EXHIBIT 99.1
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INDYMAC ABS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Master Servicer
COUNTRYWIDE HOME LOANS SERVICING LP
Backup Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2003
-------------------------------------
HOME EQUITY MORTGAGE LOAN ASSET-BACKED TRUST
Series SPMD 2003-A
HOME EQUITY MORTGAGE LOAN ASSET-BACKED CERTIFICATES
Series SPMD 2003-A
TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS I-1
Section 1.01 Definitions.........................................................................I-1
Section 1.02 Rules of Construction..............................................................I-36
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES II-1
Section 2.01 Conveyance of Mortgage Loans.......................................................II-1
Section 2.02 Acceptance by the Trustee of the Mortgage Loans....................................II-4
Section 2.03 Representations, Warranties, and Covenants of the Seller, the
Master Servicer and the Backup Servicer............................................II-7
Section 2.04 Representations and Warranties of the Depositor as to the Mortgage Loans...........II-9
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases....II-9
Section 2.06 Execution and Delivery of Certificates............................................II-10
Section 2.07 REMIC Matters.....................................................................II-10
Section 2.08 Covenants of the Master Servicer..................................................II-10
Section 2.09 Subsequent Transfers..............................................................II-10
Section 2.10 Mandatory Prepayment..............................................................II-14
ARTICLE THREE ADMINISTRATION AND SERVICING OF MORTGAGE LOANS III-1
Section 3.01 Master Servicer to Service Mortgage Loans.........................................III-1
Section 3.02 Subservicing; Enforcement of the Obligations of Subservicers......................III-1
Section 3.03 [Reserved]........................................................................III-3
Section 3.04 No Contractual Relationship Between Subservicers, the Backup Servicer
and the Trustee...................................................................III-3
Section 3.05 Trustee to Act as Master Servicer.................................................III-3
Section 3.06 Collection of Mortgage Loan Payments; Servicing Accounts; Collection
Account; Certificate Account; Distribution Account; Excess Reserve
Fund Account; Cap Contract Reserve Fund; Pre-Funding Account; Capitalized
Interest Account..................................................................III-3
Section 3.07 Collection of Taxes, Assessments, and Similar Items Escrow Accounts...............III-9
Section 3.08 Access to Certain Documentation and Information Regarding the Mortgage Loans.....III-10
Section 3.09 Permitted Withdrawals from the Certificate Account, the Distribution Account,
the Excess Reserve Fund Account and the Cap Contract Reserve Fund................III-10
Section 3.10 Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies.......III-12
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements........................III-13
i
Section 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans..III-15
Section 3.13 Trustee to Cooperate; Release of Mortgage Files..................................III-17
Section 3.14 Documents, Records, and Funds in Possession of the Master Servicer to be
Held for the Trustee.............................................................III-18
Section 3.15 Servicing Compensation...........................................................III-18
Section 3.16 Access to Certain Documentation..................................................III-19
Section 3.17 Annual Statement as to Compliance................................................III-19
Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial Statements.III-19
Section 3.19 Errors and Omissions Insurance; Fidelity Bonds...................................III-20
Section 3.20 Notification of Adjustments......................................................III-20
Section 3.21 Prepayment Charges...............................................................III-20
ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER IV-1
Section 4.01 Advances...........................................................................IV-1
Section 4.02 Priorities of Distribution.........................................................IV-1
Section 4.03 Monthly Statements to Certificateholders...........................................IV-7
Section 4.04 Cap Contract......................................................................IV-10
Section 4.05 [Reserved]........................................................................IV-10
Section 4.06 [Reserved]........................................................................IV-10
Section 4.07 Certain Matters Relating to the Determination of LIBOR............................IV-10
ARTICLE FIVE THE CERTIFICATES V-1
Section 5.01 The Certificates....................................................................V-1
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates.........V-1
Section 5.03 Mutilated, Destroyed, Lost, or Stolen Certificates..................................V-6
Section 5.04 Persons Deemed Owners...............................................................V-7
Section 5.05 Access to List of Certificateholders' Names and Addresses...........................V-7
Section 5.06 Maintenance of Office or Agency.....................................................V-7
ARTICLE SIX THE DEPOSITOR AND THE MASTER SERVICER VI-1
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer, and the
Backup Servicer....................................................................VI-1
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer, or the
Backup Servicer....................................................................VI-1
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master Servicer,
the Backup Servicer and Others.....................................................VI-1
Section 6.04 Limitation on Resignation of the Master Servicer and the Backup Servicer...........VI-2
Section 6.05 Inspection.........................................................................VI-2
ARTICLE SEVEN DEFAULT VII-1
Section 7.01 Events of Default.................................................................VII-1
Section 7.02 Backup Servicer or Trustee to Act; Appointment of Successor.......................VII-3
ii
Section 7.03 Notification to Certificateholders................................................VII-6
ARTICLE EIGHT CONCERNING THE TRUSTEE VIII-1
Section 8.01 Duties of the Trustee............................................................VIII-1
Section 8.02 Certain Matters Affecting the Trustee............................................VIII-2
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans............................VIII-3
Section 8.04 Trustee May Own Certificates.....................................................VIII-4
Section 8.05 Trustee's Fees and Expenses......................................................VIII-4
Section 8.06 Eligibility Requirements for the Trustee.........................................VIII-4
Section 8.07 Resignation and Removal of the Trustee...........................................VIII-5
Section 8.08 Successor Trustee................................................................VIII-6
Section 8.09 Merger or Consolidation of the Trustee...........................................VIII-6
Section 8.10 Appointment of Co-Trustee or Separate Trustee....................................VIII-6
Section 8.11 Tax Matters......................................................................VIII-7
Section 8.12 Periodic Filings................................................................VIII-10
Section 8.13 [Reserved]......................................................................VIII-11
Section 8.14 Tax Classification of the Cap Contract Reserve Fund.............................VIII-11
Section 8.15 Access to Records of Trustee....................................................VIII-11
Section 8.16 Suits for Enforcement...........................................................VIII-11
ARTICLE NINE TERMINATION IX-1
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.....................IX-1
Section 9.02 Final Distribution on the Certificates.............................................IX-1
Section 9.03 Additional Termination Requirements................................................IX-2
ARTICLE TEN MISCELLANEOUS PROVISIONS X-1
Section 10.01 Amendment...........................................................................X-1
Section 10.02 Recordation of Agreement; Counterparts..............................................X-3
Section 10.03 Governing Law.......................................................................X-3
Section 10.04 Intention of Parties................................................................X-3
Section 10.05 Notices.............................................................................X-4
Section 10.06 Severability of Provisions..........................................................X-5
Section 10.07 Assignment..........................................................................X-5
Section 10.08 Limitation on Rights of Certificateholders..........................................X-5
Section 10.09 Inspection and Audit Rights.........................................................X-6
Section 10.10 Certificates Nonassessable and Fully Paid...........................................X-6
Section 10.11 Official Record.....................................................................X-6
Section 10.12 Protection of Assets................................................................X-6
Section 10.13 Qualifying Special Purpose Entity...................................................X-7
iii
SCHEDULES
Schedule I Mortgage Loan Schedule............................................................S-I-1
Schedule II: Representations and Warranties of the
Seller/Master Servicer ..........................................................S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans.........................S-III-1
Schedule IV: Representations and Warranties of the Backup Servicer............................S-IV-1
Schedule V: Prepayment Charge Schedule........................................................S-V-1
EXHIBITS
Exhibit A: Form of Class A, M, and B Certificate....................................................A-1
Exhibit B: Form of Class P Certificate..............................................................B-1
Exhibit C: Form of Class R Certificate..............................................................C-1
Exhibit D: Form of Class C Certificate..............................................................D-1
Exhibit E: [Reserved]...............................................................................E-1
Exhibit F: Form of Reverse of Certificates..........................................................F-1
Exhibit G: Form of Initial Certification of Trustee.................................................G-1
Exhibit H: Form of Final Certification of Trustee...................................................H-1
Exhibit I: Form of Transfer Affidavit...............................................................I-1
Exhibit J: Form of Transferor Certificate...........................................................J-1
Exhibit K: [Reserved]...............................................................................K-1
Exhibit L: Form of Rule 144A Letter.................................................................L-1
Exhibit M: Form of Request for Release (for Trustee)................................................M-1
Exhibit N: Form of Request for Release (Mortgage Loan
Paid in Full, Repurchased, and Released).................................................N-1
Exhibit O: Form of Trustee Certification............................................................O-1
Exhibit P: [Reserved]...............................................................................P-1
Exhibit Q: Form of Subsequent Transfer Agreement....................................................Q-1
iv
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2003, among
IndyMac ABS, Inc., a Delaware corporation, as depositor (the "Depositor"),
IndyMac Bank, F.S.B. ("IndyMac"), a federal savings bank, as seller (in that
capacity, the "Seller") and as master servicer (in that capacity, the "Master
Servicer"), Countrywide Home Loans Servicing LP, a Texas limited partnership,
as backup servicer (the "Backup Servicer") and Deutsche Bank National Trust
Company, a national banking association, as trustee (the "Trustee"),
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
agree as follows.
