EXHIBIT 99.1
The Pooling and Servicing Agreement
================================================================================
INDYMAC MBS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee and Supplemental Interest Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2006
----------------------------------------
RESIDENTIAL ASSET SECURITIZATION TRUST
2006-A11
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2006-K
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS........................................................................................................10
Section 1.01 Definitions.....................................................................................10
Section 1.02 Rules of Construction...........................................................................44
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.......................................................46
Section 2.01 Conveyance of Mortgage Loans....................................................................46
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.................................................49
Section 2.03 Representations, Warranties, and Covenants of the Seller and the Servicer.......................51
Section 2.04 Representations and Warranties of the Depositor as to the Mortgage Loans........................52
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions.................................53
Section 2.06 Execution and Delivery of Certificates..........................................................53
Section 2.07 REMIC Matters...................................................................................53
ARTICLE THREE ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................................................................54
Section 3.01 Servicer to Service Mortgage Loans..............................................................54
Section 3.02 [Reserved]......................................................................................55
Section 3.03 Rights of the Depositor and the Trustee in Respect of the Servicer..............................55
Section 3.04 [Reserved]......................................................................................55
Section 3.05 Trustee to Act as Servicer......................................................................55
Section 3.06 Collection of Mortgage Loan Payments; Servicing Accounts; Collection Account; Certificate
Account; Distribution Account; Supplemental Interest Trust; Supplemental Interest Reserve
Fund............................................................................................55
Section 3.07 Collection of Taxes, Assessments and Similar Items; Escrow Accounts.............................59
Section 3.08 Access to Certain Documentation and Information Regarding the Mortgage Loans....................59
Section 3.09 Permitted Withdrawals from the Certificate Account, the Distribution Account and the
Supplemental Interest Reserve Fund..............................................................60
Section 3.10 Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies......................61
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.......................................62
Section 3.12 Realization Upon Defaulted Mortgage Loans.......................................................63
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.................................................65
Section 3.14 Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee...........66
Section 3.15 Servicing Compensation..........................................................................66
Section 3.16 Access to Certain Documentation.................................................................67
Section 3.17 Annual Statement as to Compliance...............................................................67
Section 3.18 Errors and Omissions Insurance; Fidelity Bonds..................................................67
Section 3.19 The Supplemental Interest Trust.................................................................68
Section 3.20 Prepayment Charges..............................................................................68
i
ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY THE SERVICER........................................................................69
Section 4.01 Advances........................................................................................69
Section 4.02 Priorities of Distribution......................................................................70
Section 4.03 Cross-Collateralization; Adjustments to Available Funds.........................................75
Section 4.04 [Reserved]......................................................................................76
Section 4.05 Allocation of Realized Losses...................................................................76
Section 4.06 Monthly Statements to Certificateholders........................................................77
Section 4.07 Distributions from the Supplemental Interest Reserve Fund.......................................80
Section 4.08 Determination of Pass-Through Rates for LIBOR Certificates......................................80
ARTICLE FIVE THE CERTIFICATES..................................................................................................83
Section 5.01 The Certificates................................................................................83
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates.....................83
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...............................................87
Section 5.04 Persons Deemed Owners...........................................................................87
Section 5.05 Access to List of Certificateholders' Names and Addresses.......................................88
Section 5.06 Maintenance of Office or Agency.................................................................88
ARTICLE SIX THE DEPOSITOR AND THE SERVICER.....................................................................................89
Section 6.01 Respective Liabilities of the Depositor and the Servicer........................................89
Section 6.02 Merger or Consolidation of the Depositor or the Servicer........................................89
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Servicer, and Others..................89
Section 6.04 Limitation on Resignation of the Servicer.......................................................90
ARTICLE SEVEN DEFAULT..........................................................................................................91
Section 7.01 Events of Default...............................................................................91
Section 7.02 Trustee to Act; Appointment of Successor........................................................92
Section 7.03 Notification to Certificateholders..............................................................93
ARTICLE EIGHT CONCERNING THE TRUSTEE...........................................................................................95
Section 8.01 Duties of the Trustee...........................................................................95
Section 8.02 Certain Matters Affecting the Trustee...........................................................95
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans...........................................97
Section 8.04 Trustee May Own Certificates....................................................................97
Section 8.05 Trustee's Fees and Expenses.....................................................................97
Section 8.06 Eligibility Requirements for the Trustee........................................................98
Section 8.07 Resignation and Removal of the Trustee..........................................................98
Section 8.08 Successor Trustee...............................................................................99
Section 8.09 Merger or Consolidation of the Trustee.........................................................100
Section 8.10 Appointment of Co-Trustee or Separate Trustee..................................................100
Section 8.11 Tax Matters....................................................................................101
ARTICLE NINE TERMINATION......................................................................................................104
ii
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.................................104
Section 9.02 Final Distribution on the Certificates.........................................................104
Section 9.03 Additional Termination Requirements............................................................106
ARTICLE TEN MISCELLANEOUS PROVISIONS..........................................................................................107
Section 10.01 Amendment......................................................................................107
Section 10.02 Recordation of Agreement; Counterparts.........................................................108
Section 10.03 Governing Law..................................................................................109
Section 10.04 Intention of Parties...........................................................................109
Section 10.05 Notices. 109
Section 10.06 Severability of Provisions.....................................................................110
Section 10.07 Assignment.....................................................................................110
Section 10.08 Limitation on Rights of Certificateholders.....................................................110
Section 10.09 Inspection and Audit Rights....................................................................111
Section 10.10 Certificates Nonassessable and Fully Paid......................................................111
Section 10.11 Official Record................................................................................111
Section 10.12 Protection of Assets...........................................................................112
Section 10.13 Qualifying Special Purpose Entity..............................................................112
ARTICLE ELEVEN EXCHANGE ACT REPORTING.........................................................................................113
Section 11.01 Filing Obligations.............................................................................113
Section 11.02 Form 10-D Filings..............................................................................113
Section 11.03 Form 8-K Filings...............................................................................114
Section 11.04 Form 10-K Filings..............................................................................114
Section 11.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification...................................................................115
Section 11.06 Form 15 Filing.................................................................................115
Section 11.07 Report on Assessment of Compliance and Attestation.............................................115
Section 11.08 Use of Subcontractors..........................................................................117
Section 11.09 Amendments.....................................................................................117
iii
SCHEDULES
Schedule I: Mortgage Loan Schedule...............................................................................S-I-1
Schedule II: Representations and Warranties of the Seller/Servicer...............................................S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans............................................S-III-1
Schedule IV: Principal Balance Schedule..........................................................................S-IV-1
Schedule V: Form of Monthly Report...............................................................................S-V-1
EXHIBITS
Exhibit A: Form of Senior Certificate (other than the Notional Amount Certificates)...............................A-1
Exhibit B: Form of Subordinated Certificate.......................................................................B-1
Exhibit C: Form of Class A-R Certificate..........................................................................C-1
Exhibit D: Form of Notional Amount Certificate....................................................................D-1
Exhibit E: Form of Reverse of Certificates........................................................................E-1
Exhibit F: Form of Class P Certificates...........................................................................F-1
Exhibit G-1: Form of Initial Certification of Trustee ............................................................G-1-1
Exhibit G-2: Form of Delay Delivery Certification.................................................................G-2-1
Exhibit H: Form of Final Certification of Trustee.................................................................H-1
Exhibit I: Form of Transfer Affidavit.............................................................................I-1
Exhibit J: Form of Transferor Certificate.........................................................................J-1
Exhibit K: Form of Investment Letter (Non-Rule 144A)..............................................................K-1
Exhibit L: Form of Rule 144A Letter...............................................................................L-1
Exhibit M: Form of Request for Release (for Trustee)..............................................................M-1
Exhibit N: Request for Release of Documents.......................................................................N-1
Exhibit O: [Reserved].............................................................................................O-1
Exhibit P: Form of Corridor Contract..............................................................................P-1
Exhibit Q: [Reserved].............................................................................................Q-1
iv
Exhibit R: Form of Performance Certification (Trustee)............................................................R-1
Exhibit S: Compliance Statement...................................................................................S-1
Exhibit T: List of 1119 Parties...................................................................................T-1
Exhibit U: Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (Replacement of Servicer).........................................U-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2006,
among INDYMAC MBS, INC., a Delaware corporation, as depositor (the "Depositor"),
IndyMac Bank, F.S.B. ("IndyMac"), a federal savings bank, as seller (in that
capacity, the "Seller") and as servicer (in that capacity, the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(in that capacity, the "Trustee") and as supplemental interest trustee (in that
capacity, the "Supplemental Interest Trustee").
W I T N E S S E T H T H A T
In consideration of the mutual agreements set forth in this
Agreement, the parties agree as follows:
P R E L I M I N A R Y S T A T E M E N T
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. The Trust Fund (exclusive of any
amounts in respect of waived Prepayment Charges paid by the Servicer to the
Class P Certificates pursuant to the second paragraph of Section 3.20 hereof)
for federal income tax purposes will consist of three REMICs ("REMIC 1," "REMIC
2" and the "Master REMIC"). Each Certificate, other than the Class A-R
Certificate, will represent ownership of one or more regular interests in the
Master REMIC for purposes of the REMIC Provisions. The Class A-R Certificate
represents ownership of the sole class of residual interest in each REMIC
created hereunder. The Master REMIC will hold as assets the REMIC 2 Regular
Interests. REMIC 2 will hold as assets the REMIC 1 Regular Interests. REMIC 1
will hold as assets all property of the Trust Fund other than the interests in
REMIC 1. For federal income tax purposes, each Certificate (other than the Class
A-R Certificate) is hereby designated as a regular interest in the Master REMIC
and each REMIC 1 Regular Interest and REMIC 2 Regular Interest, as defined
below, is designated as a regular interest in REMIC 1 and REMIC 2, respectively.
The latest possible maturity date of all REMIC regular interests created in this
Agreement shall be the Latest Possible Maturity Date. All amounts in respect of
waived Prepayment Charges paid by the Servicer to the Class P Certificates
pursuant to the second paragraph of Section 3.20 hereof will be treated as paid
directly by the Servicer to the Class P Certificates and not as paid by or
through any REMIC created hereunder.
The Supplemental Interest Trust, the Supplemental Interest Reserve
Fund and the Corridor Contract shall not constitute any part of any REMIC
described herein.
REMIC 1
The REMIC 1 Regular Interests will have the initial principal
balance, Pass-Through Rates and corresponding Loan Groups as set forth in the
following table:
================================================== ========================== ========================== =========================
REMIC 1 Interests Initial Principal Balance Pass-Through Rate Corresponding Loan Group
-------------------------------------------------- -------------------------- -------------------------- -------------------------
A-1 (0.9% of AB Loan Group 1). (1) 6.25% 1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
B-1 (0.1% of AB Loan Group 1). (1) 6.25% 1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
C-1 (Excess of Loan Group 1) (1) 6.25% 1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
X-1 (1) (1) 1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
PO-1 (1) 0.00% 1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
A-2 (0.9% of AB Loan Group 2). (1) Variable(2) 2
-------------------------------------------------- -------------------------- -------------------------- -------------------------
B-2 (0.1% of AB Loan Group 2). (1) Variable(2) 2
-------------------------------------------------- -------------------------- -------------------------- -------------------------
C-2 (Excess of Loan Group 2) (1) Variable(2) 2
-------------------------------------------------- -------------------------- -------------------------- -------------------------
A-3 (0.9% of AB Loan Group 3). (1) Variable(3) 3
-------------------------------------------------- -------------------------- -------------------------- -------------------------
1
-------------------------------------------------- -------------------------- -------------------------- -------------------------
B-3 (0.1% of AB Loan Group 3). (1) Variable(3) 3
-------------------------------------------------- -------------------------- -------------------------- -------------------------
C-3 (Excess of Loan Group 3) (1) Variable(3) 3
-------------------------------------------------- -------------------------- -------------------------- -------------------------
1-P $100 (4) N/A
-------------------------------------------------- -------------------------- -------------------------- -------------------------
R-1 (5) (5) N/A
================================================== ========================== ========================== =========================
------------------------------------------
(1) Each Class A Interest will have a principal balance initially equal to 0.9%
of the Assumed Balance ("AB") of its corresponding Loan Group. Each Class B
Interest will have a principal balance initially equal to 0.1% of the AB of its
corresponding Loan Group. The initial principal balance of the Class C-1
Interest will equal the excess of the Non-PO Percentage of the initial aggregate
principal balance of its corresponding Loan Group over the initial aggregate
principal balances of the Class A-1 and Class B-1 Interests, and the initial
principal balance of the C-2 and C-3 Interests will equal the excess of the
initial aggregate principal balances of their corresponding Loan Groups over the
initial aggregate principal balances of the Class A-2 and B-2, and Class A-3 and
B-3 Interests, respectively, corresponding to such Loan Group. On each
Distribution Date following the allocation of scheduled principal, prepayments
and Realized Losses, the Class X-1 Interests will have the notional balances and
pass through rates of the Class 1-A-X Certificates, and the Class PO-1 Interests
will have the principal balance of the Class 1-PO Certificates, respectively.
(2) For each Distribution Date, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in Loan Group 2.
(3) For each Distribution Date, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in Loan Group 3.
(4) The Class 1-P Interests will not bear interest. The Class 1-P will be
entitled to all Prepayment Charges collected in respect of the Mortgage Loans.
(5) The Class R-1 Interest is the sole class of residual interest in REMIC 1. It
has no principal balance and pays no principal or interest.
On each Distribution Date, interest and principal collections (or, in
the case of the ▇-▇, ▇-▇ and C-1 Interests, the Non-PO Percentage of principal
collections) shall be distributed with respect to the REMIC 1 Interests in the
following manner:
(1) Interest is to be distributed with respect to each REMIC 1 Interest
according to the formulas described above;
(2) If a Cross-Over Situation does not exist with respect to any Class of
Interests, then Principal Amounts and Realized Losses arising with respect to
each Loan Group will be allocated: first to cause the Loan Group's corresponding
Class A and Class B to equal, respectively, 0.9% of the AB and 0.1% of the AB;
and second to the Loan Group's corresponding Class C Interest;
(3) If a Cross-Over Situation exists with respect to the Class A and B Interests
then:
(a) if the Calculation Rate in respect of such Class A and Class B
Interests is less than the Pass Through Rate in respect of the
Subordinate Certificates, Principal Relocation Payments will be made
proportionately to the outstanding Class A Interests prior to any
other distributions of principal from each such Loan Group; and
(b) if the Calculation Rate in respect of such outstanding Class A
and Class B Interests is greater than the Pass Through Rate in
respect of the Subordinate Certificates, Principal Relocation
2
Payments will be made proportionately to the outstanding Class B
Interests prior to any other distributions of principal from each
such Loan Group.
In case of either (a) or (b), Principal Relocation Payments will be made so as
to cause the Calculation Rate in respect of the outstanding Class A and B
Interests to equal the Pass Through Rate in respect of the Subordinate
Certificates. With respect to each Loan Group, if (and to the extent that) the
sum of (a) the principal payments comprising the Principal Amount received
during the Due Period and (b) the Realized Losses on the Mortgage Loans in that
Loan Group, are insufficient to make the necessary reductions of principal on
the Class A and B Interests, then interest will be added to the Loan Group's
other REMIC 1 Interests that are not receiving Principal Relocation Payments, in
proportion to their principal balances.
(c) Unless required to achieve the Calculation Rate, the outstanding
aggregate Class A and B Interests will not be reduced below 1% of the
excess of (i) the aggregate Stated Principal Balance of the Mortgage
Loans as of the end of any Due Period over (ii) the Certificate
Balance Senior Certificates (excluding the Class A-R Certificates) as
of the related Distribution Date (after taking into account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents
the distribution of principal to the Class A and Class B Interests of
a Loan Group, and if the Loan Group's Class C Interest has already
been reduced to zero, then the excess principal from that Loan Group
will be paid to the Class C Interests of the other Loan Group, the
aggregate Class A and Class B Interests of which are less than 1% of
the AB. If the Mortgage Loans in the Loan Group of the Class C
Interest that receives such payment has a weighted average Adjusted
Net Mortgage Rate below the weighted average Adjusted Net Mortgage
Rate of the Mortgage Loans in the Loan Group making the payment, then
the payment will be treated by the REMIC 1 as a Realized Loss.
Conversely, if the Mortgage Loans in the Loan Group of the Class C
Interest that receives such payment have a weighted average Adjusted
Net Mortgage Rate above the weighted average Adjusted Net Mortgage
Rate of the Mortgage Loans in the Loan Group making the payment, then
the payment will be treated by the REMIC 1 as a reimbursement for
prior Realized Losses.
REMIC 2
The following table sets forth characteristics of the REMIC 2 Regular
Interests:
=========================== ======================= ====================== ================================= =======================
Class Principal
Class Designation Balance Pass-Through Rate Allocation of Interest Allocation of Principal
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-1 (1) 6.25% Class 1-A-1 Class 1-A-1
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-2 (1) 6.25% Class 1-A-2 Class 1-A-2
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-3 (1) 6.25% Class 1-A-3 Class 1-A-3
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-4 (1) 6.25% Class 1-A-4 Class 1-A-4
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-5 (1) 6.25% Class 1-A-5 Class 1-A-5
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-6 (1) 6.25% Class 1-A-6 Class 1-A-6
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-7 (1) 6.25% Class 1-A-7 Class 1-A-7
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-A-X (1) 6.25% Class 1-A-X Class 1-A-X
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-1-PO (1) 0.00% Class 1-PO Class 1-PO
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-2-A-1 (1) Variable(2) Class 2-A-1, 2-A-3-1 Class 2-A-1
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-2-A-2 (1) Variable(2) Class 2-A-2, 2-A-3-2 Class 2-A-2
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-2-A-3 (1) Variable(2) Class 2-A-3 Class 2-A-3
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-3-A-1 (1) Variable(3) Class 3-A-1 Class 3-A-1
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-$100 (1) 6.25% Class A-R Class A-R
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
3
=========================== ======================= ====================== ================================= =======================
Class Principal
Class Designation Balance Pass-Through Rate Allocation of Interest Allocation of Principal
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-1 (1) Variable(6) Class B-1 Class B-1
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-2 (1) Variable(6) Class B-2 Class B-2
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-3 (1) Variable(6) Class B-3 Class B-3
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-4 (1) Variable(6) Class B-4 Class B-4
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-5 (1) Variable(6) Class B-5 Class B-5
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-B-6 (1) Variable(6) Class B-6 Class B-6
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class 1-P (1) 0.00%(7) Class P Class P
--------------------------- ----------------------- ---------------------- --------------------------------- -----------------------
Class ▇-▇(▇) ▇/▇ ▇/▇ ▇/▇ ▇/▇
=========================== ======================= ====================== ================================= =======================
(1) For each Distribution Date, following the allocation of scheduled
principal, Principal Prepayments and Realized Losses, the principal
balance for each such Class will be the principal balance in respect
of the corresponding Class of Certificates set forth under the Column
titled "Allocation of Principal". The notional principal balance of
the Class 1-A-X Certificates for any Distribution Date will equal the
product of (i) a fraction, the numerator of which is the excess of
(a) the average of the adjusted net mortgage rates of the
Non-Discount Mortgage Loans in Loan Group 1, weighted on the basis of
their respective Stated Principal Balances as of the first day of the
related Due Period (after giving effect to prepayments received in
the Prepayment Period ending during that Due Period) over (b) 6.25%
per annum, and the denominator of which is 6.25% per annum and (ii)
the aggregate Stated Principal Balance of the Non-Discount Mortgage
Loans in Loan Group 1 as of the first day of the related Due Period
(after giving effect to prepayments received in the Prepayment Period
ending in that Due Period).
(2) For each Distribution Date, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in Loan Group 2.
(3) The Pass-Through Rate of the Class 1-3-A-1 Interest for any
Distribution Date will be equal to the weighted average of the
Adjusted Net Mortgage Rates of the Mortgage Loans in Loan Group 3.
(4) The Calculation Rate.
(5) The Class 1-P Interest will not be entitled to any interest, but will
be entitled to 100% of any Prepayment Charges collected on the
Mortgage Loans.
(6) The Class R-1 Interest is the sole class of residual interest in the
Lower Tier REMIC and will not be entitled to distributions of
principal or interest.
The Master REMIC
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount):
========================== ============================== ======================= ======================== ======================
Initial Class Certificate Integral Multiples
Class Designation Balance Pass-Through Rate Minimum Denomination in Excess of Minimum
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-1 $10,000,000 Variable(1) $ 1,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-2 $46,200,000 6.25% $ 1,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-3 $51,214,000 6.25% $ 1,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
4
========================== ============================== ======================= ======================== ======================
Initial Class Certificate Integral Multiples
Class Designation Balance Pass-Through Rate Minimum Denomination in Excess of Minimum
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-4 $25,956,000 6.25% $ 25,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-5 $1,776,900 6.25% $ 1,000 $1,000
-------------------------- ------------------------------ ----------------------- ---------------------- ----------------------
Class 1-A-6 $1,802,000 6.25% $ 25,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-7 $1,840,000 Variable(2) $ 1,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-PO $228,374 N/A(3) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 1-A-X $15,819,708(4) 6.25% $ 100,000(5) $1,000(5)
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 2-A-1 $18,638,000 Variable(6) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 2-A-2 $14,910,000 Variable (6) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 2-A-3 $59,640,000 Variable(7) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class 3-A-1 $73,554,000 Variable(8) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class A-R $100.00 6.25% $ 100 N/A
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-1 $10,815,000 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-2 $3,769,000 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-3 $2,130,000 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-4 $2,294,000 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-5 $1,638,000 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class B-6 $1,311,789.13 Variable(9) $ 100,000 $1,000
-------------------------- ------------------------------ ----------------------- ------------------------ ----------------------
Class P $100.00 N/A(10) $ 100 N/A
========================== ============================== ======================= ======================== ======================
(1) The Class 1-A-1 Certificates will bear interest during each Interest
Accrual Period as follows: (i) if LIBOR is less than 7.25%, the
Pass-Through Rate for the Class 1-A-1 Certificates will be 7.40% per
annum and (ii) if LIBOR is greater than or equal to 7.25%, the
Pass-Through Rate for the Class 1-A-1 Certificates will be 0.00% per
annum. The Pass-Through Rate for the Class 1-A-1 Certificates during
the initial Interest Accrual Period is 7.40% per annum.
(2) The Class 1-A-7 Certificates will bear interest during each Interest
Accrual Period as follows: (i) if LIBOR is less than 7.25%, the
Pass-Through Rate for the Class 1-A-7 Certificates will be 0.00% per
annum and (ii) if LIBOR is greater than or equal to 7.25%, the
Pass-Through Rate for the Class 1-A-7 Certificates will be 40.217391%
per annum. The Pass-Through Rate for the Class 1-A-7 Certificates
during the initial Interest Accrual Period is 0.00% per annum.
(3) The Class 1-PO Certificates are Principal Only Certificates and are
not entitled to receive distributions of interest.
(4) The Class 1-A-X Certificates will be Notional Amount Certificates,
will have no Class Certificate Balance and will bear interest on
their Notional Amount, which will be $15,819,708 for the initial
Interest Accrual Period. For federal income tax purposes, the Class
1-A-X Certificates will be entitled to 100% of the Class 1-1-A-X
Regular Interest cash flow.
(5) Denomination is based on Notional Amount.
(6) This Class of Certificates will bear interest during each Interest
Accrual Period at per annum rate equal to the lesser of (x) 6.25% and
(y) the weighted average of the Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2. The Pass-Through Rate for this Class
of Certificates for the initial Interest Accrual Period is 6.25%.
5
(7) The Class 2-A-3 Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to (A) the sum of (i) the
product of the weighted average of the Adjusted Net Mortgage Rate of
the Mortgage Loans in Loan Group 2 and the Class Certificate Balance
of the Class 2-A-3 Certificates immediately prior to such
Distribution Date and (ii) the product of the Pass-Through Rate on
each Component and the Component Notional Amount immediately prior to
that distribution date divided by (B) the Class Certificate Balance
of the Class 2-A-3 Certificates immediately prior to that
Distribution Date. The Pass-Through Rate for the Class 2-A-3
Certificates for the Interest Accrual Period for the first
Distribution Date is 7.20346% per annum.
(8) The Class 3-A-1 Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the weighted average of
the Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 3.
The Pass-Through Rate for the Class 3-A-1 Certificates for the
Interest Accrual Period related to the first Distribution Date is
6.70609%.
(9) The Pass-Through Rate for a Class of Subordinated Certificates for
the Interest Accrual Period for any Distribution Date will be a per
annum rate equal to (A) the sum of (i) the Required Coupon multiplied
by the excess of the aggregate Stated Principal Balance of the Group
1 Mortgage Loans as of the Due Date in the prior month (after giving
effect to Principal Prepayments received in the Prepayment Period
related to that prior Due Date) over the aggregate Class Certificate
Balance of the Group 1 Senior Certificates immediately prior to that
Distribution Date, (ii) the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in Loan Group 2 multiplied by
the excess of the aggregate Stated Principal Balance of the Group 2
Mortgage Loans for that Distribution Date over the Class Certificate
Balance of the Class 2-A-1 Certificates immediately prior to that
Distribution Date and (iii) the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in Loan Group 3 multiplied by
the excess of the aggregate Stated Principal Balance of the Group 3
Mortgage Loans for that Distribution Date over the Class Certificate
Balance of the Class 3-A-1 Certificates immediately prior to that
Distribution Date divided by (B) the aggregate Class Certificate
Balance of the Subordinated Certificates immediately prior to such
Distribution Date. The Pass-Through Rate for each Class of
Subordinated Certificates for the first Interest Accrual Period is
6.54570% per annum.
(10) The Class P Certificate will not be entitled to any interest, but
will be entitled to 100% of any Prepayment Charges paid on the
Mortgage Loans. For federal income tax purposes, all amounts in
respect of waived Prepayment Charges paid by the Servicer to the
Class P Certificates pursuant to the second paragraph of Section 3.20
hereof will be treated as paid directly by the Servicer to the Class
P Certificates and not as paid by or through any REMIC created
hereunder.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Master REMIC as cash flow on a
REMIC regular interest, without creating any shortfall--actual or potential
(other than for credit losses) to any REMIC regular interest.
Scheduled Principal Prepayments and Realized Losses will be allocated
to the same Lower Tier Interests in the same manner as such amounts are
allocated to the Master REMIC Classes referenced under the column titled
"Allocation of Principal."
6
Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed Certificates.................................... None.
Accrual Certificates............................................... None.
Book-Entry Certificates............................................ All Classes of Certificates other than the Physical
Certificates.
COFI Certificates.................................................. None.
Component Certificates............................................. Class 2-A-3 Certificates.
Components......................................................... For purposes of calculating distributions of principal
and/or interest, the Component Certificates will be
comprised of multiple payment components having the
designations, Initial Component Notional Amounts and
Pass-Through Rates set forth below:
Initial Component Pass-Through
Designation Notional Amount Rate (1)
----------- --------------- --------
Class 2-A-3-1
Component $18,638,000 (1)
Class 2-A-3-2
Component $14,910,000 (1)
(1) The Pass-Through Rate for the Class 2-A-3-1 and Class
2-A-3-2 Components for the Interest Accrual Period for any
Distribution Date will be equal to the excess, if any, of
the average of the Adjusted Net Mortgage Rates of the
Mortgage Loans in Loan Group 2, over 6.25% per annum. The
Pass-Through Rate for the Class 2-A-3-1 and Class 2-A-3-2
Components for the Interest Accrual Period for the first
Distribution Date is approximately 0.61021% per annum.
Delay Certificates................................................. All interest-bearing Classes of Certificates other than any
Non-Delay Certificates.
ERISA-Restricted Certificates...................................... The Residual Certificates and the Private Certificates; the
Retained Certificates until they have been the subject of an
ERISA-Qualifying Underwriting; and Certificates of any Class
that ceases to have a rating of BBB- (or its equivalent) or
better from at least one Rating Agency.
Group 1 Senior Certificates........................................ Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4, Class
1-A-5, Class 1-A-6, Class 1-A-7, Class 1-A-X, Class 1-PO and
Class A-R Certificates.
7
Group 1 Certificates............................................... Group 1 Senior Certificates and the portions of the
Subordinated Certificates related to Loan Group 1.
Group 2 Senior Certificates........................................ Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates.
Group 2 Certificates............................................... Group 2 Senior Certificates and the portions of the
Subordinated Certificates related to Loan Group 2.
Group 3 Senior Certificates........................................ Class 3-A-1 Certificates.
Group 3 Certificates............................................... Group 3 Senior Certificates and the portions of the
Subordinated Certificates related to Loan Group 3.
LIBOR Certificates................................................. Class 1-A-2 Certificates.
Non-Delay Certificates............................................. LIBOR Certificates.
Notional Amount Certificates....................................... Class 1-A-X Certificates.
Notional Amount Components......................................... Class 2-A-3-1 and Class 2-A-3-2 Components.
Offered Certificates............................................... All Classes of Certificates other than the Private
Certificates.
Physical Certificates.............................................. Class A-R Certificates and the Private Certificates.
Planned Principal Classes.......................................... None.
Principal Only Certificates........................................ Class 1-PO Certificates.
Private Certificates............................................... Class P, Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies.................................................... ▇▇▇▇▇'▇ and S&P.
Regular Certificates............................................... All Classes of Certificates other than the Class A-R
Certificates.
Residual Certificate............................................... Class A-R Certificates.
Retained Certificates.............................................. Class 1-A-X, Class 1-PO, Class 2-A-1, Class 2-A-2, Class
2-A-3 and Class 3-A-1 Certificates.
8
Senior Certificates................................................ Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4, Class
1-A-5, Class 1-A-6, Class 1-A-7, Class 1-PO, Class 1-A-X,
Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 3-A-1 and Class
A-R Certificates.
Senior Certificate Group........................................... The Group 1 Senior Certificates, the Group 2 Senior
Certificates and the Group 3 Senior Certificates.
Subordinated Certificates.......................................... Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates.
Targeted Principal Classes......................................... None.
Targeted Principal Component....................................... None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions in this
Agreement relating solely to such designations shall be of no force or effect,
and any calculations in this Agreement incorporating references to such
designations shall be interpreted without reference to such designations and
amounts. Defined terms and provisions in this Agreement relating to statistical
rating agencies not designated above as Rating Agencies shall be of no force or
effect.
9
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions.
Unless the context requires a different meaning, capitalized terms
are used in this Agreement as defined below.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Additional Designated Information: As defined in Section 11.02.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and any
Distribution Date, the per annum rate equal to the Mortgage Rate of that
Mortgage Loan (as of the Due Date in the month preceding the month in which such
Distribution Date occurs) less the Expense Fee Rate for that Mortgage Loan.
Adjustment Date: Not applicable.
Advance: As to a Loan Group, the payment required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such payment being equal to the aggregate of payments of principal
and interest (net of the Servicing Fee) on the Mortgage Loans in such Loan Group
that were due during the related Due Period and not received as of the close of
business on the related Determination Date, together with an amount equivalent
to interest on each REO Property, net of any net income from such REO Property,
less the aggregate amount of any such delinquent payments that the Servicer has
determined would constitute a Nonrecoverable Advance if advanced.
Advance Notice: As defined in Section 4.01(b).
Advance Deficiency: As defined in Section 4.01(b).
Affiliate: With respect to any Person, any other Person controlling,
controlled or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract, or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing. Affiliates also include any entities consolidated
with the requirements of generally accepted accounting principles.
Aggregate Planned Balance: With respect to any group of Planned
Principal Classes and any Distribution Date appearing in the Principal Balance
Schedule, the applicable amount appearing opposite such Distribution Date for
such Planned Principal Classes.
10
Aggregate Subordinated Percentage: For any Distribution Date a
fraction, expressed as a percentage, the numerator of which is equal to the
aggregate Class Certificate Balance of the Subordinated Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all the Mortgage Loans as of the Due Date in the
month preceding the month of such Distribution Date (after giving effect to
Principal Prepayments received in the Prepayment Period related to that prior
Due Date).
Agreement: This Pooling and Servicing Agreement and all amendments
and supplements.
Allocable Share: As to any Distribution Date and any Group 1 Mortgage
Loan, with respect to the Class 1-PO Certificates, zero. As to any Distribution
Date and any Group 1 Mortgage Loan and with respect to each Class of
Certificates other than the Class 1-PO Certificates, the product of (a) the
lesser of (I) the ratio that the related Required Coupon bears to the Adjusted
Net Mortgage Rate of such Group 1 Mortgage Loan and (II) one, multiplied by (b)
the ratio that the amount calculated with respect to such Distribution Date (A)
with respect to the Group 1 Senior Certificates, pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)) and (B) (1) with
respect to the Subordinated Certificates, pursuant to the definition of Assumed
Interest Amount or (2) after the second Senior Termination Date, if the Group 1
Senior Certificates are the remaining Senior Certificate Group outstanding,
pursuant to clause (i) of the definition of Class Optimal Interest Distribution
Amount (without giving effect to any reduction of such amount pursuant to
Section 4.02(d)) bears to the amount calculated with respect to such
Distribution Date for each Class of Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)) or the definition
of Assumed Interest Amount, as applicable.
As to any Distribution Date and Mortgage Loan in Loan Group 2 or Loan
Group 3 and with respect to any Group 2 Senior Certificates or Group 3 Senior
Certificates, the ratio that the amount calculated with respect to such
Distribution Date (A) with respect to the Senior Certificates of the related
Senior Certificate Group, pursuant to clause (i) of the definition of Class
Optimal Interest Distribution Amount (without giving effect to any reduction of
such amount pursuant to Section 4.02(d)) and (B) with respect to the
Subordinated Certificates, pursuant to the definition of Assumed Interest Amount
or after the second Senior Termination Date, if the Group 2 Senior Certificates
or Group 3 Senior Certificates are the remaining Senior Certificate Group
outstanding, pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 4.02(d)) bears to the amount calculated with respect to such
Distribution Date for each Class of Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving effect
to any reduction of such amount pursuant to Section 4.02(d)) or the definition
of Assumed Interest Amount for such Loan Group and Class, as applicable.
Amount Available for Senior Principal: As to any Distribution Date
and Loan Group, the related Available Funds for such Distribution Date, reduced
by the aggregate amount distributable (or allocable to the Accrual Amount, if
applicable) on such Distribution Date in respect of interest on the related
Senior Certificates pursuant to Section 4.02(a)(1)(iii), Section 4.02(a)(2)(iii)
or Section 4.02(a)(3)(iii).
