and provisions of the Agreement constitute the instrument of
assignment referred to in the second paragraph of the face of the Policy.
A premium will be payable on the Policy on each Distribution Date as
provided in Section 3.02 of the Insurance Agreement, beginning with the First
Distribution Date, in an amount equal to the Premium Amount. The premium on the
Policy is not refundable for any reason, including the payment of any Class A
Certificates prior to their maturities.
IN THE EVENT THAT AMBAC ASSURANCE CORPORATION WERE TO BECOME INSOLVENT,
ANY CLAIMS ARISING UNDER THE POLICY WOULD BE EXCLUDED FROM COVERAGE BY THE
CALIFORNIA INSURANCE GUARANTY ASSOCIATION.
The Policy to which this endorsement is attached and of which it forms
a part is hereby amended to provide that there shall be no acceleration payment
due under the Policy unless such acceleration is at the sole option of the
Insurer.
Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned Policy other than as above stated.
To the fullest extent permitted by applicable law, the Insurer hereby
waives and agrees not to assert any and all rights and defenses (including but
not limited to set-offs, counterclaims, fraud in the inducement or fact or any
other circumstances that would have the effect of discharging a surety at law or
in equity), to the extent such rights and defenses may be available to the
Insurer to avoid payment of its obligations under the Policy in accordance with
the express provisions hereof. None of the foregoing waivers shall prejudice any
claim the Insurer may have, whether directly or as subrogee of the Class A
Certificateholders, subsequent to making such payment to the Trustee in
accordance with this Policy.
To the extent the provisions of this endorsement conflict with the
provisions in the above-mentioned Policy, the provisions of this endorsement
shall govern.
The Policy and the obligations of the Insurer thereunder will terminate
without any action on the part of the Insurer or any other person on the date
that is one year and one day following the earlier to occur of (i) the date on
which all amounts required to be paid on the Class A Certificates have been paid
in full and (ii) if any proceedings requisite to avoidance as a Preference
Payment have been commenced on or prior to the date specified in clause (i)
above, the 30th day after the entry of a final and nonappealable order in
resolution or settlement of each such proceeding. Upon termination of the
Policy, the Trustee shall deliver the original of the Policy to the Insurer.
No person other than the Trustee shall be entitled to present the
Notice.
No waiver of any rights or powers of the Insurer, the Holders or the
Trustee or consent by any of them shall be valid unless signed by an authorized
officer or agent thereof.
The Policy is issued under and pursuant to, and shall be construed in
accordance with, the laws of the State of California, without giving effect to
the conflict of laws principles thereof.
IN WITNESS WHEREOF, Ambac Assurance Corporation has caused this
endorsement to the Policy to be signed by its duly authorized officers.
___________________________ ______________________________________
Assistant Secretary First Vice President
EXHIBIT A
TO THE CERTIFICATE GUARANTY INSURANCE POLICY
Policy No. AB0977BE
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
Date: [ ]
Ambac Assurance Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Reference is made to Certificate Guaranty Insurance Policy No. AB0977BE
(the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings specified
in the Policy and the Pooling and Servicing Agreement, dated as of March 1, 2006
(the "Agreement"), between IndyMac Bank, F.S.B., as the Sponsor, the Seller and
the Servicer, IndyMac ABS, Inc., as Depositor, and Deutsche Bank National Trust
Company, as Trustee, as the case may be, unless the context otherwise requires.
The Trustee hereby certifies as follows:
1. The Trustee is the Trustee under the Agreement for the
Holders.
2. The relevant Distribution Date is [date].
3. Payment on the Class A Certificates in respect of the
Distribution Date is due to be received on
_________________________ under the Agreement in an amount
equal to $_________.
4. There is an [Insured Amount] [Preference Amount] of
$______________ in respect of the Class A Certificates, which
amount is Due for Payment pursuant to the terms of the
Agreement.
5. The Trustee has not heretofore made a demand for the Insured
Amount in respect of the Distribution Date.
6. The Trustee hereby requests the payment of the [Insured
Amount] [Preference Amount] that is Due For Payment be made by
Ambac under the Policy and directs that payment under the
Policy be made to the following account by bank wire transfer
of federal or other immediately available funds in accordance
with the terms of the Policy to:
______________________________ (Trustee's account number).
7. The Trustee hereby agrees that, following receipt of the
[Insured Amount] [Preference Amount] from Ambac, it shall (a)
hold such amounts in trust and apply the same directly to the
distribution of payment on the Class A Certificates when due;
(b) not apply such funds for any other purpose; (c) deposit
such funds to the Insurance Account and not commingle such
funds with other funds held by Trustee and (d) maintain an
accurate record of such payments with respect to each
certificate and the corresponding claim on the Policy and
proceeds thereof.
FOR YOUR PROTECTION CALIFORNIA LAW REQUIRES THE FOLLOWING TO APPEAR ON
THIS FORM. ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR THE
PAYMENT OF A LOSS IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND
CONFINEMENT IN STATE PRISON.
By:
---------------------------------------
Trustee
Title:
----------------------------------------
(Officer)
C-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
INDYMAC BANK, F.S.B.,
as Seller
and
INDYMAC ABS, INC.,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 17, 2006
INDYMAC RESIDENTIAL MORTGAGE-BACKED TRUST CERTIFICATES,
SERIES 2006-L1
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS...............................................................
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS....................................................
Section 2.02 OBLIGATIONS OF SELLER UPON SALE...........................................
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS..........................
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS......
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER..............
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.....................
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER...................................................
ARTICLE V
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION...........................................................
ARTICLE VI
TERMINATION
Section 6.01 TERMINATION...............................................................
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.................................................................
Section 7.02 GOVERNING LAW.............................................................
Section 7.03 NOTICES...................................................................
Section 7.04 SEVERABILITY OF PROVISIONS................................................
Section 7.05 COUNTERPARTS..............................................................
Section 7.06 FURTHER AGREEMENTS........................................................
Section 7.07 INTENTION OF THE PARTIES..................................................
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT..................
Section 7.09 SURVIVAL..................................................................
Section 7.10 THIRD PARTY BENEFICIARY...................................................
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 17, 2006 (this
"Agreement"), between IndyMac Bank, F.S.B. (the "Seller") and IndyMac ABS, Inc.
(the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of (i) the notes or other evidence of
indebtedness (the "Mortgage Notes") as indicated on Schedule I hereto referred
to below, and the other documents or instruments constituting the Mortgage File
(collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the obligors on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of March 1, 2006 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, the Seller as seller and servicer and Deutsche Bank
National Trust Company as trustee (the "Trustee"), relating to IndyMac
Residential Mortgage-Backed Trust Certificates, Series 2006-L1, the Purchaser
will convey the Mortgage Loans to the trust created therein (the "Trust"); and
WHEREAS, the Seller is obligated, in connection with the transactions
contemplated by this Agreement, to make certain representations, warranties and
covenants with respect to itself and the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined herein
shall have the meanings assigned thereto in the Pooling and Servicing Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS;
PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.
The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, assign, set over, and otherwise convey to the
Purchaser, without recourse, (i) all of its right, title and interest in and to
each Mortgage Loan, including the related Principal Balance as of the Cut-off
Date, (ii) all interest accruing thereon on or after the Cut-off Date and all
collections in respect of interest and principal due after the Cut-off Date,
(iii) its interest in any insurance policies in respect of the Mortgage Loans
and (iv) all proceeds of any of the foregoing.
Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller agrees, at its own expense,
on or prior to the Closing Date, (i) to cause its books and records to indicate
that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (ii) to deliver to the Purchaser and the Trustee an electronic
data file containing a true and complete list of all such Mortgage Loans,
specifying for each such Mortgage Loan, as of the Cut-off Date, those data
fields as required in the Pooling and Servicing Agreement. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with, the Trustee, as assignee
of the Purchaser, or to the Custodian, on or before the Closing Date, the
following documents or instruments, which documents and instruments will comply
with the requirements of the Pooling and Servicing Agreement notwithstanding any
provision to the contrary below:
(i) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of Deutsche Bank National Trust Company,
as Trustee, without recourse", or with respect to any lost Mortgage Note, an
original Lost Note Affidavit stating that the original Mortgage Note was lost,
misplaced or destroyed, together with a copy of the related Mortgage Note;
PROVIDED, HOWEVER, that such substitutions of Lost Note Affidavits for original
Mortgage Notes may occur only with respect to Mortgage Loans, the aggregate
Stated Principal Balance of which is less than or equal to 2.00% of the Pool
Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Deutsche Bank National Trust Company, as Trustee, without recourse";
(iv) an original copy of any intervening Assignment, showing a complete
chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
With respect to up to 30% of the Mortgage Loans, the Seller may deliver
all or a portion of each related Mortgage File to the Trustee not later than
five Business Days after the Closing Date (such Mortgage Loans, the "Delayed
Delivery Mortgage Loans").
The Seller hereby confirms to the Purchaser and the Trustee that it has
made the appropriate entries in its general accounting records, to indicate that
such Mortgage Loans have been transferred to the Trustee and constitute part of
the Trust in accordance with the terms of the Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (A) has
not been returned from the applicable public recording office or (B) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date of a copy of each such document certified by the Seller in the case
of (A) above or the applicable public recording office in the case of (B) above
to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Seller, delivery to the Trustee or the
Custodian, promptly upon receipt thereof of either the original or a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original. If the original lender's title insurance
policy, or a certified copy thereof, was not delivered pursuant to Section
2.02(v) above, the Seller shall deliver or cause to be delivered to the Trustee
or a Custodian, the original or a copy of a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow company,
with the original or a certified copy thereof to be delivered to the Trustee or
the Custodian, promptly upon receipt thereof. The Seller shall deliver or cause
to be delivered to the Trustee or the Custodian promptly upon receipt thereof
any other documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Trustee or the Custodian. If the Seller does not cure such defect or deliver
such missing document within such time period, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with Section 2.03
of the Pooling and Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The Seller shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Seller shall be required to deliver such Assignments for recording within 30
days of the Closing Date. The Seller shall furnish the Trustee, or its
designated agent, with a copy of each Assignment submitted for recording. In the
event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller shall promptly have a substitute Assignment prepared
or have such defect cured, as the case may be, and thereafter cause each such
Assignment to be duly recorded.
Notwithstanding the foregoing, the Seller shall not cause to be
recorded any Assignment which relates to a Mortgage Loan secured by a Mortgaged
Property in California or in any other jurisdiction where the Rating Agencies do
not require recordation in order to receive the ratings on the Certificates at
the time of their initial issuance (which, in the case of the Insured
Certificates, shall be without regard to the Policy); PROVIDED, HOWEVER, that
each Assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) direction by the Holders of the Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Servicer Event of
Termination, (iii) the occurrence of a bankruptcy or insolvency relating to the
Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02
of the Pooling and Servicing Agreement and (v) if the Seller is not the Servicer
and with respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding anything to the contrary in this Agreement, within five
Business Days after the Closing Date, the Seller shall either:
(x) deliver to the Trustee the Mortgage File as required pursuant to
this Article II for each Delayed Delivery Mortgage Loan; or
(y)(A)repurchase the Delayed Delivery Mortgage Loan or (B) substitute a
Qualified Substitute Mortgage Loan for a Delayed Delivery Mortgage Loan, which
repurchase or substitution shall be accomplished in the manner and subject to
the conditions herein (treating each such Delayed Delivery Mortgage Loan as a
Deleted Mortgage Loan for purposes of Section 3.03);
provided, however, that if the Seller fails to deliver a Mortgage File for any
Delayed Delivery Mortgage Loan within the period specified herein, the Seller
shall use its best reasonable efforts to effect a substitution, rather than a
repurchase of, such Delayed Delivery Mortgage Loan; provided, further, that the
cure period provided for herein and in the Pooling and Servicing Agreement shall
not apply to the initial delivery of the Mortgage File for such Delayed Delivery
Mortgage Loan, but rather the Seller shall have five (5) Business Days to cure
such failure to deliver.