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (exclusive of the
Pre-Funding Account, the Cap Contract, the Cap Contract Reserve Fund and the
Excess Reserve Fund Account) for federal income tax purposes will consist of
three REMICs: the Pre-Funding REMIC, the Subsidiary REMIC, and the Master
REMIC. The Pre-Funding REMIC will consist of (a) all of the assets
constituting the Group 1 Mortgage Loans, (b) all of the assets constituting
the Group 2 Mortgage Loans and (c) $100 put in trust for the benefit of the
Class PP Regular Interest. The Pre-Funding REMIC issue (a) uncertificated
REMIC regular interests payable from the monies received from the Group 1
Mortgage Loans and Group 2 Mortgage Loans and the Class PP Regular Interest
(the "Pre-Funding REMIC Regular Interests"). The Class P-R Interest (the
"Class PR Interest") is the single "residual interest" in the Pre-Funding
REMIC. The Trustee will hold the Pre-Funding REMIC Regular Interests for the
benefit of the Subsidiary REMIC. The Subsidiary REMIC issue (a) uncertificated
REMIC regular interests payable from the monies received from the Group 1
Mortgage Loans (the "Subsidiary REMIC A Regular Interests"), (b)
uncertificated REMIC regular interests payable from the monies received from
the Group 2 Mortgage Loans (the "Subsidiary REMIC B Regular Interests"), and
the Class SP regular Interest (together with the Subsidiary REMIC A Regular
Interest, and the Subsidiary REMIC B Regular Interests (the "Subsidiary REMIC
Regular Interests"). The Subsidiary REMIC Regular Interests will be
uncertificated and will represent the "regular interests" in the Subsidiary
REMIC and (ii) the SR Interest (the "Class SR Interest") as the single
"residual interest" in the Subsidiary REMIC. The Trustee will hold the
Subsidiary REMIC Regular Interests for the benefit of the Master REMIC. The
Master REMIC will consist of the Subsidiary REMIC Regular Interests and will
be evidenced by (i) the Regular Certificates, which will represent the
"regular interests" in the Master REMIC and (ii) the MR Interest (the "Class
MR Interest") as the single "residual interest" in the Master REMIC. The Class
R Certificates will represent beneficial ownership of the PR Interest, the SR
Interest, and the MR Interest. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.
The Pre-Funding REMIC
The following table sets forth Class Designation, the Initial Principal
Balance, the Pass-Through Rate, and the Corresponding Loan Group for each
Pre-Funding REMIC Regular Interest:
1
Principal Pass Through
Amount Rate/Interest Amount Loan Group
------ -------------------- ----------
PA-1 The Principal Balance of the Initial Mortgage Loans in Loan (1) 1
Group 1
PB-1 Pre-Funding Amount initially allocated to Loan Group 1 (2) 1
PB-C Notional Balance (3) (4) 1
PA-2 The Principal Balance of the Initial Mortgage Loans in Loan (5) 2
Group 2
PB-2 Pre-Funding Amount initially allocated to Loan Group 2 (6) 2
PC-2 Notional Balance (7) (8) 2
SP $100 100% of Prepayment N/A
Penalties
SR $0 Residual N/A
(1) The Group 1 Net WAC Cap.
(2) During the Pre-Funding Period, 0%. Thereafter, the Group 1 Net WAC Cap.
(3) Equal to the Principal Amount of the Class PB-1 regular interests.
(4) During the Pre-Funding Period, 100% of the interest received on the
Subsequent Mortgage Loans in Loan Group 1. Thereafter, 0%.
(5) The Group 2 Net WAC Cap.
(6) During the Pre-Funding Period, 0%. Thereafter, the Group 2 Net WAC Cap.
(7) Equal to the Principal Amount of the Class PB-2 regular interests.
(8) During the Pre-Funding Period, 100% of the interest received on the
Subsequent Mortgage Loans in Loan Group 2. Thereafter, 0%.
2
The Subsidiary REMIC
The following table sets forth Class Designation, the Initial Principal
Balance, the Pass-Through Rate, and the Corresponding Master REMIC Class for
each Subsidiary REMIC Regular Interest:
Principal Pass Through Corresponding
Amount(3) Rate Master REMIC Class Loan Group
--------- ---- ------------------ ----------
SAF-1 1/2 the Corresponding Master REMIC Class Balance (1) AF-1 1
SAF-2 1/2 the Corresponding Master REMIC Class Balance (1) AF-2 1
SAF-3 1/2 the Corresponding Master REMIC Class Balance (1) AF-3 1
SAF-4 1/2 the Corresponding Master REMIC Class Balance (1) AF-4 1
SAF-5 1/2 the Corresponding Master REMIC Class Balance (1) AF-5 1
SMF-1 1/2 the Corresponding Master REMIC Class Balance (1) MF-1 1
SMF-2 1/2 the Corresponding Master REMIC Class Balance (1) MF-2 1
SBF 1/2 the Corresponding Master REMIC Class Balance (1) BF 1
SAV-1 1/2 the Corresponding Master REMIC Class Balance (2) AV-1 2
SAV-2 1/2 the Corresponding Master REMIC Class Balance (2) AV-2 2
SMV-1 1/2 the Corresponding Master REMIC Class Balance (2) MV-1 2
SMV-2 1/2 the Corresponding Master REMIC Class Balance (2) MV-2 2
SMV-3 1/2 the Corresponding Master REMIC Class Balance (2) MV-3 2
SMV-4 1/2 the Corresponding Master REMIC Class Balance (2) MV-4 2
SMV-5 1/2 the Corresponding Master REMIC Class Balance (2) MV-5 2
SBV 1/2 the Corresponding Master REMIC Class Balance (2) BV 2
Group 1Accrual 1/2 the Mortgage Loan Balance of Group 1 plus (1) N/A N/A
Directed Class 1/2 the Group 1 Overcollateralized Amount
Group 2 Accrual 1/2 the Mortgage Loan Balance of Group 2 plus (2) N/A N/A
Directed Class 1/2 the Group 2 Overcollateralized Amount
SP $100 100% of P N/A
Prepayment
Penalties(3)
SC Notional Amount(5) (5) C N/A
SR $0 Residual R N/A
(1) The Group 1 Net WAC Cap.
(2) The Group 2 Net WAC Cap.
(3) This calculation excludes any amounts associated with the $100 put in
trust for the Class P Certificates.
(4) The Class SP regular interest will have a Pass-Through Rate equal to zero,
but will be entitled to all Prepayment Charges.
(5) The Class SC regular interest not have a principal balance but will be
entitled to 100% of the interest received on the Class PC-1 regular
interest and the Class PC-2 regular interest.
On each Distribution Date, the principal balances of the Class SAF-1
Regular Interest, Class SAF-2 Regular Interest, Class SAF-3 Regular Interest,
Class SAF-4 Regular Interest, Class SAF-5 Regular Interest, Class SMF-1
Regular Interest, Class SMF-2 Regular Interest, Class SBF Regular Interest,
Class SAV-1 Regular Interest, Class SAV-2 Regular Interest, Class SMV-1
Regular Interest, Class SMV-2 Regular Interest, Class SMV-3 Regular Interest,
Class
3
SMV-4 Regular Interest, Class SMV-5 Regular Interest, and Class SBV Regular
Interest (together, the "Subsidiary REMIC Accretion Directed Classes") will be
reduced by an amount equal to 50% of the interest paid in reduction of the
principal balance of the Corresponding Class of Master REMIC Interest and will
be accrued and added to the principal balance of the related Group's Accrual
Directed Class. On each Distribution Date, the increase in the principal
balance of each Group's Accrual Directed Class may not exceed interest accruals
for such Distribution Date for the Accrual Directed Class for such Group. In
the event that: (i) 50% of the increase in the Group 1 Overcollateralized
Amount or the Group 2 Overcollateralized Amount (as the case may be) exceeds
(ii) the interest accruals on the related Group's Accrual Directed Class for
such Distribution Date, the excess for such Distribution Date (accumulated with
all such excesses for all prior Distribution Dates) will be added to any
increase in the such Group's Overcollateralized Amount for purposes of
determining the amount of interest accrual on such Accrual Directed Class
payable as principal on such Accrual Directed Class on the next Distribution
Date pursuant to the first sentence of this paragraph.
All payments of principal generated by the Mortgage Loans shall be
allocated 50% to the related Group's Accrual Directed Class, and 50% to the
Subsidiary REMIC Accretion Directed Classes to each such Subsidiary REMIC
Accretion Directed Class in an amount equal to 50% of the principal paid in
reduction of the principal balance of the Corresponding Class of Master REMIC
Interest (until paid in full). Notwithstanding the above, principal payments
that result in the reduction in the related Group's Overcollateralized Amount
shall be allocated to such Group's Accrual Directed Class (until paid in full).
Realized losses shall be applied so that after all distributions have been made
on each Distribution Date (i) the principal balances of each of the Subsidiary
REMIC Accretion Directed Classes is equal to 50% of the principal balance of
their Corresponding Class and (ii) the related Group's Accrual Directed Class
is equal to 50% of the aggregate principal balance of the Mortgage Loans plus
50% of the related Group's Overcollateralized Amount. Interest shortfalls will
be allocated pro rata based on each regular interests principal balance.