Amount Held for Future Distribution: As to any Distribution Date and
the Mortgage Loans in a Loan Group, the aggregate amount held in the Certificate
Account at the close of business on the related Determination Date on account of
(i) Principal Prepayments received after the last day of the related Prepayment
Period and Liquidation Proceeds and Subsequent Recoveries relating to such Loan
Group received in the month of such Distribution Date and (ii) all Scheduled
Payments relating to such Loan Group due after the related Due Date.
11
Applicable Credit Support Percentage: As defined in Section 4.02(e).
Appraised Value: With respect to any Mortgage Loan, the Appraised
Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinance Loan, the lesser of (a) the value of the Mortgaged
Property based upon the appraisal made at the time of the origination of such
Mortgage Loan and (b) the sales price of the Mortgaged Property at the time of
the origination of such Mortgage Loan; and (ii) with respect to a Refinance
Loan, the value of the Mortgaged Property based upon the appraisal made at the
time of the origination of such Refinance Loan.
Assumed Balance: For a Distribution Date and Loan Group, the
Subordinated Percentage for that Distribution Date and that Loan Group of the
aggregate of (x) in the case of Loan Group 1, the Non-PO Percentage of the
Stated Principal Balance of each Group 1 Mortgage Loan as of the Due Date
occurring in the month prior to the month of that Distribution Date (after
giving effect to Principal Prepayments received in the Prepayment Period related
to such Due Date) and (y) in the case of Loan Group 2 or Loan Group 3, the
Stated Principal Balance of each Mortgage Loan in that Loan Group as of the Due
Date occurring in the month prior to the month of that Distribution Date (after
giving effect to Principal Prepayments received in the Prepayment Period related
to such Due Date).
Assumed Interest Amount: With respect to any Distribution Date and
each Class of Subordinated Certificates, one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
applicable Assumed Balance immediately prior to that Distribution Date.
Available Funds: As to any Distribution Date and the Mortgage Loans
in a Loan Group, the sum of (a) the aggregate amount held in the Certificate
Account at the close of business on the related Determination Date, including
any Subsequent Recoveries with respect to the Mortgage Loans in that Loan Group,
net of the Amount Held for Future Distribution, net of Prepayment Charges and
net of amounts permitted to be withdrawn from the Certificate Account pursuant
to clauses (i) - (viii), inclusive, of Section 3.09(a) and amounts permitted to
be withdrawn from the Distribution Account pursuant to clauses (i) - (ii),
inclusive, of Section 3.09(b), (b) the amount of the related Advance, (c) in
connection with Defective Mortgage Loans in such Loan Group, as applicable, the
aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited
on the related Distribution Account Deposit Date, and (d) any amount deposited
on the related Distribution Account Deposit Date pursuant to Section 3.10. The
Holders of the Class P Certificates will be entitled to all Prepayment Charges
received on the Mortgage Loans and such amounts will not be available for
distribution to the Holders of any other Class of Certificates.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy Loss
shall not be deemed a Bankruptcy Loss under this Agreement so long as the
Servicer has notified the Trustee in writing that the Servicer is diligently
pursuing any remedies that may exist in connection with the related Mortgage
Loan and either (A) the related Mortgage Loan is not in default with regard to
payments due under the Mortgage Loan or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Servicer, in either case without giving effect to any Debt Service Reduction or
Deficient Valuation.
12
Bankruptcy Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Loss Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading, qualification or withdrawal of the then current ratings assigned to
the Classes of Certificates rated by it.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the City of New York, New York, the State
of California or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
Calculation Rate: For each Distribution Date, the product of (i) 10
and (ii) the weighted average pass-through rate of the outstanding Class A and
Class B Interests, treating each of the Class A Interests as capped at zero.
Cap Counterparty: Credit Suisse International, or its succession in
interest, as applicable.
Certificate: Any one of the certificates issued by the Trust Fund and
executed by the Trustee in substantially the forms attached as exhibits.
Certificate Account: The separate Eligible Account or Accounts
created and maintained by the Servicer pursuant to Section 3.06(d) with a
depository institution in the name of the Servicer for the benefit of the
Trustee on behalf of Certificateholders and designated "IndyMac Bank, F.S.B., in
trust for the registered holders of Residential Asset Securitization Trust
2006-A11, Mortgage Pass-Through Certificates, Series 2006-K."
Certificate Balance: With respect to any Certificate (other than the
Notional Amount Certificates) at any date of determination, the maximum dollar
amount of principal to which the Holder thereof is then entitled under this
Agreement, such amount being equal to the Denomination thereof (A) plus any
increase in the Certificate Balance of such Certificate pursuant to Section 4.02
due to the receipt of Subsequent Recoveries, (B) minus the sum of (i) all
distributions of principal previously made with respect thereto and (ii) all
Realized Losses allocated to that Certificate and, in the case of any
Subordinated Certificates, all other reductions in Certificate Balance
previously allocated to that Certificate pursuant to Section 4.05 and (C) in the
case of any Class of Accrual Certificates, plus the Accrual Amount added to the
Class Certificate Balance of such Class prior to such date. The Notional Amount
Certificates do not have Certificate Balances.
Certificate Group: Any of the Group 1 Certificates, the Group 2
Certificates or the Group 3 Certificates, as applicable.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of the Book-Entry Certificate. For the
purposes of this Agreement, in order for a Certificate Owner to enforce any of
its rights under this Agreement, it shall first have to provide evidence of its
beneficial ownership interest in a Certificate that is reasonably satisfactory
to the Trustee, the Depositor and/or the Servicer, as applicable.
Certificate Register: The register maintained pursuant to Section
5.02.
13
Certificate Registrar: Deutsche Bank National Trust Company and its
successors and, if a successor trustee is appointed under this Agreement, the
successor.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor is not Outstanding
and the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect a consent has been obtained, except that if the Depositor or its
affiliates own 100% of the Percentage Interests evidenced by a Class of
Certificates, the Certificates shall be Outstanding for purposes of any
provision of this Agreement requiring the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class Certificate Balance: For any Class as of any date of
determination, the aggregate of the Certificate Balances of all Certificates of
the Class as of that date.
Class Interest Shortfall: As to any Distribution Date and Class or
Component, the amount by which the amount described in clause (i) of the
definition of Class Optimal Interest Distribution Amount for such Class or
Component exceeds the amount of interest actually distributed on such Class or
Component on such Distribution Date pursuant to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest-bearing Class or Component, the sum of (i) one
month's interest accrued during the related Interest Accrual Period at the
Pass-Through Rate for such Class or Component, on the related Class Certificate
Balance, Component Notional Amount or Notional Amount, as applicable,
immediately prior to such Distribution Date, subject to reduction pursuant to
Section 4.02(d), and (ii) any Class Unpaid Interest Amounts for such Class or
Component.
Class 1-PO Deferred Amount: As to any Distribution Date and Loan
Group 1, the aggregate of the applicable PO Percentage of each Realized Loss,
other than any Excess Loss, on a Discount Mortgage Loan in Loan Group 1 to be
allocated to the Class 1-PO Certificates on such Distribution Date on or prior
to the Senior Credit Support Depletion Date or previously allocated to the Class
1-PO Certificates and not yet paid to the Holders of the Class 1-PO
Certificates.
Class Subordination Percentage: With respect to any Distribution Date
and each Class of Subordinated Certificates, the fraction (expressed as a
percentage) the numerator of which is the Class Certificate Balance of such
Class of Subordinated Certificates immediately prior to such Distribution Date
and the denominator of which is the aggregate Class Certificate Balance of all
Classes of Certificates immediately prior to such Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class
or Component of interest-bearing Certificates, the amount by which the aggregate
Class Interest Shortfalls for such Class or Component on prior Distribution
Dates exceeds the amount distributed on such Class or Component on
14
prior Distribution Dates pursuant to clause (ii) of the definition of Class
Optimal Interest Distribution Amount.
Closing Date: August 29, 2006.
CMT Index: Not applicable.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: Not applicable.
COFI Certificates: Not applicable.
Collection Account: As defined in Section 3.06(c).
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, 0.125% multiplied
by one-twelfth multiplied by the aggregate Stated Principal Balance of the
Mortgage Loans as of the first day of the prior month.
Components: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, its Initial Component Balance (A) plus any Subsequent Recoveries added to
the Component Balance of such Component pursuant to Section 4.02, (B) minus the
sum of all amounts applied in reduction of the principal balance of such
Component and Realized Losses allocated thereto and increased due to the receipt
of Subsequent Recoveries.
Component Certificates: As specified in the Preliminary Statement.
Component Notional Amount: For the Class 2-A-3-1 Component and any
Distribution Date, the Class Certificate Balance of the Class 2-A-1 Certificates
immediately prior to that Distribution Date. For the Class 2-A-3-2 Component and
any Distribution Date, the Class Certificate Balance of the Class 2-A-2
Certificates immediately prior to that Distribution Date.
Co-op Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and that governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Co-op Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Co-op Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which
15
office at the date of the execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Mortgage
Administration-IN0611 (IndyMac MBS, Inc., Residential Asset Securitization Trust
2006-A11, Mortgage Pass-Through Certificates, Series 2006-K), and which is the
address to which notices to and correspondence with the Trustee should be
directed or, with respect to the Certificate Registrar, the designated office
for presentment and surrender of Certificates for registration transfer,
exchange or final payment thereof is located at DB Services Tennessee, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Transfer Unit.
Corridor Contract: The interest rate corridor cap agreement between
the Supplemental Interest Trust and the Cap Counterparty evidenced by the
confirmation with external ID number 53143395N3 relating to the Class 1-A-2
Certificates, a form of which is attached to this Agreement as Exhibit P.
Corridor Contract Termination Date: The Distribution Date in October
2010.
Cut-off Date: August 1, 2006.
Cut-off Date Pool Principal Balance: $327,717,163.86.
Cut-off Date Principal Balance: As to any Mortgage Loan, its Stated
Principal Balance as of the close of business on the Cut-off Date.
Debt Service Reduction: For any Mortgage Loan, a reduction by a court
of competent jurisdiction in a proceeding under the Bankruptcy Code in the
Scheduled Payment for the Mortgage Loan that became final and non-appealable,
except a reduction resulting from a Deficient Valuation or a reduction that
results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient Valuation: For any Mortgage Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the then
outstanding indebtedness under the Mortgage Loan, or any reduction in the amount
of principal to be paid in connection with any Scheduled Payment that results in
a permanent forgiveness of principal, which valuation or reduction results from
an order of the court that is final and non-appealable in a proceeding under the
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Delay Delivery Certification: A certification substantially in the
form of Exhibit G-2.
Delay Delivery Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule for which none of a related Mortgage File or neither the
Mortgage Note nor a lost note affidavit for a lost Mortgage Note has been
delivered to the Trustee by the Closing Date. The Depositor shall deliver the
Mortgage Files to the Trustee:
(A) for at least 70% of the Mortgage Loans in each Loan Group, not
later than the Closing Date, and
16
(B) for the remaining 30% of the Mortgage Loans in each Loan Group,
not later than five Business Days following the Closing Date.
To the extent that the Seller is in possession of any Mortgage File
for any Delay Delivery Mortgage Loan, until delivery of the Mortgage File to the
Trustee as provided in Section 2.01, the Seller shall hold the files as
Servicer, as agent and in trust for the Trustee.
Deleted Mortgage Loan: As defined in Section 2.03(c).
Delinquent: A Mortgage Loan is "Delinquent" if any monthly payment
due on a Due Date is not made by the close of business on the next scheduled Due
Date for such Mortgage Loan. A Mortgage Loan is "30 days Delinquent" if such
monthly payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
monthly payment was due. The determination of whether a Mortgage Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in a like manner.
Denomination: For each Certificate, the amount on the face of the
Certificate as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face of the Certificate.
Depositor: IndyMac MBS, Inc., a Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the UCC.
Depository Participant: A broker, dealer, bank, or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Derivative Notional Balance: For each Distribution Date to and
including the Corridor Contract Termination Date, the amount described in
Schedule 1 to the Prospectus Supplement. After the Corridor Contract Termination
Date, zero.
Determination Date: As to any Distribution Date, the 18th day of each
month or if that day is not a Business Day the next Business Day, except that if
the next Business Day is less than two Business Days before the related
Distribution Date, then the Determination Date shall be the Business Day
preceding the 18th day of the month.
Discount Mortgage Loan: Any Mortgage Loan in Loan Group 1 with an
Adjusted Net Mortgage Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(e) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of Residential Asset
Securitization Trust 2006-A11, Mortgage Pass-Through Certificates, Series
2006-K." Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 12:30
P.M. Pacific time on the Business Day preceding the Distribution Date.
17
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if that day is not a Business Day, the
next Business Day, commencing in September 2006.
Due Date: For any Mortgage Loan and Distribution Date, the first day
of the month in which such Distribution Date occurs.
Due Period: For any Distribution Date, the period commencing on the
second day of the month preceding the month in which the Distribution Date
occurs and ending on the first day of the month in which the Distribution Date
occurs.
▇▇▇▇▇: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of
(i) an account or accounts maintained with a federal or state
chartered depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short-term ratings of
▇▇▇▇▇'▇ or Fitch and one of the two highest short-term ratings of S&P, if S&P is
a Rating Agency at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or
(iii) a trust account or accounts maintained with (a) the trust
department of a federal or state chartered depository institution or (b) a trust
company, acting in its fiduciary capacity or
(iv) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of the
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.07(a).
Event of Default: As defined in Section 7.01.
Excess Loss: For each Loan Group, the amount of any (i) Fraud Loss on
the Mortgage Loans in such Loan Group realized after the Fraud Loss Coverage
Termination Date, (ii) Special Hazard Loss on
18
the Mortgage Loans in such Loan Group realized after the Special Hazard Coverage
Termination Date or (iii) Bankruptcy Loss on the Mortgage Loans in such Loan
Group realized after the Bankruptcy Coverage Termination Date.
Excess Proceeds: For any Liquidated Mortgage Loan, the excess of
(a) all Liquidation Proceeds from the Mortgage Loan received in the
calendar month in which the Mortgage Loan became a Liquidated Mortgage Loan, net
of any amounts previously reimbursed to the Servicer as Nonrecoverable Advances
with respect to the Mortgage Loan pursuant to Section 3.09(a)(iii), over
(b) the sum of (i) the unpaid principal balance of the Liquidated
Mortgage Loan as of the Due Date in the month in which the Mortgage Loan became
a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Rate from
the Due Date for which interest was last paid or advanced (and not reimbursed)
to Certificateholders up to the Due Date applicable to the Distribution Date
following the calendar month during which the liquidation occurred.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund under
the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, the sum of (a) the
related Servicing Fee Rate and (b) the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - IndyMac 2006-K, or any
other address Fitch furnishes to the Depositor and the Servicer.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trustee or the Servicer, if such
Person has actual knowledge thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between such Person
and any Item 1119 Party.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
19
Fraud Loss Coverage Amount: As of the Closing Date, $9,831,514.00,
subject to reduction from time to time, by the amount of Fraud Losses allocated
to the Certificates. In addition, on each anniversary of the Cut-off Date, the
Fraud Loss Coverage Amount will be reduced as follows: (a) on the first, second,
third and fourth anniversaries of the Cut-off Date, to an amount equal to the
lesser of (i) 2% of the then current Stated Principal Balance of the Mortgage
Loans in the case of the first such anniversary and 1% of the then-current
Stated Principal Balance of the Mortgage Loans in the case of the second, third
and fourth such anniversaries and (ii) the excess of the Fraud Loss Coverage
Amount as of the preceding anniversary of the Cut-off Date over the cumulative
amount of Fraud Losses allocated to the Certificates since such preceding
anniversary; and (b) on the fifth anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.
Gross Margin: Not applicable.
Group 1 Certificates: As specified in the Preliminary Statement.
Group 1 Mortgage Loan: Any Mortgage Loan in Loan Group 1.
Group 1 Priority Amount: For any Distribution Date, the sum of (i)
the product of (A) the Group 1 Scheduled Principal Distribution Amount, (B) the
Shift Percentage and (C) the Group 1 Priority Percentage and (ii) the product of
(A) the Group 1 Unscheduled Principal Distribution Amount, (B) the Shift
Percentage and (C) the Group 1 Priority Percentage.
Group 1 Priority Percentage: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Class Certificate Balance of the Class 1-A-4 and Class 1-A-6 Certificates
immediately prior to such Distribution Date, and the denominator of which is the
Non-PO Percentage of the aggregate of the Stated Principal Balance of each Group
1 Mortgage Loan as of the first day of the related Due Period (after giving
effect to Principal Prepayments received in the Prepayment Period that ends
during such Due Period).
Group 1 Scheduled Principal Distribution Amount: For any Distribution
Date and Loan Group 1, an amount equal the Non-PO Percentage of all amounts
described in subclauses (a) through (d) of clause (i) of the definition of
Non-PO Formula Principal Amount for such Distribution Date; provided, however,
that if a Bankruptcy Loss that is an Excess Loss is sustained with respect to a
Group 1 Mortgage Loan that is not a Liquidated Mortgage Loan, the Group 1
Scheduled Principal Distribution Amount will be reduced on the related
Distribution Date by the applicable Non-PO Percentage of the principal portion
of such Bankruptcy Loss.
Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Group 1 Unscheduled Principal Distribution Amount: For any
Distribution Date and Loan Group 1, the Senior Prepayment Percentage of the
Non-PO Percentage of the sum of the amounts described in subclauses (e) and (f)
of clause (i) and clause (ii) of the definition of Non-PO Formula Principal
Amount for that Distribution Date.
20
Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loan: Any Mortgage Loan in Loan Group 2.
Group 2 Priority Amount: For any Distribution Date, the sum of (i)
the product of (A) the Group 2 Scheduled Principal Distribution Amount, (B) the
Shift Percentage and (C) the Group 2 Priority Percentage and (ii) the product of
(A) the Group 2 Unscheduled Principal Distribution Amount, (B) the Shift
Percentage and (C) the Group 2 Priority Percentage.
Group 2 Priority Percentage: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the Class
Certificate Balance of the Class 2-A-1 Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate of the Stated
Principal Balance of each Group 2 Mortgage Loan as of the first day of the
related Due Period (after giving effect to Principal Prepayments received in the
Prepayment Period that ends during such Due Period).
Group 2 Scheduled Principal Distribution Amount: For any Distribution
Date and Loan Group 2, an amount equal all amounts described in clauses (a)
through (d) of the definition of Principal Amount for such Distribution Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to a Group 2 Mortgage Loan that is not a Liquidated Mortgage Loan,
the Group 2 Scheduled Principal Distribution Amount will be reduced on the
related Distribution Date by the principal portion of such Bankruptcy Loss.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Unscheduled Principal Distribution Amount: For any
Distribution Date and Loan Group 2, the Senior Prepayment Percentage of the sum
of the amounts described in clauses (e) through (g) of the definition of
Principal Amount for Loan Group 2 for that Distribution Date.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Mortgage Loan: Any Mortgage Loan in Loan Group 3.
Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Index: Not applicable.
Indirect Participant: A broker, dealer, bank, or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Bankruptcy Loss Coverage Amount: $150,000.00.
Initial Component Balance: As specified in the Preliminary Statement.
Initial LIBOR Rate: 5.33% per annum.
Insurance Policy: For any Mortgage Loan included in the Trust Fund,
any insurance policy, including all riders and endorsements thereto in effect,
including any replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
21
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class and Component of
Delay Certificates and any Distribution Date, the calendar month prior to the
month of such Distribution Date. With respect to each Class of Non-Delay
Certificates and any Distribution Date, the one-month period commencing on the
25th day of the month preceding the month in which such Distribution Date occurs
and ending on the 24th day of the month in which such Distribution Date occurs.
All Classes of Certificates will accrue interest on the basis of a 360-day year
consisting of twelve 30-day months.
Interest Determination Date: With respect to (a) any Interest Accrual
Period for any LIBOR Certificates and (b) any Interest Accrual Period for the
COFI Certificates for which the applicable Index is LIBOR, the second Business
Day prior to the first day of such Interest Accrual Period.
Interest Settlement Rate: As defined in Section 4.08.
Item 1119 Party: The Depositor, the Seller, the Servicer, the
Trustee, the Cap Counterparty and any other material transaction party, as
identified in Exhibit T, as updated pursuant to Section 11.04.
Last Scheduled Distribution Date: The Distribution Date in the month
immediately following the month of the latest scheduled maturity date for any of
the Mortgage Loans.
Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
Lender PMI Loans: Mortgage Loans with respect to which the lender
rather than the borrower acquired the primary mortgage guaranty insurance and
charged the related borrower an interest premium.
LIBOR: The London interbank offered rate for one month United States
dollar deposits calculated in the manner described in Section 4.08.
LIBOR Determination Date: For any Interest Accrual Period, the second
London Business Day prior to the commencement of such Interest Accrual Period.
Limited Exchange Act Reporting Obligations: The obligations of the
Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with respect to
notice and information to be provided to the Depositor and Article 11 (except
Section 11.07(a)(i) and (ii)).
Liquidated Mortgage Loan: For any Distribution Date, a defaulted
Mortgage Loan (including any REO Property) that was liquidated in the calendar
month preceding the month of the Distribution Date and as to which the Servicer
has certified (in accordance with this Agreement) that it has received all
amounts it expects to receive in connection with the liquidation of the Mortgage
Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds
regardless of when received, received in connection with the partial or complete
liquidation of defaulted Mortgage Loans, whether through trustee's sale,
foreclosure sale, or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property, and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Servicing Fees, Servicing Advances, and Advances.
22
Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3, as
applicable.
Loan Group 1: All of the Mortgage Loans identified as Group 1
Mortgage Loans on the Mortgage Loan Schedule.
Loan Group 2: All of the Mortgage Loans identified as Group 2
Mortgage Loans on the Mortgage Loan Schedule.
Loan Group 3: All of the Mortgage Loans identified as Group 3
Mortgage Loans on the Mortgage Loan Schedule.
Loan-to-Value Ratio: For any Mortgage Loan and as of any date of
determination, is the fraction whose numerator is the original principal balance
of the related Mortgage Loan at that date of determination and whose denominator
is the Appraised Value of the related Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: For any Cooperative Unit, the rent paid by the Mortgagor
to the Cooperative Corporation pursuant to the Proprietary Lease.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moneyline Telerate Page 3750: The display page currently so
designated on the Moneyline Telerate Information Services, Inc. (or any page
replacing that page on that service for the purpose of displaying London
inter-bank offered rates of major banks).
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.06.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Loan Monitoring Group, or any other address that Moody's furnishes
to the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust, or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
23
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the Trustee pursuant to this Agreement, as from time to time are held as a
part of the Trust Fund (including any REO Property), the Mortgage Loans so held
being identified on the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property.
Mortgage Loan Schedule: As of any date, the list set forth in
Schedule I of Mortgage Loans included in the Trust Fund on that date. The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan by Loan Group:
(i) the loan number;
(ii) the street address of the Mortgaged Property,
including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off
Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential
dwelling at the time of origination was
represented to be owner-occupied;
(x) a code indicating whether the residential
dwelling is either (a) a detached single family
dwelling, (b) a dwelling in a PUD, (c) a
condominium unit, (d) a two- to four-unit
residential property, or (e) a Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the purpose for the Mortgage Loan;
(xiii) the type of documentation program pursuant to
which the Mortgage Loan was originated;
(xiv) a code indicating whether the Mortgage Loan is a
borrower-paid mortgage insurance loan;
(xv) the Servicing Fee Rate;
(xvi) a code indicating whether the Mortgage Loan is a
Lender PMI Loan;
(xvii) the coverage amount of any mortgage insurance;
24
(xviii) with respect to the Lender PMI Loans, the
interest premium charged by the lender;
(xix) a code indicating whether the Mortgage Loan is a
Delay Delivery Mortgage Loan; and
(xx) a code indicating whether the Mortgage Loan is a
MERS Mortgage Loan.
The schedule shall also set forth the total of the amounts described under (v)
above for all of the Mortgage Loans and for each Loan Group.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time (net of the interest premium for any Lender PMI Loan).
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Co-op Shares and
Proprietary Lease.
Mortgagor: The obligors on a Mortgage Note.
National Cost of Funds Index: The National Monthly Median Cost of
Funds Ratio to SAIF-Insured Institutions published by the OTS.
Net Prepayment Interest Shortfall: As to any Distribution Date and
Loan Group, the amount by which the aggregate of Prepayment Interest Shortfalls
for such Loan Group exceeds an amount equal to the sum of (a) the Compensating
Interest allocable to such Loan Group for such Distribution Date and (b) the
excess, if any, of the Compensating Interest allocable to the other Loan
Group(s) for such Distribution Date over Prepayment Interest Shortfalls for such
other Loan Group(s) and Distribution Date.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage Loan: Each Group 1 Mortgage Loan with an
Adjusted Net Mortgage Rate that is greater than or equal to the Required Coupon.
Non-PO Formula Principal Amount: As to any Distribution Date and Loan
Group 1, the sum of (i) the applicable Non-PO Percentage of (a) all monthly
payments of principal due on each Group 1 Mortgage Loan on the related Due Date,
(b) the principal portion of the purchase price of each Group 1 Mortgage Loan
that was repurchased by the Seller pursuant to this Agreement as of such
Distribution Date, excluding any Group 1 Mortgage Loan that was repurchased due
to a modification of the Mortgage Loan, (c) the Substitution Adjustment Amount
in connection with any Deleted Mortgage Loan in Loan Group 1 received with
respect to such Distribution Date, (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Group 1 Mortgage Loans that are
not yet Liquidated Mortgage Loans received during the calendar month preceding
the month of such Distribution Date, (e) with respect to each Group 1 Mortgage
Loan that became a Liquidated Mortgage Loan during the calendar month preceding
the month of such Distribution Date, the amount of Liquidation Proceeds
allocable to principal received with respect to such Group 1 Mortgage Loan, and
(f) all partial and full Principal Prepayments on the Group 1 Mortgage Loans
received during the related Prepayment Period and (ii) (A) any Subsequent
Recoveries with respect to the Group 1 Mortgage Loans received during the
calendar month preceding the month of such Distribution Date, or (B) with
respect to Subsequent
25
Recoveries attributable to a Discount Mortgage Loan in Loan Group 1 that
incurred (1) an Excess Loss or (2) a Realized Loss after the Senior Credit
Support Depletion Date, the Non-PO Percentage of any Subsequent Recoveries
received during the calendar month preceding the month of such Distribution
Date.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the Adjusted Net Mortgage
Rate of such Discount Mortgage Loan and the denominator of which is the Required
Coupon. As to any Non-Discount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer, that, in the good faith judgment of the
Servicer, will not be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Notional Amount: With respect to the Class 1-A-X Certificates and any
Distribution Date an amount equal to the product of (i) a fraction, the
numerator of which is the excess of (a) the average of the Adjusted Net Mortgage
Rate of the Non-Discount Mortgage Loans, weighted on the basis of their
respective Stated Principal Balances as of the first day of the related Due
Period (after giving effect to Principal Prepayments received in the Prepayment
Period ending during that Due Period) over (b) 6.25% per annum, and the
denominator of which is 6.25% per annum and (ii) the aggregate Stated Principal
Balance of the Non-Discount Mortgage Loans as of the first day of the related
Due Period (after giving effect to Principal Prepayments received in the
Prepayment Period that ends during such Due Period).
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate (i) signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Servicer, or (ii) if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor and the Trustee as required by this Agreement.
Opinion of Counsel: For the interpretation or application of the
REMIC Provisions, a written opinion of counsel who (i) is in fact independent of
the Depositor and the Servicer, (ii) does not have any direct financial interest
in the Depositor or the Servicer or in any affiliate of either, and (iii) is not
connected with the Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director, or person performing similar functions.
Otherwise, a written opinion of counsel who may be counsel for the Depositor or
the Servicer, including in-house counsel, reasonably acceptable to the Trustee.
Original Applicable Credit Support Percentage: With respect to each
of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
26
Class B-1............................. 6.70%
Class B-2............................. 3.40%
Class B-3............................. 2.25%
Class B-4............................. 1.60%
Class B-5............................. 0.90%
Class B-6............................. 0.40%
Original Mortgage Loan: The Mortgage Loan refinanced in connection
with the origination of a Refinance Loan.
Original Subordinated Principal Balance: On or prior to the second
Senior Termination Date, the Subordinated Percentage of (x) in the case of the
Mortgage Loans in Loan Group 1, the applicable Non-PO Percentage of the
aggregate Stated Principal Balance of the Group 1 Mortgage Loans or (y) in the
case of the Mortgage Loans in each of Loan Group 2 and Loan Group 3, the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group, in each case as of the Cut-off Date; or if such date is after the second
Senior Termination Date, the aggregate Class Certificate Balance of the
Subordinated Certificates as of the Closing Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: Not applicable.
Outstanding: For the Certificates as of any date of determination,
all Certificates theretofore executed and authenticated under this Agreement
except:
(i) Certificates theretofore canceled by the Trustee
or delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and
delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in Full before the Due Date or during the related
Prepayment Period and that did not become a Liquidated Mortgage Loan before the
Due Date.
Overcollateralized Group: As defined in Section 4.03.
Ownership Interest: As to any Residual Certificate, any ownership
interest in the Certificate including any interest in the Certificate as its
Holder and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: For each Class of Certificates, the per annum rate
set forth or calculated in the manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class, the
percentage interest being set forth on its face or equal to the percentage
obtained by dividing the Denomination of the Certificate by the aggregate of the
Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 11.05.
27
Permitted Investments: At any time, any of the following:
(i) obligations of the United States or any agency thereof backed by
the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest long-term
debt rating of each Rating Agency, or any lower rating that will not result in
the downgrading, qualification or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing delivered
by each Rating Agency;
(iii) commercial or finance company paper that is then receiving the
highest commercial or finance company paper rating of each Rating Agency, or any
lower rating that will not result in the downgrading, qualification or
withdrawal of the ratings then assigned to the Certificates by the Rating
Agencies , as evidenced by a signed writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and subject to
supervision and examination by federal or state banking authorities, provided
that the commercial paper or long-term unsecured debt obligations of the
depository institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial paper or
long-term unsecured debt obligations of the holding company, but only if ▇▇▇▇▇'▇
is not a Rating Agency) are then rated one of the two highest long-term and the
highest short-term ratings of each Rating Agency for the securities, or any
lower rating that will not result in the downgrading, qualification or
withdrawal of the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that the deposits are
fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company, or other corporation acceptable to the Rating Agencies at the time of
the issuance of the agreements, as evidenced by a signed writing delivered by
each Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (iv)
above; provided that such repurchase obligation would be accounted for as a
financing arrangement under generally accepted accounting principles;
(viii) securities (other than stripped bonds, stripped coupons, or
instruments sold at a purchase price in excess of 115% of their face amount)
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States or any state thereof that, at the time of
the investment, have one of the two highest ratings of each Rating Agency
(except if the Rating Agency is Moody's the rating shall be the highest
commercial paper rating of Moody's for the securities), or any lower rating that
will not result in the downgrading, qualification or withdrawal of the ratings
then assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency and that have a maturity date
occurring no more than 365 days from their date of issuance;
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except (i) if Fitch is a Rating Agency
and has not rated the portfolio, the highest rating assigned by Moody's and (ii)
if S&P is a Rating Agency, "AAAm" or "AAAM-G" by S&P) and
28
restricted to obligations issued or guaranteed by the United States of America
or entities whose obligations are backed by the full faith and credit of the
United States of America and repurchase agreements collateralized by such
obligations; and
(x) any other investments bearing interest or sold at a discount
acceptable to each Rating Agency that will not result in the downgrading,
qualification or withdrawal of the ratings then assigned to the Certificates by
the Rating Agencies, as evidenced by a signed writing delivered by each Rating
Agency.
No Permitted Investment may (i) evidence the right to receive
interest only payments with respect to the obligations underlying the
instrument, (ii) be sold or disposed of before its maturity or (iii) be any
obligation of the Seller or any of its Affiliates. Any Permitted Investment
shall be relatively risk free and no options or voting rights shall be exercised
with respect to any Permitted Investment. Any Permitted Investment shall be sold
or disposed of in accordance with Financial Accounting Standard 140, paragraph
35c(6) in effect as of the Closing Date.
Permitted Transferee: Any person other than
(i) the United States, any State or political subdivision thereof, or
any agency or instrumentality of any of the foregoing,
(ii) a foreign government, International Organization, or any agency
or instrumentality of either of the foregoing,
(iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Residual Certificate,
(iv) a rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code,
(v) an "electing large partnership" as defined in section 775 of the
Code,
(vi) a Person that is not a U.S. Person, and
(vii) any other Person so designated by the Depositor based on an
Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to the Person may cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization, or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Planned Balance: With respect to any Planned Balance Classes and any
Distribution Date appearing in the Principal Balance Schedule, the applicable
amount appearing opposite such Distribution Date for such Planned Balance Class.
Planned Principal Classes: As specified in the Preliminary Statement.
29
PO Formula Principal Amount: As to any Distribution Date and the
Class 1-PO Certificates, the sum of (i) the sum of the applicable PO Percentage
of (a) the principal portion of each Scheduled Payment (without giving effect,
prior to the Bankruptcy Coverage Termination Date, to any reductions thereof
caused by any Debt Service Reductions or Deficient Valuations) due on each Group
1 Mortgage Loan on the related Due Date, (b) the Stated Principal Balance of
each Group 1 Mortgage Loan that was repurchased by the Seller or the Servicer
pursuant to this Agreement as of such Distribution Date, excluding any Group 1
Mortgage Loan that was repurchased due to a modification of the Mortgage Loan,
(c) the Substitution Adjustment Amount in connection with any Deleted Mortgage
Loan in Loan Group 1 received with respect to such Distribution Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal
of Group 1 Mortgage Loans that are not yet Liquidated Mortgage Loans received
during the calendar month preceding the month of such Distribution Date, (e)
with respect to each Group 1 Mortgage Loan that became a Liquidated Mortgage
Loan during the calendar month preceding the month of such Distribution Date,
the amount of Liquidation Proceeds allocable to principal received with respect
to such Group 1 Mortgage Loan during the calendar month preceding the month of
such Distribution Date with respect to such Group 1 Mortgage Loan and (f) all
Principal Prepayments with respect to the Group 1 Mortgage Loans received during
the related Prepayment Period and (ii) with respect to Subsequent Recoveries
attributable to a Discount Mortgage Loan in Loan Group 1 that incurred (1) an
Excess Loss or (2) a Realized Loss after the Senior Credit Support Depletion
Date, the PO Percentage of any such Subsequent Recoveries on the Group 1
Mortgage Loans received during the calendar month preceding the month of such
Distribution Date.