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans to be purchased
hereunder, the Purchaser shall pay to or upon the order of the Seller on the
Closing Date the purchase price thereof (the "Mortgage Loan Purchase Price") by
transfer to the Seller of (i) immediately available funds in an amount equal to
the net sale proceeds of the Class A Certificates and (ii) the Class M
Certificates, the Class B Certificates, the Class C Certificates and the Class R
Certificates (the "IndyMac Certificates"). The Seller shall pay, and be billed
directly for, all expenses incurred by the Purchaser in connection with the
issuance of the Certificates, including, without limitation, printing fees
incurred in connection with the Prospectus Supplement relating to the Class A
Certificates and the Class M Certificates and the Private Placement Memorandum
relating to the Class B Certificates, fees and expenses of Purchaser's counsel,
accountant's fees and expenses and the fees and expenses of the Trustee and the
Certificate Insurer and other out-of-pocket costs, if any.
ARTICLE III
REPRESENTATIONS ANDWARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Seller hereby makes representations and warranties, as set
forth in Exhibit A hereof, to the Purchaser with respect to the Mortgage Loans
as of the Closing Date or as of such other date specifically provided herein.
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Seller represents, warrants and covenants to the Purchaser as of the
Closing Date:
(i) The Seller is duly organized, validly existing and in good standing
as a federal savings bank under the laws of the United States and is licensed,
qualified and in good standing in each state in which any Mortgaged Property is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Seller or to ensure the
enforceability or validity of each Mortgage Loan in accordance with the terms of
this Agreement;
(ii) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The Seller
has duly authorized the execution, delivery and performance of this Agreement
and has duly executed and delivered this Agreement. This Agreement, assuming due
authorization, execution and delivery by the Purchaser, constitutes a legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Seller, the Seller had the full power and authority to hold
each Mortgage Loan and to sell each Mortgage Loan;
(iii) The execution and delivery of this Agreement by the Seller and
the performance of and compliance with the terms of this Agreement will not
violate the Seller's charter or by-laws or constitute a default under or result
in a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;
(iv) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) The Seller does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement;
(vi) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;
(vii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(viii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions;
(ix) The information delivered by the Seller to the Purchaser with
respect to the Seller's loan loss, foreclosure and delinquency experience on
mortgage loans underwritten to similar standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects as of the date of such report;
(x) Except with respect to any statement regarding the intentions of
the Purchaser, or any other statement contained herein, the truth or falsity of
which is dependent solely upon the actions of the Purchaser, this Agreement does
not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements contained herein not misleading. The
written statements, reports and other documents prepared and furnished or to be
prepared and furnished by the Seller pursuant to this Agreement or in connection
with the transactions contemplated hereby and by the Pooling and Servicing
Agreement, taken in the aggregate, do not contain any untrue statement of
material fact or omit to state a material fact necessary to make the statements
contained therein not misleading;
(xi) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;
(xii) The Seller has not dealt with any broker, investment banker,
agent or other person, except for the Purchaser or any of its affiliates, that
may be entitled to any commission or compensation in connection with the sale of
the Mortgage Loans (except that an entity that previously financed the Seller's
ownership of the Mortgage Loans may be entitled to a fee to release its security
interest in the Mortgage Loans, which fee shall have been paid and which
security interest shall have been released on or prior to the Closing Date); and
(xiii) There is no litigation currently pending or, to the best of the
Seller's knowledge, threatened against the Seller that would reasonably be
expected to adversely affect the transfer of the Mortgage Loans, the issuance of
the Certificates or the execution, delivery, performance or enforceability of
this Agreement or the Pooling and Servicing Agreement, or that would result in a
material adverse change in the financial condition of the Seller.
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. Upon discovery by
either the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties that materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser (or which materially and
adversely affects the interests of the Purchaser in the related Mortgage Loan in
the case of a representation and warranty relating to a particular Mortgage
Loan), the party discovering such breach shall give prompt written notice to the
others. The Seller shall promptly reimburse the Servicer and the Trustee for any
expenses reasonably incurred by the Servicer or the Trustee in respect of
enforcing the remedies for the breach.
Within 90 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty made by the Seller that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest therein of the Purchaser, the Seller shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Purchase Price. In the event that such a breach shall
involve any representation or warranty set forth in Section 3.02 and such breach
cannot be cured within 90 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Purchase Price. The
Seller may, assuming the Seller has a Qualified Substitute Mortgage Loan, rather
than repurchase a deficient Mortgage Loan as provided above, remove such
Mortgage Loan (in which case it shall become a Deleted Mortgage Loan) and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. Upon
substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject
in all respects to the terms of this Agreement, including all applicable
representations and warranties thereof included in this Agreement, as of the
date of such substitution. If the Seller does not provide a Qualified Substitute
Mortgage Loan or Loans, it shall repurchase the deficient Mortgage Loan. Any
repurchase of a Mortgage Loan(s) pursuant to the foregoing provisions of this
Section 3.03 shall occur on a date specified in the Pooling and Servicing
Agreement and shall be accomplished by deposit in accordance with Section 2.03
of the Pooling and Servicing Agreement. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller and the delivery to the
Seller of any documents held by the Purchaser relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Seller shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Seller shall deposit in the Collection Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution will
be retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage 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 Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Sections 3.01 and 3.02.
It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in Section 3.03 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Parties as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01 or 3.02.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loan, or any interest therein; the Seller will notify
the Trustee, as assignee of the Purchaser, of the existence of any Lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend the
right, title and interest of the Trust, as assignee of the Purchaser, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Seller; PROVIDED, HOWEVER, that nothing in this Section 4.01 shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any of
the Mortgage Loans any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
ARTICLE V
INDEMNIFICATION WITHRESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.
The Seller agrees to indemnify and to hold each of the Purchaser, the
Trustee, each of the officers and directors of each such entity and each person
or entity who controls each such entity or person harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Purchaser, the
Trustee, or any such person or entity may sustain in any way (i) related to the
failure of the Seller to perform its duties in compliance with the terms of this
Agreement, (ii) arising from a breach by the Seller of its representations and
warranties in Section 3.01 or 3.02 of this Agreement or (iii) related to the
origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Seller or any servicer. The
Seller shall immediately notify the Purchaser and the Trustee if a claim is made
by a third party with respect to this Agreement. The Seller shall assume the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Purchaser, the Trustee or
any such person or entity in respect of such claim.
Promptly after receipt by any indemnified party under this Article V of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Article V, notify the indemnifying party in writing of the
claim or the commencement of that action; PROVIDED, HOWEVER, that the failure to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Article V except to the extent it has been materially
prejudiced by such failure; PROVIDED, FURTHER, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, and by the Seller, if the
indemnified parties under this Article V consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements,
shall use its reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to consent to a settlement of
any action, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and the indemnifying party has not previously
provided the indemnified party with written notice of its objection to such
settlement. No indemnifying party shall effect any settlement of any pending or
threatened proceeding in respect of which an indemnified party is or could have
been a party and indemnity is or could have been sought hereunder, without the
written consent of such indemnified party, unless settlement includes an
unconditional release of such indemnified party from all liability and claims
that are the subject matter of such proceeding.
ARTICLE VI
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the Seller's indemnity obligations as provided herein, upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Seller and the Purchaser, by written agreement signed by the Seller and
the Purchaser.
Section 7.02 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW
YORK WITHOUT REGARDS TO ANY CONFLICT OF LAW PROVISIONS. THE PARTIES HERETO
INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW SHALL APPLY TO THIS AGREEMENT.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
as follows: (i) if to the Seller: IndyMac Bank, F.S.B., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secondary Marketing, or
such other address as may hereafter be furnished to the Purchaser in writing by
the Seller; (ii) if to the Purchaser: IndyMac ABS, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secondary Marketing, or
such other address as may hereafter be furnished to the Seller in writing by the
Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of the
Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Purchaser will have the right to review the
Mortgage Loans and the related Mortgage Files to determine the characteristics
of the Mortgage Loans which will affect the federal income tax consequences of
owning the Mortgage Loans and the Seller will cooperate with all reasonable
requests made by the Purchaser in the course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated by the Seller to a third party without
the consent of the Purchaser, which consent shall be at the Purchaser's sole
discretion, except that the Purchaser acknowledges and agrees that the Seller
may assign its obligations hereunder to any Person into which the Seller is
merged or any corporation resulting from any merger, conversion or consolidation
to which the Seller is a party or any Person succeeding to the business of the
Seller. The parties hereto acknowledge that the Purchaser is acquiring the
Mortgage Loans for the purpose of contributing them to a trust that will issue
the Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee for
the benefit of the Certificateholders of all of the Purchaser's rights against
the Seller pursuant to this Agreement insofar as such rights relate to Mortgage
Loans transferred to the Trustee and to the enforcement or exercise of any right
or remedy against the Seller pursuant to this Agreement by the Trustee. Such
enforcement of a right or remedy by the Trustee shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Purchaser
directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01 and 3.02, the remedies set forth in Section 3.03 and the
provisions of Article V hereof shall survive the purchase of the Mortgage Loans
hereunder.
Section 7.10 THIRD PARTY BENEFICIARY. The Certificate Insurer, if any,
shall be a third party beneficiary hereof, until such time as the Certificate
Principal Balance of the Class A Certificates has been reduced to zero and all
amounts owed to the Certificate Insurer have been paid in full, and may enforce
the terms hereof as if a party hereto. The Trustee shall be a third party
beneficiary hereof.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
INDYMAC ABS, INC., as Purchaser
By:_______________________________
Name:
Title:
INDYMAC BANK, F.S.B., as Seller
By:_______________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOAN SCHEDULE
(Available Upon Request)
EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE MORTGAGE LOANS.
The Seller hereby represents and warrants to the Purchaser, as of the
Closing Date, or if so specified herein, as of the related Cut-off Date as
follows.
(i) The information set forth on the Mortgage Loan Schedule as to each
Mortgage Loan is true and correct as of the Cut-off Date.
(ii) As of the Closing Date, all regularly scheduled Monthly Payments
due with respect to each Mortgage Loan up to and including the first day of the
month before the Cut-off Date have been made; and as of the Cut-off Date, no
Mortgage Loan had more than one regularly scheduled Monthly Payment that was 30
or more days Delinquent during the twelve months before the Cut-off Date.
(iii) With respect to each Mortgage Loan, the related 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, (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.
(iv) Immediately before the assignment of the Mortgage Loans to the
Purchaser, 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 this Agreement.
(v) As of the date of origination of each Mortgage Loan, there was no
delinquent tax or assessment lien against the related Mortgaged Property. Except
for payment defaults permitted in clause (ii) above, there are no defaults in
complying with the terms of the Mortgage, or an escrow of funds has been
established in an amount sufficient to pay for every such item which remains
unpaid and which has been assessed but is not yet due and payable. The Seller
has not advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required under the Mortgage Loan, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan proceeds, whichever is earlier, to the date which precedes by one
month the Due Date of the first installment of principal and interest.
(vi) 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. No Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement, approved
by the issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the Mortgage Loan Schedule.
(vii) 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 (xi) below.
(viii) No Mortgaged Property has been materially damaged by water,
fire, earthquake, windstorm, flood, tornado, hurricane 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 the
Mortgage Loan.
(ix) Each Mortgage Loan at origination complied in all material
respects with applicable local, state and federal laws and regulations,
including usury, equal credit opportunity, anti-money laundering laws, real
estate settlement procedures and truth-in-lending and disclosure laws, or any
noncompliance does not have a material adverse effect on the value of the
related Mortgage Loan.
(x) 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 Purchaser and which has been
delivered to the Purchaser); 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.
(xi) A lender's policy of title insurance, together with extended
coverage endorsement, if applicable, in an amount at least equal to the Stated
Principal Balance of each such Mortgage Loan as of the Cut-off Date or a
commitment (binder) to issue the same was effective on the date of the
origination of each Mortgage Loan and each such policy is valid and remains in
full force and effect.