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 and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
4
Minimum Integral Multiples in
Principal Amount Pass-Through Rate Denomination Excess of Minimum
---------------- ----------------- ------------ -----------------
AF-1 $41,066,000 Variable(1)(2) $25,000 $1,000
AF-2 $14,313,000 3.167% (1) $25,000 $1,000
AF-3 $15,000,000 4.298% (1) $25,000 $1,000
AF-4 $10,323,000 5.822% (1) $25,000 $1,000
AF-5 $10,044,000 5.060% (1) $25,000 $1,000
MF-1 $4,419,000 5.945% (1) $25,000 $1,000
MF-2 $1,908,000 6.934% (1) $25,000 $1,000
BF $1,507,000 7.00% (1) $25,000 $1,000
AV-1 $110,000,000 Variable (2)(3) $25,000 $1,000
AV-2 $149,870,000 Variable (2)(3) $25,000 $1,000
MV-1 $18,723,000 Variable (2)(3) $25,000 $1,000
MV-2 $5,991,000 Variable (2)(3) $25,000 $1,000
MV-3 $2,996,000 Variable (2)(3) $25,000 $1,000
MV-4 $2,247,000 Variable (2)(3) $25,000 $1,000
MV-5 $2,247,000 Variable (2)(3) $25,000 $1,000
BV $2,247,000 Variable (2)(3) $25,000 $1,000
P $100 (4) $100.00 N/A
C 100% (5) (5) $100 $100
R n/a n/a N/A N/A
-----------
(1) Subject to a cap equal to the Group 1 Net WAC Cap.
(2) LIBOR plus the related certificate's Pass-Through Margin.
(3) Subject to a cap equal to the Adjusted Group 2 Net WAC Cap .
(4) The Class P Certificate will have a Pass-Through Rate equal to zero, but will be entitled to all
Prepayment Charges. For federal income tax purposes, the Class P Certificate will be entitled to 100%
of the amounts received on the Class SP regular interest.
(5) The Class C Certificates will represent three REMIC regular interests - the Class C1 regular interest,
the Class C2 regular interest, and the Class C3 regular interest.
As to any Distribution Date, the Class C1 regular interest will have
a Notional Balance equal to the Stated Principal Balance of the Group 1
Mortgage Loans (adjusted to take into account Principal Prepayments
received in the preceding Prepayment Period), plus any amount in the
Pre-Funding Account related to Loan Group 1 as of the last day of the
related Remittance Period, and the Pass-Through Rate for the Class C1
regular interest shall equal the excess of: (i) the Group 1 Net WAC Cap
rate over (ii) the product of: (A) two and (B) the weighted average
Pass-Through Rate of the Subsidiary REMIC A Regular Interests, with the
Group 1 Accrual Directed Class being subject to a cap equal to zero and
each related Subsidiary REMIC Accretion Directed Class is subject to a
cap equal to the Pass-Through Rate on its Corresponding Class.
As to any Distribution Date, the Class C2 regular interest will have
a Notional Balance equal to the Stated Principal Balance of the Group 2
Mortgage Loans (adjusted to take into account Principal Prepayments
received in the preceding Prepayment
5
Period), plus any amount in the Pre-Funding Account related to Loan Group
2 as of the last day of the related Remittance Period, and the
Pass-Through Rate for the Class C2 regular interest shall equal the
excess of: (i) the Group 2 Net WAC Cap Rate over (ii) the product of: (A)
two and (B) the weighted average Pass-Through Rate of the Subsidiary
REMIC B Regular Interests, with the Group 2 Accrual Directed Class being
subject to a cap equal to zero and each related related Subsidiary REMIC
Accretion Directed Class is subject to a cap equal to the Pass-Through
Rate on its Corresponding Class.
The Class C3 regular interest will be entitled to 100% of the
interest received on the Class SC regular interest.
The minimum denomination for each Class of Certificates, other than the
Class P, Class R, and the Class C Certificates, will be $25,000. The Class P,
Class R, and the Class C Certificates will each represent a 100% Percentage
Interest in such Class.
Set forth below is designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.................All Classes of Certificates other than the Physical Certificates.
Group 1 Certificates....................Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class MF-1, Class MF-2 and
Class BF Certificates.
Group 1 Senior Certificates.............Class AF-1, Class AF-2, Class AF-3, Class AF-4 and Class AF-5 Certificates.
Group 2 Certificates....................Class AV-1, Class AV-2, Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5 and
Class BV Certificates.
Group 2 Senior Certificates.............Class AV-1 and Class AV-2 Certificates
Group 1 Subordinated Certificates.......Class MF-1, Class MF-2 and Class BF Certificates.
Group 2 Subordinated Certificates.......Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5 and Class BV Certificates.
Adjustable Rate Certificates............Class AF-1 Certificates and Group 2 Certificates.
Fixed Rate Certificates.................Group 1 Certificates (other than the Class AF-1 Certificates).
ERISA-Restricted Certificates...........Class R, Class P, Class C Certificates and Certificates of any Class that ceases to
satisfy the rating requirements of the Underwriter Exemption.
LIBOR Certificates......................Adjustable Rate Certificates.
Offered Certificates....................All Classes of Certificates other than the Private Certificates.
6
Physical Certificates...................Class R, Class P, and Class C Certificates.
Private Certificates....................Class R, Class P and Class C Certificates.
Rating Agencies.........................S&P and Fitch.
Regular Certificates....................All Classes of Certificates other than the Class R Certificates.
Residual Certificates...................Class R Certificates.
7
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions.
Unless the context requires a different meaning, capitalized terms are
used in this Agreement as defined below.
Accrued Certificate Interest Distribution Amount: For any Distribution
Date for each Class of Certificates (other than the Class P, Class R, and
Class C Certificates), the amount of interest accrued during the related
Interest Accrual Period at the applicable Pass-Through Rate on the related
Class Certificate Balance immediately before the Distribution Date reduced by
any Net Prepayment Interest Shortfalls allocated to such Class and any Relief
Act Interest Shortfalls (allocated to each Certificate based on its respective
entitlements to interest irrespective of any Prepayment Interest Shortfalls or
shortfalls on the Mortgage Loans resulting from Relief Act Interest Shortfalls
for such Distribution Date).
Additional Servicing Compensation: If the Backup Servicer becomes the
successor Master Servicer as a result of a Servicer Event of Default, the
Backup Servicer will be entitled to the following supplemental fee: if 60+ day
delinquencies on the Mortgage Loans are greater than 20% of the then-current
aggregate Stated Principal Balance of the Mortgage Loans, then a supplemental
fee of 0.30% per annum will be paid on the aggregate Stated Principal Balance
of all the Mortgage Loans.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any adjustable-rate Mortgage Loan in Loan Group 2,
the first Due Date on which the related Mortgage Rate adjusts as provided in
the related Mortgage Note and each Due Date thereafter on which the Mortgage
Rate adjusts as provided in the related Mortgage Note.
Advance: The payment required to be made by the Master Servicer for any
Distribution Date pursuant to Section 4.01, the amount of that payment being
equal to the aggregate of payments of principal and interest (net of the
Master Servicing Fee, the Servicing Fee, any Additional Servicing Compensation
and any net proceeds in the case of any REO Properties) on the Mortgage Loans
that were due during the related Remittance Period and not received as of the
close of business on the related Determination Date, less the aggregate amount
of any delinquent payments that the Master Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all amendments and
supplements.
Amount Held for Future Distribution: For any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on
the related Determination Date on account of (i) Principal Prepayments
received after the end of the related Prepayment Period and Liquidation
Proceeds on the Mortgage Loans received after the end of the preceding
calendar month and (ii) all Scheduled Payments on the Mortgage Loans due after
the end of the related Remittance Period.
I-1
Applied Realized Loss Amount: For either Certificate Group and any
Distribution Date, the excess of the aggregate Class Certificate Balance of
the Offered Certificates in that Certificate Group over the sum of (x) the
aggregate Stated Principal Balance of all of the related Mortgage Loans as of
the last day of the related Prepayment Period plus (y) the amount in the
Pre-Funding Account for the related Loan Group excluding investment earnings.
Available Funds: For any Loan Group and any Distribution Date, the sum of
o all scheduled installments of interest (net of the Expense Fees for the
related Loan Group) and principal due on the Due Date on the Mortgage
Loans in that Loan Group in the related Remittance Period and received
prior to the related Determination Date, together with any related
Advances;
o all Insurance Proceeds and Liquidation Proceeds received in
connection with Mortgage Loans in that Loan Group during the
preceding calendar month (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure);
o all partial or full prepayments on the Mortgage Loans in that Loan
Group received during the related Prepayment Period together with all
Compensating Interest on those Mortgage Loans;
o the Unused Pre-Funding Amount for that Loan Group;
o the Capitalized Interest Requirement for that Loan Group; and
o amounts received for the Distribution Date as the Substitution
Adjustment Amount or purchase price of a Deleted Mortgage Loan in that
Loan Group or a Mortgage Loan in that Loan Group repurchased by the
Seller or the Master Servicer as of the Distribution Date,
minus
o amounts in reimbursement for Advances previously made with respect to
the related Mortgage Loans and other amounts reimbursable to the Master
Servicer with respect to the related Mortgage Loans pursuant to this
Agreement; and
o the Trustee Fee.
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.
Backup Servicer Event of Default: As defined in Section 7.01(II).
Basic Principal Distribution Amount: For either Loan Group and any
Distribution Date, the excess of (i) the Principal Remittance Amount for that
Loan Group for the Distribution Date over (ii) the related Excess Subordinated
Amount, if any, for that Distribution Date.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
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Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York, or the
State of California, or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Cap Contract: The interest rate cap agreement between Countrywide Home
Loans, Inc. and Bank of America, N.A. relating to the Group 2 Certificates.