PO Percentage: With respect to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the excess of the Required
Coupon over the Adjusted Net Mortgage Rate of such Discount Mortgage Loan and
the denominator of which is such Required Coupon. As to any Non-Discount
Mortgage Loan, 0%.
Pool Stated Principal Balance: The aggregate Stated Principal Balance
of the Mortgage Loans.
Prepayment Assumption: The prepayment model used in the Prospectus
Supplement, which represents an assumed rate of prepayment each month relative
to the then outstanding principal balance of a pool of mortgage loans for the
life of those mortgage loans. A 100% Prepayment Assumption assumes a constant
prepayment rate (a "CPR") of 10% per annum and an additional approximately
1.272727% per annum in each month thereafter until the twelfth month. Beginning
in the twelfth month and in each month thereafter during the life of the
mortgage loans, a 100% Prepayment Assumption assumes a CPR of 24% per annum each
month. 0% PPC assumes no prepayments. Correspondingly, 200% PPC assumes
prepayment rates equal to two times the related PPC, and so forth.
Prepayment Charge: As to a Mortgage Loan, any charge payable by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan so held by the Trust Fund being
identified in the Mortgage Loan Schedule.
Prepayment Charge Period: As to any Mortgage Loan, the period of time
during which a Prepayment Charge may be imposed.
Prepayment Interest Excess: As to any Principal Prepayment received
by the Servicer on a Mortgage Loan from the first day through the fifteenth day
of any calendar month other than the month of the Cut-off Date, all amounts paid
by the related Mortgagor in respect of interest on such Principal Prepayment.
All Prepayment Interest Excess shall be retained by the Servicer as additional
servicing compensation.
30
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received on or after the sixteenth day of the
month preceding the month of such Distribution Date (or, in the case of the
first Distribution Date, on or after the Cut-off Date) and on or before the last
day of the month preceding the month of such Distribution Date, the amount, if
any, by which one month's interest at the related Mortgage Rate, net of the
related Servicing Fee Rate, on such Principal Prepayment exceeds the amount of
interest paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date and related Due Date,
the period from and including the 16th day of the month immediately prior to the
month of such Distribution Date (or, in the case of the first Distribution Date,
from the Cut-off Date) and to and including the 15th day of the month of such
Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.
Principal Amount: As to any Distribution Date and each of Loan Group
2 and Loan Group 3, the sum of (a) all monthly payments of principal due on each
Mortgage Loan in that Loan Group on the related Due Date, (b) the principal
portion of the Purchase Price of each Mortgage Loan in that Loan Group that was
repurchased by the Seller pursuant to this Agreement as of such Distribution
Date, excluding any Mortgage Loan that was repurchased due to a modification of
the Mortgage Loan in lieu of refinancing, (c) the Substitution Adjustment Amount
in connection with any Deleted Mortgage Loan in that Loan Group received with
respect to such Distribution Date, (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Mortgage Loans in that Loan
Group that are not yet Liquidated Mortgage Loans received during the calendar
month preceding the month of such Distribution Date, (e) with respect to each
Mortgage Loan in that Loan Group that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the amount of
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, (f) all partial and full Principal Prepayments on the Mortgage
Loans in that Loan Group received during the related Prepayment Period and the
principal portion of the Purchase Price of any Mortgage Loan repurchased by the
Seller pursuant to Section 3.12, and (g) any Subsequent Recoveries with respect
to the Mortgage Loans in that Loan Group received during the calendar month
preceding the month of such Distribution Date.
Principal Balance Schedule: The principal balance schedule attached
to this Agreement as Schedule IV.
Principal Only Certificates: As specified in the Preliminary
Statement.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan (including the principal portion of the Purchase Price of any
Mortgage Loan purchased pursuant to Section 3.12) that is received in advance of
its scheduled Due Date and is not accompanied by an amount representing
scheduled interest due on any date in any month after the month of prepayment.
The Servicer shall apply partial Principal Prepayments in accordance with the
related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Private Certificates: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date and any Class of
Subordinated Certificates, the portion of the Subordinated Principal
Distribution Amount allocable to such Class, equal to the product of
31
the Subordinated Principal Distribution Amount on such Distribution Date and a
fraction, the numerator of which is the related Class Certificate Balance
thereof and the denominator of which is the aggregate Class Certificate Balance
of the Subordinated Certificates, in each case immediately prior to such
Distribution Date.
Proprietary Lease: For any Cooperative Unit, a lease or occupancy
agreement between a Cooperative Corporation and a holder of related Co-op
Shares.
Prospectus Supplement: The Prospectus Supplement dated August 29,
2006, relating to the Offered Certificates, and any supplement thereto.
PUD: Planned Unit Development.
Purchase Price: For any Mortgage Loan required to be purchased by the
Seller pursuant to Section 2.02 or 2.03 or purchased by the Servicer pursuant to
Section 3.12, the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on the
date of the purchase,
(ii) accrued and unpaid interest on the Mortgage Loan at the
applicable Mortgage Rate (or at the applicable Adjusted Mortgage Rate if (x) the
purchaser is the Servicer or (y) if the purchaser is the Seller and the Seller
is the Servicer) from the date through which interest was last paid by the
Mortgagor to the Due Date in the month in which the Purchase Price is to be
distributed to Certificateholders, net of any unreimbursed Advances made by the
Servicer on the Mortgage Loan, and
(iii) any costs and damages incurred by the Trust Fund in connection
with any violation by the Mortgage Loan of any predatory or abusive lending law.
If the Mortgage Loan is purchased pursuant to Section 3.12, the
interest component of the Purchase Price shall be computed (i) on the basis of
the applicable Adjusted Mortgage Rate before giving effect to the related
modification and (ii) from the date to which interest was last paid to the date
on which the Mortgage Loan is assigned to the Servicer pursuant to Section 3.12.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over the insurer in connection with the
insurance policy issued by the insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any of them or a successor is no longer in existence,
"Rating Agency" shall be the nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor and
identified as a "Rating Agency" in the Underwriters' Exemption, notice of which
designation shall be given to the Trustee. References to a given rating or
rating category of a Rating Agency means the rating category without giving
effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
32
(ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan that has become the
subject of a Deficient Valuation, if the principal amount due under the related
Mortgage Note has been reduced, the difference between the principal balance of
the Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. With respect to each Mortgage Loan that has become the subject of a
Debt Service Reduction and any Distribution Date, the amount, if any, by which
the principal portion of the related Scheduled Payment has been reduced.
To the extent the Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage Loan will be reduced by such Subsequent Recoveries.
Recognition Agreement: For any Cooperative Loan, an agreement between
the Cooperative Corporation and the originator of the Mortgage Loan that
establishes the rights of the originator in the Cooperative Property.
Record Date: With respect to any Distribution Date and any Definitive
Certificate and the Delay Certificates, the close of business on the last
Business Day of the month preceding the month of that Distribution Date. With
respect to any Distribution Date and the Non-Delay Certificates as long as they
are Book-Entry Certificates, the Business Day immediately prior to such
Distribution Date.
Reference Bank: As defined in Section 4.08.
Refinance Loan: Any Mortgage Loan the proceeds of which are used to
refinance an Original Mortgage Loan.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act or any similar state or local laws, the
amount, if any, by which (i) interest collectible on such Mortgage Loan for the
most recently ended calendar month is less than (ii) interest accrued thereon
for such month pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
33
-
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Event: Any event required to be reported on Form 8-K, and
in any event, the following:
(a) entry into a definitive agreement related to the Trust Fund, the
Certificates or the Mortgage Loans, or an amendment to a Transaction Document,
even if the Depositor is not a party to such agreement (e.g., a servicing
agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination of a Transaction Document (other than by expiration
of the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), even if the Depositor is not
a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Servicer only, if the Servicer becomes aware
of any bankruptcy or receivership with respect to the Seller, the Depositor, the
Servicer, the Trustee, the Cap Counterparty, any enhancement or support provider
contemplated by Items 1114(b) or 1115 of Regulation AB, or any other material
party contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Servicer and the Depositor only,
the occurrence of an early amortization, performance trigger or other event,
including an Event of Default under this Agreement;
(e) any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the
Servicer or the Trustee;
(g) with respect to the Servicer only, if the Servicer becomes aware
that (i) any material enhancement or support specified in Item 1114(a)(1)
through (3) of Regulation AB or Item 1115 of Regulation AB that was previously
applicable regarding one or more Classes of the Certificates has terminated
other than by expiration of the contract on its stated termination date or as a
result of all parties completing their obligations under such agreement; (ii)
any material enhancement specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB has been added with respect to one or more
Classes of the Certificates; or (iii) any existing material enhancement or
support specified in Item 1114(a)(1) through (3) of Regulation AB or Item 1115
of Regulation AB with respect to one or more Classes of the Certificates has
been materially amended or modified; and
(h) with respect to the Trustee, the Servicer and the Depositor only,
a required distribution to Holders of the Certificates is not made as of the
required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Servicer or the Trustee,
any Subcontractor determined by such Person pursuant to Section 11.08(b) to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB. References to a Reporting Subcontractor shall refer only to the
Subcontractor of such Person and shall not refer to Subcontractors generally.
34
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Coupon: With respect to the Group 1 Mortgage Loans, 6.25%
per annum.
Required Insurance Policy: For any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any
Managing Director, any Director, Vice President, any Assistant Vice President,
any Associate, any Assistant Secretary, any Trust Officer, or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers who at such time shall be officers to whom,
with respect to a particular matter, the matter is referred because of the
officer's knowledge of and familiarity with the particular subject and who has
direct responsibility for the administration of this Agreement.
Restricted Classes: As defined in Section 4.02(e).
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 11.05.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
If S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to S&P shall be Standard &
Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Monitoring, or any other
address that S&P furnishes to the Depositor and the Servicer.
Scheduled Balance: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: For any Cooperative Loan, the agreement between
the owner of the related Co-op Shares and the originator of the related Mortgage
Note that defines the security interest in the Co-op Shares and the related
Proprietary Lease.
Seller: IndyMac Bank, F.S.B., a federal savings bank, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
35
Senior Credit Support Depletion Date: The date on which the Class
Certificate Balance of each Class of Subordinated Certificates has been reduced
to zero.
Senior Percentage: As to any Senior Certificate Group and
Distribution Date, the percentage equivalent of a fraction the numerator of
which is the aggregate Class Certificate Balance of the Senior Certificates of
such Senior Certificate Group (other than the Class 1-PO Certificates and the
related Notional Amount Certificates) immediately before the Distribution Date
and the denominator of which is (x) in the case of the Group 1 Senior
Certificates, the aggregate of the applicable Non-PO Percentage of the Stated
Principal Balance of each Group 1 Mortgage Loan as of the Due Date occurring in
the month prior to the month of that Distribution Date (after giving effect to
Principal Prepayments received in the Prepayment Period related to such prior
Due Date) and (y) in the case of the Group 2 Senior Certificates and the Group 3
Senior Certificates, the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group as of the Due Date occurring in the month prior
to the month of that Distribution Date (after giving effect to Principal
Prepayments received in the Prepayment Period related to such prior Due Date);
provided, however, that on any Distribution Date after the second Senior
Termination Date, the Senior Percentage for the Senior Certificates of the
remaining Senior Certificate Group is the percentage equivalent of a fraction,
the numerator of which is the aggregate Class Certificate Balance of the Senior
Certificates (other than the Class 1-PO Certificates and the Notional Amount
Certificates) immediately prior to such Distribution Date and the denominator of
which is the aggregate Class Certificate Balance of all Classes of Certificates
(other than the Class 1-PO Certificates and the Notional Amount Certificates),
immediately prior to such Distribution Date.
Senior Prepayment Percentage: As to any Senior Certificate Group and
Distribution Date during the five years beginning on the first Distribution
Date, 100%. The Senior Prepayment Percentage for any Distribution Date occurring
on or after the fifth anniversary of the first Distribution Date will, except as
provided in this Agreement, be as follows: for any Distribution Date in the
first year thereafter, the related Senior Percentage plus 70% of the related
Subordinated Percentage for such Distribution Date; for any Distribution Date in
the second year thereafter, the related Senior Percentage plus 60% of the
related Subordinated Percentage for such Distribution Date; for any Distribution
Date in the third year thereafter, the related Senior Percentage plus 40% of the
related Subordinated Percentage for such Distribution Date; for any Distribution
Date in the fourth year thereafter, the related Senior Percentage plus 20% of
the related Subordinated Percentage for such Distribution Date; and for any
Distribution Date thereafter, the related Senior Percentage for such
Distribution Date (unless on any Distribution Date the Senior Percentage of a
Senior Certificate Group exceeds the initial Senior Percentage for such
Certificate Group, in which case the Senior Prepayment Percentage for each
Senior Certificate Group and such Distribution Date will once again equal 100%).
Notwithstanding the foregoing, no decrease in the Senior Prepayment Percentage
will occur unless the Senior Step Down Conditions are satisfied with respect to
all Loan Groups.
Senior Principal Distribution Amount: As to any Distribution Date and
Loan Group 1, the sum of (i) the related Senior Percentage of the Non-PO
Percentage of all amounts described in subclauses (a) through (d) of clause (i)
of the definition of Non-PO Formula Principal Amount for that Loan Group for
such Distribution Date, (ii) with respect to any Group 1 Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month preceding the month
of such Distribution Date, the lesser of (x) the Senior Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of such Group 1
Mortgage Loan and (y) either (A) if no Excess Losses were sustained on the
Liquidated Mortgage Loan during the preceding calendar month, the related Senior
Prepayment Percentage of the applicable Non-PO Percentage of the amount of the
Liquidation Proceeds allocable to principal received on the Group 1 Mortgage
Loan or (B) if an Excess Loss were sustained with respect to such Liquidated
Mortgage Loan during such preceding calendar month, the Senior Percentage of the
applicable Non-PO Percentage of the amount of the Liquidation Proceeds allocable
to principal received with respect to such
36
Group 1 Mortgage Loan, and (iii) the Senior Prepayment Percentage of the
applicable Non-PO Percentage of the amounts described in subclause (f) of clause
(i) of the definition of Non-PO Formula Principal Amount for that Loan Group and
such Distribution Date, and (iv) the applicable Senior Prepayment Percentage of
any Subsequent Recoveries described in clause (ii) of the definition of Non-PO
Formula Principal Amount for that Loan Group and such Distribution Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to a Mortgage Loan in that Loan Group that is not a Liquidated
Mortgage Loan, the Senior Principal Distribution Amount will be reduced on the
related Distribution Date by the Senior Percentage of the applicable Non-PO
Percentage of the principal portion of such Bankruptcy Loss; provided further,
however, on any Distribution Date after the second Senior Termination Date, if
the remaining Senior Certificate Group is the Group 1 Senior Certificates, the
Senior Principal Distribution Amount for the remaining Senior Certificate Group
will be calculated pursuant to the above formula based on all the Mortgage Loans
in the Mortgage Pool, as opposed to the Mortgage Loans in the related Loan
Group.
As to any Distribution Date and each of Loan Group 2 and Loan Group
3, the sum of (i) the related Senior Percentage of all amounts described in
clauses (a) through (d) of the definition of Principal Amount for that Loan
Group and such Distribution Date, (ii) with respect to any Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month preceding the month
of such Distribution Date, the lesser of (x) the related Senior Percentage of
the Stated Principal Balance of such Mortgage Loan and (y) either (A) if no
Excess Losses were sustained on the Liquidated Mortgage Loan during the
preceding calendar month, the related Senior Prepayment Percentage of the amount
of the Liquidation Proceeds allocable to principal received on the Mortgage Loan
or (B) if an Excess Loss were sustained with respect to such Liquidated Mortgage
Loan during such preceding calendar month, the Senior Percentage of the amount
of the Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, and (iii) the sum of (x) the Senior Prepayment Percentage of the
amounts described in clause (f) of the definition of Principal Amount for that
Loan Group and such Distribution Date, and (y) the applicable Senior Prepayment
Percentage of any Subsequent Recoveries described in clause (g) of the
definition of Principal Amount for that Loan Group and such Distribution Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to a Mortgage Loan in that Loan Group that is not a Liquidated
Mortgage Loan, the Senior Principal Distribution Amount will be reduced on the
related Distribution Date by the Senior Percentage of the applicable principal
portion of such Bankruptcy Loss; provided further, however, on any Distribution
Date after the second Senior Termination Date, if the remaining Senior
Certificate Group is the Group 2 Senior Certificates or Group 3 Senior
Certificates, the Senior Principal Distribution Amount for the remaining Senior
Certificate Group will be calculated pursuant to the above formula based on all
the Mortgage Loans in the Mortgage Pool, as opposed to the Mortgage Loans in the
related Loan Group.
Senior Step Down Conditions: With respect to the Mortgage Loans in a
Loan Group: (i) the aggregate Stated Principal Balance of all Mortgage Loans in
that Loan Group delinquent 60 days or more (including Mortgage Loans in
foreclosure proceedings, REO Property and Mortgage Loans the mortgagors of which
are in bankruptcy) (averaged over the preceding six month period), as a
percentage of (a) if such date is on or prior to the second Senior Termination
Date, the Subordinated Percentage for such Loan Group of the aggregate of (i) in
the case of Loan Group 1, the applicable Non-PO Percentage of the aggregate
Stated Principal Balance of the Group 1 Mortgage Loans and (y) in the case of
Loan Group 2 and Loan Group 3, the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group or (b) if such date is after the second
Senior Termination Date, the aggregate Class Certificate Balance of the
Subordinated Certificates, does not equal or exceed 50%, and (ii) cumulative
Realized Losses on the Mortgage Loans in each Loan Group do not exceed: (a)
commencing with the Distribution Date on the fifth anniversary of the first
Distribution Date, 30% of the Original Subordinated Principal Balance, (b)
commencing with the Distribution Date on the sixth anniversary of the first
Distribution Date, 35% of the Original Subordinated Principal Balance, (c)
commencing with the
37
Distribution Date on the seventh anniversary of the first Distribution Date, 40%
of the Original Subordinated Principal Balance, (d) commencing with the
Distribution Date on the eighth anniversary of the first Distribution Date, 45%
of the Original Subordinated Principal Balance, and (e) commencing with the
Distribution Date on the ninth anniversary of the first Distribution Date, 50%
of the Original Subordinated Principal Balance.
Senior Termination Date: For each Senior Certificate Group, the
Distribution Date on which the aggregate Class Certificate Balance of the
related Classes of Senior Certificates (other than the Class 1-PO Certificates)
has been reduced to zero.
Servicer: IndyMac Bank, F.S.B., a federal savings bank, and its
successors and assigns, in its capacity as servicer under this Agreement.
Servicer Advance Date: As to any Distribution Date, 12:30 P.M.
Pacific time on the Business Day preceding that Distribution Date.
Servicing Account: The separate Eligible Account or Accounts created
and maintained pursuant to Section 3.06(b).
Servicing Advances: All customary, reasonable, and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including the cost of
(a) the preservation, restoration, and protection of a
Mortgaged Property,
(b) expenses reimbursable to the Servicer pursuant to
Section 3.12 and any enforcement or judicial proceedings, including
foreclosures,
(c) the maintenance and liquidation of any REO Property,
(d) compliance with the obligations under Section 3.10; and
(e) reasonable compensation to the Servicer or its
affiliates for acting as broker in connection with the sale of
foreclosed Mortgaged Properties and for performing certain default
management and other similar services (including appraisal services)
in connection with the servicing of defaulted Mortgage Loans. For
purposes of this clause (e), only costs and expenses incurred in
connection with the performance of activities generally considered to
be outside the scope of customary servicing duties shall be treated
as Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
one month's interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the Mortgage Loan, or, whenever a payment of interest
accompanies a Principal Prepayment in Full made by the Mortgagor, interest at
the Servicing Fee Rate on the Stated Principal Balance of the Mortgage Loan for
the period covered by the payment of interest, subject to reduction as provided
in Section 3.15.
Servicing Fee Rate: For each Mortgage Loan, the per annum rate
specified on the Mortgage Loan Schedule.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing
38
officers furnished to the Trustee by the Servicer on the Closing Date pursuant
to this Agreement, as the list may from time to time be amended.
Servicing Standard: That degree of skill and care exercised by the
Servicer with respect to mortgage loans comparable to the Mortgage Loans
serviced by the Servicer for itself or others.
Shift Percentage: For any Distribution Date occurring during the five
years beginning on the first Distribution Date, 0%. Thereafter, the Shift
Percentage for any Distribution Date occurring on or after the fifth anniversary
of the first Distribution Date will be as follows: for any Distribution Date in
the first year thereafter, 30%; for any Distribution Date in the second year
thereafter, 40%; for any Distribution Date in the third year thereafter, 60%;
for any Distribution Date in the fourth year thereafter, 80%; and for any
Distribution Date thereafter, 100%.
Special Hazard Coverage Termination Date: The point in time at which
the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property pursuant to Section
3.10 to the extent of the amount of such loss covered thereby, or (ii) any loss
caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, the Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate
or remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure
or de facto, or by any authority maintaining or using
military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure
39
or destruction under quarantine or customs regulations, confiscation
by order of any government or public authority, or risks of
contraband or illegal transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $3,277,172. With respect to any Distribution Date after the
first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the principal balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged Properties located
in the single California postal zip code area having the highest aggregate
principal balance of any such zip code area and (b) the Special Hazard Loss
Coverage Amount as of the Closing Date less the amount, if any, of Special
Hazard Losses allocated to the Certificates since the Closing Date. All
principal balances for the purpose of this definition will be calculated as of
the first day of the calendar month preceding the month of such Distribution
Date after giving effect to Scheduled Payments on the Mortgage Loans then due,
whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which
a Special Hazard Loss has occurred.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date, as specified
in the amortization schedule at the time relating thereto (before any adjustment
to such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to the sum of: (i) the payment of principal
due on such Due Date and irrespective of any delinquency in payment by the
related Mortgagor and (ii) any Liquidation Proceeds allocable to principal
received in the prior calendar month and Principal Prepayments received through
the last day of the Prepayment Period in which the Due Date occurs, in each case
with respect to such Mortgage Loan.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to the Mortgage Loans under the direction or authority of the
Servicer or the Trustee, as the case may be.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Loan Group and Distribution Date
on or prior to the second Senior Termination Date, 100% minus the Senior
Percentage for the Senior Certificate Group relating to such Loan Group for such
Distribution Date. As to any Distribution Date after the second Senior
Termination Date, 100% minus the Senior Percentage for such Distribution Date; .
Subordinated Prepayment Percentage: As to any Distribution Date, 100%
minus the Senior Prepayment Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: As to any Distribution
Date and Loan Group 1, the sum of the following with respect to Loan Group 1:
(i) the Subordinated Percentage of the applicable Non-PO Percentage of all
amounts described in subclauses (a) through (d) of clause (i) of the definition
of Non-PO Formula Principal Amount with respect to Loan Group 1 and such
Distribution Date, (ii) with respect to any Group 1 Mortgage Loan that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received with respect thereto remaining after application thereof pursuant to
clause (ii) of the
40
definition of Senior Principal Distribution Amount for Loan Group 1, up to the
Subordinated Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance of such Group 1 Mortgage Loan, and (iii) the Subordinated
Prepayment Percentage of the applicable Non-PO Percentage of the amounts
described in subclause (f) of clause (i) of the definition of Non-PO Formula
Principal Amount with respect to that Loan Group for such Distribution Date,
reduced by the amount of any payments in respect of Class 1-PO Deferred Amounts
for such Distribution Date.
As to any Distribution Date and Loan Group 2 and Loan Group 3, the
sum of the following with respect to each such Loan Group: (i) the Subordinated
Percentage of all amounts described in clauses (a) through (d) of the definition
of Principal Amount with respect to such Loan Group and such Distribution Date,
(ii) with respect to any Mortgage Loan in the related Loan Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received with respect thereto remaining after application thereof pursuant to
clause (ii) of the definition of Senior Principal Distribution Amount for that
Loan Group, up to the related Subordinated Percentage of the Stated Principal
Balance of such Mortgage Loan, (iii) the sum of the Subordinated Prepayment
Percentage of the amounts described in clauses (f) and (g) of the definition of
Principal Amount with respect to that Loan Group for such Distribution Date.
Notwithstanding the foregoing, on any Distribution Date after the
second Senior Termination Date, the Subordinated Principal Distribution Amount
will not be calculated by Loan Group but will equal the amount calculated
pursuant to the formula set forth above for Loan Group 1 (if the Group 1 Senior
Certificates are the remaining Senior Certificate Group) or Loan Group 2 and
Loan Group 3 (if the Group 2 Senior Certificates or Group 3 Senior Certificates
are the remaining Senior Certificate Group) based on the applicable Subordinated
Percentage and Subordinated Prepayment Percentage for the Subordinated
Certificates for such Distribution Date with respect to all of the Mortgage
Loans as opposed to the Mortgage Loans only in the related Loan Group.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, unexpected amounts received by the Servicer (net of any related expenses
permitted to be reimbursed pursuant to Section 3.09) specifically related to
such Liquidated Mortgage Loan.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan that must, on the date of substitution, as confirmed
in a Request for Release, substantially in the form of Exhibit M,
(i) have a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution, not in excess
of, and not more than 10% less than, the Stated Principal Balance of the Deleted
Mortgage Loan (unless the amount of any shortfall is deposited by the Seller in
the Certificate Account and held for distribution to the Certificateholders on
the related Distribution Date);
(ii) have a Mortgage Rate no lower than and not more than 1% per
annum higher than the Deleted Mortgage Loan;
(iii) have a Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more
than one year less than) that of the Deleted Mortgage Loan;
41
(v) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; and
(vi) comply with each representation and warranty in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Supplemental Interest Reserve Fund: The separate fund created and
initially maintained by the Supplemental Interest Trustee pursuant to Section
3.06 in the name of the Supplemental Interest Trustee for the benefit of the
Holders of the Class 1-A-2 Certificates and designated "Deutsche Bank National
Trust Company in trust for registered holders of Residential Asset
Securitization Trust 2006-A11, Mortgage Pass-Through Certificates, Series
2006-K, Class 1-A-2." Funds in the Supplemental Interest Reserve Fund shall be
held in trust for the Holders of the Class 1-A-2 Certificates for the uses and
purposes set forth in this Agreement. The Supplemental Interest Reserve Fund
will not be an asset of any REMIC.
Supplemental Interest Trust: The separate trust created under this
Agreement pursuant to Section 3.06.
Supplemental Interest Trustee: Deutsche Bank National Trust Company,
not in its individual capacity, but solely in its capacity as trustee of the
Supplemental Interest Trust for the benefit of the Holders of the Class 1-A-2
Certificates under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Suspension Notification: Notification to the Commission of the
suspension of the Trust Fund's obligation to file reports pursuant to Section
15(d) of the Exchange Act.
Targeted Balance: Not applicable.
Targeted Principal Classes: As specified in the Preliminary
Statement.
Transaction Documents: This Agreement, the Corridor Contract and any
other document or agreement entered into in connection with the Trust Fund, the
Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Payment Made: As defined in Section 4.03.
Transfer Payment Received: As defined in Section 4.03.
Trust Fund: The corpus of the trust created under this Agreement
consisting of
(i) the Mortgage Loans and all interest and principal received on
them after the Cut-off Date, other than amounts due on the Mortgage Loans by the
Cut-off Date;
(ii) the Certificate Account, the Distribution Account and all
amounts deposited therein pursuant to this Agreement (including amounts received
from the Seller on the Closing Date that will be deposited by the Trustee in the
Certificate Account pursuant to Section 2.01);
42
(iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure, or otherwise;
(iv) the right to collect any amounts under any mortgage insurance
policies covering any Mortgage Loan and any collections received under any
mortgage insurance policies covering any Mortgage Loan;
(v) all rights to receive amounts under, and to enforce remedies in,
the Corridor Contract; and
(vi) all proceeds of the conversion, voluntary or involuntary, of any
of the foregoing.
Trustee: Deutsche Bank National Trust Company and its successors and,
if a successor trustee is appointed under this Agreement, the successor.
Trustee Fee: The fee payable to the Trustee on each Distribution Date
for its services as Trustee hereunder, in an amount equal to one-twelfth of the
Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of the
Mortgage Loans immediately prior to such Distribution Date.
Trustee Fee Rate: 0.0085% per annum.
The terms "United States," "State," and "International Organization"
have the meanings in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
UCC: The Uniform Commercial Code for the State of New York.
Undercollateralized Group: As defined in Section 4.03.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002) (or any successor thereto), or any substantially similar
administrative exemption granted by the U.S. Department of Labor.
United States Person or U.S. Person:
(i) A citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the District
of Columbia;
(iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations);
(iv) an estate whose income is includible in gross income for United
States income tax purposes regardless of its source; or
(v) a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
Persons have authority to control all substantial decisions
43
of the trust. Notwithstanding the last clause of the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as U.S. Persons before that date, may elect to continue to
be U.S. Persons.
U.S.A. Patriot Act: The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001.
Voting Rights: The portion of the voting rights of all of the
Certificates that is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class of
Notional Amount Certificates (the Voting Rights to be allocated among the
holders of Certificates of each Class in accordance with their respective
Percentage Interests), (b) 1% of all Voting Rights shall be allocated to the
Holder of the Class A-R Certificates and (c) the remaining Voting Rights shall
be allocated among Holders of the remaining Classes of Offered Certificates in
proportion to the Certificate Balances of the respective Certificates on the
date.
Withdrawal Date: The 18th day of each month, or if such day is not a
Business Day, the next preceding Business Day.
Yield Supplement Amount: For any Distribution Date, the product of
(i) the excess of (A) the lesser of (x) LIBOR (as determined by the Cap
Counterparty) plus 0.65% and (y) 9.50% over (B) 6.25%, (ii) the Class
Certificate Balance of the Class 1-A-2 Certificates immediately prior to that
Distribution Date, and (iii) a fraction, the numerator of which is 30, and the
denominator of is 360.
Section 1.02 Rules of Construction.
Except as otherwise expressly provided in this Agreement or unless
the context clearly requires otherwise
(a) References to designated articles, sections, subsections,
exhibits, and other subdivisions of this Agreement, such as "Section 6.12 (a),"
refer to the designated article, section, subsection, exhibit, or other
subdivision of this Agreement as a whole and to all subdivisions of the
designated article, section, subsection, exhibit, or other subdivision. The
words "herein," "hereof," "hereto," "hereunder," and other words of similar
import refer to this Agreement as a whole and not to any particular article,
section, exhibit, or other subdivision of this Agreement.
(b) Any term that relates to a document or a statute, rule, or
regulation includes any amendments, modifications, supplements, or any other
changes that may have occurred since the document, statute, rule, or regulation
came into being, including changes that occur after the date of this Agreement.
(c) Any party may execute any of the requirements under this
Agreement either directly or through others, and the right to cause something to
be done rather than doing it directly shall be implicit in every requirement
under this Agreement. Unless a provision is restricted as to time or limited as
to frequency, all provisions under this Agreement are implicitly available and
things may happen from time to time.
(d) The term "including" and all its variations mean "including but
not limited to." Except when used in conjunction with the word "either," the
word "or" is always used inclusively (for example, the phrase "A or B" means "A
or B or both," not "either A or B but not both").
(e) A reference to "a [thing]" or "any [of a thing]" does not imply
the existence or occurrence of the thing referred to even though not followed by
"if any," and "any [of a thing]" is any of it. A reference
44
to the plural of anything as to which there could be either one or more than one
does not imply the existence of more than one (for instance, the phrase "the
obligors on a note" means "the obligor or obligors on a note"). "Until
[something occurs]" does not imply that it must occur, and will not be modified
by the word "unless." The word "due" and the word "payable" are each used in the
sense that the stated time for payment has passed. The word "accrued" is used in
its accounting sense, i.e., an amount paid is no longer accrued. In the
calculation of amounts of things, differences and sums may generally result in
negative numbers, but when the calculation of the excess of one thing over
another results in zero or a negative number, the calculation is disregarded and
an "excess" does not exist. Portions of things may be expressed as fractions or
percentages interchangeably.
(f) All accounting terms used in an accounting context and not
otherwise defined, and accounting terms partly defined in this Agreement, to the
extent not completely defined, shall be construed in accordance with generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Agreement are inconsistent with their meanings under generally
accepted accounting principles, the definitions contained in this Agreement
shall control. Capitalized terms used in this Agreement without definition that
are defined in the Uniform Commercial Code are used in this Agreement as defined
in the Uniform Commercial Code.
(g) In the computation of a period of time from a specified date to a
later specified date or an open-ended period, the words "from" and "beginning"
mean "from and including," the word "after" means "from but excluding," the
words "to" and "until" mean "to but excluding," and the word "through" means "to
and including." Likewise, in setting deadlines or other periods, "by" means
"by." The words "preceding," "following," and words of similar import, mean
immediately preceding or following. References to a month or a year refer to
calendar months and calendar years.
(h) Any reference to the enforceability of any agreement against a
party means that it is enforceable, subject as to enforcement against the party,
to applicable bankruptcy, insolvency, reorganization, and other similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
45
ARTICLE TWO
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller, concurrently with the execution and delivery of this
Agreement, hereby transfers to the Depositor, without recourse, all the interest
of the Seller in each Mortgage Loan, including all interest and principal
received or receivable by the Seller on each Mortgage Loan after the Cut-off
Date and all interest and principal payments on each Mortgage Loan received
before the Cut-off Date for installments of interest and principal due after the
Cut-off Date but not including payments of principal and interest due by the
Cut-off Date. By the Closing Date, the Seller shall deliver to the Depositor or,
at the Depositor's direction, to the Trustee or other designee of the Depositor,
the Mortgage File for each Mortgage Loan listed in the Mortgage Loan Schedule
(except that, in the case of Mortgage Loans that are Delay Delivery Mortgage
Loans, such delivery may take place within five Business Days of the Closing
Date) as of the Closing Date. The delivery of the Mortgage Files shall be made
against payment by the Depositor of the purchase price, previously agreed to by
the Seller and Depositor, for the Mortgage Loans. With respect to any Mortgage
Loan that does not have a first payment date on or before the Due Date in the
month of the first Distribution Date, the Seller shall deposit into the
Distribution Account on the first Distribution Account Deposit Date an amount
equal to one month's interest at the related Adjusted Mortgage Rate on the
Cut-off Date Principal Balance of such Mortgage Loan. Also on the Closing Date
the Depositor shall deposit $100 into the Certificate Account.
(b) The Depositor, concurrently with the execution and delivery of
this Agreement, hereby transfers to the Trustee for the benefit of the
Certificateholders, without recourse, all the interest of the Depositor in the
Trust Fund, together with the Depositor's right to require the Seller to cure
any breach of a representation or warranty made in this Agreement by the Seller
or to repurchase or substitute for any affected Mortgage Loan in accordance with
this Agreement. The Depositor hereby directs the Supplemental Interest Trustee
to execute the Corridor Contract.