(xii) To the best of the Seller's knowledge, all inspections, licenses
and certificates required to be made or issued with respect to the Mortgaged
Property and, with respect to the use of the same, have been made or obtained
from the appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of the Mortgaged Property. All parties to
the Mortgage Note, the Mortgage and any other such related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any other such related agreement have been duly and properly executed by
other such related parties. The Seller has reviewed all of the documents
constituting the Mortgage File.
(xiii) 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.
(xiv) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder.
(xv) 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. There is no
homestead or other exemption available to a Mortgagor which would interfere with
the right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or similar
law.
(xvi) 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 Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor.
(xvii) 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.
(xvii) 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.
(xviii) Each Mortgage File contains an appraisal of the related
Mortgaged Property in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
(xix) Any leasehold estate securing a Mortgage Loan has a stated term
at least as long as the term of the related Mortgage Loan.
(xx) Each Mortgage Loan was selected from among the outstanding
residential lot 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 herein can be made. No such selection was made in a manner
intended to adversely affect the interests of the Purchaser.
(xxi) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(xxii) As of the Closing Date, no two Mortgaged Properties are
mortgaged by any one borrower.
(xxiii) None of the Mortgage Loans are classified as (a) "high cost"
loans under the Home Ownership and Equity Protection Act of 1994 or (b) "high
cost," "threshold," "covered," "predatory" or "abusive" loans under any other
applicable state, federal or local law.
(xxiv) No Mortgage Loans are subject to the Georgia Fair Lending Act
("GFLA"), effective from October 1, 2002 to March 6, 2003.
(xxv) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA.
(xxvi) Each Prepayment Charge is enforceable against and was originated
in compliance with all federal, state and local laws, (except to the extent that
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (ii) the collectability thereof may be limited due to acceleration
in connection with a foreclosure or other involuntary payoff).
(xxvii) No loan is a high cost loan or a covered loan, as applicable
(as such terms are defined in the then-current version of Standard & Poor's
LEVELS which is now Version 5.6(c) Glossary Revised, Appendix E).
(xxviii) The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor.
(xxix) The Mortgaged Property is a fee simple property located in the
state identified in the Mortgage Loan Schedule, except that with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the Mortgaged Property may
be a leasehold estate. If the Mortgage Loan is secured by a long-term
residential lease: (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; and (4) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage Note.
(xxx) The Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines in effect as of the date of origination of such Mortgage
Loan, as set forth in the Prospectus Supplement. The Mortgage Note and Mortgage
are on forms generally acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇ and the Seller
has not made any representations to a Mortgagor that are inconsistent with the
mortgage instruments used.
(xxxi) To the best of the Seller's knowledge, there is no pending
action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue.
(xxxii) The Mortgagor has not notified the Seller, and the Seller has
no knowledge of any relief requested or allowed to the Mortgagor under the
Relief Act.
(xxxiii) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded.
(xxxiv) No Mortgage Loan is (a) subject to, covered by or in violation
of the provisions of HOEPA, (b) a "high cost", "covered" (except with respect to
purchase money "covered loans" under the New Jersey Home Ownership Security Act
of 2002), "abusive", "predatory", "home loan", "Oklahoma Section 10" or "high
risk" mortgage loan (or a similarly designated loan using different terminology)
under any federal, state or local law, including without limitation, the
provisions of the Georgia Fair Lending Act, New York Banking Law, Section 6-1,
the City of Oakland, California Anti-Predatory Lending Ordinance No. 12361, the
Arkansas Home Loan Protection Act, effective as of June 14, 2003, Kentucky State
Statute KRS 360.100, effective as of June 25, 2003, the New Jersey Home
Ownership Security Act of 2002, the New Mexico Home Loan Protection Act (N.M.
Stat. ▇▇▇. ▇▇.▇▇. 58-21A-1 et seq.), the Illinois High-Risk Home Loan Act (815
Ill. Comp. Stat. 137/1 et seq.), the Oklahoma Home Ownership and Equity
Protection Act, Nevada Assembly ▇▇▇▇ No. 284, effective as of Oct. 1, 2003, the
Minnesota Residential Mortgage Originator and Servicer Licensing Act (MN Stat.
ss.58.137), the South Carolina High-Cost and Consumer Home Loans Act, effective
January 1, 2004, or any other statute or regulation providing assignee liability
to holders of such mortgage loans, or (c) subject to or in violation of any such
or comparable federal, state or local statutes or regulations.
(xxxv) The Mortgage Loan is not subject to any outstanding litigation
for fraud, origination, predatory lending, servicing or closing practices.
(xxxvi) Each Mortgage Loan has been serviced in all material respects
in compliance with all applicable federal, state and local laws.
(xxxvii) The Mortgage contains an enforceable provision (except as such
enforcement may be effected by bankruptcy and insolvency laws or by general
principals of equity) for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Seller's knowledge, such provision is
enforceable.
(xxxviii) None of the Fixed-Rate Mortgage Loans are, by their terms,
assumable.
D-1
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(Available upon request)
E-2
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration - IN06L1
Re: Pooling and Servicing Agreement dated as of March 1, 2006 among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as Seller and
Servicer, and Deutsche Bank National Trust Company, as Trustee with
respect to IndyMac ABS, Inc., Residential Mortgage-Backed Trust,
Series 2006-L1
--------------------------------------------------------------------------------
In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME. ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE):
______1. Mortgage Paid in Full
______2. Foreclosure
______3. Substitution
______4. Other Liquidation (Repurchases, etc.)
______5. Nonliquidation Reason:
Address to which Trustee should deliver the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
By: ____________________________________
(authorized agent)
Issuer: ____________________________________
Address: ____________________________________
____________________________________
Date: ____________________________________
TRUSTEE
Deutsche Bank National Trust Company
Please acknowledge the execution of the above request by your
signature and date below:
____________________________________ ___________
Signature Date
____________________________________ ___________
Documents returned to Trustee:
____________________________________ ___________
Trustee Date
F-1
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
_______________, 200__
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of March 1, 2006 among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as Seller and
Servicer, and Deutsche Bank National Trust Company, as Trustee with
respect to IndyMac ABS, Inc., Residential Mortgage-Backed Trust,
Series 2006-L1
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report
delivered in accordance with Section 2.02 of the referenced Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause (vi) of Section 2.01 of the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By: ________________________________
Name:
Title:
F-3
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
__________________________________
[Date]
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of March 1, 2006 among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as Seller and
Servicer, and Deutsche Bank National Trust Company, as Trustee with
respect to IndyMac ABS, Inc., Residential Mortgage-Backed Trust,
Series 2006-L1
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or listed on Schedule I hereto) it (or its custodian) has received
the applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in items (1), (3), (10), (11), (15)
and (18) in the definition of Mortgage Loan Schedule is correct.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By: _______________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed Trust, Series
2006-L1, Mortgage-Backed Certificates
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of March 1, 2006, among IndyMac ABS, Inc. as Depositor, IndyMac Bank, F.S.B.
as Seller and Servicer and Deutsche Bank National Trust Company as Trustee (the
"Trustee"), we hereby acknowledge the receipt of the original Mortgage Notes
with any exceptions thereto listed on Exhibit 1.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By: _______________________________
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ AGREEMENTS
BEAR ▇▇▇▇▇▇▇
BEAR ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
DATE: March 17, 2006
TO: Deutsche Bank National Trust Company, not
individually, but solely as Trustee on behalf of
IndyMac Residential Mortgaged-Backed Trust, Series
▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Mortgage-Backed Certificates,
Series ▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇
TELEPHONE: 1-714-247-6000
FACSIMILE: ▇-▇▇▇-▇▇▇-▇▇▇▇
FROM: Derivatives Documentation
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXNEC7971
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear ▇▇▇▇▇▇▇ Financial Products Inc. ("BSFP") and
Deutsche Bank National Trust Company, not individually, but solely as Trustee on
behalf of IndyMac Residential Mortgaged-Backed Trust, Series ▇▇▇▇-▇▇,
▇▇▇▇▇▇▇▇▇▇▇ Mortgage-Backed Certificates, Series 2006-L1 ("Counterparty"). This
Agreement, which evidences a complete and binding agreement between you and us
to enter into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to the 2000 ISDA DEFINITIONS (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. All provisions contained in, or incorporated by
reference to, the ISDA Form Master Agreement shall govern the Transaction
referenced in this Confirmation, except as expressly modified below. In the
event of any inconsistency between the provisions of this Agreement and the
Definitions or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Terms used and not otherwise defined herein, in the
ISDA Form Master Agreement or the Definitions shall have the meanings assigned
to them in the Pooling and Servicing Agreement, dated as of March 1, 2006, among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as Seller and Master
Servicer and Deutsche Bank National Trust Company, as Trustee (the "Pooling and
Servicing Agreement"). Each reference to a "Section" or to a "Section" "of this
Agreement" will be construed as a reference to a Section of the ISDA Form Master
Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any Calculation
Period, the lesser of (i) the amount set
forth for such period in Schedule I attached
hereto and (ii) the aggregate Certificate
Principal Balance of the Class A
Certificates immediately preceding the
related Floating Rate Payer Payment Date.
Trade Date: March 8, 2006
Effective Date: April 25, 2006
Termination Date: June 25, 2006, subject to adjustment in
accordance with the Business Day Convention.
FIXED AMOUNT (PREMIUM):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: March 17, 2006
Fixed Amount: USD 19,000. Such amount being the net Fixed
Amount of this Transaction and the
transaction with BSFP Reference Number
FXNEC7972.
FLOATING AMOUNTS:
Floating Rate Payer: BSFP
Cap Rate: With respect to any Calculation Period, the
rate set forth for such period in Schedule I
attached hereto.
Floating Rate Payer
Period End Dates: May 25, 2006 and the Termination Date,
subject to adjustment in accordance with the
Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The
Floating Rate Payer Payment Dates shall be
one Business Day prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA, provided,
however, that if the Floating Rate
determined from such Floating Rate Option
for any Calculation Period is greater than
9.82000% then the Floating Rate for such
Calculation Period shall be deemed to be
9.82000%.
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York and Santa ▇▇▇
Business Day Convention: Following
3. Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has
engaged in (or refrained from engaging in)
substantial financial transactions and has
taken (or refrained from taking) other
material actions in reliance upon the entry
by the parties into the Transaction being
entered into on the terms and conditions set
forth herein and in the Confirmation
relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.
2) TERMINATION PROVISIONS. For purposes of the ISDA Form Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not apply
to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of ISDA Form
Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) The "Bankruptcy" provisions of Section 5(a)(vii)(2) of the ISDA Form Master
Agreement will not apply to Counterparty.
(i) The provisions of Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv) shall not apply
to BSFP or Counterparty.
(j) Tax Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of the ISDA
Form Master Agreement shall not apply to BSFP or Counterparty and neither BSFP
nor Counterparty shall be required to pay any additional amounts referred to
therein.
3) Tax Representations. (a) Payer Representations. For the purpose of Section
3(e) of this Agreement, each of BSFP and the Counterparty will make the
following representations:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement. In making this
representation, it may rely on:
(i) the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a breach of
this representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by reason
of material prejudice to its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
each of BSFP and the Counterparty make the following representations.
The following representation will apply to BSFP:
BSFP is a corporation organized under the laws of the State of Delaware
and its U.S. taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
The following representation will apply to the Counterparty:
Deutsche Bank National Trust Company is the Trustee under the Pooling and
Servicing Agreement.
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5 and
6 of the ISDA Form Master Agreement, if at any time and so long as the
Counterparty has satisfied in full all its payment obligations under Section
2(a)(i) of the ISDA Form Master Agreement and has at the time no future payment
obligations, whether absolute or contingent, under such Section, then unless
BSFP is required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of the
Counterparty any portion of any such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect to the
Counterparty shall not constitute an Event of Default or Potential Event of
Default with respect to the Counterparty as Defaulting Party and (b) BSFP shall
be entitled to designate an Early Termination Date pursuant to Section 6 of the
ISDA Form Master Agreement only as a result of the occurrence of a Termination
Event set forth in either Section 5(b)(i) or 5(b)(ii) of the ISDA Form Master
Agreement with respect to BSFP as the Affected Party, or Section 5(b)(iii) with
respect to BSFP as the Burdened Party. For purposes of the Transaction which
this Confirmation relates, Counterparty's only obligation under Section 2(a)(ii)
of the ISDA Form Master Agreement is to pay the Fixed Amount on the Fixed Rate
Payer Payment Date.