Cap Contract Reserve Fund: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(f) in the name of the
Trustee for the benefit of the Holders of the Group 2 Certificates and
designated "Deutsche Bank National Trust Company in trust for registered
holders of Home Equity Mortgage Loan Asset-Backed Trust Series SPMD 2003-A,
Home Equity Mortgage Loan Asset-Backed Certificates, Group 2 Certificates.
Funds in the Cap Contract Reserve Fund shall be held in trust for the Holders
of the Group 2 Certificates for the uses and purposes set forth in this
Agreement. The Cap Contract Reserve Fund will not be an asset of any REMIC.
Capitalized Interest Account: Not applicable.
Capitalized Interest Requirement: Not applicable.
Certificate: Any one of the Certificates issued by the Trust Fund and
executed by the Trustee in substantially the forms attached as exhibits.
Certificate Account: The separate Eligible Account or Accounts created
and maintained by the Master Servicer pursuant to Section 3.06(c) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of Certificateholders and designated "IndyMac Bank,
F.S.B., in trust for the registered holders of Home Equity Mortgage Loan
Asset-Backed Certificates, Series SPMD 2003-A."
Certificate Balance: For any Certificate (other than a Class R or a Class
C Certificate) at any date, the maximum dollar amount of principal to which
the Holder of the Certificate is then entitled, such amount being equal to the
Certificate's Denomination minus all distributions of principal previously
made with respect thereto and in the case of any Subordinated Certificate,
reduced by any Applied Realized Loss Amounts applicable to that Subordinated
Certificate. The Class R and Class C Certificates have no Certificate Balance.
Certificate Group: Any of the Group 1 Certificates or the Group 2
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 purposes of
this Agreement, in order for a Certificate Owner to enforce any of its rights
under this Agreement, it shall first have to provide evidence of its
beneficial ownership interest in a Certificate that is reasonably satisfactory
to the Trustee, the Depositor and/or the Master Servicer, as applicable.
Certificate Register: The register maintained pursuant to Section 5.02.
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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 unless the Depositor or its affiliates
own 100% of the Percentage Interests evidenced by a Class of Certificates, in
which case 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 conclusively rely on a certification of the Depositor or any
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as in the
Preliminary Statement.
Class AF-5 Percentage: For any Distribution Date, a fraction, the
numerator of which is the Class Certificate Balance of the Class AF-5
Certificates immediately before that Distribution Date and the denominator of
which is the aggregate Class Certificate Balances of the Group 1 Senior
Certificates immediately before that Distribution Date.
Class BF Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 1 Senior
Certificates (after taking into account distribution of the Group 1 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MF-1 Certificates (after
taking into account distribution of the Class MF-1 Principal Distribution
Amount for that Distribution Date),
(C) the Class Certificate Balance of the Class MF-2 Certificates (after
taking into account distribution of the Class MF-2 Principal Distribution
Amount for that Distribution Date), and
(D) the Class Certificate Balance of the Class BF Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 96.30% of the aggregate Stated Principal Balance of all of the Group
1 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 1 Mortgage Loans as of the last day
of the related Prepayment Period minus $502,191.
Class BV Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
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(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distribution of the Class MV-1 Principal Distribution
Amount for that Distribution Date),
(C) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account distribution of the Class MV-2 Principal Distribution
Amount for that Distribution Date),
(D) the Class Certificate Balance of the Class MV-3 Certificates (after
taking into account distribution of the Class MV-3 Principal Distribution
Amount for that Distribution Date),
(E) the Class Certificate Balance of the Class MV-4 Certificates (after
taking into account distribution of the Class MV-4 Principal Distribution
Amount for that Distribution Date),
(F) the Class Certificate Balance of the Class MV-5 Certificates (after
taking into account distribution of the Class MV-5 Principal Distribution
Amount for that Distribution Date), and
(G) the Class Certificate Balance of the Class BV Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 96.50% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
Class C Distributable Amount: On any Distribution Date, the amount of
interest that has accrued on the Class C Certificates but that has not been
distributed on the Class C Certificates on prior Distribution Dates.
Class MF-1 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 1 Senior
Certificates (after taking into account distribution of the Group 1 Senior
Principal Distribution Amount for that Distribution Date) and
(B) the Class Certificate Balance of the Class MF-1 Certificates
immediately before that Distribution Date
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over (ii) the lesser of
(A) 89.50% of the aggregate Stated Principal Balance of all of the Group
1 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 1 Mortgage Loans as of the last day
of the related Prepayment Period minus $502,191.
Class MF-2 Principal Distribution Amount for any Distribution Date is the
excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 1 Senior
Certificates (after taking into account distribution of the Group 1 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MF-1 Certificates (after
taking into account distribution of the Class MF-1 Principal Distribution
Amount for that Distribution Date) and
(C) the Class Certificate Balance of the Class MF-2 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 93.30% of the aggregate Stated Principal Balance of all of the Group
1 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 1 Mortgage Loans as of the last day
of the related Prepayment Period minus $502,191.
Class MV-1 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date) and
(B) the Class Certificate Balance of the Class MV-1 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 86.00% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
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Class MV-2 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distribution of the Class MV-1 Principal Distribution
Amount for that Distribution Date) and
(C) the Class Certificate Balance of the Class MV-2 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 90.00% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
Class MV-3 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the group 2 senior
certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distribution of the Class MV-1 Principal Distribution
Amount for that Distribution Date),
(C) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account distribution of the Class MV-2 Principal Distribution
Amount for that Distribution Date), and
(D) the Class Certificate Balance of the Class MV-3 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 92.00% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
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Class MV-4 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distribution of the Class MV-1 Principal Distribution
Amount for that Distribution Date),
(C) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account distribution of the Class MV-2 Principal Distribution
Amount for that Distribution Date),
(D) the Class Certificate Balance of the Class MV-3 Certificates (after
taking into account distribution of the Class MV-3 Principal Distribution
Amount for that Distribution Date), and
(E) the Class Certificate Balance of the Class MV-4 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 93.50% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
Class MV-5 Principal Distribution Amount: For any Distribution Date is an
amount, not less than zero, equal to the excess of:
(i) the sum of
(A) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates (after taking into account distribution of the Group 2 Senior
Principal Distribution Amount for that Distribution Date),
(B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distribution of the Class MV-1 Principal Distribution
Amount for that Distribution Date),
(C) the Class Certificate Balance of the Class MV-2 Certificates (after
taking into account distribution of the Class MV-2 Principal Distribution
Amount for that Distribution Date),
(D) the Class Certificate Balance of the Class MV-3 Certificates (after
taking into account distribution of the Class MV-3 Principal Distribution
Amount for that Distribution Date),
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(E) the Class Certificate Balance of the Class MV-4 Certificates (after
taking into account distribution of the Class MV-4 Principal Distribution
Amount for that Distribution Date), and
(F) the Class Certificate Balance of the Class MV-5 Certificates
immediately before that Distribution Date
over (ii) the lesser of
(A) 95.00% of the aggregate Stated Principal Balance of all of the Group
2 Mortgage Loans as of the last day of the related Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate Stated
Principal Balance of all of the Group 2 Mortgage Loans as of the last day
of the related Prepayment Period minus $1,497,817.
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 the date.
Class R Certificates: A certificate representing the beneficial ownership
of the SR Interest and the MR Interest.
Closing Date: August 28, 2003.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Value: For any Mortgage Loan, the Collateral Value of the
related Mortgaged Property shall be, other than for Mortgage Loans the
proceeds of which were used for a Refinance Loan, the lesser of (i) the
appraised value determined in an appraisal obtained by the originator at
origination of the Mortgage Loan and (ii) the sales price for the Mortgaged
Property. In the case of a Refinance Loan, the Collateral Value of the related
Mortgaged Property is its appraised value determined in an appraisal obtained
at the time of refinancing.
Collection Account: As defined in Section 3.06(c).
Combined Loan-to-Value Ratio: For any Mortgage Loan at any time, the
ratio, expressed as a percentage, of
(i) the sum of (a) the original principal balance of the Mortgage Loan
and (b) the outstanding principal balance at the date of origination of the
Mortgage Loan of any senior mortgage loan, or in the case of any open-ended
senior mortgage loan, the maximum available line of credit with respect to the
Mortgage Loan at origination, regardless of any lesser amount actually
outstanding at the date of origination of the Mortgage Loan, to
(ii) the Collateral Value of the Mortgage Loan.
Compensating Interest: For any Distribution Date, the lesser of (i) any
Prepayment Interest Shortfalls during the portion of the Prepayment Period in
the prior calendar month and (ii) 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.
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Coop 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 Coop 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 Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the State
of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of
the execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Corporate Trust Administration IN030A
(IndyMac ABS, Inc., Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD
2003-A), facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇ and which is the address to which
notices to and correspondence with the Trustee should be directed.
Corresponding Class: As provided in the Preliminary Statement, in the
case of the Subsidiary REMIC Regular Interests that correspond to the
Certificates.
Cut-off Date: For each Initial Mortgage Loan, the later of its date of
origination and August 1, 2003; for each Subsequent Mortgage Loan, the later
of its date of origination and the first day of the month in which the
Subsequent Mortgage Loan is added to the Trust Fund.
Cut-off Date Principal Balance: As to any Mortgage Loan, its Stated
Principal Balance as of the close of business on the related 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 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).