(c) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered (or, in the case of the Delay Delivery
Mortgage Loans, will deliver to the Trustee within the time periods specified in
the definition of Delay Delivery Mortgage Loans), for the benefit of the
Certificateholders the following documents or instruments with respect to each
Mortgage Loan so assigned:
(i) The original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
_______________ ______________without recourse," with all intervening
endorsements showing a complete chain of endorsement from the originator
to the Person endorsing the Mortgage Note (each endorsement being
sufficient to transfer all interest of the party so endorsing, as
noteholder or assignee thereof, in that Mortgage Note) or a lost note
affidavit for any Lost Mortgage Note from the Seller stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
Mortgage Note;
(ii) Except as provided below and for each Mortgage Loan that is not
a MERS Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage certified by the Seller as being a true and complete copy of the
Mortgage (or, in the case of a Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico, a true copy of the
Mortgage certified as such by the applicable notary) and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence of the
MIN of the Mortgage Loan and either language indicating that the Mortgage
Loan is a MOM
46
Loan if the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a
MOM Loan at origination, the original Mortgage and the assignment thereof
to MERS, with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which such Mortgage
has been recorded;
(iii) In the case of a Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage (which may be included in
a blanket assignment or assignments), together with, except as provided
below, all interim recorded assignments of the mortgage (each assignment,
when duly and validly completed, to be in recordable form and sufficient
to effect the assignment of and transfer to its assignee of the Mortgage
to which the assignment relates). If the related Mortgage has not been
returned from the applicable public recording office, the assignment of
the Mortgage may exclude the information to be provided by the recording
office. The assignment of Mortgage need not be delivered in the case of a
Mortgage for which the related Mortgage Property is located in the
Commonwealth of Puerto Rico;
(iv) The original or copies of each assumption, modification,
written assurance, or substitution agreement;
(v) Except as provided below, the original or duplicate original
lender's title policy and all its riders;
(vi) The originals of the following documents for each Cooperative
Loan:
(A) the Co-op Shares, together with a stock power in blank;
(B) the executed Security Agreement;
(C) the executed Proprietary Lease;
(D) the executed Recognition Agreement;
(E) the executed UCC-1 financing statement that has been
filed in all places required to perfect the Seller's
interest in the Co-op Shares and the Proprietary Lease
with evidence of recording on it; and
(F) executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law,
evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation). If in
connection with any Mortgage Loan the Depositor cannot
deliver
(a) the original recorded Mortgage,
(b) all interim recorded assignments, or
(c) the lender's title policy (together with all its
riders).
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's expense, the MERS(R)
System to indicate that the Mortgage Loans sold by the Seller to the Depositor
have been assigned by the Seller to the Trustee in accordance with this
Agreement for the benefit of the Certificateholders by including (or deleting,
in the case of Mortgage
47
Loans that are repurchased in accordance with this Agreement) in such computer
files the information required by the MERS(R) System to identify the series of
the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Servicer to, and the
Servicer agrees that it will not, alter the information referenced in this
paragraph with respect to any Mortgage Loan sold by the Seller to the Depositor
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original recorded
Mortgage, (b) all interim recorded assignments or (c) the lender's title policy
(together with all riders thereto) satisfying the requirements of clause (ii),
(iii) or (v) above, respectively, concurrently with the execution and delivery
of this Agreement because such document or documents have not been returned from
the applicable public recording office in the case of clause (ii) or (iii)
above, or because the title policy has not been delivered to either the Servicer
or the Depositor by the applicable title insurer in the case of clause (v)
above, then the Depositor shall promptly deliver to the Trustee, in the case of
clause (ii) or (iii) above, the original Mortgage or the interim assignment, as
the case may be, with evidence of recording indicated on when it is received
from the public recording office, or a copy of it, certified, if appropriate, by
the relevant recording office and in the case of clause (v) above, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or
duplicate copy thereof to be delivered to the Trustee upon receipt thereof. The
delivery of the original Mortgage Loan and each interim assignment or a copy of
them, certified, if appropriate, by the relevant recording office, shall not be
made later than one year following the Closing Date, or, in the case of clause
(v) above, later than 120 days following the Closing Date. If the Depositor is
unable to deliver each Mortgage by that date and each interim assignment because
any documents have not been returned by the appropriate recording office, or, in
the case of each interim assignment, because the related Mortgage has not been
returned by the appropriate recording office, the Depositor shall deliver the
documents to the Trustee as promptly as possible upon their receipt and, in any
event, within 720 days following the Closing Date.
The Depositor shall forward to the Trustee (a) from time to time
additional original documents evidencing an assumption or modification of a
Mortgage Loan and (b) any other documents required to be delivered by the
Depositor or the Servicer to the Trustee. If the original Mortgage is not
delivered and in connection with the payment in full of the related Mortgage
Loan the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only a
copy of the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Servicer shall execute and deliver the required document to
the public recording office. If a public recording office retains the original
recorded Mortgage or if a Mortgage is lost after recordation in a public
recording office, the Seller shall deliver to the Trustee a copy of the Mortgage
certified by the public recording office to be a true and complete copy of the
original recorded Mortgage.
As promptly as practicable after any transfer of a Mortgage Loan
under this Agreement, and in any event within thirty days after the transfer,
the Trustee shall (i) affix the Trustee's name to each assignment of Mortgage,
as its assignee, and (ii) cause to be delivered for recording in the appropriate
public office for real property records the assignments of the Mortgages to the
Trustee, except that, if the Trustee has not received the information required
to deliver any assignment of a Mortgage for recording, the Trustee shall deliver
it as soon as practicable after receipt of the needed information and in any
event within thirty days.
The Trustee need not record any assignment that relates to a Mortgage
Loan (a) the Mortgaged Property and Mortgage File relating to which are located
in California or (b) in any other jurisdiction (including Puerto Rico) under the
laws of which, as evidenced by an Opinion of Counsel delivered by the Seller (at
the Seller's expense) to the Trustee, recording the assignment is not necessary
to protect the
48
Trustee's and the Certificateholders' interest in the related Mortgage Loan. The
Seller shall deliver such Opinion of Counsel within 90 days of the Closing Date.
If any Mortgage Loans have been prepaid in full as of the Closing
Date, the Depositor, in lieu of delivering the above documents to the Trustee,
will deposit in the Certificate Account the portion of the prepayment that is
required to be deposited in the Certificate Account pursuant to Section 3.06.
Notwithstanding anything to the contrary in this Agreement, within
five Business Days after the Closing Date, the Seller shall either
(x) deliver to the Trustee the Mortgage File as required
pursuant to this Section 2.01 for each Delay Delivery
Mortgage Loan or
(y) (A) repurchase the Delay Delivery Mortgage Loan or (B)
substitute the Substitute Mortgage Loan for a Delay
Delivery Mortgage Loan, which repurchase or substitution
shall be accomplished in the manner and subject to the
conditions in Section 2.03 (treating each such Delay
Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such Section 2.03);
provided, however, that if the Seller fails to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the period specified herein, the Seller
shall use its best reasonable efforts to effect a substitution, rather than a
repurchase of, such Deleted Mortgage Loan and provided further that the cure
period provided for in Section 2.02 or in Section 2.03 shall not apply to the
initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan, but
rather the Seller shall have five (5) Business Days to cure such failure to
deliver. At the end of such period, the Trustee shall send a Delay Delivery
Certification for the Delay Delivery Mortgage Loans delivered during such period
in accordance with the provisions of Section 2.02.
(d) The Seller agrees to treat the transfer of the Mortgage Loans to the
Depositor as a sale for all tax, accounting, and regulatory purposes.
(e) The Trust Fund does not intend to acquire or hold any Mortgage Loan that
would violate the representations made by the Seller set forth in clause (28) of
Schedule III.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form of Exhibit G-1, and declares that it holds and
will hold such documents and the other documents delivered to it constituting
the Mortgage Files for the Mortgage Loans, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders.
The Trustee acknowledges that it will maintain possession of the
related Mortgage Notes in the State of California, unless otherwise permitted by
the Rating Agencies. The Trustee agrees to execute and deliver on the Closing
Date to the Depositor, the Servicer and the Seller an Initial Certification in
the form of Exhibit G-1. Based on its review and examination, and only as to the
documents identified in such Initial Certification, the Trustee acknowledges
that such documents appear regular on their face and relate to such Mortgage
Loans. The Trustee shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.
49
By the thirtieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall deliver to the
Depositor, the Servicer, and the Seller a Delay Delivery Certification with
respect to the Mortgage Loans substantially in the form of Exhibit G-2, with any
applicable exceptions noted thereon.
By the ninetieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall deliver to the
Depositor, the Servicer and the Seller a Final Certification with respect to the
Mortgage Loans in the form of Exhibit H, with any applicable exceptions noted
thereon.
If, in the course of its review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification. The Trustee shall not make any determination as to whether (i)
any endorsement is sufficient to transfer all interest of the party so
endorsing, as noteholder or assignee thereof, in that Mortgage Note or (ii) any
assignment is in recordable form or is sufficient to effect the assignment of
and transfer to the assignee thereof under the mortgage to which the assignment
relates. The Seller shall promptly correct any defect that materially and
adversely affects the interests of the Certificateholders within 90 days from
the date it was so notified of the defect and, if the Seller does not correct
the defect within that period, the Seller shall either (a) substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the pursuant Section 2.03, or (b) purchase the Mortgage Loan at
its Purchase Price from the Trustee within 90 days from the date the Seller was
notified of the defect in writing.
If a substitution or purchase of a Mortgage Loan pursuant to this
provision is required because of a delay in delivery of any documents by the
appropriate recording office, or there is a dispute between either the Servicer
or the Seller and the Trustee over the location or status of the recorded
document, then the substitution or purchase shall occur within 720 days from the
Closing Date. In no other case may a substitution or purchase occur more than
540 days from the Closing Date.
The Trustee shall deliver written notice to each Rating Agency within
270 days from the Closing Date indicating each Mortgage Loan (a) that has not
been returned by the appropriate recording office or (b) as to which there is a
dispute as to location or status of the Mortgage Loan. The notice shall be
delivered every 90 days thereafter until the related Mortgage Loan is returned
to the Trustee. Any substitution pursuant to (a) above or purchase pursuant to
(b) above shall not be effected before the delivery to the Trustee of the
Opinion of Counsel, if required by Section 2.05, and any substitution pursuant
to (a) above shall not be effected before the additional delivery to the Trustee
of a Request for Release substantially in the form of Exhibit N. No substitution
is permitted to be made in any calendar month after the Determination Date for
the month.
The Purchase Price for any Mortgage Loan shall be deposited by the
Seller in the Certificate Account by the Distribution Account Deposit Date for
the Distribution Date in the month following the month of repurchase and, upon
receipt of the deposit and certification with respect thereto in the form of
Exhibit N, the Trustee shall release the related Mortgage File to the Seller and
shall execute and deliver at the Seller's request any instruments of transfer or
assignment prepared by the Seller, in each case without recourse, necessary to
vest in the Seller, or a designee, the Trustee's interest in any Mortgage Loan
released pursuant hereto.
If pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Servicer shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and
50
regulations or (ii) cause MERS to designate on the MERS(R) System the Seller as
the beneficial holder of such Mortgage Loan.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein. The
Servicer shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of any other documents or instruments constituting the
Mortgage File that come into the possession of the Servicer from time to time.
The obligation of the Seller to substitute for or to purchase any
Mortgage Loan that does not meet the requirements of Section 2.01 shall
constitute the sole remedy respecting the defect available to the Trustee, the
Depositor, and any Certificateholder against the Seller.
Section 2.03 Representations, Warranties, and Covenants of the Seller
and the Servicer.
(a) IndyMac, in its capacities as Seller and Servicer, makes the
representations and warranties in Schedule II, and by this reference
incorporated in this Agreement, to the Depositor and the Trustee, as of the
Closing Date.
(b) The Seller, in its capacity as Seller, makes the representations
and warranties in Schedule III, and by this reference incorporated in this
Agreement, to the Depositor and the Trustee, as of the Closing Date, or if so
specified in Schedule III, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties. The Seller covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to Section 2.03(b) which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects, and if such breach is not so
cured, shall, (i) if the 90-day period expires before the second anniversary of
the Closing Date, remove the Mortgage Loan (a "Deleted Mortgage Loan") from the
Trust Fund and substitute in its place a Substitute Mortgage Loan, in accordance
with this Section 2.03; or (ii) repurchase the affected Mortgage Loan or
Mortgage Loans from the Trustee at the Purchase Price in the manner set forth
below. Any substitution pursuant to (i) above shall not be effected before the
delivery to the Trustee of the Opinion of Counsel, if required by Section 2.05,
and a Request for Release substantially in the form of Exhibit N, and the
Mortgage File for any Substitute Mortgage Loan. The Seller shall promptly
reimburse the Servicer and the Trustee for any expenses reasonably incurred by
the Servicer or the Trustee in respect of enforcing the remedies for the breach.
With respect to any Substitute Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan.
51
The Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of the Deleted Mortgage Loan
and the substitution of the Substitute Mortgage Loans and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon the
substitution, the Substitute Mortgage Loans shall be subject to this Agreement
in all respects, and the Seller shall be deemed to have made with respect to the
Substitute Mortgage Loans, as of the date of substitution, the representations
and warranties made pursuant to Section 2.03(b) with respect to the Mortgage
Loan. Upon any substitution and the deposit to the Certificate Account of the
amount required to be deposited therein in connection with the substitution as
described in the following paragraph, the Trustee shall release the Mortgage
File held for the benefit of the Certificateholders relating to the Deleted
Mortgage Loan to the Seller and shall execute and deliver at the Seller's
direction such instruments of transfer or assignment prepared by the Seller, in
each case without recourse, as shall be necessary to vest title in the Seller,
or its designee, the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the month of substitution). The amount of such shortage (the "Substitution
Adjustment Amount") plus, if the Seller is not the Servicer, an amount equal to
the aggregate of any unreimbursed Advances and Servicer Advances with respect to
such Deleted Mortgage Loans shall be deposited into the Certificate Account by
the Seller by the Distribution Account Deposit Date for the Distribution Date in
the month succeeding the calendar month during which the related Mortgage Loan
became required to be purchased or replaced hereunder. If the Seller repurchases
a Mortgage Loan, the Purchase Price therefor shall be deposited in the
Certificate Account pursuant to Section 3.06 by the Distribution Account Deposit
Date for the Distribution Date in the month following the month during which the
Seller became obligated hereunder to repurchase or replace the Mortgage Loan and
upon such deposit of the Purchase Price and receipt of a Request for Release in
the form of Exhibit N, the Trustee shall release the related Mortgage File held
for the benefit of the Certificateholders to such Person, and the Trustee shall
execute and deliver at such Person's direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the Trustee. The obligation under this
Agreement of any Person to cure, repurchase, or replace any Mortgage Loan as to
which a breach has occurred and is continuing shall constitute the sole remedy
against the Person respecting the breach available to Certificateholders, the
Depositor, or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor as to
the Mortgage Loans.
The Depositor represents and warrants to the Trustee with respect to
each Mortgage Loan as of the date of this Agreement or such other date set forth
in this Agreement that as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, defenses, or
counterclaims.
The representations and warranties in this Section 2.04 shall survive
delivery of the Mortgage Files to the Trustee. Upon discovery by the Depositor
or the Trustee of any breach of any of the representations and warranties in
this Section that materially and adversely affects the interest of the
Certificateholders, the party discovering the breach shall give prompt written
notice to the others and to each Rating Agency.
52
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement, no substitution
pursuant to Section 2.02 or 2.03 shall be made more than 90 days after the
Closing Date unless the Seller delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on "prohibited transactions" on
the Trust Fund or contributions after the Startup Date, as defined in sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any REMIC created
under this Agreement to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within five Business Days of discovery) give written
notice thereof to the other parties. In connection therewith, the Trustee shall
require the Seller, at the Seller's option, to either (i) substitute, if the
conditions in Section 2.03(c) with respect to substitutions are satisfied, a
Substitute Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty made pursuant
to Section 2.03. The Trustee shall reconvey to the Seller the Mortgage Loan to
be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
under this Agreement. The "Startup Day" for purposes of the REMIC Provisions
shall be the Closing Date. Each REMIC's fiscal year shall be the calendar year.
53
ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with this Agreement and
the Servicing Standard.
The Servicer shall not make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would cause any REMIC created
under this Agreement to fail to qualify as a REMIC or result in the imposition
of any tax under section 860F(a) or section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Servicer, in
its own name or in the name of the Depositor and the Trustee, is hereby
authorized and empowered by the Depositor and the Trustee, when the Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders, or any of them,
any instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor or
the Trustee any documents requiring execution and delivery by either or both of
them appropriate to enable the Servicer to service and administer the Mortgage
Loans to the extent that the Servicer is not permitted to execute and deliver
such documents pursuant to the preceding sentence. Upon receipt of the
documents, the Depositor or the Trustee shall execute the documents and deliver
them to the Servicer.
The Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name, when the
Servicer believes it appropriate in its best judgment to register any Mortgage
Loan on the MERS(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.
In accordance with and to the extent of the Servicing Standard, the
Servicer shall advance funds necessary to effect the payment of taxes and
assessments on the Mortgaged Properties, which advances shall be reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.07, and further as provided in Section 3.09. The costs incurred by the
Servicer in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the Mortgage Loans so permit.
Nothing in this Agreement to the contrary shall limit the Servicer
from undertaking any legal action that it may deem appropriate with respect to
the Mortgage Loans including, without limitation, any rights or causes of action
arising out of the origination of the Mortgage Loans.
54
Section 3.02 [Reserved].
Section 3.03 Rights of the Depositor and the Trustee in Respect of
the Servicer.
The Depositor may, but is not obligated to, enforce the obligations
of the Servicer under this Agreement and may, but is not obligated to, perform,
or cause a designee to perform, any defaulted obligation of the Servicer under
this Agreement and in connection with any such defaulted obligation to exercise
the related rights of the Servicer under this Agreement; provided that the
Servicer shall not be relieved of any of its obligations under this Agreement by
virtue of such performance by the Depositor or its designee. Neither the Trustee
nor the Depositor shall have any responsibility or liability for any action or
failure to act by the Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Servicer under this Agreement or
otherwise.
Section 3.04 [Reserved].
Section 3.05 Trustee to Act as Servicer.
If the Servicer for any reason is no longer the Servicer under this
Agreement (including because of the occurrence or existence of an Event of
Default or termination by the Depositor), the Trustee or its successor shall
assume all of the rights and obligations of the Servicer under this Agreement
arising thereafter (except that the Trustee shall not be
(i) liable for losses of the Servicer pursuant to Section 3.10
or any acts or omissions of the predecessor Servicer hereunder,
(ii) obligated to make Advances if it is prohibited from doing
so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including repurchases or substitutions
pursuant to Section 2.02 or 2.03,
(iv) responsible for expenses of the Servicer pursuant to
Section 2.03, or
(v) deemed to have made any representations and warranties of
the Servicer hereunder). Any assumption shall be subject to Section
7.02.
Notwithstanding anything else in this Agreement to the contrary, in
no event shall the Trustee be liable for any servicing fee or for any
differential in the amount of the Servicing Fee paid under this Agreement and
the amount necessary to induce any successor Servicer to act as successor
Servicer under this Agreement and the transactions provided for in this
Agreement.
Section 3.06 Collection of Mortgage Loan Payments; Servicing
Accounts; Collection Account; Certificate Account; Distribution Account;
Supplemental Interest Trust; Supplemental Interest Reserve Fund.
(a) In accordance with and to the extent of the Servicing Standard,
the Servicer shall make reasonable efforts in accordance with the customary and
usual standards of practice of prudent mortgage servicers to collect all
payments called for under the Mortgage Loans to the extent the procedures are
consistent with this Agreement and any related Required Insurance Policy.
Consistent with the foregoing, the Servicer may in its discretion (i) waive any
late payment charge or, subject to Section 3.20, any Prepayment Charge in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Delinquent Mortgage Loan for a period not greater than 125
days. In connection
55
with a seriously delinquent or defaulted Mortgage Loan, the Servicer may,
consistent with the Servicing Standard, waive, modify or vary any term of that
Mortgage Loan (including modifications that change the Mortgage Rate, forgive
the payment of principal or interest or extend the final maturity date of that
Mortgage Loan ), accept payment from the related Mortgagor of an amount less
than the Stated Principal Balance in final satisfaction of that Mortgage Loan,
or consent to the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor if in the Servicer's determination
such waiver, modification, postponement or indulgence is not materially adverse
to the interests of the Certificateholders (taking into account any estimated
loss that might result absent such action) and is expected to minimize the loss
on such Mortgage Loan; provided, however, the Servicer shall not initiate new
lending to such Mortgagor through the Trust and cannot, except as provided in
the immediately succeeding sentence, extend the maturity of any Mortgage Loan
past the date on which the final payment is due on the latest maturing Mortgage
Loan as of the Cut-off Date. With respect to no more than 5% of the Mortgage
Loans (measured by aggregate Cut-off Date Principal Balance of the Mortgage
Loans), the Servicer may extend the maturity of a Mortgage Loan past the date on
which the final payment is due on the latest maturing Mortgage Loan as of the
Cut-off Date, but in no event more than one year past such date. In the event of
any such arrangement, the Servicer shall make Advances on the related Mortgage
Loan in accordance with Section 4.01 during the scheduled period in accordance
with the amortization schedule of the Mortgage Loan without modification thereof
because of the arrangements. The Servicer shall not be required to institute or
join in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note, or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which the payment is required is prohibited by applicable law. The Servicer
shall not have the discretion to sell any Delinquent or defaulted Mortgage Loan.
(b) The Servicer shall establish and maintain one or more Servicing
Accounts (the "Servicing Account") into which the Servicer shall deposit on a
daily basis within one Business Day of receipt, the following payments and
collections received by it in respect of Mortgage Loans after the Cut-off Date
(other than in respect of principal and interest due on the Mortgage Loans by
the Cut-off Date):
(i) all payments on account of principal on the Mortgage
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans, net of the related Servicing Fee; and
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures.
By the Withdrawal Date in each calendar month, the Servicer shall (a)
withdraw from the Servicing Account all amounts on deposit therein pursuant to
clauses (i) and (ii) above (other than amounts attributable to a Principal
Prepayment in Full) and (b) deposit such amounts in the Collection Account.
By the Business Day in each calendar month following the deposit in
the Servicing Account of amounts on deposit therein pursuant to clause (iii)
above or pursuant to any Principal Prepayment in Full, the Servicer shall (a)
withdraw such amounts from the Servicing Account and (b) deposit such amounts in
the Collection Account.
(c) The Servicer shall establish and maintain a Collection Account
(the "Collection Account") into which the Servicer shall deposit, as and when
required by paragraph (b) of this Section 3.06, all
56
amounts required to be deposited into the Collection Account pursuant to that
paragraph. The Collection Account shall be an Eligible Account held for the
benefit of the Certificateholders.
(d) The Servicer shall establish and maintain a Certificate Account
into which the Servicer shall deposit on a daily basis (i) within one Business
Day of deposit in the Collection Account (in the case of items (i) through (iii)
below) and (2) within one Business Day of receipt (in the case of all other
items), except as otherwise specified herein, the following payments and
collections received by it in respect of Mortgage Loans after the Cut-off Date
(other than in respect of principal and interest due on the Mortgage Loans by
the Cut-off Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans, net of the Servicing Fee;
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Servicer
pursuant to Section 3.06(f) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Servicer
pursuant to Sections 3.10 and 3.12;
(vi) all Purchase Prices from the Servicer or Seller and all
Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to Section
4.01;
(viii) any other amounts required to be deposited under this
Agreement; and
(ix) all Prepayment Charges collected.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for the Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Servicer shall cause funds to be
deposited into the Certificate Account in an amount required to cause an amount
of interest to be paid with respect to the Mortgage Loan equal to the amount of
interest that has accrued on the Mortgage Loan from the preceding Due Date at
the Mortgage Rate net of the Servicing Fee Rate on that date.
The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption
fees, if collected, need not be remitted by the Servicer. If the Servicer remits
any amount not required to be remitted, it may at any time withdraw that amount
from the Certificate Account, any provision in this Agreement to the contrary
notwithstanding. The withdrawal or direction may be accomplished by delivering
written notice of it to the Trustee or any other institution maintaining the
Certificate Account that describes the amounts deposited in error in the
Certificate Account. The Servicer shall maintain adequate records with respect
to all withdrawals made pursuant to this Section
57
3.06. All funds deposited in the Certificate Account shall be held in trust for
the Certificateholders until withdrawn in accordance with Section 3.09.
(e) The Trustee shall establish and maintain the Distribution Account
on behalf of the Certificateholders. The Trustee shall, promptly upon receipt,
deposit in the Distribution Account and retain in the Distribution Account the
following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.09(a);
(ii) any amount deposited by the Servicer pursuant to Section
3.06(f) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited under this Agreement that
are required to be deposited in the Distribution Account.
If the Servicer remits any amount not required to be remitted, it may
at any time direct the Trustee in writing to withdraw that amount from the
Distribution Account, any provision in this Agreement to the contrary
notwithstanding. The direction may be accomplished by delivering an Officer's
Certificate to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.09. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Servicer.
(f) Each institution at which the Certificate Account is maintained
shall invest the funds in such account as directed in writing by the Servicer in
Permitted Investments, which shall mature not later than the second Business Day
preceding the related Distribution Account Deposit Date (except that if the
Permitted Investment is an obligation of the institution that maintains the
account, then the Permitted Investment shall mature not later than the Business
Day preceding the Distribution Account Deposit Date) and which shall not be sold
or disposed of before its maturity. The funds in the Distribution Account shall
remain uninvested. All such Permitted Investments shall be made in the name of
the Trustee, for the benefit of the Certificateholders. All income realized from
any such investment of funds on deposit in the Certificate Account shall be for
the benefit of the Servicer as servicing compensation and shall be remitted to
it monthly as provided in this Agreement. The amount of any realized losses on
Permitted Investments in the Certificate Account shall promptly be deposited by
the Servicer in the Certificate Account. The Trustee shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Certificate Account and made in accordance with this
Section 3.06.
(g) (i) On the Closing Date, there is hereby established a separate
trust (the "Supplemental Interest Trust"), the assets of which shall consist of
the Supplemental Interest Reserve Fund and the Supplemental Interest Trustee's
rights and obligations under the Corridor Contract. The Supplemental Interest
Trust shall be maintained by the Supplemental Interest Trustee, who initially
shall be the Trustee.
(ii) On the Closing Date, the Supplemental Interest Trustee
shall establish and maintain in its name, in trust for the benefit
of the Holders of the Class 1-A-2 Certificates, the Supplemental
Interest Reserve Fund. All funds on deposit in the Supplemental
Interest Reserve Fund shall be held separate and apart from, and
shall not be commingled with, any other moneys, including without
limitation, other moneys held by the Trustee pursuant to this
Agreement.
58
(iii) On each Distribution Date, the Supplemental Interest
Trustee shall deposit into the Supplemental Interest Reserve Fund
all amounts received in respect of the Corridor Contract for the
Class 1-A-2 Certificates for the related Interest Accrual Period.
Funds in the Supplemental Interest Reserve Fund shall not be
invested. The Supplemental Interest Trustee shall make withdrawals
from the Supplemental Interest Reserve Fund to make distributions
pursuant to Section 4.08 exclusively (other than as expressly
provided for in Section 3.09).
(h) The Servicer shall give notice to the Trustee, the Seller, each
Rating Agency and the Depositor of any proposed change of the location of the
Certificate Account not later than 30 days and not more than 45 days prior to
any change of this Agreement. The Trustee shall give notice to the Servicer, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Distribution Account not later than 30 days and not more than 45
days prior to any change of this Agreement. The Supplemental Interest Trustee
shall give notice to the Servicer, the Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Supplemental Interest
Reserve Fund prior to any change thereof.
Section 3.07 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Servicer to compel a Mortgagor
to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
(without duplication) the Servicer out of related collections for any payments
made pursuant to Section 3.01 (with respect to taxes and assessments and
insurance premiums) and Section 3.10 (with respect to hazard insurance), to
refund to any Mortgagors any sums determined to be overages, to pay interest, if
required by law or the related Mortgage or Mortgage Note, to Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 9.01. The Escrow
Accounts shall not be a part of the Trust Fund.
(c) The Servicer shall advance any payments referred to in Section
3.07(a) that are not timely paid by the Mortgagors or advanced by the Servicer
on the date when the tax, premium or other cost for which such payment is
intended is due, but the Servicer shall be required so to advance only to the
extent that such advances, in the good faith judgment of the Servicer, will be
recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
Section 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will provide
to each Certificateholder or Certificate Owner that is a savings and loan
association, bank, or insurance company certain reports and reasonable access to
information and documentation regarding the Mortgage Loans sufficient to permit
59
the Certificateholder or Certificate Owner to comply with applicable regulations
of the OTS or other regulatory authorities with respect to investment in the
Certificates. The Servicer shall be entitled to be reimbursed by each such
Certificateholder or Certificate Owner for actual expenses incurred by the
Servicer in providing the reports and access.
Section 3.09 Permitted Withdrawals from the Certificate Account, the
Distribution Account and the Supplemental Interest Reserve Fund.
(a) The Servicer may (and, in the case of clause (ix) below, shall)
from time to time make withdrawals from the Certificate Account for the
following purposes:
(i) to pay to the Servicer (to the extent not previously
retained) the servicing compensation to which it is entitled
pursuant to Section 3.15, and to pay to the Servicer, as additional
servicing compensation, earnings on or investment income with
respect to funds in or credited to the Certificate Account;
(ii) to reimburse the Servicer or successor Servicer for the
unreimbursed Advances made by it, such right of reimbursement
pursuant to this subclause (ii) being limited to amounts received on
the Mortgage Loans in respect of which the Advance was made;
(iii) to reimburse the Servicer or successor Servicer for any
Nonrecoverable Advance previously made by it;
(iv) to reimburse the Servicer for Insured Expenses from the
related Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this
clause (a) with respect to any Mortgage Loan being limited to
amounts received on the Mortgage Loans that represent late
recoveries of the payments for which the advances were made pursuant
to Section 3.01 or Section 3.07, (b) unreimbursed Servicing Advances
made in respect of a Mortgage Loan for which such Servicing Advances
are not recoverable from the Mortgagor and (c) for unpaid Servicing
Fees as provided in Section 3.12;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect of such Mortgage Loan that has
been purchased pursuant to Section 2.02, 2.03, or 3.12, all amounts
received thereon after the date of such purchase;
(vii) to reimburse the Seller, the Servicer, or the Depositor
for expenses incurred by any of them and reimbursable pursuant to
Section 6.03;
(viii) to withdraw any amount deposited in the Certificate
Account and not required to be deposited in the Certificate Account;
(ix) by the Distribution Account Deposit Date, to withdraw (1)
the Available Funds and the Trustee Fee for the Distribution Date,
to the extent on deposit, and (2) the Prepayment Charges on deposit,
and remit such amount to the Trustee for deposit in the Distribution
Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01.
60
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, to justify any withdrawal from the
Certificate Account pursuant to subclauses (i), (ii), (iv), (v), and (vi).
Before making any withdrawal from the Certificate Account pursuant to subclause
(iii), the Servicer shall deliver to the Trustee an Officer's Certificate of a
Servicing Officer indicating the amount of any previous Advance determined by
the Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loans and their respective portions of the Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account
for distributions to Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn the amount of any taxes
that it is authorized to withhold pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to withdraw and return to the Servicer any amount
deposited in the Distribution Account and not required to be
deposited therein; and
(iii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01.
(c) The Supplemental Interest Trustee shall withdraw funds on
deposit in the Supplemental Interest Reserve Fund for distribution to the Class
1-A-2 Certificates in the manner specified in Section 4.08 (and to withhold from
the amounts so withdrawn the amount of any taxes that it is authorized to retain
pursuant to the third to last paragraph of Section 8.11). In addition, the
Supplemental Interest Trustee may from time to time make withdrawals from the
Supplemental Interest Reserve Fund for the following purposes:
(i) to withdraw any amount deposited in the Supplemental
Interest Reserve Fund and not required to be deposited therein; and
(ii) to clear and terminate the Supplemental Interest Reserve
Fund upon the earlier of (i) the reduction of the Class Certificate
Balance of the Class 1-A-2 Certificates to zero, and (ii) the
Corridor Contract Termination Date.
Section 3.10 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Servicer shall maintain, for each Mortgage Loan, hazard
insurance with extended coverage in an amount that is at least equal to the
lesser of
(i) the maximum insurable value of the improvements securing the
Mortgage Loan and
(ii) the greater of (y) the outstanding principal balance of the
Mortgage Loan and (z) an amount such that the proceeds of the policy are
sufficient to prevent the Mortgagor or the mortgagee from becoming a co-insurer.
Each policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. Any amounts
collected under the policies (other than the amounts to be applied to the
restoration or repair of the related Mortgaged Property or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the
61
Certificate Account. Any cost incurred in maintaining any insurance shall not,
for the purpose of calculating monthly distributions to the Certificateholders
or remittances to the Trustee for their benefit, be added to the principal
balance of the Mortgage Loan, notwithstanding that the Mortgage Loan so permits.
Such costs shall be recoverable by the Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 3.09. No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage other
than pursuant to any applicable laws and regulations in force that require
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and the area is participating in the national flood insurance program, the
Servicer shall maintain flood insurance for the Mortgage Loan. The flood
insurance shall be in an amount equal to the least of (i) the original principal
balance of the related Mortgage Loan, (ii) the replacement value of the
improvements that are part of the Mortgaged Property, and (iii) the maximum
amount of flood insurance available for the related Mortgaged Property under the
national flood insurance program.
If the Servicer obtains and maintains a blanket policy insuring
against hazard losses on all of the Mortgage Loans, it shall have satisfied its
obligations in the first sentence of this Section 3.10. The policy may contain a
deductible clause on terms substantially equivalent to those commercially
available and maintained by comparable servicers. If the policy contains a
deductible clause and a policy complying with the first sentence of this Section
3.10 has not been maintained on the related Mortgaged Property, and if a loss
that would have been covered by the required policy occurs, the Servicer shall
deposit in the Certificate Account, without any right of reimbursement, the
amount not otherwise payable under the blanket policy because of the deductible
clause. In connection with its activities as Servicer of the Mortgage Loans, the
Servicer agrees to present, on behalf of itself, the Depositor, and the Trustee
for the benefit of the Certificateholders, claims under any blanket policy.