5) DOCUMENTS TO BE DELIVERED. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
PARTY REQUIRED TO DELIVER DOCUMENT FORM/DOCUMENT/ DATE BY WHICH TO
CERTIFICATE BE DELIVERED
BSFP and Any document required or Promptly after the earlier of (i) reasonable
the Counterparty reasonably requested to allow demand by either party or (ii) learning that
the other party to make such form or document is required
payments under this Agreement
without any deduction or
withholding for or on the
account of any Tax or with such
deduction or withholding at a
reduced rate
(2) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO COVERED BY SECTION 3(D) REPRESENTATION
DELIVER DOCUMENT CERTIFICATE BE DELIVERED
BSFP and Any documents required by Upon the execution and Yes
the Counterparty the receiving party to delivery of this Agreement
evidence the authority of and such Confirmation
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver this Agreement, any
Confirmation , and any
Credit Support Documents to
which it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under this Agreement, such
Confirmation and/or Credit
Support Document, as the
case may be
BSFP and Counterparty A certificate of an Upon the execution and Yes
authorized officer of the delivery of this Agreement
party, as to the incumbency
and authority of the
respective officers of the
party signing this Agreement.
BSFP Legal opinion(s) with respect Upon the execution and No
to such party and its Credit delivery of this Agreement
Support Provider, if any, for and any Confirmation
it reasonably satisfactory in
form and substance to the
other party relating to the
enforceability of the party's
obligations under this
Agreement.
BSFP A copy of the most recent Promptly after request by Yes
annual report of such the other party
party (only if available) and
its Credit Support Provider,
if any, containing in all
cases audited consolidated
financial statements for each
fiscal year certified by
independent certified public
accountants and prepared in
accordance with generally
accepted accounting
principles in the United
States or in the country in
which such party is organized
6) MISCELLANEOUS. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of ISDA Form
Master Agreement:
Address for notices or communications to BSFP:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: DPC Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Derivative Operations - 7th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: Deutsche Bank National Trust Company
▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Trust ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇-▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) ISDA Form Master Agreement will not
apply to this Agreement; neither BSFP nor the Counterparty have any Offices
other than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of ISDA Form Master Agreement, it shall not in future
have any Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of ISDA Form Master
Agreement:
BSFP is not a Multibranch Party.
The Counterparty is a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP; provided, however, that if
an Event of Default occurs with respect to BSFP, then the Counterparty shall be
entitled to appoint a financial institution which would qualify as a Reference
Market-maker to act as Calculation Agent.
(f) Credit Support Document. Not applicable for either BSFP or the Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole, without
regard to the conflict of law provision thereof, other than New York General
Obligations Law Sections 5-1401 and 5-1402.
(i) Non-Petition. BSFP hereby irrevocably and unconditionally agrees that it
will not institute against, or join any other person in instituting against or
cause any other person to institute against IndyMac ABS, Inc. or Counterparty,
any bankruptcy, reorganization, arrangement, insolvency, or similar proceeding
under the laws of the United States, or any other jurisdiction for the
non-payment of any amount due hereunder or any other reason until the payment in
full of the Certificates and the expiration of a period of one year plus ten
days (or, if longer, the applicable preference period) following such payment.
(j) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(k) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(l) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(m) Set-Off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other
party hereunder against any obligation between it and the other party under any
other agreements. The provisions Set-off set forth in Section 6(e) of the ISDA
Master Form Agreement shall not apply for purposes of this Transaction.
(n) This Agreement may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
(o) Trustee Liability Limitations. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by Deutsche
Bank National Trust Company (DBNTC), not individually or personally but solely
as Trustee, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on
the part of the Counterparty is made and intended not as personal
representations, undertakings and agreements by DBNTC but is made and intended
for the purpose of binding only the Counterparty, (c) nothing herein contained
shall be construed as creating any liability on DBNTC, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall DBNTC be personally liable for the payment of any
indebtedness or expenses of the Counterparty or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Counterparty under this Agreement or any other related
documents.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, PROVIDED that BSFP and the Counterparty shall not be deemed to
have any Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) RELATIONSHIP BETWEEN PARTIES.
Each party represents to the other party on each date
when it enters into a Transaction that:--
(1) NONRELIANCE. It is not relying on any statement or representation
of the other party regarding the Transaction (whether written or oral), other
than the representations expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(i) It has the capacity to evaluate (internally or through independent
professional advice) the Transaction and has made its own decision to enter into
the Transaction; and
(ii) It understands the terms, conditions and risks of the Transaction
and is willing and able to accept those terms and conditions and to assume those
risks, financially and otherwise.
(3) PURPOSE. It is entering into the Transaction for the purposes of
managing its borrowings or investments, hedging its underlying assets or
liabilities or in connection with a line of business.
(4) STATUS OF PARTIES. The other party is not acting as agent,
fiduciary or advisor for it in respect of the Transaction.
(5) ELIGIBLE CONTRACT PARTICIPANT. It constitutes an "eligible contract
participant" as such term is defined in Section 1(a)12 of the Commodity Exchange
Act, as amended."
10) The ISDA Form Master Agreement is hereby amended as follows
(a) The word "third" shall be replaced by the word "second" in the
third line of Section 5(a)(i) of the ISDA Form Master Agreement.
11) Additional Termination Events. Additional Termination Events will apply. (i)
If a Rating Agency Downgrade has occurred and BSFP has not, within 30 days,
complied with Section 12 below, then an Additional Termination Event shall have
occurred with respect to BSFP and BSFP shall be the sole Affected Party with
respect to such an Additional Termination Event. (ii) If, upon the occurrence of
a Swap Disclosure Event (as defined in paragraph 13 below) BSFP has not, within
10 Business Days after such Swap Disclosure Event complied with any of the
provisions set forth in clause (iii) of paragraph 13 below, then an Additional
Termination Event shall have occurred with respect to BSFP and BSFP shall be the
sole Affected Party with respect to such Additional Termination Event.
12) Rating Agency Downgrade. In the event that BSFP's long-term unsecured and
unsubordinated debt rating is withdrawn or reduced below "AA-" by S&P or its
long-term unsecured and unsubordinated debt rating is withdrawn or reduced below
"Aa3" by ▇▇▇▇▇'▇ (and together with S&P, the "Swap Rating Agencies", and such
rating thresholds, "Approved Rating Thresholds"), then within 30 days after such
rating withdrawal or downgrade, BSFP shall, at its own expense, either (i) seek
another entity to replace BSFP as party to this Agreement that meets or exceeds
the Approved Rating Thresholds on terms substantially similar to this Agreement
or (ii) obtain a guaranty of, or a contingent agreement of another person with
the Approved Rating Thresholds, to honor, BSFP's obligations under this
Agreement.
13) Compliance with Regulation AB.
(i) BSFP agrees and acknowledges that IndyMac ABS, Inc. ("IMABS") is required
under Regulation AB under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation
AB"), to disclose certain financial information regarding BSFP or its group of
affiliated entities, if applicable, depending on the aggregate "significance
percentage" of this Agreement and any other derivative contracts between BSFP or
its group of affiliated entities, if applicable, and Counterparty, as calculated
from time to time in accordance with Item 1115 of Regulation AB.
(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any
Business Day after the date hereof, IMABS requests from BSFP the applicable
financial information described in Item 1115 of Regulation AB (such request to
be based on a reasonable determination by IMABS, in good faith, that such
information is required under Regulation AB) (the "Swap Financial Disclosure").
(iii) Upon the occurrence of a Swap Disclosure Event, BSFP, at its own expense,
shall (a) provide to IMABS the Swap Financial Disclosure, (b) secure another
entity to replace BSFP as party to this Agreement on terms substantially similar
to this Agreement and subject to prior notification to the Swap Rating Agencies,
which entity (or a guarantor therefor) meets or exceeds the Approved Rating
Thresholds and which satisfies the Rating Agency Condition and which entity is
able to comply with the requirements of Item 1115 of Regulation AB or (c) obtain
a guaranty of the BSFP's obligations under this Agreement, subject to Rating
Agency Condition, from an affiliate of the BSFP that is able to comply with the
financial information disclosure requirements of Item 1115 of Regulation AB,
such that disclosure provided in respect of the affiliate will satisfy any
disclosure requirements applicable to the Swap Provider, and cause such
affiliate to provide Swap Financial Disclosure. If permitted by Regulation AB,
any required Swap Financial Disclosure may be provided by incorporation by
reference from reports filed pursuant to the Exchange Act.
(iv) BSFP agrees that, in the event that BSFP provides Swap Financial
Disclosure to IMABS in accordance with clause (iii)(a) of paragraph 13 or causes
its affiliate to provide Swap Financial Disclosure to IMABS in accordance with
clause (iii)(c) of paragraph 13, it will indemnify and hold harmless IMABS, its
respective directors or officers and any person controlling IMABS, from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in such Swap
Financial Disclosure or caused by any omission or alleged omission to state in
such Swap Financial Disclosure a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
NEITHER THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. OTHER THAN BSFP IS AN
OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: PAYMENTS TO BSFP:
Citibank, N.A., New York
ABA Number: ▇▇▇-▇▇▇▇-▇▇, for the account of
Bear, ▇▇▇▇▇▇▇ Securities Corp.
Account Number: 0925-3186, for further credit to
Bear ▇▇▇▇▇▇▇ Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
PAYMENTS TO COUNTERPARTY:
Deutsche Bank National Trust Company
ABA # ▇▇▇▇▇▇▇▇▇
Account # ▇▇▇▇▇▇▇▇
Account Name: NYLTD Funds Control/Stars West
Ref: IndyMac 2006-L1 Class A Certificates
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to ▇▇▇-▇▇▇-▇▇▇▇. For inquiries regarding U.S. Transactions, please
contact ▇▇▇▇▇ ▇▇▇▇▇▇ by telephone at ▇▇▇-▇▇▇-▇▇▇▇. For all other inquiries
please contact DERIVATIVES DOCUMENTATION by telephone at ▇▇▇-▇-▇▇▇-▇▇▇▇.
Originals will be provided for your execution upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC.
By: _______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
AGREED AND ACCEPTED AS OF THE TRADE DATE
BY: DEUTSCHE BANK NATIONAL TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY, BUT
SOLELY AS TRUSTEE FOR INDYMAC RESIDENTIAL MORTGAGED-BACKED TRUST, SERIES
▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇ MORTGAGE-BACKED CERTIFICATES, SERIES 2006-L1
By: _______________________________
Name:
Title:
am
SCHEDULE I
(all such dates subject to adjustment in accordance with the Business Day
Convention)
FROM AND INCLUDING TO BUT EXCLUDING NOTIONAL AMOUNT (USD) CAP RATE (%)
------------------ ---------------- --------------------- ------------
Effective Date 25-May-2006 232,099,883.00 6.33000
25-May-2006 Termination Date 225,049,670.00 6.13000
BEAR ▇▇▇▇▇▇▇
BEAR ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
DATE: March 17, 2006
TO: Deutsche Bank National Trust Company, not individually, but
solely as Trustee on behalf of IndyMac Residential
Mortgaged-Backed Trust, Series ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Mortgage-Backed Certificates, Series ▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇
TELEPHONE: ▇-▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇-▇▇▇-▇▇▇-▇▇▇▇
FROM: Derivatives Documentation
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER:FXNEC7972
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear ▇▇▇▇▇▇▇ Financial Products Inc. ("BSFP") and
Deutsche Bank National Trust Company, not individually, but solely as Trustee on
behalf of IndyMac Residential Mortgaged-Backed Trust, Series ▇▇▇▇-▇▇,
▇▇▇▇▇▇▇▇▇▇▇ Mortgage-Backed Certificates, Series 2006-L1 ("Counterparty"). This
Agreement, which evidences a complete and binding agreement between you and us
to enter into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to the 2000 ISDA DEFINITIONS (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. All provisions contained in, or incorporated by
reference to, the ISDA Form Master Agreement shall govern the Transaction
referenced in this Confirmation, except as expressly modified below. In the
event of any inconsistency between the provisions of this Agreement and the
Definitions or the ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Terms used and not otherwise defined herein, in the
ISDA Form Master Agreement or the Definitions shall have the meanings assigned
to them in the Pooling and Servicing Agreement, dated as of March 1, 2006, among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as Seller and Master
Servicer and Deutsche Bank National Trust Company, as Trustee (the "Pooling and
Servicing Agreement"). Each reference to a "Section" or to a "Section" "of this
Agreement" will be construed as a reference to a Section of the ISDA Form Master
Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any
Calculation Period, the lesser of
(i) the amount set forth for such
period in Schedule I attached hereto
and (ii) the aggregate Certificate
Principal Balance of the Subordinate
Certificates immediately preceding
the related Floating Rate Payer
Payment Date.