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Delay Delivery Certification: A certification substantially in the form
of Exhibit G-1.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans identified
on the Mortgage Loan Schedule for which all or a portion of a related Mortgage
File is not delivered to the Trustee by the Closing Date, and (ii) all
Subsequent Mortgage Loans. The Depositor shall deliver the Mortgage Files to
the Trustee:
(A) for at least 70% of the Initial Mortgage Loans, not later than the
Closing Date,
(B) for the remaining 30% of the Initial Mortgage Loans, not later than
five Business Days after the Closing Date,
(C) for at least 90% of the Subsequent Mortgage Loans conveyed on a
Subsequent Transfer Date, that Subsequent Transfer Date, and
(D) for the remaining 10% of the Subsequent Mortgage Loans conveyed on
the related Subsequent Transfer Date, not later than thirty days after the
relevant Subsequent Transfer Date. To the extent that the Seller is in
possession of any Mortgage Files for any Delay Delivery Mortgage Loan, until
delivery of the Mortgage File to the Trustee as provided in Section 2.01, the
Seller shall hold the files as Master Servicer, as agent and in trust for the
Trustee.
Deleted Mortgage Loan: As defined in Section 2.03(c).
Denomination: For each Certificate, the amount on the face of the
Certificate as the "Initial Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face of the Certificate.
Depositor: IndyMac ABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the UCC.
Depository Participant: A broker, dealer, bank, or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 18th day of each
month or if that day is not a Business Day, the next Business Day, except that
if the next Business Day is less than two Business Days before the related
Distribution Date, then the Determination Date shall be the Business Day
immediately preceding the 18th day of the month.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(g) in the name of the
Trustee for the benefit of the Certificateholders and designated "Deutsche
Bank National Trust Company in trust for registered holders of IndyMac Home
Equity Mortgage Loan Asset-Backed Certificates, Series SPMD 2003-A." Funds in
the Distribution Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.
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Distribution Account Deposit Date: As to any Distribution Date, 12:30
p.m. Pacific time on the Business Day preceding the Distribution Date.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if that day is not a Business Day, the next
Business Day, commencing in September 2003.
Due Date: For any Mortgage Loan and Distribution Date, the first day of
the month in which the Distribution Date occurs.
Eligible Account: Any of
(i) an account maintained with a federal or state chartered depository
institution or trust company the short-term unsecured debt obligations of
which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of the
holding company, but only if ▇▇▇▇▇'▇ is not a Rating Agency) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or
(ii) an account in a depository institution or trust company that is
insured by the FDIC or the SAIF (to the limits established by the FDIC or the
SAIF) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to
each Rating Agency, the Certificateholders have a claim on the funds in the
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing the funds in the
account that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which the account is maintained, or
(iii) a trust account or accounts maintained with the trust department of
a federal or state chartered depository institution or trust company, acting
in its fiduciary capacity, or
(iv) any other account acceptable to each Rating Agency without reduction
or withdrawal of their then current ratings of the Certificates as evidenced
by a letter from each Rating Agency to the Trustee.
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).
Excess Proceeds: For any Liquidated Mortgage Loan, the excess of
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(a) all Liquidation Proceeds from the Mortgage Loan received in the
calendar month in which the Mortgage Loan became a Liquidated Mortgage Loan,
net of any amounts previously reimbursed to the Master Servicer as
Nonrecoverable Advances with respect to the Mortgage Loan pursuant to Section
3.09(a)(ii), 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.
Excess Reserve Fund Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(e) in the name of the
Trustee for the benefit of the Certificateholders and designated "Deutsche
Bank National Trust Company in trust for registered holders of IndyMac Home
Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2003-A." Funds in the
Excess Reserve Fund Account shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement. The Excess Reserve Fund
Account will not be an asset of any REMIC.
Excess Subordinated Amount: For either Certificate Group and any
Distribution Date, the excess of (a) the related Subordinated Amount on the
Distribution Date over (b) the related Specified Subordinated Amount for the
Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fees: As to each Mortgage Loan, the sum of the related Master
Servicing Fee, Servicing Fee, Trustee Fee, any Additional Servicing
Compensation, and any lender-paid mortgage insurance premiums.
Expense Fee Rate: As to each Mortgage Loan, the sum of the related Master
Servicing Fee Rate, Servicing Fee Rate, Trustee Fee Rate, the rate at which
any Additional Servicing Compensation is being paid, and the rate at which
lender-paid mortgage insurance premiums are paid.
Extra Principal Distribution Amount: As to any Loan Group for any
Distribution Date, the lesser of (x) the related Total Monthly Excess Spread
for that Distribution Date and (y) the related Subordination Deficiency for
that Distribution Date.
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 SPMD 2003-A, or
any other address Fitch furnishes to the Depositor and the Master Servicer.
I-13
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.
Group 1 Certificates: As specified in the Preliminary Statement.
Group 1 Cumulative Net Loss Trigger Event: With respect to any
Distribution Date on or after the related Stepdown Date, exists if the
percentage obtained by dividing (x) the aggregate amount of Realized Losses on
the Group 1 Mortgage Loans incurred from the applicable Cut-off Date through
the last day of the related Remittance Period by (y) the aggregate Stated
Principal Balance of the Group 1 Mortgage Loans as of the applicable Cut-off
Date exceeds (A) 3.25% from September 2006 through August 2007, (B) 4.25% from
September 2007 through August 2008, (C) 5.25% from September 2008 through
August 2009 and (D) 5.50% thereafter.
Group 1 Delinquency Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date for Loan Group 1, exists if (A) the product of 1.30
times the quotient (expressed as a percentage) of (x) the three month rolling
average of 60+ Day Delinquent Loans for Loan Group 1 and (y) the Stated
Principal Balance of the Group 1 Mortgage Loans, as of the last day of the
preceding calendar month, equals or exceeds the Senior Enhancement Percentage
for the Group 1 Certificates.
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
Group 1 Net WAC Cap: As to any Distribution Date, the weighted average of
the Adjusted Net Mortgage Rates on the Group 1 Mortgage Loans (adjusted to
take into account Principal Prepayments received during the preceding
Prepayment Period) as of the last day of the Remittance Period for the
preceding Distribution Date, or, in the case of the first Distribution Date,
as of the Initial Cut-off Date (in the case of the Class AF-1 Certificates,
adjusted to the actual number of days in the related Interest Accrual Period
and a year consisting of 360 days).
Group 1 Net WAC Shortfall: For any Class of Group 1 Certificates and any
Distribution Date on which the Pass-Through Rate for the Certificates is the
Group 1 Net WAC Cap, is an amount equal to excess of (x) the amount of
interest such Class of Certificates would have accrued for such Distribution
Date had such Pass-Through Rate not been limited by the Group 1 Net WAC Cap
over (y) the amount of interest such Class of Certificates accrued for such
Distribution Date at the Group 1 Net WAC Cap.
Group ▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to any Class of
Group 1 Certificates and any Distribution Date, is an amount equal to the
aggregate amount of Group 1 Net WAC Shortfall for such Class on that
Distribution Date, plus any unpaid Group 1 Net WAC Shortfall for such Class
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate on that Class of Certificates, without giving
effect to the Group 1 Net WAC Cap.
Group 1 Overcollateralized Amount. An amount equal to the excess of the
aggregate Stated Principal Balance of the Group 1 Mortgage Loans as of the
last day of the related Remittance Period plus the related remaining
Pre-Funding Amount (excluding investment earnings thereon) over the aggregate
of the Class Certificate Balances of the Group 1 Certificates and the Class P
Certificate.
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Group 1 Pre-Funding Amount: $10,653,630.
Group 1 Senior Certificates: As specified in the Preliminary Statement.
Group 1 Senior Principal Distribution Amount: For any Distribution Date,
the excess of
(i) the aggregate Class Certificate Balance of the Group 1 Senior
Certificates immediately before the Distribution Date over
(ii) the lesser of
(A) 80.70% of the aggregate Stated Principal Balance of all of
the Group 1 Mortgage Loans as of the last day of the related
Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate
Stated Principal Balance of all of the Group 1 Mortgage Loans as of
the last day of the related Prepayment Period minus $502,191.
Group 1 Subordinated Certificates: As specified in the Preliminary
Statement.
Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Cumulative Net Loss Trigger Event: Exists with respect to any
Distribution Date on or after the related Stepdown Date, if the percentage
obtained by dividing (x) the aggregate amount of Realized Losses on the Group
2 Mortgage Loans incurred from the Initial Cut-off Date through the last day
of the related Remittance Period by (y) the aggregate Stated Principal Balance
of the Group 2 Mortgage Loans as of the Initial Cut-off Date exceeds (A) 3.50%
from September 2006 through August 2007, (B) 4.50% from September 2007 through
August 2008, (C) 5.50% from September 2008 through August 2009 and (E) 5.75%
thereafter.
Group 2 Delinquency Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date for Loan Group 2, exists if (A) the product of 1.77
times the quotient (expressed as a percentage) of (x) the three month rolling
average of 60+ Day Delinquent Loan for Loan Group 2 and (y) the Stated
Principal Balance of the Group 2 Mortgage Loans, as of the last day of the
preceding calendar month equals or exceeds the Senior Enhancement Percentage
for Certificate Group 2.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 2 Net WAC Cap: For any Distribution Date, the product of
(i) a fraction whose numerator is 30 and whose denominator is the
actual number of days in the related Interest Accrual Period and
(ii) the weighted average of the Adjusted Net Mortgage Rates on the
Group 2 Mortgage Loans (adjusted to take into account Principal
Prepayments received during the preceding Prepayment Period) as of the
last day of the Remittance Period for the preceding Distribution Date.