(b) The Servicer shall not take any action that would result in
non-coverage under any applicable Primary Insurance Policy of any loss that, but
for the actions of the Servicer, would have been covered thereunder. The
Servicer shall not cancel or refuse to renew any Primary Insurance Policy that
is in effect at the date of the initial issuance of the Certificates and is
required to be kept in force hereunder unless the replacement Primary Insurance
Policy for the canceled or non-renewed policy is maintained with a Qualified
Insurer. The Servicer need not maintain any Primary Insurance Policy if
maintaining the Primary Insurance Policy is prohibited by applicable law. The
Servicer agrees, to the extent permitted by applicable law, to effect the timely
payment of the premiums on each Primary Insurance Policy, and any costs not
otherwise recoverable shall be recoverable by the Servicer from the related
liquidation proceeds.
In connection with its activities as Servicer of the Mortgage Loans,
the Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take any reasonable action in accordance with the
Servicing Standard necessary to permit recovery under any Primary Insurance
Policies respecting defaulted Mortgage Loans. Any amounts collected by the
Servicer under any Primary Insurance Policies shall be deposited in the
Certificate Account or the Collection Account (as applicable).
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11, when any
property subject to a Mortgage has been conveyed by the Mortgagor, the Servicer
shall to the extent that it has knowledge of the conveyance and in accordance
with the Servicing Standard, enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable law and
governmental regulations, but only to the extent that enforcement will not
adversely affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to exercise
62
these rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
conditions contained in the Mortgage Note and Mortgage related thereto and the
consent of the mortgagee under the Mortgage Note or Mortgage is not otherwise so
required under the Mortgage Note or Mortgage as a condition to the transfer.
If (i) the Servicer is prohibited by law from enforcing any
due-on-sale clause, (ii) coverage under any Required Insurance Policy would be
adversely affected, (iii) the Mortgage Note does not include a due-on-sale
clause, or (iv) nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption and
modification agreement from or with the person to whom the property has been or
is about to be conveyed, pursuant to which the person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon. The Mortgage Loan must continue to be covered (if so
covered before the Servicer enters into the agreement) by the applicable
Required Insurance Policies.
The Servicer, subject to Section 3.11(b), is also authorized with
the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with the Person, pursuant to
which the original Mortgagor is released from liability and the Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section 3.11 because of any transfer or assumption that the Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.11(a), in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and the Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and
deliver to the Trustee for signature and shall direct the Trustee, in writing,
to execute the assumption agreement with the Person to whom the Mortgaged
Property is to be conveyed, and the modification agreement or supplement to the
Mortgage Note or Mortgage or other instruments appropriate to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to the Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed.
In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Servicer in accordance with its underwriting standards
as then in effect. Together with each substitution, assumption, or other
agreement or instrument delivered to the Trustee for execution by it, the
Servicer shall deliver an Officer's Certificate signed by a Servicing Officer
stating that the requirements of this subsection have been met in connection
with such Officer's Certificate. The Servicer shall notify the Trustee that any
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of the substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of the Mortgage File to the same extent as
all other documents and instruments constituting a part of the Mortgage File.
The Servicer will retain any fee collected by it for entering into an assumption
or substitution of liability agreement as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use reasonable efforts in accordance with the
Servicing Standard to foreclose on or otherwise comparably convert the ownership
of assets securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
63
of delinquent payments. In connection with the foreclosure or other conversion,
the Servicer shall follow the Servicing Standard and shall follow the
requirements of the insurer under any Required Insurance Policy. The Servicer
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration of any property unless it determines (i) that the
restoration or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan after reimbursement to itself of restoration expenses and (ii)
that restoration expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate Account). The Servicer shall be responsible for all other costs and
expenses incurred by it in any foreclosure proceedings. The Servicer is entitled
to reimbursement of such costs and expenses from the liquidation proceeds with
respect to the related Mortgaged Property, as provided in the definition of
Liquidation Proceeds. If the Servicer has knowledge that a Mortgaged Property
that the Servicer is contemplating acquiring in foreclosure or by deed in lieu
of foreclosure is located within a one mile radius of any site listed in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984 or other
site with environmental or hazardous waste risks known to the Servicer, the
Servicer will, before acquiring the Mortgaged Property, consider the risks and
only take action in accordance with its established environmental review
procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to the REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to the REO Property references the Pooling and Servicing
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
the REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve the REO Property in accordance with the
Servicing Standard.
The Servicer shall perform the tax reporting and withholding
required by sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and, if required by
section 6050P of the Code with respect to the cancellation of indebtedness by
certain financial entities, by preparing any required tax and information
returns, in the form required.
If the Trust Fund acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the REO Property shall only be held temporarily, shall be actively marketed for
sale, and the Servicer shall dispose of the Mortgaged Property as soon as
practicable, and in any case before the end of the third calendar year following
the calendar year in which the Trust Fund acquires the property. Notwithstanding
any other provision of this Agreement, no Mortgaged Property acquired by the
Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the Trust Fund.
The decision of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
the foreclosure would exceed the costs and expenses of bringing a foreclosure
proceeding. The proceeds received from the maintenance of any REO Properties,
net of reimbursement to the Servicer for costs incurred (including any property
or other taxes) in connection with maintenance of the REO Properties and net of
unreimbursed Servicing Fees, Advances, and Servicing Advances, shall be applied
to the payment of principal of and interest on the related defaulted Mortgage
Loans (with interest accruing as though the Mortgage Loans were still current
and adjustments, if applicable, to the Mortgage Rate were being made in
accordance with the Mortgage Note) and all such proceeds shall be deemed, for
all purposes in this Agreement, to be payments on account of principal and
interest on the related Mortgage Notes and shall be deposited into the
Certificate Account. To the extent the net proceeds received during any calendar
month exceeds the amount attributable to amortizing principal and accrued
interest at the related Mortgage Rate on the related Mortgage Loan for
64
the calendar month, the excess shall be considered to be a partial prepayment of
principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
proceeds from an REO Property, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances or Servicing Fees or for any related unreimbursed Advances,
as applicable; second, to reimburse the Servicer, as applicable, and to
reimburse the Certificate Account for any Nonrecoverable Advances (or portions
thereof) that were previously withdrawn by the Servicer pursuant to Section
3.09(a)(iii) that related to the Mortgage Loan; third, to accrued and unpaid
interest (to the extent no Advance has been made for such amount or any such
Advance has been reimbursed) on the Mortgage Loan or related REO Property, at
the Adjusted Net Mortgage Rate to the Due Date occurring in the month in which
such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan. The Servicer will retain any Excess Proceeds
from the liquidation of a Liquidated Mortgage Loan as additional servicing
compensation pursuant to Section 3.15.
The Servicer may agree to a modification of any Mortgage Loan at the
request of the related Mortgagor if (i) the modification is in lieu of a
refinancing and (ii) the Servicer purchases that Mortgage Loan from the Trust
Fund as described below. Upon the agreement of the Servicer to modify a Mortgage
Loan in accordance with the preceding sentence, the Servicer shall purchase that
Mortgage Loan and all interest of the Trustee in that Mortgage Loan shall
automatically be deemed transferred and assigned to the Servicer and all
benefits and burdens of ownership thereof, including the right to accrued
interest thereon from the date of purchase and the risk of default thereon,
shall pass to the Servicer. The Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of this
paragraph have been satisfied with respect to a Mortgage Loan to be repurchased
pursuant to this paragraph.
The Servicer shall deposit the Purchase Price for any Mortgage Loan
repurchased pursuant to Section 3.12 in the Certificate Account pursuant to
Section 3.06 within one Business Day after the purchase of the Mortgage Loan.
Upon receipt by the Trustee of written notification of any such deposit signed
by a Servicing Officer, the Trustee shall release to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Servicer any Mortgage Loan previously transferred and assigned pursuant hereto.
The Servicer covenants and agrees to indemnify the Trust Fund against any
liability for any "prohibited transaction" taxes and any related interest,
additions, and penalties imposed on the Trust Fund established hereunder as a
result of any modification of a Mortgage Loan effected pursuant to this Section,
or any purchase of a Mortgage Loan by the Servicer in connection with a
modification (but such obligation shall not prevent the Servicer or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Servicer from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The Servicer shall
have no right of reimbursement for any amount paid pursuant to the foregoing
indemnification, except to the extent that the amount of any tax, interest, and
penalties, together with interest thereon, is refunded to the Trust Fund.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee by
delivering a Request for Release substantially in the form of Exhibit N. Upon
receipt of the request, the Trustee shall promptly release the related Mortgage
File to the Servicer, and the Trustee shall at the Servicer's direction execute
and deliver to the Servicer the request for reconveyance, deed of reconveyance,
or release or satisfaction of mortgage or such instrument releasing the lien of
the Mortgage in each case provided by the Servicer, together with the Mortgage
Note with
65
written evidence of cancellation thereon. The Servicer is authorized to cause
the removal from the registration on the MERS System of such Mortgage and to
execute and deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation or of partial
or full release. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor.
From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee shall, upon delivery to the Trustee of a Request for Release
in the form of Exhibit M signed by a Servicing Officer, release the Mortgage
File to the Servicer or its designee. Subject to the further limitations set
forth below, the Servicer shall cause the Mortgage File or documents so released
to be returned to the Trustee when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the Certificate Account, in which case the Servicer shall deliver
to the Trustee a Request for Release in the form of Exhibit N, signed by a
Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Servicer shall deliver to the Trustee, for signature, as appropriate, any
court pleadings, requests for trustee's sale, or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Section 3.14 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee.
The Servicer shall account fully to the Trustee for any funds it
receives or otherwise collects as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. All Mortgage Files and funds collected or held by,
or under the control of, the Servicer in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or from Liquidation
Proceeds, including any funds on deposit in the Certificate Account, shall be
held by the Servicer for and on behalf of the Trustee and shall be and remain
the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, the Collection Account, Distribution Account, or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment, or other encumbrance, or assert by
legal action or otherwise any claim or right of setoff against any Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Servicer
under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer may
retain or withdraw from the Servicing Account, the Collection Account, or the
Certificate Account the Servicing Fee for each Mortgage Loan for the related
Distribution Date. Notwithstanding the foregoing, the Servicing Fee payable to
the Servicer shall be reduced by the lesser of the aggregate of the Prepayment
Interest Shortfalls with respect to the Distribution Date and the aggregate
Compensating Interest for the Distribution Date.
66
The Servicer may retain or withdraw from the Servicing Account, the
Collection Account, or the Certificate Account the Servicing Fee for each
Mortgage Loan for the related Distribution Date. If the Servicer directly
services a Mortgage Loan, the Servicer may retain the Servicing Fee for its own
account as compensation for performing services.
Additional servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, assumption fees, late payment charges and all income
net of any losses realized from Permitted Investments shall be retained by the
Servicer to the extent not required to be deposited in the Certificate Account
pursuant to Section 3.06. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
the payment of any premiums for hazard insurance, and any Primary Insurance
Policy and maintenance of the other forms of insurance coverage required by this
Agreement) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.
Section 3.16 Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Certificates and Certificate
Owners and the examiners and supervisory agents of the OTS, the FDIC, and such
other authorities, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Access shall be
afforded without charge, but only upon reasonable prior written request and
during normal business hours at the offices designated by the Servicer. Nothing
in this Section 3.16 shall limit the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the Servicer to provide access as provided in this Section
3.16 as a result of such obligation shall not constitute a breach of this
Section 3.16.
Section 3.17 Annual Statement as to Compliance.
(a) By March 1 of each year, commencing with 2007, the Servicer
shall deliver to the Trustee via electronic mail (▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇)
and the Depositor an Officer's Certificate signed by two Servicing Officers
stating, as to each signer thereof, that (i) a review of the activities of the
Servicer during the preceding calendar year (or applicable portion thereof) and
of the performance of the Servicer under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on the review, the Servicer has fulfilled all its obligations under this
Agreement, in all material respects throughout the year (or applicable portion
thereof), or, if there has been a failure to fulfill any obligation in any
material respect, specifying each failure known to the officer and the nature
and status thereof.
(b) [Reserved].
(c) The Trustee shall forward a copy of each such statement to each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Servicer's expense,
provided such statement is delivered by the Servicer to the Trustee.
Section 3.18 Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall obtain and maintain in force (a) policies of
insurance covering errors and omissions in the performance of its obligations as
Servicer hereunder and (b) a fidelity bond covering its officers, employees, and
agents. Each policy and bond shall, together, comply with the requirements from
time to time of FNMA or FHLMC for persons performing servicing for mortgage
loans purchased by FNMA or FHLMC. If any policy or bond ceases to be in effect,
the Servicer shall obtain a comparable
67
replacement policy or bond from an insurer or issuer meeting the above
requirements as of the date of the replacement.
Section 3.19 The Supplemental Interest Trust.
The Supplemental Interest Trustee will enter into the Corridor
Contract with the Cap Counterparty. The Corridor Contract will not be an asset
of the trust or any REMIC but instead will be an asset of the Supplemental
Interest Trust. The Supplemental Interest Trustee, on behalf of the Supplemental
Interest Trust, shall cause to be deposited any amounts received from time to
time with respect to the Corridor Contract into the Supplemental Interest
Reserve Fund.
The Supplemental Interest Trustee shall be subject to a
standard of care identical to that of the Trustee under Article Eight of this
Agreement.
The Cap Counterparty shall act as calculation agent under the
Corridor Contract and the Trustee shall be entitled to conclusively rely on the
accuracy, completeness and correctness of calculations made by the Cap
Counterparty as calculation agent. The Trustee, on behalf of the Supplemental
Interest Trust, shall terminate the Corridor Contract, upon the occurrence of
certain events of default or termination events to the extent specified
thereunder. Upon any such termination, the Cap Counterparty will be obligated to
pay the Supplemental Interest Trustee, for the benefit of the Supplemental
Interest Trust, an amount in respect of such termination. Any amounts received
by the Supplemental Interest Trustee for the benefit of the Supplemental
Interest Trust in respect of the termination of the Corridor Contract shall be
deposited and held in the Supplemental Interest Reserve Fund and applied on
future Distribution Dates to pay the Yield Supplement Amount to the Class 1-A-2
Certificates.
Any amounts remaining in the Supplemental Interest Reserve
Fund on the Distribution Date immediately following the earlier of (x) the
Corridor Contract Termination Date and (y) the date on which the Class
Certificate Balance of the Class 1-A-2 Certificates has been reduced to zero,
will be distributed to Credit Suisse (USA) LLC, and will not be available for
payment of any Yield Supplement Amounts on the Class 1-A-2 Certificates.
Section 3.20 Prepayment Charges.
The Servicer will not waive any part of any Prepayment Charge unless
the waiver relates to a default or a reasonably foreseeable default, the
Prepayment Charge would cause an undue hardship to the related borrower, the
Mortgaged Property is sold by the Mortgagor, the collection of any Prepayment
Charge would violate any relevant law or regulation or the waiving of the
Prepayment Charge would otherwise benefit the Trust Fund and it is expected that
the waiver would maximize recovery of total proceeds taking into account the
value of the Prepayment Charge and related Mortgage Loan and doing so is
standard and customary in servicing similar Mortgage Loans (including any waiver
of a Prepayment Charge in connection with a refinancing of a Mortgage Loan that
is related to a default or a reasonably foreseeable default). The Servicer will
not waive a Prepayment Charge in connection with a refinancing of a Mortgage
Loan that is not related to a default or a reasonably foreseeable default.
If a Prepayment Charge is waived other than as permitted by the
prior paragraph, then the Servicer is required to pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Distribution Account from its own funds,
without any right of reimbursement therefor, together with and at the time that
the amount prepaid on the related Mortgage Loan is required to be deposited into
the Distribution Account.
68
ARTICLE FOUR
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01 Advances.
(a) The Servicer shall determine on or before each Servicer Advance
Date whether it is required to make an Advance pursuant to the definition
thereof. If the Servicer determines it is required to make an Advance, it shall,
on or before the Servicer Advance Date, either (i) deposit into the Certificate
Account an amount equal to the Advance or (ii) make an appropriate entry in its
records relating to the Certificate Account that any Amount Held for Future
Distribution has been used by the Servicer in discharge of its obligation to
make any such Advance. Any funds so applied shall be replaced by the Servicer by
deposit in the Certificate Account no later than the close of business on the
next Servicer Advance Date. The Servicer shall be entitled to be reimbursed from
the Certificate Account for all Advances of its own funds made pursuant to this
Section 4.01 as provided in Section 3.09. The obligation to make Advances with
respect to any Mortgage Loan shall continue if such Mortgage Loan has been
foreclosed or otherwise terminated and the Mortgaged Property has not been
liquidated. The Servicer shall inform the Trustee of the amount of the Advance
to be made on each Servicer Advance Date no later than the second Business Day
before the related Distribution Date.
(b) If the Servicer determines that it will be unable to comply with
its obligation to make the Advances as and when described in the second sentence
of Section 4.01(a), it shall use its best efforts to give written notice thereof
to the Trustee (each such notice an "Advance Notice"; and such notice may be
given by telecopy), not later than 3:00 P.M., New York time, on the Business Day
immediately preceding the related Servicer Advance Date, specifying the amount
that it will be unable to deposit (each such amount an "Advance Deficiency") and
certifying that such Advance Deficiency constitutes an Advance hereunder and is
not a Nonrecoverable Advance. If the Trustee receives a Trustee Advance Notice
on or before 3:00 P.M., New York time on a Servicer Advance Date, the Trustee is
entitled to immediately terminate the Servicer under Section 7.01, and shall,
not later than 3:00 P.M., New York time, on the related Distribution Date,
deposit in the Distribution Account an amount equal to the Advance Deficiency
identified in such Trustee Advance Notice unless it is prohibited from so doing
by applicable law. Notwithstanding the foregoing, the Trustee shall not be
required to make such deposit if the Trustee shall have received written
notification from the Servicer that the Servicer has deposited or caused to be
deposited in the Certificate Account an amount equal to such Advance Deficiency
by 3:00 P.M. New York time on the related Distribution Date. If the Trustee has
not terminated the Servicer, the Servicer shall reimburse the Trustee for the
amount of any Advance (including interest at the Prime Rate on the day of such
reimbursement published in The Wall Street Journal) on such amount, made by the
Trustee pursuant to this Section 4.01(b) not later than the second day following
the related Servicer Advance Date. In the event that the Servicer does not
reimburse the Trustee in accordance with the requirements of the preceding
sentence, the Trustee shall immediately (a) terminate all of the rights and
obligations of the Servicer under this Agreement in accordance with Section 7.01
and (b) subject to the limitations set forth in Section 3.05, assume all of the
rights and obligations of the Servicer hereunder.
(c) The Servicer shall, not later than the close of business on the
Business Day immediately preceding each Servicer Advance Date, deliver to the
Trustee a report (in form and substance reasonably satisfactory to the Trustee)
that indicates (i) the Mortgage Loans with respect to which the Servicer has
determined that the related Scheduled Payments should be advanced and (ii) the
amount of the related Scheduled Payments. The Servicer shall deliver to the
Trustee on the related Servicer Advance Date an Officer's Certificate of a
Servicing Officer indicating the amount of any proposed Advance determined by
the Servicer to be a Nonrecoverable Advance.
69
Section 4.02 Priorities of Distribution.
(a) (1) On each Distribution Date, the Trustee shall withdraw the
Available Funds for Loan Group 1 from the Distribution Account and apply such
funds to distributions on the Group 1 Senior Certificates in the following order
and priority and, in each case, to the extent of Available Funds remaining:
(i) concurrently, to each interest-bearing Class of Group 1 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount that would have been distributed in the absence of
such shortfall; provided that prior to the Accrual Termination Date, the
Accrual Amount shall be distributed as provided in Section 4.02(a)(1)(ii);
(ii) [reserved];
(iii) concurrently, to the Classes of Group 1 Senior Certificates as
follows:
(A) to the Class 1-PO Certificates the PO Formula Principal
Amount until the Class Certificate Balance thereof is
reduced to zero; and
(B) on each Distribution Date, the Non-PO Formula Principal
Amount for Loan Group 1 up to the amount of the related
Senior Principal Distribution Amount for such
Distribution Date will be distributed in the following
priority:
1. to the Class A-R Certificates, until its Class
Certificate Balance is reduced to zero;
2. concurrently, to the Class 1-A-4 and Class
1-A-6 Certificates, pro rata, the Group 1 Priority
Amount, until their respective Class Certificate
Balances are reduced to zero;
3. the lesser of (x) 99.99% of the related Senior
Principal Distribution Amount available for distribution
pursuant to this clause 3. and (y) $810,000 for each
Distribution Date, to the Class 1-A-3 Certificates until
its Class Certificate Balance is reduced to zero;
4. concurrently, to the Class 1-A-1, Class 1-A-2
and Class 1-A-7 Certificates, pro rata, until their
respective Class Certificate Balances are reduced to
zero;
5. sequentially, to the Class 1-A-3 and Class
1-A-5 Certificates, in that order, until their
respective Class Certificate Balances are reduced to
zero; and
6. concurrently, to the Class 1-A-4 and Class
1-A-6 Certificates, pro rata, without regard to the
Group 1 Priority Amount, until their respective Class
Certificate Balances are reduced to zero; and
70
(iv) to the Class 1-PO Certificates, any Class 1-PO Deferred Amount,
up to an amount not to exceed the amount calculated pursuant to the
definition of Subordinated Principal Distribution Amount for Loan Group 1
actually received or advanced for such Distribution Date (with such amount
to be allocated first from amounts calculated pursuant to (i) and (ii) and
then (iii) of the definition of Subordinated Principal Distribution Amount
for Loan Group 1;
(2) On each Distribution Date, the Trustee shall withdraw the Available
Funds for Loan Group 2 from the Distribution Account and apply such funds to
distributions on the Group 2 Senior Certificates in the following order and
priority and, in each case, to the extent of related Available Funds remaining:
(i) concurrently, to each interest-bearing Class of Group 2 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount that would have been distributed in the absence of
such shortfall; provided that prior to the Accrual Termination Date, the
Accrual Amount shall be distributed as provided in Section 4.02(a)(2)(ii);
(ii) [reserved];
(iii) concurrently, to the Classes of Group 2 Senior Certificates as
follows:
(A) [reserved]; and
(B) on each Distribution Date, the Principal Amount for Loan
Group 2 up to the amount of the related Senior Principal
Distribution Amount for such Distribution Date will be
distributed in the following priority:
1. to the Class 2-A-1 Certificates, the Group 2
Priority Amount, until its Class Certificate Balance is
reduced to zero;
2. concurrently, to the Class 2-A-2 and Class
2-A-3 Certificates, pro rata, until their respective
Class Certificate Balances are reduced to zero; and
3. to the Class 2-A-1 Certificates, without regard
to the Group 2 Priority Amount, until its Class
Certificate Balance is reduced to zero;
(3) On each Distribution Date, the Trustee shall withdraw the Available
Funds for Loan Group 3 from the Distribution Account and apply such funds to
distributions on the Group 3 Senior Certificates in the following order and
priority and, in each case, to the extent of related Available Funds remaining:
(i) concurrently, to each interest-bearing Class of Group 3 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount that would have been distributed in the absence of
such shortfall; provided that prior to the Accrual Termination Date, the
Accrual Amount shall be distributed as provided in Section 4.02(a)(3)(ii);
(ii) [reserved];
71
(iii) concurrently, to the Classes of Group 3 Senior Certificates as
follows:
(A) [reserved]; and
(B) on each Distribution Date, the Principal Amount for Loan
Group 3 up to the amount of the related Senior Principal
Distribution Amount for such Distribution Date to the
Class 3-A-1 Certificates, until its Class Certificate
Balance is reduced to zero;
(4) On each Distribution Date, after making the distributions described in
Section 4.02(a)(1), Section 4.02(a)(2) and Section 4.02(a)(3), Available Funds
remaining will be distributed to the Senior Certificates to the extent provided
in Section 4.03.
(5) On each Distribution Date, Available Funds from all Loan Groups
remaining after making the distributions described in Section 4.02(a)(1),
Section 4.02(a)(2), Section 4.02(a)(3) and Section 4.02(a)(4) will be
distributed to the Subordinated Certificates and the Class A-R Certificates,
subject to paragraph 4.02(e) below, in the following order of priority:
(A) to the Class B-1 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(C) to the Class B-2 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(E) to the Class B-3 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(G) to the Class B-4 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(I) to the Class B-5 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date;
72
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(K) to the Class B-6 Certificates, an amount allocable to interest
equal to the Class Optimal Interest Distribution Amount for
such Class for such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Certificate Balance thereof is reduced to
zero;
(6) [reserved]; and
(7) to the Class A-R Certificates, any remaining funds; provided, that
such amounts shall not include the $100 held in trust for the Class P
Certificates.
On each Distribution Date, all amounts representing Prepayment Charges
received during the related Prepayment Period will be distributed to the holders
of the Class P Certificates. On the Distribution Date immediately following the
expiration of the latest Prepayment Charge Period of the Mortgage Loans, the
$100 held in trust for the Class P Certificates will be distributed to the
holders of the Class P Certificates.
On any Distribution Date, amounts distributed in respect of Class 1-PO
Deferred Amounts will not reduce the Class Certificate Balance of the Class 1-PO
Certificates.
On any Distribution Date, to the extent the Amount Available for Senior
Principal for Loan Group 1 is insufficient to make the full distribution
required to be made pursuant to the applicable clause (a)(iii), (A) the amount
distributable on the Class 1-PO Certificates in respect of principal shall be
equal to the product of (1) the Amount Available for Senior Principal for Loan
Group 1 and (2) a fraction, the numerator of which is the related PO Formula
Principal Amount and the denominator of which is the sum of such PO Formula
Principal Amount and the Senior Principal Distribution Amount for Loan Group 1
and (B) the amount distributable on the Group 1 Senior Certificates other than
the Class 1-PO Certificates, in respect of principal shall be equal to the
product of (1) such Amount Available for Senior Principal and (2) a fraction,
the numerator of which is the Senior Principal Distribution Amount for Loan
Group 1 and the denominator of which is the sum of such Senior Principal
Distribution Amount and the related PO Formula Principal Amount.
(b) On each Distribution Date prior to and including the applicable
Accrual Termination Date with respect to each Class of Accrual Certificates, the
Accrual Amount for such Class for such Distribution Date shall not (except as
provided in the second to last sentence in this paragraph) be distributed as
interest with respect to such Class of Accrual Certificates, but shall instead
be added to the related Class Certificate Balance of such Class on the related
Distribution Date. With respect to any Distribution Date prior to and including
the applicable Accrual Termination Date on which principal payments on any Class
of Accrual Certificates are distributed pursuant to Section 4.02(a)(1)(iii),
Section 4.02(a)(2)(iii) or Section 4.02(a)(4)(iii), the related Accrual Amount
shall be deemed to have been added on such Distribution Date to the related
Class Certificate Balance (and included in the amount distributable on the
related Class or Classes or Accretion Directed Certificates pursuant to Section
4.02(a)(1)(iii), Section 4.02(a)(2)(iii) or Section 4.02(a)(3)(iii) for such
Distribution Date) and the related distribution thereon shall be deemed to have
been applied concurrently towards the reduction of all or a portion of the
amount so added and, to the extent of any excess, towards the reduction of the
73
Class Certificate Balance of such Class of Accrual Certificates immediately
prior to such Distribution Date. Notwithstanding any such distribution, each
such Class shall continue to be a Class of Accrual Certificates on each
subsequent Distribution Date until the applicable Accrual Termination Date.
(c) On each Distribution Date on or after the Senior Credit Support
Depletion Date, notwithstanding the allocation and priority set forth in Section
4.02(a)(1)(iii)(B), the Non-PO Formula Principal Amount related to Loan Group 1
up to the amount of the related Senior Principal Distribution Amount for such
Distribution Date will be distributed concurrently, as principal, of the related
Classes of Senior Certificates (other than the related Notional Amount
Certificates and the Class 1-PO Certificates), pro rata, on the basis of their
respective Class Certificate Balances, until the Class Certificate Balances
thereof are reduced to zero. On each Distribution Date on or after the Senior
Credit Support Depletion Date, notwithstanding the allocation and priority set
forth in Section 4.02(a)(2)(iii)(B), the Principal Amount related to Loan Group
2 up to the amount of the related Senior Principal Distribution Amount for such
Distribution Date will be distributed concurrently, as principal, of the related
Classes of Senior Certificates, pro rata, on the basis of their respective Class
Certificate Balances, until the Class Certificate Balances thereof are reduced
to zero.
(d) On each Distribution Date, the amount referred to in clause (i) of the
definition of Class Optimal Interest Distribution Amount for each Class and
Component of Certificates for such Distribution Date shall be reduced by (i) the
related Class's or Component's pro rata share of Net Prepayment Interest
Shortfalls based (x) with respect to a Class or Component of Senior
Certificates, on the related Class Optimal Interest Distribution Amount and (y)
with respect to a Class of Subordinated Certificates on or prior to the second
Senior Termination Date on the Assumed Interest Amount and after such Senior
Termination Date, the related Class's Class Optimal Interest Distribution Amount
for such Distribution Date, without taking into account such Net Prepayment
Interest Shortfalls and (ii) the related Class's Allocable Share of (A) after
the Special Hazard Coverage Termination Date, with respect to each Mortgage Loan
in the related Loan Group (or, after the Senior Credit Support Depletion Date,
any Mortgage Loan) that became a Special Hazard Mortgage Loan during the
calendar month preceding the month of such Distribution Date, the excess of one
month's interest at the Adjusted Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan as of the Due Date in such month over the amount
of Liquidation Proceeds applied as interest on such Mortgage Loan with respect
to such month, (B) after the Bankruptcy Coverage Termination Date, with respect
to each Mortgage Loan in the related Loan Group (or, after the Senior Credit
Support Depletion Date, any Mortgage Loan) that became subject to a Bankruptcy
Loss during the calendar month preceding the month of such Distribution Date,
the interest portion of the related Debt Service Reduction or Deficient
Valuation, (C) each Relief Act Reduction for the Mortgage Loans in the related
Loan Group (or, after the Senior Credit Support Depletion Date, any Mortgage
Loan) incurred during the calendar month preceding the month of such
Distribution Date and (D) after the Fraud Loss Coverage Termination Date, with
respect to each Mortgage Loan in the related Loan Group (or, after the Senior
Credit Support Depletion Date, any Mortgage Loan) that became a Fraud Loan
during the calendar month preceding the month of such Distribution Date, the
excess of one month's interest at the related Adjusted Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due Date in such month
over the amount of Liquidation Proceeds applied as interest on such Mortgage
Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in Section
4.02(a), if, with respect to any Class of Subordinated Certificates, on any
Distribution Date the sum of the related Class Subordination Percentages of such
Class and of all Classes of Subordinated Certificates that have a higher
numerical Class designation than such Class (the "Applicable Credit Support
Percentage") is less than the Original Applicable Credit Support Percentage for
such Class, no distribution of Principal Prepayments on the Mortgage Loans will
be made to any such Classes (the "Restricted Classes") and the amount of such
Principal Prepayments otherwise distributable to the Restricted Classes shall be
74
distributed to the Classes of Subordinated Certificates having lower numerical
Class designations than such Class, pro rata, based on their respective Class
Certificate Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order set forth in Section 4.02(a)(5).
Notwithstanding the foregoing, the Class of Subordinated Certificates then
outstanding with the lowest numerical class designation shall not be a
Restricted Class.
(f) If the amount of a Realized Loss on a Mortgage Loan in a Loan Group
has been reduced by application of Subsequent Recoveries with respect to such
Mortgage Loan, the amount of such Subsequent Recoveries will be applied
sequentially, in the order of payment priority, to increase the Class
Certificate Balance of each related Class of Certificates to which Realized
Losses have been allocated, but in each case by not more than the amount of
Realized Losses previously allocated to that Class of Certificates pursuant to
Section 4.05. Holders of such Certificates will not be entitled to any payment
in respect of the Class Optimal Interest Distribution Amount on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Certificate Balance of each Certificate of such Class in accordance with its
respective Percentage Interest.
Section 4.03 Cross-Collateralization; Adjustments to Available Funds.
(a) On each Distribution Date prior to the earlier of the Senior Credit
Support Depletion Date and the second Senior Termination Date, but after a
Senior Termination Date, the Trustee shall distribute the principal portion of
Available Funds on the Mortgage Loans in the Loan Group relating to the Senior
Certificate Group that will have been paid in full, to the Holders of the Senior
Certificates of the other Senior Certificate Groups, pro rata, based on their
Class Certificate Balances, provided, however, that the Trustee shall not make
such distribution on such Distribution Date if (a) the Aggregate Subordinated
Percentage for such Distribution Date is greater than or equal to 200% of the
Aggregate Subordinated Percentage as of the Closing Date and (b) the average
Stated Principal Balance of the Mortgage Loans delinquent 60 days or more over
the last six months, as a percentage of the aggregate Class Certificate Balance
of the Subordinated Certificates, is less than 50%.
(b) If on any Distribution Date the aggregate Class Certificate Balance of
the Senior Certificates in a Senior Certificate Group is greater than the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group (the "Undercollateralized Group"), then the Trustee shall reduce the
Available Funds of the other Loan Group(s) to the extent that it is not
undercollateralized (the "Overcollateralized Group"), as follows:
(i) to add to the Available Funds of the Undercollateralized Group
an amount equal to the lesser of (a) one month's interest on the Transfer
Payment Received of the Undercollateralized Group at the weighted average
Pass-Through Rate of the Senior Certificates related to the
Undercollateralized Group and (b) Available Funds of the
Overcollateralized Group remaining after making distributions to the
Certificates of the Overcollateralized Group on such Distribution Date
pursuant to Section 4.02; and
(ii) to the Senior Certificates of the Undercollateralized Group, to
the extent of the principal portion of Available Funds of the
Overcollateralized Group remaining after making distributions to the
Senior Certificates of the Overcollateralized Group on such Distribution
Date pursuant to Section 4.02, until the Class Certificate Balance of the
Senior Certificates of such Undercollateralized Group equals the aggregate
Stated Principal Balance (or the aggregate Non-PO Percentage thereof in
the case of Loan Group 1 only) of the Mortgage Loans in the related Loan
Group.
75
The principal portion of transfer payment received by the
Undercollateralized Group is referred to as a "Transfer Payment Received." The
principal portion of transfer payment made by the Overcollateralized Group is
referred to as a "Transfer Payment Made."