Trade Date: March 8, 2006
Effective Date: April 25, 2006
Termination Date: June 25, 2006, subject to adjustment
in accordance with the Business Day
Convention.
FIXED AMOUNT (PREMIUM):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date:March 17, 2006
Fixed Amount:The Fixed Amount will be
netted as specified the Confirmation
identified by BSFP Reference Number
FXNEC7971.
FLOATING AMOUNTS:
Floating Rate Payer: BSFP
Cap Rate: With respect to any Calculation
Period, the rate set forth for
such period in Schedule I attached
hereto.
Floating Rate Payer
Period End Dates: May 25, 2006 and the Termination
Date, subject to adjustment in
accordance with the Business Day
Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable.
The Floating Rate Payer Payment
Dates shall be one Business Day
prior to each Floating Rate Payer
Period End Date.
Floating Rate Option: USD-LIBOR-BBA,
provided, however, that if the
Floating Rate determined from such
Floating Rate Option for any
Calculation Period is greater than
7.50000% then the Floating Rate for
such Calculation Period shall be
deemed to be 7.50000%.
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable
Business Days: New York and Santa ▇▇▇
Business Day Convention: Following
3. Additional Provisions:
Each party hereto is hereby advised
and acknowledges that the other
party has engaged in (or refrained
from engaging in) substantial
financial transactions and has
taken (or refrained from taking)
other material actions in reliance
upon the entry by the parties into
the Transaction being entered into
on the terms and conditions set
forth herein and in the
Confirmation relating to such
Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
2) TERMINATION PROVISIONS. For purposes of the ISDA Form Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP or
to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not apply
to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of ISDA Form
Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) The "Bankruptcy" provisions of Section 5(a)(vii)(2) of the ISDA Form Master
Agreement will not apply to Counterparty.
(i) The provisions of Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv) shall not apply
to BSFP or Counterparty.
(j) Tax Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of the ISDA
Form Master Agreement shall not apply to BSFP or Counterparty and neither BSFP
nor Counterparty shall be required to pay any additional amounts referred to
therein.
3) Tax Representations. (a) Payer Representations. For the purpose of Section
3(e) of this Agreement, each of BSFP and the Counterparty will make the
following representations:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement. In making this
representation, it may rely on:
(i) the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a breach of
this representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by reason
of material prejudice to its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
each of BSFP and the Counterparty make the following representations.
The following representation will apply to BSFP:
BSFP is a corporation organized under the laws of the State of Delaware
and its U.S. taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
The following representation will apply to the Counterparty:
Deutsche Bank National Trust Company is the Trustee under the Pooling and
Servicing Agreement.
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5 and
6 of the ISDA Form Master Agreement, if at any time and so long as the
Counterparty has satisfied in full all its payment obligations under Section
2(a)(i) of the ISDA Form Master Agreement and has at the time no future payment
obligations, whether absolute or contingent, under such Section, then unless
BSFP is required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of the
Counterparty any portion of any such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect to the
Counterparty shall not constitute an Event of Default or Potential Event of
Default with respect to the Counterparty as Defaulting Party and (b) BSFP shall
be entitled to designate an Early Termination Date pursuant to Section 6 of the
ISDA Form Master Agreement only as a result of the occurrence of a Termination
Event set forth in either Section 5(b)(i) or 5(b)(ii) of the ISDA Form Master
Agreement with respect to BSFP as the Affected Party, or Section 5(b)(iii) with
respect to BSFP as the Burdened Party. For purposes of the Transaction which
this Confirmation relates, Counterparty's only obligation under Section 2(a)(ii)
of the ISDA Form Master Agreement is to pay the Fixed Amount on the Fixed Rate
Payer Payment Date.
5) DOCUMENTS TO BE DELIVERED. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
PARTY REQUIRED TO DELIVER DOCUMENT FORM/DOCUMENT/ DATE BY WHICH TO
CERTIFICATE BE DELIVERED
BSFP and Any document required or Promptly after the earlier of (i) reasonable
the Counterparty reasonably requested to allow demand by either party or (ii) learning that
the other party to make such form or document is required
payments under this Agreement
without any deduction or
withholding for or on the
account of any Tax or with such
deduction or withholding at a
reduced rate
(2) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO COVERED BY SECTION 3(D) REPRESENTATION
DELIVER DOCUMENT CERTIFICATE BE DELIVERED
BSFP and Any documents required by Upon the execution and Yes
the Counterparty the receiving party to delivery of this Agreement
evidence the authority of and such Confirmation
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver this Agreement, any
Confirmation , and any
Credit Support Documents to
which it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under this Agreement, such
Confirmation and/or Credit
Support Document, as the
case may be
BSFP and Counterparty A certificate of an Upon the execution and Yes
authorized officer of the delivery of this Agreement
party, as to the incumbency
and authority of the
respective officers of the
party signing this Agreement.
BSFP Legal opinion(s) with respect Upon the execution and No
to such party and its Credit delivery of this Agreement
Support Provider, if any, for and any Confirmation
it reasonably satisfactory in
form and substance to the
other party relating to the
enforceability of the party's
obligations under this
Agreement.
BSFP A copy of the most recent Promptly after request by Yes
annual report of such the other party
party (only if available) and
its Credit Support Provider,
if any, containing in all
cases audited consolidated
financial statements for each
fiscal year certified by
independent certified public
accountants and prepared in
accordance with generally
accepted accounting
principles in the United
States or in the country in
which such party is organized
6) MISCELLANEOUS. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of ISDA Form Master
Agreement:
Address for notices or communications to BSFP:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: DPC Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Derivative Operations - 7th Floor
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: Deutsche Bank National Trust Company
▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Trust ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: ▇-▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) ISDA Form Master Agreement will not
apply to this Agreement; neither BSFP nor the Counterparty have any Offices
other than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of ISDA Form Master Agreement, it shall not in future
have any Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of ISDA Form Master
Agreement:
BSFP is not a Multibranch Party.
The Counterparty is a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP; provided, however, that if
an Event of Default occurs with respect to BSFP, then the Counterparty shall be
entitled to appoint a financial institution which would qualify as a Reference
Market-maker to act as Calculation Agent.
(f) Credit Support Document. Not applicable for either BSFP or the Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole, without
regard to the conflict of law provision thereof, other than New York General
Obligations Law Sections 5-1401 and 5-1402.
(i) Non-Petition. BSFP hereby irrevocably and unconditionally agrees that it
will not institute against, or join any other person in instituting against or
cause any other person to institute against IndyMac ABS, Inc. or Counterparty,
any bankruptcy, reorganization, arrangement, insolvency, or similar proceeding
under the laws of the United States, or any other jurisdiction for the
non-payment of any amount due hereunder or any other reason until the payment in
full of the Certificates and the expiration of a period of one year plus ten
days (or, if longer, the applicable preference period) following such payment.
(j) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(k) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(l) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(m) Set-Off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other
party hereunder against any obligation between it and the other party under any
other agreements. The provisions Set-off set forth in Section 6(e) of the ISDA
Master Form Agreement shall not apply for purposes of this Transaction.
(n) This Agreement may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
(o) Trustee Liability Limitations. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by Deutsche
Bank National Trust Company (DBNTC), not individually or personally but solely
as Trustee, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on
the part of the Counterparty is made and intended not as personal
representations, undertakings and agreements by DBNTC but is made and intended
for the purpose of binding only the Counterparty, (c) nothing herein contained
shall be construed as creating any liability on DBNTC, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall DBNTC be personally liable for the payment of any
indebtedness or expenses of the Counterparty or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Counterparty under this Agreement or any other related
documents.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, PROVIDED that BSFP and the Counterparty shall not be deemed to
have any Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) RELATIONSHIP BETWEEN PARTIES.
Each party represents to the other party on each date
when it enters into a Transaction that:--
(1) NONRELIANCE. It is not relying on any statement or representation
of the other party regarding the Transaction (whether written or oral), other
than the representations expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) EVALUATION AND UNDERSTANDING.
(i) It has the capacity to evaluate (internally or through independent
professional advice) the Transaction and has made its own decision to enter into
the Transaction; and
(ii) It understands the terms, conditions and risks of the Transaction
and is willing and able to accept those terms and conditions and to assume those
risks, financially and otherwise.
(3) PURPOSE. It is entering into the Transaction for the purposes of
managing its borrowings or investments, hedging its underlying assets or
liabilities or in connection with a line of business.
(4) STATUS OF PARTIES. The other party is not acting as agent,
fiduciary or advisor for it in respect of the Transaction.
(5) ELIGIBLE CONTRACT PARTICIPANT. It constitutes an "eligible contract
participant" as such term is defined in Section 1(a)12 of the Commodity Exchange
Act, as amended."
10) The ISDA Form Master Agreement is hereby amended as follows
(a) The word "third" shall be replaced by the word "second" in the
third line of Section 5(a)(i) of the ISDA Form Master Agreement.
11) Additional Termination Events. Additional Termination Events will apply. (i)
If a Rating Agency Downgrade has occurred and BSFP has not, within 30 days,
complied with Section 12 below, then an Additional Termination Event shall have
occurred with respect to BSFP and BSFP shall be the sole Affected Party with
respect to such an Additional Termination Event. (ii) If, upon the occurrence of
a Swap Disclosure Event (as defined in paragraph 13 below) BSFP has not, within
10 Business Days after such Swap Disclosure Event complied with any of the
provisions set forth in clause (iii) of paragraph 13 below, then an Additional
Termination Event shall have occurred with respect to BSFP and BSFP shall be the
sole Affected Party with respect to such Additional Termination Event.
12) Rating Agency Downgrade. In the event that BSFP's long-term unsecured and
unsubordinated debt rating is withdrawn or reduced below "AA-" by S&P or its
long-term unsecured and unsubordinated debt rating is withdrawn or reduced below
"Aa3" by ▇▇▇▇▇'▇ (and together with S&P, the "Swap Rating Agencies", and such
rating thresholds, "Approved Rating Thresholds"), then within 30 days after such
rating withdrawal or downgrade, BSFP shall, at its own expense, either (i) seek
another entity to replace BSFP as party to this Agreement that meets or exceeds
the Approved Rating Thresholds on terms substantially similar to this Agreement
or (ii) obtain a guaranty of, or a contingent agreement of another person with
the Approved Rating Thresholds, to honor, BSFP's obligations under this
Agreement.
13) Compliance with Regulation AB.
(i) BSFP agrees and acknowledges that IndyMac ABS, Inc. ("IMABS") is required
under Regulation AB under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation
AB"), to disclose certain financial information regarding BSFP or its group of
affiliated entities, if applicable, depending on the aggregate "significance
percentage" of this Agreement and any other derivative contracts between BSFP or
its group of affiliated entities, if applicable, and Counterparty, as calculated
from time to time in accordance with Item 1115 of Regulation AB.