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Group ▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to any Class of
Group 2 Certificates and any Distribution Date, is an amount equal to the
aggregate amount of Group 2 Net WAC Shortfall for such Class on that
Distribution Date, plus any unpaid Group 2 Net WAC Shortfall for such Class
from prior Distribution Dates, to the extent not covered by payments from the
Cap Contract Reserve Fund (and interest accrued thereon at the then applicable
Pass-Through Rate on that Class of Certificates, without giving effect to the
Group 2 Net WAC Cap).
Group 2 Net WAC Shortfall: For any Class of Group 2 Certificates and any
Distribution Date on which the Pass-Through Rate for any Class of Group 2
Certificates is the Group 2 Net WAC Cap, is an amount equal to excess of (x)
the amount of interest such Class of Certificates would have accrued for such
Distribution Date had such Pass-Through Rate been not been limited by the
Group 2 Net WAC Cap over (y) the amount of interest such Class of Certificates
accrued for such Distribution Date at the Group 2 Net WAC Cap.
Group 2 Overcollateralized Amount. An amount equal to the excess of the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans as of the
last day of the related Remittance Period plus the related remaining
Pre-Funding Amount (excluding investment earnings thereon) over the aggregate
of the Class Certificate Balances of the Group 2 Certificates and the Class P
Certificate.
Group 2 Pre-Funding Amount: $15,675,734.
Group 2 Senior Certificates: As specified in the Preliminary Statement.
Group 2 Senior Principal Distribution Amount: For any Distribution Date,
the excess of
(i) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates immediately before the Distribution Date over
(ii) the lesser of
(A) 73.50% of the aggregate Stated Principal Balance of all of
the Group 2 Mortgage Loans as of the last day of the related
Prepayment Period and
(B) an amount, not less than zero, equal to the aggregate
Stated Principal Balance of all of the Group 2 Mortgage Loans as of
the last day of the related Prepayment Period minus $1,497,817.
Group 2 Subordinated Certificates: As specified in the Preliminary
Statement.
Indenture: The indenture, or document of similar import, if any, pursuant
to which the NIM Notes are issued.
Index: As to each adjustable-rate Mortgage Loan in Loan Group 2, the
index from time to time in effect for the adjustment of the Mortgage Rate set
forth as such on the related Mortgage Note.
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.
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Initial Cut-off Date: August 1, 2003.
Initial Mortgage Loans: Such of the Mortgage Loans transferred and
assigned to the Trustee pursuant to the provisions hereof, as from time to
time are held as a part of the Trust Fund (including any REO Property), the
Mortgage Loans so held being identified on the Mortgage Loan Schedule as of
the Closing Date, notwithstanding foreclosure or other acquisition of title of
the related Mortgaged Property.
Insurance Policy: For any Mortgage Loan included in the Trust Fund, any
insurance policy, including all riders and endorsements 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 or released to the Mortgagor.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: For each Class of Fixed Rate Certificates and
the corresponding Class of Subsidiary REMIC A and Subsidiary REMIC B Regular
Interests ("Lower Tier Interest") and any Distribution Date, the calendar
month before the month of the Distribution Date. For purposes of computing
accrual of interest on each Class Fixed Rate Certificates and the
corresponding Class of Class of Lower Tier Interest, each month is assumed to
have 30 days and each year is assumed to have 360 days. For each Class of
Adjustable Rate Certificates and the corresponding Class of Lower Tier
Interest and any Distribution Date, the period from the Distribution Date in
the month preceding the month in which the Distribution Date occurs to the
Distribution Date (or in the case of the first Distribution Date, the period
from the Closing Date to the first Distribution Date). For purposes of
computing interest accruals on each Class of Adjustable Rate Certificates and
the corresponding Class of Lower Tier Interest, each Interest Accrual Period
has the actual number of days in the month and each year is assumed to have
360 days.
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: For any Interest Accrual Period for the LIBOR Certificates, the
rate determined by the Trustee on the related LIBOR Determination Date on the
basis of the offered rate for one-month U.S. dollar deposits that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on that date. If the rate
does not appear on Telerate Page 3750, the rate for that date will be
determined on the basis of the rates at which one-month U.S. dollar deposits
are offered by the Reference Banks at approximately 11:00 a.m. (London time)
on that date to prime banks in the London interbank market. In that case, the
Trustee will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If at least two quotations are so
provided, the rate for that date will be the arithmetic mean of the quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16%). If
fewer than two quotations are provided as requested, the rate for that date
will be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Master Servicer, at approximately 11:00 a.m. (New York
City time) on that date for one-month U.S. dollar loans to leading European
banks.
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LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: For any Interest Accrual Period for the LIBOR
Certificates, the second London Business Day preceding the commencement of
that Interest Accrual Period.
Liquidated Mortgage Loan: For any Distribution Date, a defaulted Mortgage
Loan (including any REO Property) that was liquidated in the calendar month
preceding the month of the Distribution Date and as to which the Master
Servicer has certified (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation
of the Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds regardless of
when received, received in connection with the partial or complete liquidation
of defaulted Mortgage Loans, whether through trustee's sale, foreclosure sale,
or otherwise or amounts received in connection with any condemnation or
partial release of a Mortgaged Property, and any other proceeds received in
connection with an REO Property, less the sum of related unreimbursed
Servicing Fees, Servicing Advances, and Advances.
Loan Group: Any of Loan Group 1 or Loan Group 2, as applicable.
Loan Group 1: Certain of the Mortgage Loans that have Mortgage Rates that
are fixed.
Loan Group 2: All Mortgage Loans that have Mortgage Rates that are
adjustable and certain of the Mortgage Loans that have Mortgage Rates that are
fixed.
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 Collateral Value of the related Mortgaged Property.
Lockout Percentage: The indicated percentage for the indicated
Distribution Dates:
Distribution Dates Percentage
September 2003 through August 2006 0%
September 2006 through August 2008 45%
September 2008 through August 2009 80%
September 2009 through August 2010 100%
September 2010 and thereafter 300%
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.
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Maintenance: For any Cooperative Unit, the rent paid by the Mortgagor to
the Cooperative Corporation pursuant to the Proprietary Lease.
Margin: As to each adjustable-rate Mortgage Loan in Loan Group 2, the
percentage amount on the related Mortgage Note added to the Index in
calculating its Mortgage Rate.
Master REMIC: As defined in the Preliminary Statement.
Master Servicer: IndyMac Bank, F.S.B., a federal savings bank, and its
successors and assigns, in its capacity as master servicer under this
Agreement.
Master Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
Pacific time on the Business Day preceding the Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution Date,
one month's interest at the related Master Servicing Fee Rate on the Stated
Principal Balance of the Mortgage Loan or, in the event of any payment of
interest that accompanies a Principal Prepayment in Full made by the
Mortgagor, interest at the Master 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.
Master Servicing Fee Rate: For each Mortgage Loan, zero.
Maximum Rate: As to each adjustable-rate Mortgage Loan in Loan Group 2,
the maximum rate specified in the related Mortgage Note at which interest can
accrue on the Mortgage Loan; as to each fixed-rate Mortgage Loan in Loan Group
2, the rate specified in the related Mortgage Note at which interest accrues
on the Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that the Master Servicer has
modified pursuant to Section 3.12.
Monthly Statement: The statement prepared by the Trustee pursuant to
Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investor Service, Inc. 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 Master Servicer.
Mortgage: The mortgage, deed of trust, or other instrument creating a
first or second lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to either (i) this Agreement or (ii) a Subsequent
Transfer Agreement and 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.
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Mortgage Loan Schedule: As of any date, the list of Mortgage Loans in
Schedule I included in the Trust Fund on that date, separately identifying the
Initial Mortgage Loans and the Subsequent Mortgage Loans. The Mortgage Loan
Schedule shall be prepared by the Seller and shall contain the following
information with respect to each Mortgage Loan by Loan Group:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the related Cut-off
Date;
(viii) the Loan-to-Value Ratio or Combined Loan-to-Value (as
applicable) 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) with respect to the adjustable-rate Mortgage Loans in Loan
Group 2:
(a) the Maximum Rate;
(b) the Periodic Rate Cap;
(c) the Adjustment Date; and
(d) the Margin;
(xv) a code indicating whether the Mortgage Loan is a Performance
Loan;
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(xvi) a code indicating whether the Mortgage Loan is a
borrower-paid mortgage insurance loan;
(xvii) the Servicing Fee Rate;
(xviii) a code indicating whether the Mortgage Loan is a Lender PMI
Loan;
(xix) the coverage amount of any mortgage insurance;
(xx) with respect to the Lender PMI Loans, the Lender PMI fee
premium; and
(xxi) a code indicating whether the Mortgage Loan is a Delay
Delivery Mortgage Loan.
The schedule shall also state the total of the amounts described under (v)
above for all of the Mortgage Loans in each Loan Group and in the aggregate.
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.
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor: The obligors on a Mortgage Note.
MR Interest: As defined in the Preliminary Statement.
Net Prepayment Interest Shortfall: For any Distribution Date, the excess
of the sum of the Prepayment Interest Shortfalls over the sum of the
Compensating Interest payments made on the Distribution Date.