If more than one Overcollateralized Group exists on any Distribution
Date, reductions in the Available Funds of such Overcollateralized Groups to
make payments required to be made pursuant to this Section 4.03 on such
Distribution Date shall be made pro rata, based on the amount of remaining
Available Funds for each such Overcollateralized Group. If more than one
Undercollateralized Group exists on any Distribution Date, the payments required
to be made pursuant to this Section 4.03 on such Distribution Date shall be made
pro rata, based on the amount of payments to be made to the Undercollateralized
Groups.
Section 4.04 [Reserved].
Section 4.05 Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Trustee shall determine
the total amount of Realized Losses, including Excess Losses, with respect to
each related Distribution Date.
Realized Losses with respect to a Loan Group and any Distribution Date
shall be allocated as follows:
(i) the applicable PO Percentage of any Realized Loss on the Group 1
Mortgage Loans, including any Excess Loss, shall be allocated to the Class
1-PO Certificates until its Certificate Balance is reduced to zero; and
(ii) (A) (x) the applicable Non-PO Percentage of any Realized Loss
(other than any Excess Loss) on the Mortgage Loans in Loan Group 1 and (y)
any Realized Loss (other than any Excess Loss) on the Mortgage Loans in
Loan Group 2 or Loan Group 3, shall be allocated first to the Subordinated
Certificates in reverse order of their respective numerical Class
designations (beginning with the Class of Subordinated Certificates then
outstanding with the highest numerical Class designation) until the
respective Class Certificate Balance of each such Class is reduced to
zero, and second to the Classes of Senior Certificates in the related
Senior Certificate Group (other than any Notional Amount Certificates, if
applicable, and the Class 1-PO Certificates), pro rata on the basis of
their respective Class Certificate Balances, in each case immediately
prior to the related Distribution Date, until the respective Class
Certificate Balance of each such Class is reduced to zero; except that the
applicable Non-PO Percentage of any Realized Losses on the Group 1
Mortgage Loans that would otherwise be allocated to the Class 1-A-2
Certificates will instead be allocated to the Class 1-A-6 Certificates
until its Class Certificate Balance is reduced to zero;
(B) (x) the applicable Non-PO Percentage of any Excess Losses on the
Mortgage Loans in Loan Group 1 and (y) any Excess Losses on the Mortgage
Loans in Loan Group 2 or Loan Group 3, shall be allocated among the
Classes of Senior Certificates of the related Senior Certificate Group
(other than the Class 1-PO Certificates and the Notional Amount
Certificates) and the Subordinated Certificates as follows: (i) in the
case of the Senior Certificates, the Senior Percentage of such Excess
Losses shall be allocated among the Classes of Senior Certificates in the
related Senior Certificate Group, pro rata, on the basis of their
respective Class Certificate Balances immediately prior to the related
Distribution Date and (ii) in the case of the Subordinated Certificates,
the Subordinated Percentage of such Excess Loss shall be allocated among
the Classes of Subordinated Certificates, pro rata, based on each Class'
share of the
76
Assumed Balance of the related Loan Group immediately prior to the related
Distribution Date; provided, however, on any Distribution Date after the
second Senior Termination Date, such Excess Losses on the Mortgage Loans
in the related Loan Group shall be allocated to the Senior Certificates
and the Subordinated Certificates on the basis of their respective Class
Certificate Balances immediately prior to such Distribution Date; provided
further, however, on any Distribution Date on and after the Senior Credit
Support Depletion Date, (x) in the case of Loan Group 1, the Non-PO
Percentage of any Excess Loss on the Group 1 Mortgage Loans and (y) in the
case of Loan Group 2 and Loan Group 3, any Excess Loss on the Mortgage
Loans in the related Loan Group, shall be allocated, pro rata, among the
Classes of Senior Certificates (other than the Class 1-PO Certificates and
the Notional Amount Certificates) based on their respective Class
Certificate Balances immediately prior to the related Distribution Date.
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class designation shall
be reduced on each Distribution Date by the sum of (i) the amount of any
payments on the Class 1-PO Certificates in respect of Class 1-PO Deferred
Amounts and (ii) the amount, if any, by which the aggregate Class Certificate
Balance of all outstanding Classes of Certificates (after giving effect to the
distribution of principal and the allocation of Realized Losses and Class 1-PO
Deferred Amounts on such Distribution Date) exceeds the aggregate Stated
Principal Balance of the Mortgage Loans for the following Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Certificate Balance of a Class of Certificates pursuant
to Section 4.05(b) shall be allocated among the Certificates of such Class in
proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or any reduction in
the Certificate Balance of a Certificate pursuant to Section 4.05(b) shall be
accomplished by reducing the Certificate Balance thereof immediately following
the distributions made on the related Distribution Date in accordance with the
definition of Certificate Balance.
Section 4.06 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare and
make available on its website at ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ to each
Certificateholder, the Servicer and the Depositor a statement for the related
distribution of:
(i) the applicable Record Dates, Interest Accrual Periods and
Determination Dates for calculating distributions for the Distribution
Date;
(ii) the amount of funds received from the Servicer for the
Distribution Date separately identifying amounts received in respect of
the Mortgage Loans and the amount of Advances included in the distribution
on the Distribution Date;
(iii) the Servicing Fee and the amounts of any additional servicing
compensation received by the Servicer attributable to penalties, fees,
Excess Proceeds or other similar charges or fees and items with respect to
the Distribution Date, and, with respect to Lender PMI Loans, the interest
premium charged the related borrower for primary mortgage guaranty
insurance;
(iv) the Trustee Fee for the Distribution Date;
(v) the aggregate amount of expenses paid from amounts on deposit in
the Distribution Account;
77
(vi) the aggregate amount on deposit in the Distribution Account and
Supplemental Interest Reserve Fund, as of the beginning and end of the
related Due Period;
(vii) the amount of the distribution allocable to principal,
separately identifying the aggregate amount of any Principal Prepayments
and Liquidation Proceeds included therein;
(viii) the amount of the distribution allocable to interest, any
Class Unpaid Interest Amounts included in the distribution and any
remaining Class Unpaid Interest Amounts after giving effect to the
distribution;
(ix) if the distribution to the Holders of any Class of Certificates
is less than the full amount that would be distributable to them if
sufficient funds were available, the amount of the shortfall and the
allocation of the shortfall between principal and interest;
(x) the aggregate amount of Realized Losses incurred and Subsequent
Recoveries, if any, received during the preceding calendar month and
aggregate Realized Losses through the Distribution Date;
(xi) the Class Certificate Balance (including Component Balances) or
Notional Amount of each Class of Certificates before and after giving
effect to the distribution of principal on the Distribution Date;
(xii) the Pass-Through Rate for each Class of Certificates with
respect to the Distribution Date;
(xiii) the LIBOR rate applicable for that Distribution Date;
(xiv) the number of Mortgage Loans and the aggregate Stated
Principal Balance of the Mortgage Loans and the Pool Stated Principal
Balance as the first day of the related Due Period and the last day of the
related Due Period;
(xv) as of the last day of the related Due Period:
(A) the weighted average mortgage rate of the Mortgage
Loans, and
(B) the weighted average remaining term to maturity of the
Mortgage Loans;
(xvi) the number and aggregate outstanding Stated Principal Balance
of the Mortgage Loans as of the end of the preceding calendar month:
(A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days and
(B) in foreclosure and delinquent (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days,
in each case as of the close of business on the last day of
the calendar month preceding the Distribution Date;
(xvii) for each of the preceding 12 calendar months, or all calendar
months since the Cut-off Date, whichever is less, the aggregate dollar
amount of the Scheduled Payments (A) due
78
on all Outstanding Mortgage Loans on the Due Date in each such month and
(B) delinquent sixty (60) days or more on the Due Date in each such month;
(xviii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of the Mortgage Loan as of the close of business on the
Determination Date preceding the Distribution Date;
(xix) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding the Distribution Date;
(xx) the aggregate amount of Principal Prepayments received during
the related Prepayment Period and the number of Mortgage Loans subject to
such Principal Prepayments;
(xxi) the amount of Advances included in the distribution on the
Distribution Date and the aggregate amount of Advances outstanding as of
the close of business on the Distribution Date;
(xxii) the aggregate amount of Advances reimbursed during the
related Due Period, the general source of funds for such reimbursements
and the aggregate amount of Advances outstanding as of the close of
business on the Distribution Date;
(xxiii) the aggregate amount of Servicing Advances reimbursed during
the related Due Period, the general source of funds for such
reimbursements and the aggregate amount of Servicing Advances outstanding
as of the close of business on the Distribution Date;
(xxiv) the aggregate number and outstanding Stated Principal Balance
of Mortgage Loans repurchased during the related Due Period due to
material breaches of representations and warranties regarding such
Mortgage Loans;
(xxv) each Senior Prepayment Percentage and Subordinated Prepayment
Percentage for the Distribution Date;
(xxvi) each Senior Percentage and Subordinated Percentage for the
Distribution Date;
(xxvii) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each case as
of the related Determination Date;
(xxviii) with respect to the second Distribution Date, the number
and aggregate balance of any Delayed Delivery Mortgage Loans not delivered
within the time periods specified in the definition of Delayed Delivery
Mortgage Loans;
(xxix) Prepayment Charges collected, waived, and paid by the
Servicer;
(xxx) the aggregate Stated Principal Balance of the Mortgage Loans
in each Loan Group and in the aggregate that became Liquidated Mortgage
Loans in the prior month and since the Cut-off Date (in each case
immediately prior to the Stated Principal Balance being reduced to zero);
(xxxi) the amount of any payments made by the Cap Counterparty to
the Supplemental Interest Trust under the Corridor Contract;
79
(xxxii) the Stated Principal Balance of any Mortgage Loan that has
been repurchased by the Servicer in accordance with Section 2.02, 2.03 or
3.12; and
(xxxiii) the Stated Principal Balance of any Substitute Mortgage
Loan provided by the Seller and the Stated Principal Balance of any
Mortgage Loan that has been replaced by a Substitute Mortgage Loan in
accordance with Section 2.03.
The Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicer.
By each Determination Date the Servicer shall provide to the Trustee in
electronic form the information needed to determine the distributions to be made
pursuant to Section 4.02 and any other information on which the Servicer and the
Trustee mutually agree.
(b) On or before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the third Business Day prior to
the related Distribution Date), the Servicer shall deliver to the Trustee (which
delivery may be by electronic data transmission) a report in substantially the
form set forth as Schedule V.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(v) and (a)(vi) of this Section 4.06
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
Section 4.07 Distributions from the Supplemental Interest Reserve Fund.
(a) On each Distribution Date on or prior to the earlier of (i) the
termination of the Corridor Contract and (ii) the date on which the Class
Certificate Balance of the Class 1-A-2 Certificates is reduced to zero, amounts
on deposit in the Supplemental Interest Reserve Fund will be withdrawn therefrom
and distributed to the Class 1-A-2 Certificates to the extent needed to pay the
Yield Supplement Amount for such Distribution Date and any Yield Supplement
Amount remaining unpaid from prior Distribution Dates. Any remaining amounts
will remain in the Supplemental Interest Reserve Fund for future distributions
to the Class 1-A-2 Certificates.
(b) On the Distribution Date immediately following the earlier of (i) the
Corridor Contract Termination Date and (ii) the date on which the Class
Certificate Balance of the Class 1-A-2 Certificates has been reduced to zero,
all amounts remaining in the Supplemental Interest Reserve Fund will be
distributed to Credit Suisse Securities LLC (USA).
Section 4.08 Determination of Pass-Through Rates for LIBOR Certificates.
On each LIBOR Determination Date so long as the LIBOR Certificates are
outstanding, the Trustee will determine LIBOR on the basis of the British
Bankers' Association ("BBA") "Interest Settlement Rate" for one-month deposits
in U.S. dollars as found on Moneyline Telerate Page 3750 as of 11:00 a.m. London
time on each LIBOR Determination Date.
(a) If LIBOR cannot be determined as provided in the first paragraph of
this Section 4.08, the Trustee shall either (i) request each Reference Bank to
inform the Trustee of the quotation offered by its
80
principal London office for making one-month United States dollar deposits in
leading banks in the London interbank market, as of 11:00 a.m. (London time) on
such LIBOR Determination Date or (ii) in lieu of making any such request, rely
on such Reference Bank quotations that appear at such time on the Reuters Screen
LIBO Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition), to the
extent available.
(b) LIBOR for the next Interest Accrual Period for a Class of LIBOR
Certificates will be established by the Trustee on each LIBOR Determination Date
as follows:
(i) If on any LIBOR Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual
Period for a Class of LIBOR Certificates shall be the arithmetic mean of
such offered quotations (rounding such arithmetic mean upwards if
necessary to the nearest whole multiple of 1/32%).
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period for a Class of LIBOR Certificates shall be
whichever is the higher of (i) LIBOR as determined on the previous LIBOR
Determination Date or (ii) the Reserve Interest Rate. The "Reserve
Interest Rate" shall be the rate per annum which the Trustee determines to
be either (i) the arithmetic mean (rounded upwards if necessary to the
nearest whole multiple of 1/32%) of the one-month United States dollar
lending rates that New York City banks selected by the Trustee are
quoting, on the relevant LIBOR Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations
are, in the opinion of the Trustee, being so made, or (ii) in the event
that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks
selected by the Trustee are quoting on such LIBOR Determination Date to
leading European banks.
(iii) If on any LIBOR Determination Date the Trustee is required but
is unable to determine the Reserve Interest Rate in the manner provided in
paragraph (b) above, LIBOR shall be LIBOR as determined on the preceding
LIBOR Determination Date, or, in the case of the first LIBOR Determination
Date, the Initial LIBOR Rate.
(c) Until all of the LIBOR Certificates are paid in full, the Trustee will
at all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Servicer initially
shall designate the Reference Banks. Each "Reference Bank" shall be a leading
bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Servicer should terminate its appointment as Reference Bank, the
Trustee shall promptly appoint or cause to be appointed another Reference Bank.
The Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(d) The Pass-Through Rate for each Class of LIBOR Certificates for each
related Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement.
81
(e) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Trustee may conclusively rely and shall be protected in relying upon the offered
quotations (whether written, oral or on the Dow ▇▇▇▇▇ Markets) from the BBA
designated banks, the Reference Banks or the New York City banks as to LIBOR,
the Interest Settlement Rate or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from, the BBA designated banks, the Reference Banks or the New York City banks
or to determine such arithmetic mean, all as provided for in this Section 4.08.
(f) The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.
(g) The Pass-Through Rate for the Interest Accrual Period for the first
Distribution Date for each Class of LIBOR Certificates is set forth in the
applicable footnote under the heading "Master REMIC" in the Preliminary
Statement.
82
ARTICLE FIVE
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples of $1,000 in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must exceed
the applicable minimum denomination) and aggregate denominations per Class set
forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days before the related Record Date
or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Trustee shall execute the Certificates by the manual or facsimile
signature of an authorized officer. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time such signatures were affixed,
authorized to sign on behalf of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to be so
authorized before the countersignature and delivery of any such Certificates or
did not hold such offices at the date of such Certificate. No Certificate shall
be entitled to any benefit under this Agreement, or be valid for any purpose,
unless countersigned by the Trustee by manual signature, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their countersignature. On the
Closing Date, the Trustee shall countersign the Certificates to be issued at the
direction of the Depositor, or any affiliate thereof.
The Depositor shall provide the Trustee, on a continuous basis with an
adequate inventory of Certificates to facilitate transfers.
Section 5.02 Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, in accordance with Section 5.06, a
Certificate Register for the Trust Fund in which, subject to subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. A written instrument of transfer in form satisfactory to
the Trustee duly executed by the holder of a Certificate or his attorney duly
authorized in writing shall accompany every Certificate presented or surrendered
for registration of transfer or exchange.
83
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. If a transfer is to be made in reliance on an exemption from the
Securities Act and such state securities laws, to assure compliance with the
Securities Act and such state securities laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit J (the "Transferor Certificate") and
deliver to the Trustee either (i) a letter in substantially the form of either
Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter") or
(ii) at the expense of the transferor, an Opinion of Counsel that the transfer
may be made without registration under the Securities Act. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by that Holder, information regarding the related Certificates and
the Mortgage Loans and any other information necessary to satisfy the condition
to eligibility in Rule 144A(d)(4) for transfer of the Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans, and other matters regarding the
Trust Fund as the Depositor reasonably requests to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect a
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Seller, and the Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (if the Certificate is a Private Certificate, the requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit K or Exhibit L, and if the
Certificate is a Residual Certificate, the requirement is satisfied only by the
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit I), to the effect that (x) the transferee is not an
employee benefit plan or arrangement subject to section 406 of ERISA or a plan
subject to section 4975 of the Code, or a person acting on behalf of any such
plan or arrangement or using the assets of any such plan or arrangement to
effect the transfer, or (y) if the ERISA-Restricted Certificate has been the
subject of an ERISA-Qualifying Underwriting, a representation that the
transferee is an insurance company that is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificate satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, or
(ii) in the case of any ERISA-Restricted Certificate presented for registration
in the name of an employee benefit plan subject to ERISA, or a plan or
arrangement subject to section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of the Trustee, the Servicer or the Trust Fund,
addressed to the Trustee and the Servicer, to the effect that the purchase and
holding of such ERISA-Restricted Certificate will not result in a non-exempt
prohibited transaction under ERISA or section 4975 of the Code and will not
subject the Trustee or the Servicer to any
84
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Residual Certificate, if the
appropriate representation letter or Opinion of Counsel referred to in the
preceding sentence is not furnished, the representation in clause (i) above
shall be deemed to have been made to the Trustee by the transferee's (including
an initial acquirer's) acceptance of the ERISA-Restricted Certificates. If the
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to section 406 of ERISA or a plan subject to section 4975 of
the Code, or a person acting on behalf of any such plan or arrangement or using
the assets of any such plan or arrangement, without the Opinion of Counsel
described above, the attempted transfer or acquisition shall be void.
So long as the Corridor Contract is in effect, no transfer of a Class
1-A-2 Certificate (other than a transfer to an affiliate of the Depositor
(either directly or through a nominee) in connection with the initial issuance
of the Certificates) shall be made unless the Trustee shall have received a
representation letter from the transferee of such Class 1-A-2 Certificate to the
effect that (i) such transferee is not a Plan, or (ii) the purchase and holding
of a Class 1-A-2 Certificate satisfies the requirements for exemptive relief
under ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ 96-23, the service
provider exemption provided by Section 408(b)(17) of ERISA and Section
4975(d)(26) of the Code or a similar exemption. In the event that such
representation letter is not delivered, one of the foregoing representations, as
appropriate, shall be deemed to have been made by the transferee's (including an
initial acquiror's) acceptance of the Class 1-A-2 Certificate. In the event that
such representation is violated, such transfer or acquisition shall be void and
of no effect.
To the extent permitted under applicable law (including ERISA), the
Trustee shall be under no liability to any Person for any registration of
transfer of any ERISA-Restricted Certificate that is in fact not permitted by
this Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under this
Agreement so long as the transfer was registered by the Trustee in accordance
with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form of Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
85
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of this Section 5.02(c) shall be
absolutely null and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a Holder of a
Residual Certificate in violation of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of registration of Transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual Certificate that is
in fact not permitted by Section 5.02(b) and this Section 5.02(c) or for
making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under this Agreement
so long as the Transfer was registered after receipt of the related
Transfer Affidavit, Transferor Certificate and either the Rule 144A Letter
or the Investment Letter. The Trustee shall be entitled but not obligated
to recover from any Holder of a Residual Certificate that was in fact not
a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trust Fund, the Trustee, the Seller or the
Servicer, to the effect that the elimination of such restrictions will not cause
any REMIC created under this Agreement to fail to qualify as a REMIC at any time
that the Certificates are outstanding or result in the imposition of any tax on
the Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Residual Certificate hereby consents to
any amendment of this Agreement which, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions referred
to above in this Section 5.02 in connection with transfer shall be at the
expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and Indirect Participants as representatives
of the Certificate Owners of the Book-Entry Certificates for purposes of
exercising the rights of holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository
86
with respect to its Depository Participants and furnished by the Depository
Participants with respect to Indirect Participants and persons shown on the
books of such Indirect Participants as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing the Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
to locate a qualified successor or (y) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate Balance
of the Book-Entry Certificates together advise the Trustee and the Depository
through the Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Servicer
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or (b) the
Trustee receives evidence to its satisfaction of the destruction, loss, or theft
of any Certificate and the Servicer and the Trustee receive the security or
indemnity required by them to hold each of them harmless, then, in the absence
of notice to the Trustee that the Certificate has been acquired by a Protected
Purchaser, and if the requirements of Section 8-406 of the UCC are met and
subject to Section 8-405 of the UCC, the Trustee shall execute, countersign, and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or
stolen Certificate, a new Certificate of like Class, tenor, and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen, or destroyed Certificate is
found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Trustee, and any agent of the Servicer or the Trustee
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving
87
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicer, the Trustee nor any agent of the Servicer
or the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders and/or Certificate Owners (a) request
such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders and/or Certificate Owners propose to
transmit, or if the Depositor or Servicer shall request such information in
writing from the Trustee, then the Trustee shall, within ten Business Days after
the receipt of such request, provide the Depositor, the Servicer or such
Certificateholders and/or Certificate Owners at such recipients' expense the
most recent list of the Certificateholders of such Trust Fund held by the
Trustee. The Depositor and every Certificateholder and/or Certificate Owner, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable because of the disclosure of any such information as to the list of
the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency.
The Trustee will maintain at its expense an office or offices or agency or
agencies in the United States located at DB Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Transfer Unit., where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
88
ARTICLE SIX
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance with
this Agreement only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them in this Agreement.
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect their
existence and their rights and franchises as a corporation and a federal savings
bank, respectively, under the laws of the United States or under the laws of one
of the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, FNMA or FHLMC.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Servicer, the Servicer shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement Servicer.
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Servicer, and Others.
None of the Depositor, the Seller, the Servicer or any of the directors,
officers, employees or agents of the Depositor, the Seller or the Servicer shall
be under any liability to the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Seller, the Servicer or any such Person
against any breach of representations or warranties made by it herein or protect
the Depositor, the Seller, the Servicer or any such Person from any liability
which would otherwise be imposed by reasons of willful misfeasance, bad faith or
gross negligence in the performance of duties or because of reckless disregard
of obligations and duties hereunder. The Depositor, the Seller, the Servicer,
and any director, officer, employee or agent of the Depositor, the Seller or 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 Depositor, the Seller, the Servicer, and any director, officer, employee or
agent of the Depositor, the Seller or the Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates, other than any loss, liability or expense related to any
specific
89
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 because of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or because of 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 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. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor, the
Seller, and the Servicer shall be entitled to be reimbursed therefor out of the
Certificate Account.
Section 6.04 Limitation on Resignation of the Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading, qualification or withdrawal of the
rating of any of the Certificates or (b) upon determination that its duties
under this Agreement are no longer permissible under applicable law. Any such
determination under clause (b) permitting the resignation of the Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the Servicer's responsibilities, duties, liabilities
and obligations under this Agreement and the Depositor shall have received the
information described in the following sentence. As a condition to the
effectiveness of any such resignation, at least 15 calendar days prior to the
effective date of such resignation, the Servicer shall provide (x) written
notice to the Depositor of any successor pursuant to this Section and (y) in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to the resignation
of the Servicer.
90
ARTICLE SEVEN
DEFAULT
Section 7.01 Events of Default.
"Event of Default," wherever used in this Agreement, means any one of the
following events:
(a) any failure by the Servicer to deposit in the Certificate Account or
remit to the Trustee any payment required to be made by it under this Agreement,
which failure continues unremedied for five days after the date on which written
notice of the failure has been given to the Servicer by the Trustee or the
Depositor or to the Servicer and the Trustee by the Holders of Certificates of
any Class evidencing not less than 25% of the aggregate Percentage Interests of
the Class; or
(b) any failure by the Servicer to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
contained in this Agreement (except with respect to a failure related to a
Limited Exchange Act Reporting Obligation), which failure materially affects the
rights of Certificateholders and continues unremedied for a period of 60 days
after the date on which written notice of such failure shall have been given to
the Servicer by the Trustee or the Depositor, or to the Servicer and the Trustee
by the Holders of Certificates of any Class evidencing not less than 25% of the
Percentage Interests of the Class; provided that the sixty-day cure period shall
not apply to the initial delivery of the Mortgage File for Delay Delivery
Mortgage Loans nor the failure to repurchase or substitute in lieu thereof; or
(c) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a receiver, conservator or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(d) the Servicer shall consent to the appointment of a receiver,
conservator or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the Servicer
or all or substantially all of the property of the Servicer; or
(e) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of, or commence
a voluntary case under, any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(f) the Servicer shall fail (i) to make an Advance on the Servicer Advance
Date or (ii) to reimburse in full the Trustee within two days of the Servicer
Advance Date for any Advance made by the Trustee pursuant to Section 4.01(b).
If an Event of Default described in clauses (a) through (f) of this
Section 7.01 occurs, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates of any Class evidencing not less than
66 2/3% of the Percentage Interests of the Class, the Trustee shall by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. In addition, if during the period that the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Servicer shall fail to observe or perform any of the obligations that
constitute a
91
Limited Exchange Act Reporting Obligation or the obligations set forth in
Section 3.17(a) or Section 11.07(a)(i) and (ii), and such failure continues for
the lesser of 10 calendar days or such period in which the applicable Exchange
Act Report can be filed timely (without taking into account any extensions), so
long as such failure shall not have been remedied, the Trustee shall, but only
at the direction of the Depositor, terminate all of the rights and obligations
of the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. The
Depositor shall not be entitled to terminate the rights and obligations of the
Servicer if a failure of the Servicer to identify a Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
On and after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. The
Trustee shall make any Advance that the Servicer failed to make subject to
Section 3.05, whether or not the obligations of the Servicer have been
terminated pursuant to this Section. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any documents and other instruments, and to do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Servicer to pay amounts owed pursuant to Article Eight. The
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including the transfer to
the Trustee of all cash amounts which shall at the time be credited to the
Certificate Account, or thereafter be received with respect to the Mortgage
Loans. If the Servicer fails to make any Advance required under Section 4.01 of
this Agreement, thereby triggering an Event of Default described in clause (f)
of this Section 7.01, the Trustee shall make such Advance on that Distribution
Date.
Notwithstanding any termination of the activities of the Servicer under
this Agreement, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due before the
notice terminating such Servicer's rights and obligations as Servicer hereunder
and received after such notice, that portion thereof to which such Servicer
would have been entitled pursuant to Sections 3.09(a)(i) through (viii), and any
other amounts payable to such Servicer hereunder the entitlement to which arose
before the termination of its activities hereunder.
If the Servicer is terminated, the Trustee shall provide the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a successor
servicer in the event the Trustee should succeed to the duties of the Servicer
as set forth herein.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01, the Trustee shall, subject to and to the extent
provided in Section 3.05, be the successor 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 by the terms hereof and applicable law
including the obligation to make Advances pursuant to Section 4.01. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans that the Servicer would have been entitled to charge to the
Certificate Account or Distribution Account if the Servicer had continued to act
hereunder, including, if the Servicer was receiving the Servicing Fee, the
Servicing Fee. Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in
92
accordance with Section 7.01, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution the appointment of which does not adversely affect
the then current rating of the Certificates by each Rating Agency, as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
to the Servicer shall be an institution which is a FNMA and FHLMC approved
seller/servicer in good standing, which has a net worth of at least $15,000,000,
which is willing to service the Mortgage Loans and which executes and delivers
to the Depositor and the Trustee an agreement accepting such delegation and
assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer (other
than liabilities of the Servicer under Section 6.03 incurred before termination
of the Servicer under Section 7.01), with like effect as if originally named as
a party to this Agreement; provided that each Rating Agency acknowledges that
its rating of the Certificates in effect immediately before such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. Pending appointment of a successor to the Servicer hereunder, the
Trustee shall act in such capacity as provided above, subject to section 3.03
and unless prohibited by law. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that in no case shall the rate of such compensation
exceed the Servicing Fee Rate. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder because of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor Servicer, including the Trustee if the
Trustee is acting as successor Servicer, shall represent and warrant that it is
a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, or (ii) the predecessor
Servicer shall cooperate with the successor Servicer either (x) in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Trustee and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Servicer or (y) in causing MERS to designate
on the MERS(R) System the successor Servicer as the servicer of such Mortgage
Loan. The predecessor Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The successor Servicer shall
cause such assignment to be delivered to the Trustee promptly upon receipt of
the original with evidence of recording thereon or a copy certified by the
public recording office in which such assignment was recorded.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to this Agreement.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
93
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating Agency
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
94
ARTICLE EIGHT
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
The Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form
required by this Agreement. The Trustee shall not be responsible for the
accuracy or content of any such resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that, unless an Event of Default
known to the Trustee has occurred and is continuing,
(a) 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 the duties and obligations specifically set forth
in this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee, and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
is finally proven that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
direction of Holders of Certificates evidencing not less than 25% of the Voting
Rights of Certificates relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement. As long as any Voting
Rights are held by parties other than the Seller, its Affiliates, or its agents,
Voting Rights of Certificates held by the Seller, its Affiliates or its agents
as the Seller shall certify to the Trustee upon any such entity obtaining such
ownership will be excluded from participating in such voting arrangements, and
excluded from determining the 25% threshold.
Section 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) 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,
95
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by Holders of Certificates
evidencing not less than 25% of the Voting Rights allocated to each Class of
Certificates (provided, however, that no Certificates held by the Seller, the
Depositor or any Affiliate thereof shall be given effect for the purpose of
calculating any such aggregation of Voting Rights);
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own funds or
otherwise incur any financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers hereunder if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security);
(h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof;
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby;
(j) 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; and
96
(k) the Trustee shall not knowingly take any action that would cause the
Trust Fund to fail to qualify as a qualifying special purpose entity.
In order to comply with laws, rules, regulations and executive orders in
effect from time to time applicable to banking institutions, including those
relating to the funding of terrorist activities and money laundering
("Applicable Law"), 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 identifying
information and documentation as may be available for such party in order to
enable the Trustee to comply with Applicable Law.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Seller, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and countersignature of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Servicer of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Certificate Account by the
Depositor or the Servicer.
Except as provided in Section 2.01(c), the Trustee shall have no
responsibility for filing or recording 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). The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document or of MERS or the
MERS(R) System other than with respect to the Trustee's execution and
counter-signature of the Certificates.
The Trustee executes the Certificates not in its individual capacity but
solely as Trustee of the Trust Fund created by this Agreement, 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 on behalf of
the Trust Fund 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 Fund.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Trustee.
Section 8.05 Trustee's Fees and Expenses.
As compensation for its activities under this Agreement, on each
Distribution Date the Trustee may withdraw from the Distribution Account 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) resulting
from any error in any tax or information return prepared by the Servicer or
incurred in connection with any claim or legal action relating to
97
(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
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the Certificates and
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement.
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, Supplemental
Interest Trustee, Registrar, or Paying Agent under this Agreement or for any
other expenses.
Section 8.06 Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause either of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Seller, the Depositor or
the Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicer, and each Rating Agency not less than 60 days before the date specified
in such notice, when, subject to Section 8.08, such resignation is to take
effect, and acceptance by a successor trustee in accordance with Section 8.08
meeting the qualifications set forth in Section 8.06. If no successor trustee
meeting such qualifications shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
98
As a condition to the effectiveness of any such resignation, at least 15
calendar days prior to the effective date of such resignation, the Trustee shall
provide (x) written notice to the Depositor of any successor pursuant to this
Section and (y) in writing and in form and substance reasonably satisfactory to
the Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
the resignation of the Trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, (ii) the Trustee shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, (iii)(A) a tax is imposed with respect to the Trust
Fund by any state in which the Trustee or the Trust Fund is located and (B) the
imposition of such tax would be avoided by the appointment of a different
trustee, or (iv) during the period which the Depositor is required to file
Exchange Act Reports with respect to the Trust Fund, the Trustee fails to comply
with its obligations under the last sentence of Section 7.01, the preceding
paragraph, Section 8.09 or Article Eleven and such failure is not remedied
within the lesser of 10 calendar days or such period in which the applicable
Exchange Act Report can be filed timely (without taking into account any
extensions), then, in the case of clauses (i) through (iii), then the Depositor
or the Servicer, or in the case of clause (iv), the Depositor, may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which shall be delivered to the Trustee, one copy to the Servicer
and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which shall be delivered
by the successor Trustee to the Servicer, one complete set to the Trustee so
removed, one complete set to the successor so appointed and one complete set to
the Depositor, together with a written description of the basis for such
removal. As long as any Voting Rights are held by parties other than the Seller,
its Affiliates, or its agents, Voting Rights of Certificates held by the Seller,
its Affiliates or its agents as the Seller shall certify to the Trustee upon any
such entity obtaining such ownership will be excluded from participating in such
voting arrangements, and excluded from determining the 51% threshold. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to this Section 8.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee and the
Servicer an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The Depositor, the Servicer and the predecessor trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this Section
8.08 unless, at the time of its acceptance, the successor trustee is eligible
under Section 8.06 and its appointment does not
99
adversely affect the then current rating of the Certificates and has provided to
the Depositor in writing and in form and substance reasonably satisfactory to
the Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
Section 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
Section 8.06 without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the Trustee shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement Trustee.
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 Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon the
Trustee, except for the obligation of the Trustee under this Agreement to
advance funds on behalf of the Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
100
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 applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of any
act or omission of any other trustee hereunder and such appointment shall not,
and shall not be deemed to, constitute any such separate trustee or co-trustee
as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee; and
(d) The Servicer, and not the Trustee, shall be liable for the payment of
reasonable compensation, reimbursement and indemnification to any such separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article Eight. 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
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the assets with respect to which one or more REMIC
elections pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of each REMIC created under this Agreement and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) with respect to each REMIC created hereunder and
prepare and file with the Internal Revenue Service and applicable state or local
tax authorities income tax or information returns for each taxable year with
respect to each REMIC described in the Preliminary Statement, containing such
information and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and furnish to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby;
101
(b) within thirty days of the Closing Date, furnish to the Internal
Revenue Service, on Forms 8811 or as otherwise may be required by the Code, the
name, title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code;
(c) make an election that each REMIC created under this Agreement be
treated as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including the calculation of any original issue
discount using the Prepayment Assumption;
(e) provide information necessary for the computation of tax imposed on
the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Person that is not a Permitted Transferee, or a pass-through entity in which a
Person that is not a Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status as any REMIC created under this Agreement under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take any
action that would cause the termination of the REMIC status of any REMIC created
under this Agreement;
(h) pay, from the sources specified in the last paragraph of this Section
8.11, the amount of any federal or state tax, including prohibited transaction
taxes as described below, imposed on any REMIC before its termination when and
as the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings);
(i) ensure that federal, state or local income tax or information returns
shall be signed by the Trustee or such other person as may be required to sign
such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each REMIC created under this Agreement,
including the income, expenses, assets, and liabilities thereof and the fair
market value and adjusted basis of the assets determined at such intervals as
may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and
(k) as and when necessary and appropriate, represent each REMIC created
under this Agreement in any administrative or judicial proceedings relating to
an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of such REMIC, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of such REMIC, and otherwise act on behalf
of such REMIC in relation to any tax matter or controversy involving it.