(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any
Business Day after the date hereof, IMABS requests from BSFP the applicable
financial information described in Item 1115 of Regulation AB (such request to
be based on a reasonable determination by IMABS, in good faith, that such
information is required under Regulation AB) (the "Swap Financial Disclosure").
(iii) Upon the occurrence of a Swap Disclosure Event, BSFP, at its own expense,
shall (a) provide to IMABS the Swap Financial Disclosure, (b) secure another
entity to replace BSFP as party to this Agreement on terms substantially similar
to this Agreement and subject to prior notification to the Swap Rating Agencies,
which entity (or a guarantor therefor) meets or exceeds the Approved Rating
Thresholds and which satisfies the Rating Agency Condition and which entity is
able to comply with the requirements of Item 1115 of Regulation AB or (c) obtain
a guaranty of the BSFP's obligations under this Agreement, subject to Rating
Agency Condition, from an affiliate of the BSFP that is able to comply with the
financial information disclosure requirements of Item 1115 of Regulation AB,
such that disclosure provided in respect of the affiliate will satisfy any
disclosure requirements applicable to the Swap Provider, and cause such
affiliate to provide Swap Financial Disclosure. If permitted by Regulation AB,
any required Swap Financial Disclosure may be provided by incorporation by
reference from reports filed pursuant to the Exchange Act.
(iv) BSFP agrees that, in the event that BSFP provides Swap Financial
Disclosure to IMABS in accordance with clause (iii)(a) of paragraph 13 or causes
its affiliate to provide Swap Financial Disclosure to IMABS in accordance with
clause (iii)(c) of paragraph 13, it will indemnify and hold harmless IMABS, its
respective directors or officers and any person controlling IMABS, from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in such Swap
Financial Disclosure or caused by any omission or alleged omission to state in
such Swap Financial Disclosure a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
NEITHER THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. OTHER THAN BSFP IS AN
OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: PAYMENTS TO BSFP:
Citibank, N.A., New York
ABA Number: ▇▇▇-▇▇▇▇-▇▇, for the account of
Bear, ▇▇▇▇▇▇▇ Securities Corp.
Account Number: 0925-3186, for further credit to
Bear ▇▇▇▇▇▇▇ Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
PAYMENTS TO COUNTERPARTY:
Deutsche Bank National Trust Company
ABA # ▇▇▇▇▇▇▇▇▇
Account # ▇▇▇▇▇▇▇▇
Account Name: NYLTD Funds Control/Stars West
Ref: ▇▇▇▇▇▇▇ ▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Certificates
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to ▇▇▇-▇▇▇-▇▇▇▇. For inquiries regarding U.S. Transactions, please
contact ▇▇▇▇▇ ▇▇▇▇▇▇ by telephone at ▇▇▇-▇▇▇-▇▇▇▇. For all other inquiries
please contact DERIVATIVES DOCUMENTATION by telephone at ▇▇▇-▇-▇▇▇-▇▇▇▇.
Originals will be provided for your execution upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC.
By: _______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
AGREED AND ACCEPTED AS OF THE TRADE DATE
BY: DEUTSCHE BANK NATIONAL TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY, BUT
SOLELY AS TRUSTEE FOR INDYMAC RESIDENTIAL MORTGAGED-BACKED TRUST, SERIES
▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇ MORTGAGE-BACKED CERTIFICATES, SERIES 2006-L1
By: _______________________________
Name:
Title:
am
SCHEDULE I
(all such dates subject to adjustment in accordance with the Business Day
Convention)
FROM AND INCLUDING TO BUT EXCLUDING NOTIONAL AMOUNT (USD) CAP RATE (%)
------------------ ---------------- --------------------- ------------
Effective Date 25-May-2006 5,635,000.00 4.51000
25-May-2006 Termination Date 5,635,000.00 4.31000
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, ___________________ who first being duly sworn deposes and says: Deponent
is ___________ of _____________, successor by merger to ________________
("Seller") and who has personal knowledge of the facts set out in this
affidavit.
On ______________________, ________ did execute and deliver a promissory
note in the principal amount of $_______________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as trustee on behalf of IndyMac ABS, Inc., IndyMac
Residential Mortgage-Backed Trust 2006-L1, Mortgage Backed Certificates, Series
2006-L1, to accept the transfer of the above described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company,
IndyMac ABS, Inc. and IndyMac Bank, F.S.B. harmless for any losses incurred by
such parties resulting from the above described promissory note has been lost or
misplaced.
By: _______________
_______________
STATE OF_____________ )
) ss.:
COUNTY OF___________ )
On this _____ day of _____________, 20__, before me, a Notary Public,
in and for said County and State, appeared ___________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.
Witness my hand and Notarial Seal this _____________ day of 20__.
____________________
____________________
My commission expires _____________.
I-1
EXHIBIT I
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
[DATE]
IndyMac ABS, Inc. Deutsche Bank National Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration - IN06L1
Re: IndyMac ABS Inc., IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series 2006-L1
Ladies and Gentlemen:
_______________________________ (the "Transferee") intends to
acquire from __________________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of IndyMac Residential Mortgage-Backed Trust
2006-L1, Mortgage Backed Certificates, Series 2006-L1, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of March 1, 2006 among IndyMac ABS,
Inc. as depositor (the "Depositor"), IndyMac Bank, F.S.B. as seller (the
"Seller") and servicer (the "Servicer") and Deutsche Bank National Trust Company
as trustee (the "Trustee"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Pooling and Servicing
Agreement. The Transferee hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Servicer the following:
The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, ▇▇▇▇▇ plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 ▇.▇.▇.▇▇.
2510.3-101.
Very truly yours,
[Transferee]
By:___________________________
Name:
Title:
J-7
EXHIBIT J
FORM OF RULE 144A INVESTMENT LETTER
[Date]
IndyMac ABS, Inc. Deutsche Bank National Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration - IN06L1
Re: IndyMac Residential Mortgage-Backed Trust 2006-L1, Mortgage-Backed
Certificates Series 2006-L1
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that:
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws;
(b) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates;
(c) [Reserved];
(d) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates;
(e) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act; and
(f) either (i) we are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended ("Plan"), or any other person (including an investment manager,
a named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan within
the meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101 or (ii) we have provided the Trustee, the Depositor and the
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to such parties to the effect that the purchase of Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Depositor or the Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement].
Very truly yours,
[NAME OF TRANSFEREE]
By:____________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_______(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
_______ CORPORATION, ETC. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section
501 (c) (3) of the Internal Revenue Code of 1986, as amended.
_______ BANK. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_______ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_______ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.
_______ INSURANCE COMPANY. The Buyer is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
---------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
_______ STATE OR LOCAL PLAN. The Buyer is a plan established
and maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
_______ ERISA PLAN. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974.
_______ INVESTMENT ADVISOR. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
_______ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
_______ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
development company as defined in
Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their market value, and
(ii) no current information with respect to the cost of those securities has
been published. If clause (ii) in the preceding sentence applies, the securities
may be valued at market. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
___________________________
Print Name of Buyer
By: __________________________
Name:
Title:
Date: __________________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
______ The Buyer owned $_________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
______ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $_____________ in securities
(other than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties listed
in the Rule 144A Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
___________________________
Print Name of Buyer
By: __________________________
Name:
Title:
IF AN ADVISER:
___________________________
Print Name of Buyer
Date:______________________
K-1
EXHIBIT K
[RESERVED]
L-1
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: IndyMac ABS, Inc., IndyMac Residential Mortgage-Backed Trust
2006-L1, Mortgage-Backed Certificates, Series 2006-L1
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class R Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[TRANSFEROR]
By: _______________________________
Name:
Title:
M-3
EXHIBIT M
AFFIDAVIT OF TRANSFER OF CLASS R CERTIFICATES
PURSUANT TO SECTION 5.02(D)
INDYMAC ABS, INC. INDYMAC RESIDENTIAL MORTGAGE-BACKED TRUST 2006-L1,
MORTGAGE-BACKED CERTIFICATES, SERIES 2006-L1
STATE OF_____________ )
) ss.:
COUNTY OF___________ )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of, the proposed Transferee of an Ownership
Interest in Class R Certificates (the "Certificate") issued pursuant to the
Pooling and Servicing Agreement (the "Agreement"), relating to the
above-referenced Certificates, among the IndyMac ABS, Inc. (the "Depositor"),
IndyMac Bank, F.S.B., as seller (the "Seller") and servicer (the "Servicer") and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) to
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to whom
the Transferee attempts to Transfer its Ownership Interest in the Certificate,
and in connection with any Transfer by a Person for whom the Transferee is
acting as nominee, trustee or agent, and the Transferee will not Transfer its
Ownership Interest or cause any Ownership Interest to be Transferred to any
Person that the Transferee knows is not a Permitted Transferee. In connection
with any such Transfer by the Transferee, the Transferee agrees to deliver to
the Trustee a certificate substantially in the form set forth as Exhibit L to
the Agreement (a "Transferor Certificate") to the effect that such Transferee
has no actual knowledge that the Person to which the Transfer is to be made is
not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is .
9. The Transferee is a United States Person as defined in the Agreement.
10. The Transferee is aware that the Certificate may be a "non-economic residual
interest" within the meaning of proposed Treasury regulations promulgated
pursuant to the Code and that the transferor of a non-economic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to ERISA or a
plan that is subject to Section 4975 of the Code, nor is it acting on behalf of
such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this _______ day of _______, ____.
[NAME OF TRANSFEREE]
By: __________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________
[Assistant] Secretary
Personally appeared before me the above-named
___________________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the ______________ of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of __________, ____.
_____________________________
NOTARY PUBLIC
My Commission expires the ____ day of ________, ____.
N-1-1
EXHIBIT N-1
FORM OF CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: IndyMac ABS Inc.
IndyMac Residential Mortgage-Backed Trust 2006-L1
MORTGAGE-BACKED CERTIFICATES, SERIES 2006-L1
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K and all
reports on Form 10-D required to be filed in respect of the period covered by
this report on Form 10-K of IndyMac Residential Mortgage-Backed Trust 2006-L1,
Mortgage-Backed Certificates, Series ▇▇▇▇-▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇ Periodic
Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the distribution, servicing and
other information required to be provided under Form 10-D for the period covered
by this report is included in the Exchange Act Periodic Reports;
4. Based on my knowledge and the servicer compliance
statement(s) required in this report under Item 1123 of Regulation AB and except
as disclosed in the Exchange Act Periodic Reports, the servicer(s) [has/have]
fulfilled [its/their] obligations under the servicing agreement(s) in all
material respects; and;
5. All of the reports on assessment of compliance with
servicing criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria for asset-backed
securities required to be included in this report in accordance with Item 1122
of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as
an exhibit to this report, except as otherwise disclosed in this report. Any
material instances of noncompliance described in such reports have been
disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: Deutsche
Bank National Trust Company.
Date: __________________
_______________________________
[Signature]
[Title]
N-2-1
EXHIBIT N-2
TRUSTEE'S OFFICER'S CERTIFICATE
I, ____________________, a duly elected and acting officer of
Deutsche Bank National Trust Company (the "Trustee") hereby certify as follows:
Reference is hereby made to the Pooling and Servicing
Agreement dated as of March 1, 2006 (the "Pooling Agreement") by and among
IndyMac Bank, F.S.B., as seller and servicer, IndyMac ABS, Inc., as depositor
and Deutsche Bank National Trust Company, as trustee and supplemental interest
trustee, pursuant to which was created the IndyMac Residential Mortgage-Backed
Trust 2006-L1, Mortgage-Backed Certificates, Series 2006-L1 (the "Trust").
Capitalized terms used herein but not defined shall have the meanings assigned
to them in the Pooling Agreement.