Net WAC Cap: Either the Group 1 Net WAC Cap or the Group ▇ ▇▇▇ ▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: Either the Group 1 Net WAC Cap
CarryForward Amount or the Group 2 Net WAC Cap CarryForward Amount.
Net WAC Cap Payment: For any Distribution Date and either Certificate
Group, the lesser of the amounts otherwise distributable on the Class C
Certificates on the Distribution Date in respect of the related Loan Group and
the sum of any related Net WAC Cap CarryForward Amount plus the excess of the
related Required Reserve Amount for the Distribution Date over the amount on
deposit in the Excess Reserve Fund Account related to that Certificate Group
on the related Determination Date.
NIM Notes: Net interest margin securities, if any, that are secured by
the cash flow on the Class C and/or Class P Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not
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be ultimately recoverable by the Master Servicer from the related Mortgagor,
related Liquidation Proceeds or otherwise from collections related to the
Mortgage Loan.
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 on its presentation and surrender.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii) if provided for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor and the Trustee as required by this Agreement.
Opinion of Counsel: For the interpretation or application of the REMIC
Provisions, a written opinion of counsel who (i) is in fact independent of the
Depositor and the Master Servicer, (ii) does not have any direct financial
interest in the Depositor or the Master Servicer or in any affiliate of
either, and (iii) is not connected with the Depositor or the Master Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director, or
person performing similar functions. Otherwise, a written opinion of counsel,
who may be counsel for the Depositor or the Master Servicer, including
in-house counsel, reasonably acceptable to the Trustee.
Optional Termination: The termination of the Trust Fund created under
this Agreement in connection with the purchase of the Mortgage Loans pursuant
to Section 9.01(a).
Optional Termination Date: The Distribution Date on which the assets of
the Trust Fund decline to less than 10% the sum of (i) the Stated Principal
Balance of the Initial Mortgage Loans as of the Initial Cut-off Date and (ii)
the aggregate Stated Principal Balance of the Subsequent Mortgage Loans as of
their respective Subsequent Cut-off Dates.
Original Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinance Loan.
OTS: The Office of Thrift Supervision.
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 and that did not become a
Liquidated Mortgage Loan before the Due Date.
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Overcollateralized Amount. An amount equal to the excess of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related Remittance Period plus the remaining Pre-Funding Amount (excluding
investment earnings thereon) over the aggregate of the Class Certificate
Balances of the Group 1 Certificates, the Group 2 Certificates, the
Subordinated Certificates, and Class P Certificate.
Ownership Interest: As to any Residual Certificate, any ownership
interest in the Certificate including any interest in the Certificate as its
Holder and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Margin: For the Class AF-1 Certificates, 0.17%; Class AV-1
Certificates, 0.16%; Class AV-2 Certificates, 0.43%; Class MV-1 Certificates,
0.95%; Class MV-2 Certificates, 1.65%; Class MV-3 Certificates, 2.00%; Class
MV-4 Certificates, 2.75%; Class MV-5 Certificates, 3.50%; and Class BV
Certificates, 3.50%. After the Optional Termination Date, the Pass-Through
Margin on the Class AF-1 and Class AV-1 Certificates will be unchanged, the
Pass-Through Margin for the Class AV-2 Certificates will be doubled, and the
Pass-Through Margin for the Classes of Group 2 Subordinated Certificates will
increase by 50%.
Pass-Through Rate: For each Class of Certificates and each Lower Tier
Interest, the per annum rate in 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 stated on their 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 Loan: Mortgage Loans that provide borrowers the potential of
margin reduction for good payment history. If, at the time of evaluation, the
related borrower has made scheduled payments in full since the origination of
the loan with a maximum of one late payment (which, however, cannot be in the
month of evaluation) the Mortgage Loan is eligible for a reduction (ranging
from 0.50% to 1.00%) in the margin used to calculate the Mortgage Rate.
Periodic Rate Cap: As to any adjustable-rate Mortgage Loan in Loan Group
2 and any Adjustment Date, the maximum percentage increase or decrease to the
related Mortgage Rate on the Adjustment Date, as specified in the related
Mortgage Note.
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 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
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in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and subject to
supervision and examination by federal 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 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;
(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 or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency;
(ix) units of a taxable money-market portfolio having the highest rating
assigned by each Rating Agency (except (i) if Fitch is a Rating Agency and has
not rated the portfolio, the highest rating assigned by Moody's and (ii) if
S&P is a Rating Agency, "AAAm" or "AAAM-G" by S&P) and restricted to
obligations issued or guaranteed by the United States of America or entities
whose obligations are backed by the full faith and credit of the United States
of America and repurchase agreements collateralized by such obligations; and
(x) any other investments bearing interest or sold at a discount acceptable
to each Rating Agency that will not result in the downgrading 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 evidence the right to receive interest only
payments with respect to the obligations underlying the instrument. Any
Permitted Investment shall be relatively risk free and no options or voting
rights shall be exercised with respect to any Permitted Investment. No
Permitted Investment may be sold or disposed of before its maturity.
I-24
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) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code,
(v) a Person that is not a U.S. Person, and
(vi) any other Person so designated by the Depositor based on an Opinion of
Counsel that the Transfer of an Ownership Interest in a Residual Certificate
to the Person may cause any REMIC created under this Agreement to fail to
qualify as a REMIC at any time that the Certificates are outstanding.
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 FHLMC, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization, or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans on the last day of the
related Remittance Period that were Outstanding Mortgage Loans on that day.
Pre-Funding Amount: For any Loan Group and any date, the amount on
deposit in the Pre-Funding Account related to that Loan Group as of that date
(net of any reinvestment earnings thereon).
Pre-Funding Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.06 in the name of the Trustee for the
benefit of the Certificateholders and designated "Deutsche Bank National Trust
Company, in trust for registered holders of IndyMac Home Equity Mortgage Loan
Asset-Backed Certificates, Series SPMD 2003-A" for the purchase of Subsequent
Mortgage Loans. Funds in the Pre-Funding Account shall be held in trust for
the Certificateholders for the uses and purposes stated in this Agreement and
shall not be a part of any REMIC created under this Agreement; provided
I-25
however, that any investment income earned from Permitted Investments made
with funds in the Pre-Funding Account shall be for the account of the Seller.
Pre-Funding Period: The period commencing on the Closing Date and ending
on the earlier to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000 and (ii) November 20, 2003.
Prepayment Charge: As to a Mortgage Loan, any charge paid 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 being identified
in the Prepayment Charge Schedule.
Prepayment Charge Period: As to any Mortgage Loan the period of time
during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of any date, the list of Prepayment
Charges included in the Trust Fund on that date, (including the prepayment
charge summary attached thereto). The Prepayment Charge Schedule shall contain
the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan account number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination in which the related Mortgage
Property is located;
(iv) the first date on which a Monthly Payment is or was due under
the related Mortgage Note;
(v) the term of the Prepayment Charge;
(vi) the original principal amount of the related Mortgage Loan; and
(v) the Cut-off Date Principal Balance of the related Mortgage Loan.
The Prepayment Charge Schedule shall be amended from time to time by the
Master Servicer in accordance with this Agreement.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan, and Principal Prepayment, the excess of one month's interest at the
related Mortgage Rate (net of the related rate at which lender-paid primary
mortgage insurance premiums are calculated if relevant for the Mortgage Loan
and period involved) minus the Servicing Fee Rate on the Principal Prepayment
over the amount of interest paid in connection with the 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, on the Initial Cut-off Date) and to and including the 15th day of the
month of such Distribution Date.
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Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal Distribution Amount: For a Loan Group and any Distribution
Date, the sum of (i) the Basic Principal Distribution Amount for that Loan
Group for the Distribution Date and (ii) the Extra Principal Distribution
Amount for that Loan Group for the Distribution Date.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan (including the Purchase Price of any Modified Mortgage Loan
purchased pursuant to Section 3.12) that is received in advance of its
scheduled Due Date and is not accompanied by an amount representing scheduled
interest due on any date in any month after the month of prepayment. The
Master Servicer shall apply partial Principal Prepayments in accordance with
the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: For either Loan Group and any Distribution
Date, the sum of the following amounts (without duplication) with respect to
the preceding Remittance Period:
(i) the principal portion of previously undistributed Scheduled Payments
on a related Mortgage Loan due after the Cut-off Date and by the Due Date
occurring in the related Remittance Period that were not the subject of a
previous Advance and were received by the Master Servicer before the related
Determination Date or were part of the Advance for the Determination Date,
(ii) each Principal Prepayment on a related Mortgage Loan received by the
Master Servicer during the related Prepayment Period,
(iii) the Liquidation Proceeds on the related Mortgage Loans allocable to
principal actually collected by the Master Servicer during the preceding
calendar month,
(iv) the portion of the purchase price with respect to each related
Deleted Mortgage Loan, the repurchase obligation for which arose during the
preceding calendar month and that was repurchased before the related
Distribution Account Deposit Date,
(v) the principal portion of any Substitution Adjustment Amounts in
connection with a substitution of a related Mortgage Loan as of the
Distribution Date,
(vi) with respect to the Distribution Date occurring in the month
following the end of the Pre-Funding Period, the related Unused Pre-Funding
Amount, and
(vii) the allocable portion of the proceeds received with respect to the
termination of the Trust Fund (to the extent such proceeds relate to
principal).
Private Certificates: As specified in the Preliminary Statement.
Proprietary Lease: For any Cooperative Unit, a lease or occupancy
agreement between a Cooperative Corporation and a holder of related Coop
Shares.