102
To enable the Trustee to perform its duties under this Agreement, the
Depositor shall provide to the Trustee within ten days after the Closing Date
all information or data that the Trustee requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Thereafter, the Depositor
shall provide to the Trustee promptly upon written request therefor any
additional information or data that the Trustee may, from time to time,
reasonably request to enable the Trustee to perform its duties under this
Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide, or to cause to be provided, accurate information or data to the
Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" (as defined in section
860F(a)(2) of the Code) of any REMIC created under this Agreement, on the "net
income from foreclosure property" of any REMIC created under this Agreement as
defined in section 860G(c) of the Code, on any contribution to any REMIC created
under this Agreement 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 any 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 2.02 or 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 3.09(b).
The Trustee shall treat the Supplemental Interest Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that
is owned by the Supplemental Interest Trustee, and that is not an asset of any
REMIC created under this Agreement. The Trustee shall treat the rights of the
holders of the Class 1-A-2 Certificates to receive payments from the
Supplemental Interest Reserve Fund and the Supplemental Interest Trust as rights
in an interest rate cap contract written by the Cap Counterparty in respect of
any Yield Supplement Amounts distributed in favor of the Holders of the Class
1-A-2 Certificates. Thus, the Class 1-A-2 Certificates shall be treated as
representing ownership of not only a Master REMIC regular interest, but also
ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the Master REMIC regular interests, the Trustee
shall assume that the cap contracts entered into by the Class 1-A-2 Certificates
have a value of $156,800.
The Trustee shall account for the Supplemental Interest Trust as a grantor
trust under subpart E, Part I of subchapter J of the Code and not as an asset of
any REMIC created hereunder. The Trustee shall file or cause to be filed with
the Internal Revenue Service Form 1041 or such other form as may be applicable
and shall furnish or cause to be furnished, to the Cap Counterparty and the
Class 1-A-2 Certificateholders, the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
103
ARTICLE NINE
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer, and the Trustee created hereby shall terminate upon the
earlier of
(a) the purchase by the Servicer of all Mortgage Loans (and REO
Properties) at the 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) plus
one month's accrued interest thereon at the applicable Adjusted Mortgage
Rate less any amounts collected by the Servicer representing principal and
interest due after the related Due Date,
(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 Adjusted Net Mortgage Rate and
(iii) any costs and damages incurred by the Trust Fund in connection
with any violation by each Mortgage Loan of any predatory or abusive
lending law and
(b) the later of
(i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan and the disposition of all REO Property
and
(ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall
the trusts created hereby continue beyond the expiration of 21 years from
the death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late Ambassador of the United States to the Court of St. James's, living
on the date of this Agreement.
The right to purchase all Mortgage Loans and REO Properties pursuant to
clause (a) above shall be conditioned upon the aggregate Stated Principal
Balance of those Mortgage Loans, at the time of any such repurchase, aggregating
less than ten percent (10%) of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date. The Servicer shall effect any such
repurchase by depositing the purchase price, as calculated above, as of the
month preceding the date on which such purchase price shall be distributed to
Certificateholders into the Certificate Account.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date the Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Certificate Account, the Servicer shall direct the Trustee
promptly to send a final distribution notice to each Certificateholder. If the
Servicer elects to terminate the Trust Fund pursuant to clause (a) of Section
9.01, no later than the 15th day of the month preceding the month of the final
Distribution Date the Servicer shall notify the
104
Depositor and the Trustee of the date the Servicer intends to terminate the
Trust Fund and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
Notice of any termination of the Trust Fund specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 15th day and not
later than the last day of the month next preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to the Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Servicer will give such notice to each Rating Agency at the time
such notice is given to Certificateholders.
If this notice is given, the Servicer shall cause all funds in the
Certificate Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day before the applicable Distribution Date
in an amount equal to the final distribution in respect of the Certificates.
Upon such final deposit with respect to the Trust Fund and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
the Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case on
the final Distribution Date and in the order set forth in Section 4.02, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates, its Certificate Balance plus for each such Class accrued
interest thereon (or on their Notional Amount, if applicable) in the case of an
interest-bearing Certificate and (ii) as to the Residual Certificates, any
amount remaining on deposit in the Distribution Account (other than the amounts
retained to meet claims) after application pursuant to clause (i) above.
Notwithstanding the reduction of the Certificate Balance of any Class of
Certificates to zero, such Class will be outstanding hereunder solely for the
purpose of receiving distributions and for no other purpose until the
termination of the respective obligations and responsibilities of the Depositor,
the Servicer and the Trustee hereunder in accordance with Article Nine. The
foregoing provisions are intended to distribute to each Class of Regular
Certificates any accrued and unpaid interest and principal to which they are
entitled based on the Pass-Through Rates and actual Class Certificate Balances
or Notional Amounts set forth in the Preliminary Statement upon liquidation of
the Trust Fund.
If any affected Certificateholder does not surrender its Certificates for
cancellation within six months after the date specified in the above mentioned
written notice, the Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice all the applicable Certificates shall not have been surrendered
for cancellation, the Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain a part of the Trust Fund. If
within one year after the second notice all Certificates shall not have been
surrendered for cancellation, then the Class A-R Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which remain
subject hereto.
The Supplemental Interest Trust shall terminate on the earlier of (i) the
Corridor Contract Termination Date and (ii) the date on which the Class
Certificate Balance of the Class 1-A-2 Certificates is reduced to zero.
105
Section 9.03 Additional Termination Requirements.
(a) If the Servicer exercises its purchase option with respect to the
Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Servicer, to the
effect that the failure to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" on
any REMIC created hereunder as defined in section 860F of the Code, or (ii)
cause any REMIC created under this Agreement to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(b) The Trustee shall sell all of the assets of the Trust Fund to the
Servicer, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each
REMIC created under this Agreement.
(c) The Trustee shall attach a statement to the final federal income tax
return for each REMIC created under this Agreement stating that pursuant to
Treasury Regulation ss. 1.860F-1, the first day of the 90-day liquidation period
for such REMIC was the date on which the Trustee sold the assets of the Trust
Fund to the Servicer.
106
ARTICLE TEN
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee without the consent of any of the Certificateholders
(i) to cure any ambiguity or mistake, (ii) to correct any defective provision in
this Agreement or to supplement any provision in this Agreement which may be
inconsistent with any other provision in this Agreement, (iii) to conform this
Agreement to the Prospectus Supplement, (iv) to add to the duties of the
Depositor, the Seller or the Servicer, (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement to comply
with any rules or regulations promulgated by the Securities and Exchange
Commission from time to time, (vi) to add any other provisions with respect to
matters or questions arising under this Agreement, or (vii) to modify, alter,
amend, add to, or rescind any of the terms or provisions contained in this
Agreement.
No action pursuant to clauses (v), (vi) or (vii) above may, as evidenced
by an Opinion of Counsel (which Opinion of Counsel shall not be an expense of
the Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder. The amendment shall not be deemed to
adversely affect in any material respect the interests of the Certificateholders
if the Person requesting the amendment obtains a letter from each Rating Agency
stating that the amendment would not result in the downgrading, qualification or
withdrawal of the respective ratings then assigned to the Certificates. Any such
letter in and of itself will not represent a determination as to the materiality
of any amendment and will represent a determination only as to the credit issues
affecting any rating. Each party to this Agreement agrees that it will cooperate
with each other party in amending this Agreement pursuant to clause (v) above.
The Trustee, the Depositor, and the Servicer also may at any time and from
time to time amend this Agreement without the consent of the Certificateholders
to modify, eliminate or add to any of its provisions to the extent necessary or
helpful to (i) maintain the qualification of any REMIC created under this
Agreement as a REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any REMIC created under this Agreement pursuant to the
Code that would be a claim at any time before the final redemption of the
Certificates, or (iii) comply with any other requirements of the Code, if the
Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that the action is
necessary or helpful for one of the foregoing purposes.
This Agreement may also be amended from time to time by the Depositor, the
Servicer, and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of each Class of
Certificates adversely affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates. As long as any Voting Rights are held by parties other than the
Seller, its Affiliates, or its agents, as the Seller shall certify to the
Trustee upon any such entity obtaining such ownership, Voting Rights of
Certificates held by the Seller, its Affiliates or its agents will be excluded
from participating in such voting arrangements, and excluded from determining
the 51% threshold. No amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate,
107
(ii) amend, modify, add to, rescind, or alter in any respect Section
10.13, 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 Seller, the Depositor or any Affiliate thereof shall be given effect for
the purpose of calculating any such aggregation of Percentage Interests), or
(iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless (i) it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not cause
the imposition of any tax on any REMIC created under this Agreement or the
Certificateholders or cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding and (ii) because the
Trust Fund is required to be a Qualifying Special Purpose Entity (as that term
is defined in Statement of Financial Accounting Standards No. 140 ("SFAS 140"),
in order for the Seller to continue to account for the transfer of the Mortgage
Loans under this Agreement as a sale under SFAS 140, prior to the parties hereto
entering into such an amendment, the Trustee shall receive an Officer's
Certificate, which shall not be an expense of the Trustee or the Trust Fund, to
the effect that such amendment would not "significantly change" (within the
meaning of SFAS 140) the permitted activities of the Trust Fund so as to cause
the Trust Fund to fail to qualify as a Qualifying Special Purpose Entity.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 10.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
preceding clause (A) is not required to be reached pursuant to this Section
10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at its expense, but only upon receipt of an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
108
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance (i) of
the Mortgage Loans by the Seller to the Depositor and (ii) of the Trust Fund by
the Depositor to the Trustee each be, and be construed as, an absolute sale
thereof. It is, further, not the intention of the parties that such conveyances
be deemed a pledge thereof. However, if, notwithstanding the intent of the
parties, the assets are held to be the property of the Seller or Depositor, as
the case may be, or if for any other reason this Agreement is held or deemed to
create a security interest in either such assets, then (i) this Agreement shall
be deemed to be a security agreement within the meaning of the UCC and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant (i) by the Seller to the Depositor or (ii) by the Depositor to the
Trustee, for the benefit of the Certificateholders, of a security interest in
all of the assets transferred, whether now owned or hereafter acquired.
The Seller and the Depositor for the benefit of the Certificateholders
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and the
appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.03; and
5. The final distribution to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
109
1. Each report to Certificateholders described in Section 4.06;
2. Each annual statement as to compliance described in Section 3.17;
3. Each annual independent public accountants' servicing report described
in Section 11.07; and
4. Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02,
2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, IndyMac MBS, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secondary Marketing, Transaction Management; (b) in the case of the
Servicer, IndyMac Bank, F.S.B., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Secondary Marketing, Transaction Management or such other
address as may be hereafter furnished to the Depositor and the Trustee by the
Servicer in writing; (c) in the case of the Trustee to the Corporate Trust
Office, Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration IN0611, Series
2006-K, or such other address as the Trustee may hereafter furnish to the
Depositor or Servicer and (d) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained in this Agreement,
except as provided in Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created by this Agreement, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties to this Agreement or any of them.
No Certificateholder shall have any right to vote (except as provided in
this Agreement) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties to this Agreement, nor
shall anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party because of any action taken by the parties to
this Agreement pursuant to any provision of this Agreement.
110
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as provided in this Agreement, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
this Section 10.08, each Certificateholder and the Trustee shall be entitled to
any relief that can be given either at law or in equity. As long as any Voting
Rights are held by parties other than the Seller, its Affiliates, or its agents,
Voting Rights of Certificates held by the Seller, its Affiliates or its agents
as the Seller shall certify to the Trustee upon any such entity obtaining such
ownership will be excluded from participating in such voting arrangements, and
excluded from determining the 25% threshold.
Section 10.09 Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense incident to the exercise
by the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall be
borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 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.
111
Section 10.12 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 after the Certificates
have been paid in full.
Section 10.13 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.
112
ARTICLE ELEVEN
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations.
The Servicer, the Trustee and the Seller shall reasonably cooperate with
the Depositor in connection with the satisfaction of the Depositor's reporting
requirements under the Exchange Act with respect to the Trust Fund. In addition
to the information specified below, if so requested by the Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act, the
Servicer, the Trustee and the Seller shall provide the Depositor with (a) such
information which is available to such Person without unreasonable effort or
expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor is
not a party) to any agreement or amendment required to be filed, copies of such
agreement or amendment in ▇▇▇▇▇-compatible form.
Section 11.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, unless no reporting obligation
under the Exchange Act exists at such time with respect to the Trust Fund, the
Trustee shall prepare for filing and file within 15 days after each Distribution
Date (subject to permitted extensions under the Exchange Act) with the
Commission with respect to the Trust Fund, a Form 10-D with copies of the
Monthly Report and, to the extent delivered to the Trustee, no later than five
calendar days following the Distribution Date, such other information identified
by the Depositor or the Servicer, in writing, to be filed with the Commission
(such other information, the "Additional Designated Information"). If the
Depositor or Servicer directs that any Additional Designated Information is to
be filed with any Form 10-D, the Depositor or Servicer, as the case may be,
shall specify the Item on Form 10-D to which such information is responsive and,
with respect to any Exhibit to be filed on Form 10-D, the Exhibit number. Any
information to be filed on Form 10-D shall be delivered to the Trustee in
▇▇▇▇▇-compatible form or as otherwise agreed upon by the Trustee and the
Depositor or the Servicer, as the case may be, at the Depositor's expense, and
any necessary conversion to ▇▇▇▇▇-compatible format will be at the Depositor's
expense. At the reasonable request of, and in accordance with the reasonable
directions of, the Depositor or the Servicer, subject to the two preceding
sentences, the Trustee shall prepare for filing and file an amendment to any
Form 10-D previously filed with the Commission with respect to the Trust Fund.
The Depositor shall sign the Form 10-D filed on behalf of the Trust Fund.
The Trustee shall prepare each Form 10-D and, no later than five Business
Days prior to the date on which such Form 10-D is required to be filed, deliver
a copy of such Form 10-D 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-D. The Trustee shall make any changes thereto
requested by the Depositor and deliver the final Form 10-D to the Depositor for
signature no later than three Business Days prior to the date on which such Form
10-D must be filed by the Trustee in accordance with this Section 11.02. The
Depositor shall execute the final Form 10-D 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 Form 10-D is required to be filed), with an original
executed hard copy to follow by overnight courier.
(b) No later than each Distribution Date, any party responsible for
providing Additional Designated Information shall notify the Depositor and the
Trustee of any Form 10-D Disclosure Item, together with a description of any
such Form 10-D Disclosure Item in form and substance reasonably
113
acceptable to the Depositor. In addition to such information as the Servicer and
the Trustee are obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Depositor, each of the Servicer and the
Trustee shall provide such information which is available to the Servicer and
the Trustee, as applicable, without unreasonable effort or expense regarding the
performance or servicing of the Mortgage Loans (in the case of the Trustee,
based on the information provided by the Servicer) as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with the
Remittance Reports in the case of the Servicer and the Monthly Statement in the
case of the Trustee, commencing with the first such report due not less than
five Business Days following such request.
(c) The Trustee shall not have any responsibility to file any items (other
than those generated by it) that have not been received in a format suitable (or
readily convertible into a format suitable) for electronic filing via the ▇▇▇▇▇
system and shall not have any responsibility to convert any such items to such
format (other than those items generated by it or that are readily convertible
to such format). The Trustee shall have no liability to the Certificateholders,
the Trust Fund, the Servicer or the Depositor with respect to any failure to
properly prepare or file any of Form 10-D to the extent that such failure is not
the result of any negligence, bad faith or willful misconduct on its part. The
Trustee will not have any duty to verify the accuracy or sufficiency of any
information to be included in any Form 10-D not provided by it.
(d) The Trustee shall have no liability with respect to any failure to
properly prepare and file such periodic reports resulting or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
Section 11.03 Form 8-K Filings.
The Servicer shall prepare and file on behalf of the Trust Fund any Form
8-K required by the Exchange Act. Each Form 8-K must be signed by the Servicer.
Any reporting party identified on Exhibit T shall promptly notify the Depositor
and the Servicer (if the notifying party is not the Servicer), but in no event
later than one (1) Business Day after its occurrence, of any Reportable Event of
which it has actual knowledge. Each Person shall be deemed to have actual
knowledge of any such event to the extent that it relates to such Person or any
action or failure to act by such Person.
Section 11.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2007 (or such earlier date
as may be required by the Exchange Act), the Depositor shall prepare and file on
behalf of the Trust Fund a Form 10-K, in form and substance as required by the
Exchange Act. A senior officer in charge of the servicing function of the
Servicer shall sign each Form 10-K filed on behalf of the Trust Fund. Such Form
10-K shall include as exhibits each (i) annual compliance statement described
under Section 3.17, (ii) annual report on assessments of compliance with
servicing criteria described under Section 11.07 and (iii) accountant's report
described under Section 11.07. Each Form 10-K shall also include any
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be included therewith, as described in
Section 11.05.
If the Item 1119 Parties listed on Exhibit T have changed since the
Closing Date, no later than March 1 of each year, the Depositor shall provide
each of the Servicer and the Trustee via electronic mail
(▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇) with an updated Exhibit T setting forth the Item
1119 Parties. No later than March 15 of each year, commencing in 2007, the
Servicer and the Trustee shall notify the Depositor and the Servicer of any Form
10-K Disclosure Item, together with a description of any such Form 10-K
Disclosure Item in form and substance reasonably acceptable to the Depositor.
Additionally, each of the Servicer and the Trustee shall provide, and shall
cause each Reporting Subcontractor retained by the Servicer or the Trustee, as
applicable, the following information no later than March 15 of each year in
114
which a Form 10-K is required to be filed on behalf of the Trust Fund: (i) if
such Person's report on assessment of compliance with servicing criteria
described under Section 11.07 or related registered public accounting firm
attestation report described under Section 11.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person's report on assessment of compliance with servicing
criteria or related registered public accounting firm attestation report is not
provided to be filed as an exhibit to such Form 10-K, information detailing the
explanation why such report is not included.
Section 11.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Servicer and the Trustee shall (unless such
person is the Certifying Person), and the Servicer shall cause each Reporting
Subcontractor and the Trustee shall cause each Reporting Subcontractor to,
provide to the Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the
"Certifying Person") a certification (each, a "Performance Certification"), in
the form attached hereto as Exhibit R on which the Certifying Person, the entity
for which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The senior officer in charge of
the servicing function of the Servicer shall serve as the Certifying Person on
behalf of the Trust Fund. Neither the Servicer nor the Depositor will request
delivery of a certification under this clause unless the Depositor is required
under the Exchange Act to file an annual report on Form 10-K with respect to the
Trust Fund. In the event that prior to the filing date of the Form 10-K in March
of each year, the Trustee or the Depositor has actual knowledge of information
material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, the Trustee or the Depositor, as
the case may be, shall promptly notify the Servicer and the Depositor. The
respective parties hereto agree to cooperate with all reasonable requests made
by any Certifying Person or Certification Party in connection with such Person's
attempt to conduct any due diligence that such Person reasonably believes to be
appropriate in order to allow it to deliver any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or
portion thereof with respect to the Trust Fund.
Section 11.06 Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is able to do
so under applicable law, the Trustee on behalf of the Depositor shall file a
Form 15 relating to the automatic suspension of reporting in respect of the
Trust Fund under the Exchange Act.
Section 11.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2007,
unless no reporting obligation under the Exchange Act exists at such time with
respect to the Trust Fund:
(i) Each of the Servicer and the Trustee shall deliver to the
Depositor and the Servicer a report (in form and substance reasonably
satisfactory to the Depositor) regarding the Servicer's or the Trustee's,
as applicable, assessment of compliance with the Servicing Criteria during
the immediately preceding calendar year, as required under Rules 13a-18
and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report
shall be signed by an authorized officer of such Person and shall address
each of the Servicing Criteria applicable to such party specified on a
certification delivered to the Depositor concurrently with the execution
of this Agreement. To the extent any of the Servicing Criteria are not
applicable to such Person, with respect to asset-backed securities
transactions taken as a whole involving such Person and that are
115
backed by the same asset type backing the Certificates, such report shall
include such a statement to that effect. The Depositor and the Servicer,
and each of their respective officers and directors shall be entitled to
rely on upon each such servicing criteria assessment.
(ii) Each of the Servicer and the Trustee shall deliver to the
Depositor and the Servicer a report of a registered public accounting firm
reasonably acceptable to the Depositor that attests to, and reports on,
the assessment of compliance made by Servicer or the Trustee, as
applicable, and delivered pursuant to the preceding paragraphs. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act, including,
without limitation that in the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such
report why it was unable to express such an opinion. Such report must be
available for general use and not contain restricted use language. To the
extent any of the Servicing Criteria are not applicable to such Person,
with respect to asset-backed securities transactions taken as a whole
involving such Person and that are backed by the same asset type backing
the Certificates, such report shall include such a statement to that
effect.
(iii) The Servicer shall cause each Reporting Subcontractor to
deliver to the Depositor an assessment of compliance and accountant's
attestation as and when provided in paragraphs (a) and (b) of this Section
11.07.
(iv) The Trustee shall cause each Reporting Subcontractor to deliver
to the Depositor and the Servicer an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b) of
this Section.
(v) The Servicer shall execute (and the Servicer shall cause each
Reporting Subcontractor to execute) a reliance certificate to enable the
Certification Parties to rely upon each (A) annual compliance statement
provided pursuant to Section 3.17, (B) annual report on assessments of
compliance with servicing criteria provided pursuant to this Section 11.07
and (C) accountant's report provided pursuant to this Section 11.07 and
shall include a certification that each such annual compliance statement
or report discloses any deficiencies or defaults described to the
registered public accountants of such Person to enable such accountants to
render the certificates provided for in this Section 11.07.
(vi) The Trustee shall execute (and the Trustee shall cause each
Reporting Subcontractor to execute) a reliance certificate to enable the
Certification Parties to rely upon each (A) annual report on assessments
of compliance with servicing criteria provided pursuant to this Section
11.07 and (C) accountant's report provided pursuant to this Section 11.07
and shall include a certification that each such report discloses any
deficiencies or defaults described to the registered public accountants of
such Person to enable such accountants to render the certificates provided
for in this Section 11.07.
(b) In the event the Servicer, the Trustee or Reporting Subcontractor is
terminated or resigns during the term of this Agreement, such Person shall
provide documents and information required by this Section 11.07 with respect to
the period of time it was subject to this Agreement or provided services with
respect to the Trust Fund, the Certificates or the Mortgage Loans.
(c) An assessment of compliance provided by a Subcontractor pursuant to
Section 11.07(a)(iii) or (iv) need not address any elements of the Servicing
Criteria other than those specified by the Servicer or the Trustee, as
applicable, pursuant to Section 11.07(a)(i).
116
Section 11.08 Use of Subcontractors.
(a) [Reserved].
(b) It shall not be necessary for the Servicer or the Trustee to seek the
consent of the Depositor or any other party hereto to the utilization of any
Subcontractor. The Servicer or the Trustee, as applicable, shall promptly upon
request provide to the Depositor (or any designee of the Depositor, such as the
Servicer or administrator) a written description (in form and substance
satisfactory to the Depositor) of the role and function of each Subcontractor
utilized by such Person, specifying (i) the identity of each such Subcontractor,
(ii) which (if any) of such Subcontractors are "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, and (iii) which
elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (ii) of
this paragraph.
As a condition to the utilization of any Subcontractor determined to be a
Reporting Subcontractor, the Servicer or the Trustee, as applicable, shall cause
any such Subcontractor used by such Person for the benefit of the Depositor to
comply with the provisions of Sections 11.07 and 11.09 of this Agreement to the
same extent as if such Subcontractor were the Servicer (except with respect to
the Servicer's duties with respect to preparing and filing any Exchange Act
Reports or as the Certifying Person) or the Trustee, as applicable. The Servicer
or the Trustee, as applicable, shall be responsible for obtaining from each
Subcontractor and delivering to the Depositor and the Servicer, any assessment
of compliance and attestation required to be delivered by such Subcontractor
under Section 11.05 and Section 11.07, in each case as and when required to be
delivered.
Section 11.09 Amendments.
In the event the parties to this Agreement desire to further clarify or
amend any provision of this Article Eleven, this Agreement shall be amended to
reflect the new agreement between the parties covering matters in this Article
Eleven pursuant to Section 10.01, which amendment shall not require any Opinion
of Counsel or Rating Agency confirmations or the consent of any
Certificateholder.
If, during the period that the Depositor is required to file Exchange Act
Reports with respect to the Trust Fund, the Servicer is no longer an Affiliate
of the Depositor, the Depositor shall assume the obligations and
responsibilities of the Servicer in this Article Eleven with respect to the
preparation and filing of the Exchange Act Reports and/or acting as the
Certifying Person, if the Depositor has received indemnity from such successor
Servicer satisfactory to the Depositor, and such Servicer has agreed to provide
a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to the Depositor substantially in the form of
Exhibit U.
* * * * * *
117
IN WITNESS WHEREOF, the Depositor, the Trustee, and the Seller and
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
INDYMAC MBS, INC.
as Depositor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee and Supplemental Interest Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
INDYMAC BANK, F.S.B.
as Seller and Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
STATE OF CALIFORNIA )
: ss.:
COUNTY OF Los Angeles )
On this 29th day of August, 2006, before me, personally appeared ▇▇▇▇
▇▇▇▇▇▇▇▇, known to me to be Vice President of IndyMac MBS, Inc., one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity 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.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
Notary Public
[NOTARIAL SEAL]
1
STATE OF CALIFORNIA )
: ss.:
COUNTY OF Orange )
On this 25th day of August, 2006, before me, personally appeared ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Associate and a Vice
President, respectively, of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity 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.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Notary Public
[NOTARIAL SEAL]
2
STATE OF CALIFORNIA )
: ss.:
COUNTY OF Los Angeles )
On this 29th day of August, 2006, before me, personally appeared ▇▇▇▇
▇▇▇▇▇▇▇▇, known to me to be a Vice President of IndyMac Bank, F.S.B., one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity 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.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
Notary Public
[NOTARIAL SEAL]
3
Schedule I
MORTGAGE LOAN SCHEDULE [DELIVERED AT CLOSING TO TRUSTEE]
S-I-1
Schedule II
INDYMAC MBS, INC. MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-K
Representations and Warranties of the Seller/Servicer
Indy Mac Bank, F.S.B. ("IndyMac") hereby makes the representations
and warranties set forth in this Schedule II to the Depositor and the Trustee,
as of the Closing Date. Capitalized terms used but not otherwise defined in this
Schedule II shall have the meanings assigned thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among IndyMac, as seller and servicer, IndyMac MBS,
Inc., as depositor, and Deutsche Bank National Trust Company, as trustee and
supplemental interest trustee.
(1) IndyMac is duly organized as a federally insured
savings bank and is validly existing and in good standing under the
laws of the United States of America and is duly authorized and
qualified to transact any business contemplated by the Pooling and
Servicing Agreement to be conducted by IndyMac in any state in which
a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the Pooling and
Servicing Agreement and to perform any of its other obligations under
the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) IndyMac has the full corporate power and authority to
sell and service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions
contemplated by the Pooling and Servicing Agreement and has duly
authorized by all necessary corporate action on the part of IndyMac
the execution, delivery and performance of the Pooling and Servicing
Agreement; and the Pooling and Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of
IndyMac, enforceable against IndyMac in accordance with its terms,
except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by IndyMac, the sale and servicing of the Mortgage Loans by
IndyMac under the Pooling and Servicing Agreement, the consummation
of any other of the transactions contemplated by the Pooling and
Servicing Agreement, and the fulfillment of or compliance with the
terms thereof are in the ordinary course of business of IndyMac and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of IndyMac or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result
in a material default under, any other material agreement or
instrument to which IndyMac is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or
regulation applicable to IndyMac of any court, regulatory body,
administrative agency or
S-II-1
governmental body having jurisdiction over IndyMac (including the
OTS, the Federal Deposit Insurance Corporation or any other
governmental entity having regulatory authority over IndyMac); and
IndyMac is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it (including the OTS, the Federal Deposit Insurance Corporation or
any other governmental entity having regulatory authority over
IndyMac) which breach or violation may materially impair IndyMac's
ability to perform or meet any of its obligations under the Pooling
and Servicing Agreement.
(4) IndyMac is an approved servicer of conventional
mortgage loans for FNMA or FHLMC or is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of IndyMac's
knowledge, threatened against IndyMac that would prohibit the
execution or delivery of, or performance under, the Pooling and
Servicing Agreement by IndyMac.
(6) IndyMac is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the MERS Mortgage Loans for as
long as such Mortgage Loans are registered with MERS.
S-II-2
Schedule III
INDYMAC MBS, INC.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-K
Representations and Warranties as to the Mortgage Loans
IndyMac Bank, F.S.B. ("IndyMac") hereby makes the representations and
warranties set forth in this Schedule III to the Depositor and the Trustee, as
of the Closing Date or if so specified in this Schedule III, as of the Cut-off
Date with respect to each Mortgage Loan. Capitalized terms used but not
otherwise defined in this Schedule III shall have the meanings assigned to them
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among IndyMac, as seller and servicer,
IndyMac MBS, Inc., as depositor, and Deutsche Bank National Trust Company, as
trustee and supplemental interest trustee.
(1) The information set forth on Schedule I to the Pooling
and Servicing Agreement with respect to each Mortgage Loan is true
and correct in all material respects as of the Closing Date.
(2) All regularly scheduled monthly payments due with
respect to each Mortgage Loan up to and including the Due Date before
the Cut-off Date have been made; and as of the Cut-off Date, no
Mortgage Loan had a regularly scheduled monthly payment that was 60
or more days Delinquent during the twelve months before the Cut-off
Date.
(3) With respect to any Mortgage Loan that is not a
Cooperative Loan, each Mortgage is a valid and enforceable first lien
on the Mortgaged Property subject only to (a) the lien of
nondelinquent current real property taxes and assessments and liens
or interests arising under or as a result of any federal, state or
local law, regulation or ordinance relating to hazardous wastes or
hazardous substances and, if the related Mortgaged Property is a unit
in a condominium project or planned unit development, any lien for
common charges permitted by statute or homeowner association fees,
(b) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of
such Mortgage, such exceptions appearing of record being generally
acceptable to mortgage lending institutions in the area wherein the
related Mortgaged Property is located or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage.
(4) Immediately before the assignment of the Mortgage Loans
to the Depositor, the Seller had good title to, and was the sole
owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to the Pooling and
Servicing Agreement.
(5) As of the date of origination of each Mortgage Loan,
there was no delinquent tax or assessment lien against the related
Mortgaged Property.
(6) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
S-III-1
(7) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property which are or may be a
lien prior to or equal with, the lien of such Mortgage, except those
which are insured against by the title insurance policy referred to
in item (11) below.
(8) No Mortgaged Property has been materially damaged by
water, fire, earthquake, windstorm, flood, tornado or similar
casualty (excluding casualty from the presence of hazardous wastes or
hazardous substances, as to which the Seller makes no representation)
so as to affect adversely the value of the related Mortgaged Property
as security for the Mortgage Loan.
(9) Each Mortgage Loan at origination complied in all
material respects with applicable local, state and federal laws and
regulations, including usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending, and disclosure laws, or any
noncompliance does not have a material adverse effect on the value of
the related Mortgage Loan.
(10) The Seller has not modified the Mortgage in any
material respect (except that a Mortgage Loan may have been modified
by a written instrument which has been recorded or submitted for
recordation, if necessary, to protect the interests of the
Certificateholders and which has been delivered to the Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or in
part; released the related Mortgaged Property in whole or in part
from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect
thereto.
(11) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Mortgage Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each
Mortgage Loan and each such policy is valid and remains in full force
and effect.
(12) Each Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Exchange Act) by an entity that satisfied
at the time of origination the requirements of Section 3(a)(41) of
the Exchange Act.
(13) All of the improvements which were included for the
purpose of determining the Appraised Value of the Mortgaged Property
lie wholly within the boundaries and building restriction lines of
such property, and no improvements on adjoining properties encroach
upon the Mortgaged Property, unless such failure to be wholly within
such boundaries and restriction lines or such encroachment, as the
case may be, does not have a material effect on the value of the
Mortgaged Property.
(14) As of the date of origination of each Mortgage Loan,
no improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation unless such
violation would not have a material adverse effect on the value of
the related Mortgaged Property. All inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including certificates of occupancy
and fire underwriting certificates, have been made or obtained from
the appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of the Mortgaged Property.
(15) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law.
S-III-2
(16) The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder.
(17) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure.
(18) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after default by
the Mortgagor.
(19) At the Closing Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides
for fire and extended coverage and coverage for such other hazards as
are customarily required by institutional single family mortgage
lenders in the area where the Mortgaged Property is located, and the
Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance
at the Mortgagor's cost and expense. Anything to the contrary in this
item (19) notwithstanding, no breach of this item (19) shall be
deemed to give rise to any obligation of the Seller to repurchase or
substitute for such affected Mortgage Loan or Loans so long as the
Servicer maintains a blanket policy pursuant to the second paragraph
of Section 3.10(a) of the Pooling and Servicing Agreement.
(20) If at the time of origination of each Mortgage Loan,
the related Mortgaged Property was in an area then identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
then-current requirements of the Flood Insurance Administration is in
effect with respect to the Mortgaged Property with a generally
acceptable carrier.
(21) There is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property, nor is such
a proceeding currently occurring.
(22) There is no material event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a material non-monetary default, breach, violation
or event of acceleration under the Mortgage or the related Mortgage
Note; and the Seller has not waived any material non-monetary
default, breach, violation or event of acceleration.
(23) Each Mortgage File contains an appraisal of the
related Mortgaged Property in a form acceptable to FNMA or FHLMC.
(24) Any leasehold estate securing a Mortgage Loan has a
stated term of not less than five years in excess of the term of the
related Mortgage Loan.
(25) Each Mortgage Loan was selected from among the
outstanding fixed-rate one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the
representations and warranties made with respect to the Mortgage
Loans set forth in this Schedule III can be made. No such selection
was made in a manner intended to adversely affect the interests of
the Certificateholders.
S-III-3
(26) None of the Mortgage Loans as of the Cut-off Date are
Cooperative Loans.