1. I am an authorized officer of the Trustee and I have
reviewed this annual report on Form 10-K and all reports on Form 10-D required
to be filed in respect of the period covered by this report on Form 10-K of
IndyMac Residential Mortgage-Backed Trust 2006-L1, Mortgage-Backed Certificates,
Series ▇▇▇▇-▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇ Periodic Reports");
2. For purposes of this certificate, "Relevant Information"
means the information in the report on assessment of the Trustee's compliance
with the servicing criteria set forth in Item 1122(d) of Reg AB (the "Servicing
Assessment"), the registered public accounting firm's attestation provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
1122(b) of Reg AB ( the "Attestation Report") applicable to the Trustee and the
Monthly Statements (excluding information provided, or based on information
provided, by the Servicer or any servicer) and those items in Exhibit S attached
to the Pooling and Servicing Agreement which indicate the 4.03 statement or the
Trustee as the responsible party during the Relevant Year. Based on my
knowledge, the Relevant Information, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report; and
3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in the Monthly Statements.
4. I am responsible for reviewing the activities performed by
the Trustee, as servicer under the Pooling Agreement during the Relevant Year.
Based upon the review required by the Pooling Agreement and except as disclosed
in the Servicing Assessment or Attestation Report, to the best of my knowledge,
the Trustee has fulfilled its obligations under the Pooling Agreement throughout
the Relevant Year. Relevant Year shall mean 200__.
DATED as of _____________, 200____.
By: _____________________________
Name: _____________________________
Title:_____________________________
O-5
EXHIBIT O
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
KEY:
X - obligation
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
PRIMARY
REG AB REFERENCE SERVICING CRITERIA SERVICER SERVICER TRUSTEE NOTES
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(1)(i) Policies and procedures are X X X-1 1 -
instituted to monitor any ATTEST TO
performance or other triggers KNOWLEDGE
and events of default in BUT NOT
accordance with the transaction TO PROCESS
agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(1)(ii) If any material servicing X X
activities are outsourced to
third parties, policies and
procedures are instituted to
monitor the third party's
performance and compliance with
such servicing activities.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Any requirements in the NA
transaction agreements to
maintain a back-up servicer for
1122(d)(1)(iii) the Pool Assets are maintained.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(1)(iv) A fidelity bond and errors and X X
omissions policy is in effect on
the party participating in the
servicing function throughout
the reporting period in the
amount of coverage required by
and otherwise in accordance with
the terms of the transaction
agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
CASH COLLECTION AND
ADMINISTRATION
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(2)(i) Payments on pool assets are X X
deposited into the appropriate
custodial bank accounts and
related bank clearing accounts
no more than two business days
following receipt, or such other
number of days specified in the
transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Disbursements made via wire X X
transfer on behalf of an obligor
or to an investor are made only
1122(d)(2)(ii) by authorized personnel.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Advances of funds or guarantees X X
regarding collections, cash
flows or distributions, and any
interest or other fees charged
for such advances, are made,
reviewed and approved as
specified in the transaction
1122(d)(2)(iii) agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
The related accounts for the X X
transaction, such as cash
reserve accounts or accounts
established as a form of over
collateralization, are
separately maintained (e.g.,
with respect to commingling of
cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Each custodial account is X X X
maintained at a federally
insured depository institution
as set forth in the transaction
agreements. For purposes of this
criterion, "federally insured
depository institution" with
respect to a foreign financial
institution means a foreign
financial institution that meets
the requirements of Rule
13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Unissued checks are safeguarded X
so as to prevent unauthorized
1122(d)(2)(vi) access.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(2)(vii) Reconciliations are prepared on X X
a monthly basis for all
asset-backed securities related
bank accounts, including
custodial accounts and related
bank clearing accounts. These
reconciliations are (A)
mathematically accurate; (B)
prepared within 30 calendar days
after the bank statement cutoff
date, or such other number of
days specified in the
transaction agreements; (C)
reviewed and approved by someone
other than the person who
prepared the reconciliation; and
(D) contain explanations for
reconciling items. These
reconciling items are resolved
within 90 calendar days of their
original identification, or such
other number of days specified
in the transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
INVESTOR REMITTANCES AND
REPORTING
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(3)(i) Reports to investors, including X X
those to be filed with the
Commission, are maintained in
accordance with the transaction
agreements and applicable
Commission requirements.
Specifically, such reports (A)
are prepared in accordance with
timeframes and other terms set
forth in the transaction
agreements; (B) provide
information calculated in
accordance with the terms
specified in the transaction
agreements; (C) are filed with
the Commission as required by
its rules and regulations; and
(D) agree with investors' or the
trustee's records as to the
total unpaid principal balance
and number of Pool Assets
serviced by the Servicer.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Amounts due to investors are X X
allocated and remitted in
accordance with timeframes,
distribution priority and other
terms set forth in the
1122(d)(3)(ii) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Disbursements made to an X X
investor are posted within two
business days to the Servicer's
investor records, or such other
number of days specified in the
1122(d)(3)(iii) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(3)(iv) Amounts remitted to investors X X
per the investor reports agree
with cancelled checks, or other
form of payment, or custodial
bank statements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
POOL ASSET ADMINISTRATION
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(i) Collateral or security on pool X
assets is maintained as required
by the transaction agreements or
related pool asset documents.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(ii) Pool assets and related X
documents are safeguarded as
required by the transaction
agreements
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(iii) Any additions, removals or X X
substitutions to the asset pool
are made, reviewed and approved
in accordance with any
conditions or requirements in
the transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(iv) Payments on pool assets, X
including any payoffs, made in
accordance with the related pool
asset documents are posted to
the Servicer's obligor records
maintained no more than two
business days after receipt, or
such other number of days
specified in the transaction
agreements, and allocated to
principal, interest or other
items (e.g., escrow) in
accordance with the related pool
asset documents.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
The Servicer's records regarding X
the pool assets agree with the
Servicer's records with respect to
an obligor's unpaid principal
1122(d)(4)(v) balance.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Changes with respect to the X
terms or status of an obligor's
pool assets (e.g., loan
modifications or re-agings) are
made, reviewed and approved by
authorized personnel in
accordance with the transaction
agreements and related pool
1122(d)(4)(vi) asset documents.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Loss mitigation or recovery X
actions (e.g., forbearance
plans, modifications and deeds
in lieu of foreclosure,
foreclosures and repossessions,
as applicable) are initiated,
conducted and concluded in
accordance with the timeframes
or other requirements
established by the transaction
1122(d)(4)(vii) agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(viii) Records documenting collection X
efforts are maintained during
the period a pool asset is
delinquent in accordance with
the transaction agreements. Such
records are maintained on at
least a monthly basis, or such
other period specified in the
transaction agreements, and
describe the entity's activities
in monitoring delinquent pool
assets including, for example,
phone calls, letters and payment
rescheduling plans in cases
where delinquency is deemed
temporary (e.g., illness or
unemployment).
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(ix) Adjustments to interest rates or X
rates of return for pool assets
with variable rates are computed
based on the related pool asset
documents.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
1122(d)(4)(x) Regarding any funds held in X
trust for an obligor (such as
escrow accounts): (A) such funds
are analyzed, in accordance with
the obligor's pool asset
documents, on at least an annual
basis, or such other period
specified in the transaction
agreements; (B) interest on such
funds is paid, or credited, to
obligors in accordance with
applicable pool asset documents
and state laws; and (C) such
funds are returned to the
obligor within 30 calendar days
of full repayment of the related
pool assets, or such other
number of days specified in the
transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Payments made on behalf of an X
obligor (such as tax or
insurance payments) are made on
or before the related penalty or
expiration dates, as indicated
on the appropriate bills or
notices for such payments,
provided that such support has
been received by the servicer at
least 30 calendar days prior to
these dates, or such other
number of days specified in the
1122(d)(4)(xi) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Any late payment penalties in X
connection with any payment to be
made on behalf of an obligor are
paid from the Servicer's funds
and not charged to the obligor,
unless the late payment was due
to the obligor's error or
1122(d)(4)(xii) omission.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Disbursements made on behalf of X
an obligor are posted within two
business days to the obligor's
records maintained by the
servicer, or such other number of
days specified in the
1122(d)(4)(xiii) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Delinquencies, charge-offs and X X
uncollectible accounts are
recognized and recorded in
accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
Any external enhancement or X
other support, identified in Item
1114(a)(1) through (3) or Item
1115 of Regulation AB, is
maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
------------------ ---------------------------------- ------------ ----------- ----------- -----------
P-9
EXHIBIT P
FORM 10-D, FORM 8-K AND FORM 10-K
REPORTING RESPONSIBILITY
As to each item described below, the entity indicated as the Responsible Party
shall be primarily responsible for reporting the information to the Trustee
pursuant to Section 3.24(a)(iv). If the Trustee is indicated below as to any
item, then the Trustee is primarily responsible for obtaining that information.
Under Item 1 of Form 10-D: a) items marked "4.03 statement" are required to be
included in the periodic Distribution Date statement under Section 6.07,
provided by the Trustee based on information received from the Servicer; and b)
items marked "Form 10-D report" are required to be in the Form 10-D report but
not the 4.03 statement, provided by the party indicated. Information under all
other Items of Form 10-D is to be included in the Form 10-D report.
FORM ITEM DESCRIPTION RESPONSIBLE PARTY
-------------- --------------- ---------------------------------------------------------- ---------------------------
10-D Must be filed within 15 days of the distribution date for the asset-backed securities.
======================================================================================
-------------- --------------- ---------------------------------------------------------- ---------------------------
1 DISTRIBUTION AND POOL PERFORMANCE INFORMATION
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1121(A) - DISTRIBUTION AND POOL PERFORMANCE
INFORMATION
-------------- --------------- ---------------------------------------------------------- ---------------------------
(1) Any applicable record dates, accrual dates, 4.03 statement
determination dates for
calculating distributions and actual distribution
dates for the distribution period.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(2) Cash flows received and the sources thereof 4.03 statement
for distributions, fees and
expenses.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(3) Calculated amounts and distribution of the
flow of funds for the period 4.03 statement
itemized by type and priority of payment,
including:
-------------- --------------- ---------------------------------------------------------- ---------------------------
(i) Fees or expenses accrued and paid,
with an identification of the 4.03 statement
general purpose of such fees and the party
receiving such fees or expenses.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(ii) Payments accrued or paid with
respect to enhancement or other 4.03 statement
support identified in Item 1114 of Regulation AB
(such as insurance premiums or other enhancement
maintenance fees), with an identification of the
general purpose of such payments and the party
receiving such payments.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(iii) Principal, interest and other 4.03 statement
distributions accrued and paid on the
asset-backed securities by type and by class or
series and any principal or interest shortfalls
or carryovers.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(iv) The amount of excess cash flow or 4.03 statement
excess spread and the disposition
of excess cash flow.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(4) Beginning and ending principal balances of 4.03 statement
the asset-backed securities.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(5) Interest rates applicable to the pool assets 4.03 statement
and the asset-backed securities,
as applicable. Consider providing interest rate
information for pool assets in appropriate
distributional groups or incremental ranges.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(6) Beginning and ending balances of transaction 4.03 statement
accounts, such as reserve
accounts, and material account activity during
the period.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(7) Any amounts drawn on any credit enhancement 4.03 statement
or other support identified in
Item 1114 of Regulation AB, as applicable, and
the amount of coverage remaining under any such
enhancement, if known and applicable.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(8) Number and amount of pool assets at the 4.03 statement
beginning and ending of each
period, and updated pool composition information, Updated pool composition
such as weighted average coupon, weighted information fields to be as
average life, weighted average specified by Depositor from
remaining term, pool time to time
factors and prepayment amounts.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(9) Delinquency and loss information for the period. 4.03 statement.
In addition, describe any material changes to the
information specified in Item 1100(b)(5) of Regulation Form 10-D report: Servicer
AB regarding the pool assets.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(10) Information on the amount, terms and general 4.03 statement
purpose of any advances made or
reimbursed during the period, including the
general use of funds advanced and the general
source of funds for reimbursements.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(11) Any material modifications, extensions or 4.03 statement
waivers to pool asset terms, fees,
penalties or payments during the distribution
period or that have cumulatively become material
over time.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(12) Material breaches of pool asset Form 10-D report:
representations or warranties Securities Adminstrator
or transaction covenants.
(subject to Depositor
approval)
-------------- --------------- ---------------------------------------------------------- ---------------------------
(13) Information on ratio, coverage or other 4.03 statement
tests used for determining any
early amortization, liquidation or other
performance trigger and whether the trigger was
met.
-------------- --------------- ---------------------------------------------------------- ---------------------------
(14) Information regarding any new issuance of Form 10-D report:
asset-backed securities backed
by the same asset pool, Depositor
[information regarding] any pool asset changes (other Form 10-D report: Servicer
than in connection with a pool asset converting
into Servicer cash in
accordance with its terms), such as additions or
removals in connection with a prefunding or
revolving period and pool asset substitutions and
repurchases (and purchase rates, if applicable),
and cash flows available for future purchases,
such as the balances of any prefunding or
revolving accounts, if applicable.
Disclose any material changes in the solicitation, Form 10-D report: Servicer
credit-granting, underwriting, origination, acquisition
or pool selection criteria or procedures, as
applicable, used to
originate, acquire or select the new pool assets.
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1121(B) - PRE-FUNDING OR REVOLVING PERIOD Depositor
INFORMATION
Updated pool information as required under Item
1121(b).
-------------- --------------- ---------------------------------------------------------- ---------------------------
2 LEGAL PROCEEDINGS
-------------- --------------- ---------------------------------------------------------- ---------------------------
Item 1117 - Legal proceedings pending against the
following entities, or their respective property,
that is material to Certificateholders, including
proceedings known to be contemplated by
governmental authorities:
Sponsor (Seller)
Sponsor
Depositor
Depositor
Trustee
Trustee
Issuing entity
Depositor
Servicer, affiliated Servicer, other Servicer
servicing 20% or more of pool assets at time of
report, other Servicer material servicers
Originator of 20% or more of pool assets as of the
Cut-off Date Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
3 SALES OF SECURITIES AND USE OF PROCEEDS
-------------- --------------- ---------------------------------------------------------- ---------------------------
INFORMATION FROM ITEM 2(A) OF PART II OF FORM 10-Q:
With respect to any sale of securities by the
sponsor, depositor or issuing entity, that are
backed by the same Depositor asset pool or are
otherwise issued by the issuing entity, whether
or not registered, provide the sales and use of
proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if
securities were not registered.
-------------- --------------- ---------------------------------------------------------- ---------------------------
4 DEFAULTS UPON SENIOR SECURITIES
-------------- --------------- ---------------------------------------------------------- ---------------------------
INFORMATION FROM ITEM 3 OF PART II OF FORM 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any Trustee
required notice)
-------------- --------------- ---------------------------------------------------------- ---------------------------
5 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------------- --------------- ---------------------------------------------------------- ---------------------------
INFORMATION FROM ITEM 4 OF PART II OF FORM 10-Q Party submitting the
matter to Holders for vote
-------------- --------------- ---------------------------------------------------------- ---------------------------
6 SIGNIFICANT OBLIGORS OF POOL ASSETS
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1112(B) - SIGNIFICANT OBLIGOR FINANCIAL INFORMATION* Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Item.
-------------- --------------- ---------------------------------------------------------- ---------------------------
7 SIGNIFICANT ENHANCEMENT PROVIDER INFORMATION
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1114(B)(2) - CREDIT ENHANCEMENT PROVIDER FINANCIAL Depositor
INFORMATION*
Determining applicable disclosure threshold
Obtaining required financial information or effecting
incorporation by reference
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1115(B) - DERIVATIVE COUNTERPARTY FINANCIAL
INFORMATION*
Determining current maximum probable exposure Depositor
Determining current significance percentage
Trustee
Obtaining required financial information or effecting Trustee
incorporation by reference
-------------- --------------- ---------------------------------------------------------- ---------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items.
-------------- --------------- ---------------------------------------------------------- ---------------------------
8 OTHER INFORMATION
-------------- --------------- ---------------------------------------------------------- ---------------------------
DISCLOSE ANY INFORMATION REQUIRED TO BE REPORTED
ON FORM The Responsible Party for 8-K DURING THE
PERIOD COVERED BY THE FORM 10-D BUT NOT the
applicable Form 8-K REPORTED item as indicated
below
-------------- --------------- ---------------------------------------------------------- ---------------------------
9 EXHIBITS
-------------- --------------- ---------------------------------------------------------- ---------------------------
Distribution report Trustee
-------------- --------------- ---------------------------------------------------------- ---------------------------
EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K, SUCH AS Depositor
MATERIAL AGREEMENTS
-------------- ------------------------------------------------------------------------------------------------------
8-K Must be filed within four business days of an event reportable on Form 8-K.
===========================================================================
-------------- --------------- ---------------------------------------------------------- ---------------------------
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclosure is required regarding entry into or amendment Servicer; or any of the
of any definitive agreement that is material to the following that is a party
securitization, even if depositor is not a party. to the agreement if
Servicer is not: Trustee,
Examples: servicing agreement, custodial agreement. Sponsor, Depositor
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
-------------- --------------- ---------------------------------------------------------- ---------------------------
1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclosure is required regarding termination of any Servicer; or any of the
definitive agreement that is material to the following that is a party
securitization (other than expiration in accordance with to the agreement if
its terms), even if depositor is not a party. Servicer is not: Trustee,
Sponsor, Depositor
Examples: servicing agreement, custodial agreement.
-------------- --------------- ---------------------------------------------------------- ---------------------------
1.03 BANKRUPTCY OR RECEIVERSHIP
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclosure is required regarding the bankruptcy Servicer
or receivership, if known to the
Servicer, with respect to any of the following:
Sponsor (Seller), Depositor, Servicer, affiliated
Servicer, other Servicer servicing 20% or more of
pool assets at time of report, other material
servicers, Trustee, significant obligor, credit
enhancer (10% or more), derivatives counterparty
-------------- --------------- ---------------------------------------------------------- ---------------------------
2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT
FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT
-------------- --------------- ---------------------------------------------------------- ---------------------------
Includes an early amortization, performance Servicer
trigger or other event, including event
of default, that would materially alter the
payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
4.03 statement
-------------- --------------- ---------------------------------------------------------- ---------------------------
3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclosure is required of any material modification to Trustee
documents defining the rights of Certificateholders,
including the Pooling and Servicing Agreement
-------------- --------------- ---------------------------------------------------------- ---------------------------
5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS;
CHANGE IN FISCAL YEAR
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclosure is required of any amendment "to the Depositor
governing documents of the issuing entity"
-------------- --------------- ---------------------------------------------------------- ---------------------------
5.06 CHANGE IN SHELL COMPANY STATUS
-------------- --------------- ---------------------------------------------------------- ---------------------------
[Not applicable to ABS issuers] Depositor
-------------- --------------- ---------------------------------------------------------- ---------------------------
6.01 ABS INFORMATIONAL AND COMPUTATIONAL MATERIAL
-------------- --------------- ---------------------------------------------------------- ---------------------------
[Not included in reports to be filed under Section 3.18] Depositor
-------------- --------------- ---------------------------------------------------------- ---------------------------
6.02 CHANGE OF SERVICER OR TRUSTEE
-------------- --------------- ---------------------------------------------------------- ---------------------------
Requires disclosure of any removal, replacement, Trustee or Servicer
substitution or addition of
any servicer, affiliated servicer, other servicer
servicing 10% or more of pool assets at time of
report, other material servicers, certificate
administrator or trustee. Reg AB disclosure about
any new servicer or trustee is also required.
-------------- --------------- ---------------------------------------------------------- ---------------------------
6.03 CHANGE IN CREDIT ENHANCEMENT OR OTHER EXTERNAL SUPPORT
-------------- --------------- ---------------------------------------------------------- ---------------------------
Covers termination of any enhancement in manner Depositor or Trustee
other than by its terms, the
addition of an enhancement, or a material change
in the enhancement provided. Applies to external
credit enhancements as well as derivatives. Reg
AB disclosure about any new enhancement provider
is also required.
-------------- --------------- ---------------------------------------------------------- ---------------------------
6.04 FAILURE TO MAKE A REQUIRED DISTRIBUTION Trustee
-------------- --------------- ---------------------------------------------------------- ---------------------------
6.05 SECURITIES ACT UPDATING DISCLOSURE
-------------- --------------- ---------------------------------------------------------- ---------------------------
If any material pool characteristic differs by 5% Depositor
or more at the time of issuance of the
securities from the description in the final
prospectus, provide updated Reg AB disclosure
about the actual asset pool.
-------------- --------------- ---------------------------------------------------------- ---------------------------
If there are any new servicers or originators Depositor
required to be disclosed under
Regulation AB as a result of the foregoing,
provide the information called for in Items 1108
and 1110 respectively.
-------------- --------------- ---------------------------------------------------------- ---------------------------
7.01 REGULATION FD DISCLOSURE Depositor
-------------- --------------- ---------------------------------------------------------- ---------------------------
8.01 OTHER EVENTS
-------------- --------------- ---------------------------------------------------------- ---------------------------
Any event, with respect to which information is Depositor
not otherwise called for in Form 8-K,
that the registrant deems of importance to
security holders.
-------------- --------------- ---------------------------------------------------------- ---------------------------
9.01 FINANCIAL STATEMENTS AND EXHIBITS The Responsible Party
applicable to reportable
event
-------------- ------------------------------------------------------------------------------------------------------
10-K Must be filed within 90 days of the fiscal year end for the registrant.
=======================================================================
-------------- --------------- ---------------------------------------------------------- ---------------------------
9B OTHER INFORMATION
-------------- --------------- ---------------------------------------------------------- ---------------------------
Disclose any information required to be reported
on Form The Responsible Party for 8-K during the
fourth quarter covered by the Form 10-K the
applicable Form 8-K but not reported item as
indicated above
-------------- --------------- ---------------------------------------------------------- ---------------------------
15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1112(B) - SIGNIFICANT OBLIGOR FINANCIAL INFORMATION Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1114(B)(2) - CREDIT ENHANCEMENT PROVIDER FINANCIAL
INFORMATION
Determining applicable disclosure threshold
Obtaining required financial information or effecting
incorporation by reference
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1115(B) - DERIVATIVE COUNTERPARTY FINANCIAL
INFORMATION
Determining current maximum probable exposure Depositor
Determining current significance percentage
Obtaining required financial information or effecting
incorporation by reference
-------------- --------------- ---------------------------------------------------------- ---------------------------
Item 1117 - Legal proceedings pending against the
following entities, or their respective property,
that is material to Certificateholders, including
proceedings known to be contemplated by
governmental authorities:
Sponsor (Seller)
Sponsor
Depositor
Depositor
Trustee
Trustee
Issuing entity
Depositor
Servicer, affiliated Servicer, other Servicer
servicing 20% or more of pool assets at time of
report, other Servicer material servicers
Originator of 20% or more of pool assets as of the
Cut-off Date Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
Item 1119 - Affiliations and relationships
between the following entities, or their
respective affiliates, that are material to
Certificateholders:
Sponsor (Seller)
Sponsor
Depositor
Depositor
Trustee
Trustee (only as to
Servicer, affiliated Servicer, other Servicer affiliations between Trustee
servicing the 20% or more of and such other parties
pool assets at time of report, other material servicers listed)
Servicer
Originator
Servicer
Credit Enhancer/Support Provider
Trustee
Significant Obligor Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1122 - ASSESSMENT OF COMPLIANCE WITH SERVICING Each Party participating
CRITERIA in the servicing function
-------------- --------------- ---------------------------------------------------------- ---------------------------
ITEM 1123 - SERVICER COMPLIANCE STATEMENT Servicer, Servicer
-------------- --------------- ---------------------------------------------------------- ---------------------------
Schedule I-1
SCHEDULE I
LIST OF MULTIPLE MORTGAGE LOANS TO SINGLE BORROWERS
AVAILABLE UPON REQUEST