(27) The aggregate PO Percentage of the Stated Principal
Balances of the Discount Mortgage Loans does not exceed $228,374.
(28) None of the Mortgage Loans is a "high cost" loan,
"covered" loan or any other similarly designated loan as defined
under any state, local or federal law, as defined by applicable
predatory and abusive lending laws.
(29) Each Mortgage Loan at the time it was made complied in
all material respects with applicable local, state, and federal laws,
including, but not limited to, all applicable predatory and abusive
lending laws.
(30) No Mortgage Loan is a "High-Cost Home Loan" as defined
in the New Jersey Home Ownership Act effective November 27, 2003
(N.J.S.A. 46:10B-22 et seq.).
(31) No Mortgage Loan is a "High-Cost Home Loan" as defined
in the New Mexico Home Loan Protection Act effective January 1, 2004
(N.M. Stat. ▇▇▇. ▇▇.▇▇. 58-21A-1 et seq.).
(32) Each Mortgage Loan has been underwritten and serviced
substantially in accordance with the Seller's guidelines, subject to
such variances as are reflected on the Mortgage Loan Schedule or that
the Seller has approved.
(33) No Mortgage Loan is a High Cost Loan or Covered Loan,
as applicable (as such terms are defined in the then-current version
of Standard & Poor's LEVELS(R) Glossary, which is now Version 5.7
Revised, Appendix E) and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act (Exclusion Representation).
(34) The Pooling and Servicing Agreement creates a valid
and continuing "security interest" (as defined in Section 1-201(37)
of the UCC) in each Mortgage Note in favor of the Trustee, which
security interest is prior to all other liens and is enforceable as
such against creditors of and purchasers from the Depositor. Each
Mortgage Note constitutes "promissory notes" (as defined in Section
9-102(a)(65) of the UCC). Immediately before the assignment of each
Mortgage Note to the Trustee, the Depositor had good and marketable
title to such Mortgage Note free and clear of any lien, claim,
encumbrance of any Person. All original executed copies of each
Mortgage Note have been or shall be delivered to the Trustee within
five Business Days following the Closing Date. Other than the
security interest granted to the Trustee, the Depositor has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any Mortgage Note. The Depositor has not authorized the
filing of and is not aware of any financing statements against the
Depositor that include a description of any of the Mortgage Notes.
The Depositor is not aware of any judgment or tax liens filed against
the Depositor. None of the Mortgage Notes has any marks or notations
indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee.
(35) To the best of seller's knowledge, there was no fraud
involved in the origination of any Mortgage Loan by the mortgagee or
by the Mortgagor, any appraiser or any other party involved in the
origination of the Mortgage Loan
S-III-4
(36) No Mortgage Loan is a "High-Cost Home Mortgage Loan"
as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 (Mass. Gen. Laws ch. 183C).
S-III-5
Schedule IV
Principal Balance Schedule
[Not applicable]
S-IV-1
Schedule V
Form of Monthly Report
[On file with the Trustee]
S-V-1
EXHIBIT A
[FORM OF SENIOR CERTIFICATE (OTHER THAN NOTIONAL AMOUNT CERTIFICATES)]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER 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").
[UNTIL THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AND IS NOT
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, UNTIL THIS CERTIFICATE HAS
BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.]
[PRIOR TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT EITHER (I) SUCH TRANSFEREE IS NEITHER AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE
CODE NOR ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE SUCH A PLAN'S OR
ARRANGEMENT'S ASSETS BY REASON OF ITS INVESTMENT IN THE ENTITY (A "PLAN") NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN TO
EFFECT SUCH TRANSFER OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ 96-23 OR THE SERVICE
PROVIDER EXEMPTION PROVIDED BY SECTION 408(b)(17) OF ERISA AND SECTION
4975(d)(26) OF THE CODE. ANY PURPORTED TRANSFER OF THIS CERTIFICATE PRIOR TO THE
TERMINATION OF THE SUPPLEMENTAL INTEREST
A-1
TRUST TO OR ON BEHALF OF A PLAN WITHOUT THE DELIVERY TO THE TRUSTEE OF A
REPRESENTATION LETTER AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT. IF THIS
CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE TRANSFEREE WILL BE DEEMED TO HAVE
MADE A REPRESENTATION AS PROVIDED IN CLAUSE (I) OR (II) OF THIS PARAGRAPH, AS
APPLICABLE.]
A-2
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance of this
Certificate ("Denomination") : $
Initial Certificate Balances of all
Certificates of this Class : $
CUSIP :
Interest Rate : %
Maturity Date :
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
Class [__]
evidencing a percentage interest in the
distributions allocable to the Certificates of the
above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one-
to four-family residential properties.
IndyMac MBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein or in the Agreement (defined below). Accordingly, the
Certificate Balance at any time may be less than the Certificate 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 _______ is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate Initial Certificate Balances of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by IndyMac MBS, Inc. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among 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") and supplemental interest 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.
A-3
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.
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.
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 20__
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
A-5
EXHIBIT B
[FORM OF SUBORDINATED CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "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.]
[NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AND
IS NOT INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR, DELIVERS A
REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN, OR DELIVERS TO THE TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE
WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.]
B-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance of this
Certificate ("Denomination") : $
Initial Certificate Balances of all
Certificates of this Class : $
CUSIP :
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
Class [___]
evidencing a percentage interest in the
distributions allocable to the Certificates of the
above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one-
to four-family residential properties.
IndyMac MBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as set forth
herein or in the Agreement (defined below). Accordingly, the Certificate Balance
at any time may be less than the Certificate 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 ________ is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the denomination of this
Certificate by the aggregate Initial Certificate Balances of the denominations
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by IndyMac MBS, Inc. (the "Depositor"). The Trust Fund
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among 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") and supplemental interest 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.
[No transfer of a Certificate of this Class shall be made unless such transfer
is made pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws or is
B-2
exempt from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer. In the event that such a
transfer is to be made within three years from the date of the initial issuance
of Certificates pursuant hereto, there shall also be delivered (except in the
case of a transfer pursuant to Rule 144A of the Securities Act) to the Trustee
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act and such state securities laws, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Seller, the Servicer 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 a Certificate of this Class shall be made unless the Trustee
shall have received either (i) a representation [letter] from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
other benefit plan subject to Section 406 of ERISA or Section 4975 of the Code,
nor a person acting on behalf of or investing plan assets of any such plan,
which representation letter shall not be an expense of the Trustee or the
Servicer, (ii) if the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificate are covered under
Sections I and III of PTCE 95-60 or (iii) in the case of any such Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan, an Opinion of Counsel satisfactory to the Trustee to the
effect that the purchase and holding of such Certificate will not result in a
nonexempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee or the Servicer to any obligation in addition to
those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Trust Fund. Notwithstanding anything
else to the contrary herein, any purported transfer of a Certificate of this
Class to or on behalf of an employee benefit plan subject to ERISA or to Section
4975 of the Code without the opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect.]
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.
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.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 20__
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
B-4
EXHIBIT C
[FORM OF CLASS A-R CERTIFICATE]
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").
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 AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AND
IS NOT INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR, IF SUCH PURCHASER
IS AN INSURANCE COMPANY, DELIVERS A REPRESENTATION IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN, OR DELIVERS TO THE TRUSTEE AN
OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED
TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO ERISA OR TO SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
C-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance of this
Certificate ("Denomination") : $
Initial Certificate Balances of all
Certificates of this Class : $
CUSIP :
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
evidencing the distributions allocable to the
Class A-R Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one-
to four-family residential properties.
IndyMac MBS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as set forth
herein or in the Agreement (defined below). Accordingly, the Certificate Balance
at any time may be less than the Certificate 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 _____________ is the registered owner of the Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Initial Certificate Balances of the denominations of all Certificates
of the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting of the Mortgage Loans deposited by
IndyMac MBS, Inc. (the "Depositor"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement") among 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") and
supplemental interest 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.
Any distribution of the proceeds of any remaining assets of the Trust Fund will
be made only upon presentment and surrender of this Class A-R Certificate at the
office or agency maintained by the Trustee.
C-2
No transfer of a Class A-R Certificate shall be made unless the Trustee shall
have received either (i) a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, or a person
investing on behalf of or with plan assets of any such plan, which
representation letter shall not be an expense of the Trustee or the Servicer,
(ii) if the purchaser is an insurance company, a representation that the
purchaser is an insurance company which is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificate are covered under
Sections I and III of PTCE 95-60 or (iii) in the case of any Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan, an Opinion of Counsel satisfactory to the Trustee to the
effect that the purchase and holding of such Class A-R Certificate will not
result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and will not subject the Trustee or the Servicer to any
obligation in addition to those undertaken in the Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Servicer or the Trust Fund.
Such representation shall be deemed to have been made to the Trustee by the
Transferee's acceptance of this Class A-R Certificate and by a beneficial
owner's acceptance of its interest in such Certificate. Notwithstanding anything
else to the contrary herein, any purported transfer of a Class A-R Certificate
to or on behalf of an employee benefit plan subject to ERISA or to Section 4975
of the Code without the opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect.
Each Holder of this Class A-R 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 Class A-R Certificate must be a Permitted Transferee, (ii) no Ownership
Interest in this Class A-R Certificate may be transferred without delivery to
the Trustee of (a) a transfer affidavit of the proposed transferee and (b) a
transfer certificate of the transferor, each of such documents to be in the form
described in the Agreement, (iii) each person holding or acquiring any Ownership
Interest in this Class A-R Certificate must agree to require a transfer
affidavit and to deliver a transfer certificate to the Trustee as required
pursuant to the Agreement, (iv) each person holding or acquiring an Ownership
Interest in this Class A-R Certificate must agree not to transfer an Ownership
Interest in this Class A-R Certificate if it has actual knowledge that the
proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class A-R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
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.
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.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 20__
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
C-4
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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").
[UNTIL THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AND IS NOT
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING
ELSE TO THE CONTRARY HEREIN, UNTIL THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE
CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED
ABOVE SHALL BE VOID AND OF NO EFFECT.]
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
D-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Notional Amount of this
Certificate ("Denomination") : $
Initial Notional Amount of all
Certificates of this Class : $
CUSIP :
Interest Rate : %
Maturity Date :
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
Class [__]
evidencing a percentage interest in the
distributions allocable to the Certificates of the
above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one-
to four-family residential properties.
IndyMac MBS, Inc., as Depositor
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.
D-2
This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Notional Amounts of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by IndyMac MBS, Inc. (the "Depositor"). The Trust Fund
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among 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") and supplemental interest 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.
[Until this certificate has been the subject of an ERISA-Qualifying
Underwriting, no transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person investing on behalf of or with plan assets of any such plan,
which representation letter shall not be an expense of the Trustee or the
Servicer, or (ii) in the case of any such Certificate presented for registration
in the name of an employee benefit plan subject to ERISA or Section 4975 of the
Code (or comparable provisions of any subsequent enactments), or a trustee of
any such plan or any other person acting on behalf of any such plan, an Opinion
of Counsel satisfactory to the Trustee to the effect that the purchase and
holding of such Certificate will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee or the Servicer to any obligation in addition to those
undertaken in the Agreement, which Opinion of Counsel shall not be an expense of
the Trustee, the Servicer, or the Trust Fund. Notwithstanding anything else to
the contrary herein, until this certificate has been the subject of an
ERISA-Qualifying Underwriting, any purported transfer of a Certificate of this
Class to or on behalf of an employee benefit plan subject to ERISA or to the
Code without the opinion of counsel satisfactory to the Trustee as described
above shall be void and of no effect.]
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.
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.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________, 20__
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By ______________________
Countersigned:
By ___________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
D-4
EXHIBIT E
[Form of Reverse of Certificates]
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac MBS, Inc. Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund 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 the last Business Day of the month next preceding the month
of such Distribution 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 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 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.
E-1
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 Fund 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 neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans in the mortgage pool is less than 10% of the
Cut-off Date Pool Principal Balance, the Servicer will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans in the
mortgage pool and all property acquired in respect of the Mortgage Loans in the
mortgage pool at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in 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.
E-2
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 Fund.
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.
E-3
STATE OF CALIFORNIA )
: 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]
E-4
EXHIBIT F
[FORM OF CLASS P CERTIFICATE]
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 "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.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AND IS NOT INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR, IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING AND THE PURCHASER IS AN INSURANCE COMPANY, A REPRESENTATION IN
ACCORDANCE WITH THE AGREEMENT REFERRED TO HEREIN, OR AN OPINION OF COUNSEL IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
F-1
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates
of this Class : $
CUSIP :
Interest Rate :
Maturity Date :
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates, Series 2006-K
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties.
Distributions in respect of this Certificate are distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate 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 ________________ 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
with respect to a Trust Fund consisting primarily of the Mortgage Loans
deposited by IndyMac MBS, Inc. (the "Depositor"). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among the Depositor, IndyMac Bank, F.S.B., as
seller and servicer (the "Seller" or the "Servicer", as appropriate), and
Deutsche Bank National Trust Company, as trustee (the "Trustee") and
supplemental interest trustee. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the
F-2
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.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
This Certificate does not have a Certificate 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.
No transfer of a Certificate of this Class shall be made unless such disposition
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and any applicable state securities laws or is made in
accordance with the 1933 Act and such laws. In the event of any such transfer,
the Trustee shall require the transferor to execute a transferor certificate (in
substantially the form attached to the Pooling and Servicing Agreement) and
deliver either (i) an Investment Letter or the Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee 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 be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, nor a person acting
on behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Trustee or (y) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, that the transferee is
purchasing such Certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificate are covered under Sections I and III of PTCE 95-60,
or (ii) in the case of any Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of the Trustee, the Servicer or the Trust Fund, addressed to
the Trustee, to the effect that the purchase and holding of such Certificate
will not result in a nonexempt prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Trustee or the Servicer to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability.
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.
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.
* * *
F-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: _______, ____
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By___________________________________
Countersigned:
By ___________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
F-4
INDYMAC MBS, INC.
Residential Asset Securitization Trust 2006-A11
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates designated as
IndyMac MBS, Inc. Mortgage Pass-Through Certificates, of the Series specified on
the face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund 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 the last Business Day of the month next preceding the month of such
Distribution 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 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, 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
F-6
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund 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 neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 10% of the Cut-off Date Pool Principal Balance, the
Servicer will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the event
that no such optional termination occurs, the related obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in 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.
F-6
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 Fund.
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.
F-7
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]
F-8
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Seller]
______________________
______________________
Re: Pooling and Servicing Agreement among IndyMac MBS, Inc.,
as Depositor, IndyMac Bank, F.S.B., as Seller and
Servicer, and Deutsche Bank National Trust Company, as
Trustee and Supplemental Interest Trustee, Mortgage
Pass-Through Certificates, Series 2006-K
----------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (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 listed in the attached schedule), it
has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments); provided, however, that it has
received no assignment with respect to any Mortgage for which the Mortgaged
Property is located in the Commonwealth of Puerto Rico.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and to such Mortgage
Loan.
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 each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
G-1-1
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:__________________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF DELAY DELIVERY CERTIFICATION (MORTGAGE LOANS)
[date]
[Depositor]
[Servicer]
[Seller]
__________________
__________________
Re: Pooling and Servicing Agreement among IndyMac MBS, Inc., as
Depositor, IndyMac Bank, F.S.B., as Seller and Servicer, and
Deutsche Bank National Trust Company, as Trustee and Supplemental
Interest Trustee, Mortgage Pass-Through Certificates, Series 2006-K
-------------------------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto
(the "Schedule A"), delivered by the undersigned, as Trustee, on the Closing
Date in accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). The undersigned
hereby certifies that, as to each Delay Delivery Mortgage Loan listed on
Schedule A attached hereto (other than any Mortgage Loan paid in full or listed
on Schedule B attached hereto) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that
show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost
or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original
Mortgage Note was lost or destroyed, together with a copy
of the Mortgage Note;
(ii) the original recorded Mortgage;
(iii) a duly executed assignment of the Mortgage to "Deutsche
Bank National Trust Company, as trustee under the Pooling
and Servicing Agreement dated as of August 1, 2006, without
recourse" (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to
effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such Mortgage;
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
G-2-1
(vi) the original or duplicate original lender's title policy
and all riders, if any, thereto or, in the event such
original title policy has not been received from the
insurer, any one of an original title binder, an original
preliminary title report or an original title commitment,
or a copy thereof certified by the title company, with the
original policy of title insurance to be delivered within
one year of the Closing Date.
In the event that in connection with any Mortgage Loan for which the
Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or
(iv), as applicable, the Trustee has received, in lieu thereof, a true and
complete copy of such Mortgage and/or such assignment or assignments of the
Mortgage, as applicable, each certified by the Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage Loan, as
the case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (vi) and
(xi) of the definition of the "Mortgage Loan Schedule" in Section 1.01 of the
Pooling and Servicing Agreement accurately reflects information set forth in the
Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced 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 each Mortgage File of any of
the Mortgage Loans identified on the [Mortgage Loan Schedule][Loan Number and
Borrower Identification Mortgage Loan Schedule] or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:__________________________________
Name:
Title:
G-2-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Seller]
_________________
_________________
Re: Pooling and Servicing Agreement among IndyMac MBS, Inc., as
Depositor, IndyMac Bank, F.S.B., as Seller and Servicer, and
Deutsche Bank National Trust Company, as Trustee and Supplemental
Interest Trustee, Mortgage Pass-Through Certificates, Series 2006-K
-------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (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 the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01(c) of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator to the
Seller.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided
in Section 2.01(c) of the Pooling and Servicing Agreement; provided, however,
that it has received no assignment with respect to any Mortgage for which the
Mortgaged Property is located in the Commonwealth of Puerto Rico, or, if the
Depositor has certified or the Trustee otherwise knows that the Mortgage has not
been returned from the applicable recording office, a copy of the assignment of
the Mortgage (excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Seller.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi) and (xi) of the definition of the "Mortgage Loan Schedule" in Section
1.01 of the Pooling and Servicing Agreement accurately reflects information set
forth in the Mortgage File.
H-1
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 each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:__________________________________
Name:
Title:
H-2
EXHIBIT I
TRANSFER AFFIDAVIT
IndyMac MBS, Inc.
Mortgage Pass-Through Certificates
Series ▇▇▇▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
: 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 a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, by and among IndyMac MBS,
Inc., as depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller and
servicer and Deutsche Bank National Trust Company, as Trustee and Supplemental
Interest Trustee. Capitalized terms used, but not defined herein or in Exhibit 1
hereto, 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 for its own account.
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) for 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(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) 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(c)
I-1
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 J 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 U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic 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 a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of a U.S. taxpayer.
12. The Transferee will not transfer the Certificates, directly or
indirectly, to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
13. The Transferee will not cause income from the Certificates to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
14. Either:
(a) (i) At the time of the transfer, and at the close of
each of the Transferee's two fiscal years preceding the Transferee's
fiscal year of transfer, the Transferee's gross assets for financial
reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million. For purposes of the
preceding sentence, the gross assets and net assets of a Transferee
do not include any obligation of any Related Person, as defined
below, or any other asset if a principal purpose for holding or
acquiring the other asset is to permit the Transferee to satisfy the
conditions of this paragraph 15(a); (ii) The Transferee is an
Eligible Corporation, as defined below, and hereby agrees that any
subsequent transfer of the interest will be to another Eligible
Corporation in a transaction that satisfies this Transfer Affidavit,
including this paragraph 15(a); and (iii) The Transferee has not
given the Transferor any reason to know that the Transferee will not
honor the restrictions on subsequent transfers of the residual
interest or that the Transferee cannot or will not pay any taxes
associated with the residual interest; or
I-2
(b)(i) The Transferee is a United States Person; (ii) The
present value of the anticipated tax liabilities associated with
holding the residual interest does not exceed the sum of: (A) The
present value of any consideration given to the Transferee to acquire
the interest; (B) The present value of the expected future
distributions on the interest; and (C) The present value of the
anticipated tax savings associated with holding the interest as any
REMIC generates losses; and (iii) For purposes of calculating the
aforementioned present values: (A) The transferee has assumed that it
pays tax at a rate equal to the highest rate of tax specified in Code
Section 11(b)(1) (unless the Transferee has been subject to the
alternative minimum tax under Code Section 55 in the preceding two
years and will compute its taxable income in the current taxable year
using the alternative minimum tax rate, in which case the Transferee
can assume that it pays tax at the rate specified in Code Section
55(b)(1)(B) provided the Transferee states in this Transfer Affidavit
that it is using such alternate rate and that has been subject to the
alternative minimum tax under Code Section 55 in the preceding two
years and will compute its taxable income in the current taxable year
using the alternative minimum tax rate):and (B) The Transferee uses a
discount rate equal to the Federal short-term rate prescribed by
section 1274(d) for the month of the transfer and the compounding
period used by the Transferee.
The term "Eligible Corporation" means any domestic C corporation (as
defined in section 1361(a)(2) of the Code) other than a corporation which is
exempt from, or is not subject to, tax under section 11 of the Code, an entity
described in section 851(a) or 856(a) of the Code, a REMIC; or an organization
to which part I, subchapter T, chapter 1, subtitle A of the Code applies. The
Term "Related Person" means any person that bears a relationship to the
Transferee enumerated in section 267(b) or 707(b)(1) of the Code, using "20
percent" instead of "50 percent" where it appears under the provisions; or is
under common control (within the meaning of section 52(a) and (b) of the Code)
with the Transferee.
15. Either (i) 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, and the
Transferee is not acting on behalf of or with plan assets of such a plan; or
(ii) the Transferee is an insurance company that is investing funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the purchase
and holding of the Class A-R Certificate satisfy the requirements for exemptive
relief under Sections I and III of PTCE 95-60.
* * *
I-3
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 , 20 .
_____________________________________
Print 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 ________, 20__ .
_____________________________
NOTARY PUBLIC
My Commission expires the ____ day of
________, 20__ .
I-4
EXHIBIT 1
to EXHIBIT I
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest
in such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Code Section 511 on unrelated business taxable income) on any excess inclusions
(as defined in Code Section 860E(c)(1)) with respect to any Class A-R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(c), (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership, or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or an estate or trust whose income from sources without the United States is
includible in gross income for federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, and
(vi) any other Person so designated by the Depositor based upon an Opinion of
Counsel that the Transfer of an Ownership Interest in a Class A-R Certificate to
such Person may cause the Trust Fund to fail to qualify as a REMIC at any time
that certain Certificates are Outstanding. The terms "United States," "State"
and "International Organization" shall have the meanings set forth in Code
Section 7701 or successor provisions. 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, with the exception of
the FHLMC, a majority of its board of directors is not selected by such
governmental unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-5
EXHIBIT 2
to EXHIBIT I
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the
acceptance or acquisition of such Ownership Interest to have agreed to be bound
by the following provisions, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee
of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual
Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register
the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall
have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall agree
(A) to obtain a Transfer Affidavit from any other Person to
whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a
Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any
Transfer of a Residual Certificate and (C) not to Transfer
its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual
Certificate to any other Person if it has actual knowledge
that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Residual Certificate in violation
of the provisions of this Section 5.02(c) shall be
absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall
become a Holder of a Residual Certificate in violation of
the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all
rights as Holder thereof retroactive to the date of
registration of Transfer of such Residual Certificate. The
Trustee shall be under no liability to any Person for any
registration of Transfer of a Residual Certificate that is
in fact not permitted by Section 5.02(b) and this Section
5.02(c) or for making any payments due on such Certificate
to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this
Agreement so long as the Transfer was registered after
receipt of the Transfer Affidavit, Transferor Certificate
and either the Rule 144A Letter or the Investment Letter.
The Trustee shall be entitled but not obligated to recover
from any Holder of a Residual Certificate that was in fact
not a Permitted Transferee at the time it became a Holder
or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
I-6
(v) The Depositor shall use its best efforts to
make available, upon receipt of written request from the
Trustee, all information necessary to compute any tax
imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate
to any Holder who is not a Permitted Transferee.
I-7
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
IndyMac MBS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secondary Marketing, Transaction Management
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration, Series 200 -
Re: IndyMac MBS, Inc.
Mortgage Pass-Through Certificates, Series 2006-K, Class
--------------------------------------------------------
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 and
(c) to the extent we are disposing of a Class A-R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
_____________________________
Print Name of Transferor
By:__________________________
Authorized Officer
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 200__
IndyMac MBS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secondary Marketing, Transaction Management
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration, Series 200 -
Re: IndyMac MBS, Inc.
Mortgage Pass-Through Certificates, Series 2006-K, Class
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced
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 are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) 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, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement to
effect such acquisition or (ii) [if the Certificate has been the subject of an
ERISA-Qualifying Underwriting,] we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) 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, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially
K-1
the same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement.
Very truly yours,
_____________________________
Print Name of Transferee
By: _________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 200__
IndyMac MBS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secondary Marketing, Transaction Management
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trust Administration, Series 200 -
Re: IndyMac MBS, Inc.
Mortgage Pass-Through Certificates, Series 2006-K, Class
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced
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 such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) 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, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement or using the assets of any such plan or arrangement
to effect such acquisition, or (ii) [if the Certificate has been the subject of
an ERISA-Qualifying Underwriting,] we are purchasing the Certificates with funds
contained in an "insurance company general account" (as defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and our purchase
and holding of the Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60, (e) 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 Act or that would
render the disposition of the Certificates a violation of Section 5 of the 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, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Act ("Rule 144A") and have completed either of
the forms of certification to that effect attached hereto as Annex 1 or Annex 2,
(g) we are aware that the sale to us is being made in reliance on Rule 144A, and
(h) we are acquiring the
L-1
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 (A) 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 (B)
pursuant to another exemption from registration under the Act.
Very truly yours,
_____________________________
Print Name of Transferee
By: _________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
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
__________________________
(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.
L-3
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ 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 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.
L-4
_____________________________
Print Name of Buyer
By:__________________________
Name:
Title:
_____________________________
Date:
L-5
ANNEX 2 TO EXHIBIT L
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 Buyer's 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.
L-6
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:
_____________________________
Date:
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
IndyMac MBS, Inc.
Mortgage Pass-Through Certificates
Series 2006-K
Loan Information
Name of Mortgagor:
Servicer
Loan No.: _____________________________
Trustee
Name: _____________________________
Address: _____________________________
_____________________________
Trustee
Mortgage File No.:
The undersigned Servicer hereby acknowledges that it has received
from Deutsche Bank National Trust Company, as Trustee for the Holders of
Mortgage Pass-Through Certificates, of the above-referenced Series, the
documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given them
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series among the Trustee, IndyMac Bank, F.S.B.,
as Seller and Servicer and IndyMac MBS, Inc., as Depositor.
( ) Mortgage Note dated ___________, ____, in the original principal
sum of $________, made by __________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded
on _________________ as instrument no. __________ in the County
Recorder's Office of the County of __________, State of
_______________ in book/reel/docket _______________ of official
records at page/image.
M-1
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
The undersigned Servicer hereby acknowledges and agrees as follows:
(1) The Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or other
impositions nor shall the Servicer assert or seek to assert any
claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when
the need therefor no longer exists, unless the Mortgage Loan
relating to the Documents has been liquidated and the proceeds
thereof have been remitted to the Certificate Account and except
as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Servicer shall at all times be earmarked for the account of the
Trustee, and the Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the
Servicer's possession, custody or control.
INDYMAC BANK, F.S.B.
By: ______________________
Name:
Title:
Date: , 20
M-2
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
Attn: Mortgage Custody Services
Re: The Pooling and Servicing Agreement dated August 1, 2006 among IndyMac
Bank, F.S.B. as Servicer, Inc, IndyMac MBS, Inc. and Deutsche Bank
National Trust Company, as Trustee and Supplemental Interest Trustee
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by
you as Trustee for IndyMac MBS, Inc., we request the release of the Mortgage
Loan File for the Mortgage Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
---------------------------------------
Mortgage Loan Number:
---------------------
Reason for Requesting Documents (check one)
-------------------------------------------
_______1. Mortgage Loan paid in full (IndyMac hereby certifies that all amounts
have been received.)
_______2. Mortgage Loan Liquidated (IndyMac hereby certifies that all proceeds
of foreclosure, insurance, or other liquidation have been finally
received.)
_______3. Mortgage Loan in Foreclosure.
_______4. Other (explain): ____________________________________
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as an additional documents in your possession relating to
the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return of all
of the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
N-1
INDYMAC BANK, F.S.B.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
By:________________________
Name:______________________
Title:____________________
Date:______________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:________________________
Name:______________________
Title:____________________
Date:______________________
N-2
EXHIBIT O
[RESERVED]
O-1
EXHIBIT P
FORM OF CORRIDOR CONTRACT
[On File With Trustee]
P-1
EXHIBIT Q
[Reserved]
Q-1
EXHIBIT R
FORM OF PERFORMANCE CERTIFICATION
(Trustee)
Re: The Pooling and Servicing Agreement dated as of August 1, 2006 (the
"Pooling and Servicing Agreement") among IndyMac MBS, Inc., as Depositor,
IndyMac Bank, F.S.B., as Seller and Servicer, and the undersigned, as
Trustee (the "Trustee") and Supplemental Interest Trustee
---------------------------------------------------------
I, ________________________________, the _______________________ of
the Trustee, certify to the Depositor and the Servicer, and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(i) I have reviewed the report on assessment of the Trustee's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and Section 1122(b) of Regulation AB (the "Attestation Report"), all
reports on Form 10-D containing statements to certificateholders filed in
respect of the period included in the year covered by the annual report of
the Trust Fund (collectively, the "Distribution Date Statements");
(ii) Assuming the accuracy and completeness of the information
delivered to the Trustee by the Servicer as provided in the Pooling and
Servicing Agreement and subject to paragraph (iv) below, to its knowledge
the distribution information determined by the Trustee and set forth in
the Distribution Date Statements contained in all Form 10-D's included in
the year covered by the annual report of such Trust on Form 10-K for the
calendar year 200[ ], is complete and does not contain any material
misstatement of fact as of the last day of the period covered by such
annual report;
(iii) Based solely on the information delivered to the Trustee by
the Servicer as provided in the Pooling and Servicing Agreement, the
distribution information required under the Pooling and Servicing
Agreement to be contained in the Trust Fund's Distribution Date
Statements, is included in such Distribution Date Statements;
(iv) The Trustee is not certifying as to the accuracy, completeness
or correctness of the information which it received from the Servicer and
did not independently verify or confirm the accuracy, completeness or
correctness of the information provided by the Servicer;
(v) I am responsible for reviewing the activities performed by the
Trustee as a person "performing a servicing function" under the Pooling
and Servicing Agreement, and based on my knowledge and the compliance
review conducted in preparing the Servicing Assessment and except as
disclosed in the Servicing Assessment or the Attestation Report, the
Trustee has fulfilled its obligations under the Pooling and Servicing
Agreement; and
(vi) The Servicing Assessment and Attestation Report required to be
provided by the Trustee and by Subcontractor, if any, pursuant to the
Pooling and Servicing Agreement, have been provided to the Servicer and
the Depositor. Any material instances of noncompliance
R-1
described in such reports have been disclosed to the Servicer and the
Depositor. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:________________________
By:__________________________
Name:
Title:
R-2
EXHIBIT S
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
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.
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Servicer Trustee Notes
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or X X
other triggers and events of default in accordance with the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third X X
parties, policies and procedures are instituted to monitor the third
party's performance and compliance with such servicing activities.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up NA
servicer for the mortgage loans are maintained.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
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.
-----------------------------------------------------------------------------------------------------------------------------------
S-1
-----------------------------------------------------------------------------------------------------------------------------------
Primary
Reg AB Reference Servicing Criteria Servicer Trustee Notes
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate X X
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.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to X X
an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve X X
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured X X
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 Exchange Act.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X X
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.
-----------------------------------------------------------------------------------------------------------------------------------
S-2
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Servicer Trustee Notes
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the X X
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 mortgage loans serviced by the Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance X X
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two business X X
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with X X
cancelled checks, or other form of payment, or custodial bank
statements.
-----------------------------------------------------------------------------------------------------------------------------------
S-3
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Servicer Trustee Notes
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required X X
by the transaction agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by X X
the transaction agreements
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X X
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan 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 mortgage
loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
balance.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage X
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
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 agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the X
period a mortgage loan 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 mortgage loans 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 rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
-----------------------------------------------------------------------------------------------------------------------------------
S-4
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Servicer Trustee Notes
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan 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 mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
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 transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made X
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 omission.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two X
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized X
and recorded in accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item X(with X
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained respect to a
as set forth in the transaction agreements. swap
disclosure
event)
-----------------------------------------------------------------------------------------------------------------------------------
S-5
EXHIBIT T
[FORM OF] LIST OF ITEM 1119 PARTIES
ASSET BACKED CERTIFICATES
Series 200_-__
[Date]
--------------------------------------------------------------------------------
Party Contact Information
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
T-1
EXHIBIT U
[FORM OF] ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION
Re: Residential Asset Securitization Trust 2006-A8
----------------------------------------------
The undersigned Servicer hereby certifies to the Depositor and its
officers, directors and Affiliates (collectively, the "Certification Parties")
as follows, with the knowledge and intent that the Certification Parties will
rely on this Certification in connection with the certification concerning the
Trust Fund to be signed by an officer of the Depositor and submitted to the
Securities and Exchange Commission pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002:
1. I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the Servicer
during 200[ ] that were delivered by the Servicer to the Trustee pursuant to the
Agreement (collectively, the "Servicing Information");
2. Based on my knowledge, the Servicing 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 the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Servicing Information;
3. Based on my knowledge, all of the Servicing Information required
to be provided by the Servicer under the Agreement has been provided to the
Depositor or the Trustee, as applicable;
4. I am responsible for reviewing the activities performed by the
Servicer as servicer under the Servicing Agreement (the "Pooling and Servicing
Agreement") relating to the above-referenced Series, among IndyMac MBS, Inc., as
Depositor, IndyMac Bank, F.S.B., as Seller and Servicer, and Deutsche Bank
National Trust Company, as Trustee and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Pooling and Servicing Assessment or the
Attestation Report, the Servicer has fulfilled its obligations under the
Agreement in all material respects; and
5. The Compliance Statement required to be delivered by the Servicer
pursuant to the Pooling and Servicing Agreement, and the Servicing Assessment
and Attestation Report required to be provided by the Servicer and by any
Reporting Subcontractor pursuant to the Agreement, have been provided to the
Depositor. Any material instances of noncompliance described in such reports
have been disclosed to the Depositor. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
U-1
[SERVICER]
By:__________________________
Name:
Title:
Date:________________________
U-2