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Prospectus Supplement: The Prospectus Supplement dated August 26, 2003
relating to the Offered Certificates.
PUD: Planned unit development.
Purchase Price: For any Modified Mortgage Loan or any Mortgage Loan
required to be purchased by the Seller pursuant to Section 2.02 or 2.03 or
purchased at the option of the Master Servicer pursuant to Section 3.12, the
sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on the date
of the purchase,
(ii) accrued interest on the Mortgage Loan at the applicable Mortgage
Rate (or at the applicable Adjusted Net Mortgage Rate if (x) the purchaser is
the Master Servicer or (y) if the purchaser is the Seller and the Seller is
the Master Servicer) from the date through which interest was last paid by the
Mortgagor to the Due Date in the month in which the Purchase Price is to be
distributed to Certificateholders, 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 a Modified Mortgage Loan, the interest component of
the Purchase Price shall be computed (i) on the basis of the applicable
Adjusted Net 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 Modified Mortgage Loan is assigned to the Master Servicer pursuant to
Section 3.12.
Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and
each state having jurisdiction over the insurer in connection with the
insurance policy issued by the insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and
to write the insurance provided by the insurance policy issued by it, approved
as a FNMA- or FHLMC-approved mortgage insurer or having a claims paying
ability rating of at least "AA" or equivalent rating by a nationally
recognized statistical rating organization.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any of them or a successor is no longer in existence, "Rating
Agency" shall be the nationally recognized statistical rating organization, or
other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Trustee. References to a given rating or
rating category of a Rating Agency means the rating category without giving
effect to any modifiers.
Realized Loss: The excess of the Stated Principal Balance of a defaulted
Mortgage Loan over the net Liquidation Proceeds with respect thereto that are
allocated to principal.
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: For any Definitive Certificate or any Fixed Rate
Certificate, the close of business on the last Business Day of the month
preceding the month of the related Distribution
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Date. For the Adjustable Rate Certificates held in book-entry form, the close
of business on the Business Day before the related Distribution Date.
Reference Bank: As defined in Section 4.07.
Refinance Loan: Any Mortgage Loan the proceeds of which are used to
refinance an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relevant Mortgage Loan: A Mortgage Loan as to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended calendar month as a result of the application of the Relief Act, the
amount, if any, by which 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.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Interest Shortfall: With respect to any Distribution Date and
any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereof for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC 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.
Remittance 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.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: For any Mortgage Loan, any insurance policy
that is required to be maintained from time to time under this Agreement.
Required Reserve Amount: On any Distribution Date, $10,000.
Residual Certificates: As specified in the Preliminary Statement.
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Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any
Assistant Treasurer, 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.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
SR Interest: As defined in the Preliminary Statement.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies. 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
Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Monitoring, or any
other address that S&P furnishes to the Depositor and the Master Servicer.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
allocable to principal or interest on the Mortgage Loan that, 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
the 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 Coop Shares and the originator of the related Mortgage
Note that defines the security interest in the Coop 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 Enhancement Percentage: For each Certificate Group and any
Distribution Date, the percentage obtained by dividing
(x) the sum of (i) the aggregate Class Certificate Balance of the
Subordinated Certificates of the related Certificate Group and (ii) the
related Subordinated Amount (in each case after taking in to account the
distributions of the related Principal Remittance Amount for the
Distribution Date) by
(y) the aggregate Stated Principal Balance of all of the related
Mortgage Loans as of the last day of the related Prepayment Period.
Senior Specified Enhancement Percentage: As of any date of determination,
19.30% with respect to the Group 1 Certificates and 26.50% with respect to the
Group 2 Certificates.
Servicer Event of Default: As defined in Section 7.01(I).
Servicing Account: The separate Eligible Account or Accounts created and
maintained pursuant to Section 3.06(b).
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Servicing Advances: All customary, reasonable, and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations, including the cost of
(i) (a) the preservation, restoration, and protection of a Mortgaged
Property,
(b) expenses reimbursable to the Master Servicer pursuant to Section
3.12 and any enforcement or judicial proceedings, including foreclosures,
(c) the maintenance and liquidation of any REO Property, and
(d) compliance with the obligations under Section 3.10; and
(ii) reasonable compensation to the Master Servicer or its affiliates for
acting as broker in connection with the sale of foreclosed Mortgaged
Properties and for performing certain default management and other similar
services (including appraisal services) in connection with the servicing of
defaulted Mortgage Loans. For purposes of clause (ii), only costs and expenses
incurred in connection with the performance of activities generally considered
to be outside the scope of customary servicing or master servicing duties
shall be treated as Servicing Advances.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, one
month's interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the Mortgage Loan as of the Due Date occurring in the preceding
calendar month, 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 any Mortgage Loan, 0.50%.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as the list may from time to time be amended.
Servicing Standard: That degree of skill and care exercised by the Master
Servicer with respect to mortgage loans comparable to the Mortgage Loans
serviced by the Master Servicer for itself or others.
60+ Day Delinquent Loan: As of any day during any calendar month, each
Mortgage Loan in foreclosure, all REO Property, each Mortgage Loan for which
the Mortgagor has filed for bankruptcy, and each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the
Remittance Period before the Remittance Period ending in the calendar month,
two months or more past due (without giving effect to any grace period). For
instance, in making a determination on the Distribution Date in July with
respect to a Mortgage Loan whose Scheduled Payment for May is delinquent (and
that has no previous Scheduled Payment that is delinquent), that Mortgage Loan
would not be a 60+ Day Delinquent Loan because as of the last day of the
Remittance Period before the Remittance Period ending in July (which would be
the Remittance Period ending in June (on June 1)), the Scheduled Payment for
May (due May 1) would only be one month past due.
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Specified Subordinated Amount: With respect to any Distribution Date
before the Stepdown Date for the related Certificate Group, an amount equal to
1.85% and 1.75%, for Loan Group 1 and Loan Group 2, respectively, of the sum
of the Cut-off Date Principal Balance of the Initial Mortgage Loans in the
related Loan Group plus the amount in the Pre-Funding Account for the related
Loan Group; with respect to each Distribution Date on and after the Stepdown
Date for the related Certificate Group, an amount equal to 3.70% and 3.50%,
for Loan Group 1 and Loan Group 2, respectively, of the aggregate Stated
Principal Balance of the Mortgage Loans in that Loan Group as of the last day
of the related Remittance Period, subject to a minimum amount for each Loan
Group equal to 0.50% of the aggregate Stated Principal Balance of the Initial
Mortgage Loans in that Loan Group as of the respective Cut-off Dates plus the
amount in the Pre-Funding Account on the Closing Date related to such Loan
Group, provided, however, that on any Distribution Date after the related
Stepdown Date on which a Trigger Event for a Certificate Group is in effect,
the Specified Subordinated Amount will be the Specified Subordinated Amount
for the prior Distribution Date.
SR Interest: As defined in the Preliminary Statement.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of the Mortgage Loan as of the Due Date as specified
in the amortization schedule at the time relating thereto (before any
adjustment to the amortization schedule for any moratorium or similar waiver
or grace period) after giving effect to (i) the payment of principal due on
the Due Date and irrespective of any delinquency in payment by the related
Mortgagor and (ii) any previous partial Principal Prepayments and Liquidation
Proceeds allocable to principal received during the related Prepayment Period.
Stepdown Date: With respect to each Certificate Group, the earlier to
occur of (a) the Class Certificate Balance of the related Senior Certificates
being reduced to zero, and (b) the later to occur of (i) the Distribution Date
in September 2006 and (ii) the first Distribution Date on which the related
Senior Enhancement Percentage (calculated for this purpose only after taking
into account distributions of principal on the related Mortgage Loans on the
last day of the related Prepayment Period but before any application of
Principal Distribution Amount to the Certificates) is greater than or equal to
the related Senior Specified Enhancement Percentage.
Subordinated Amount: For a Loan Group and any Distribution Date, the
excess of
(a) the aggregate Stated Principal Balances of the related Mortgage Loans
immediately following that Distribution Date plus the amount, if any, on
deposit in the Pre-Funding Account related to that Loan Group over
(b) the Class Certificate Balance of the Offered Certificates in that
Certificate Group as of that date (after taking into account the payment of
the Principal Remittance Amount on those certificates on that Distribution
Date).
Subordinated Certificates: The Group 1 and Group 2 Subordinated
Certificates.
Subordination Deficiency: For a Loan Group and any Distribution Date, the
excess of (a) the Specified Subordinated Amount applicable to the Distribution
Date over (b) the related Subordinated Amount applicable to the Distribution
Date.
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Subordination Reduction Amount: For a Loan Group and any Distribution
Date, the lesser of (a) the related Excess Subordinated Amount and (b) the
related Total Monthly Excess Spread.
Subsequent Cut-off Date: The later of (i) the first day of the month in
which the Subsequent Mortgage Loan is added to the Trust Fund and (ii) the
origination date of such Mortgage Loan.
Subsequent Mortgage Loan: Such of the Mortgage Loans transferred and
assigned to the Trustee pursuant to (i) a Subsequent Transfer Agreement and
(ii) the provisions hereof, as from time to time are held as a part of the
Trust Fund (including any REO Property), the Mortgage Loans so held being
identified on the Mortgage Loan Schedule for the related Subsequent Transfer
Date, notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property. When used with respect to a single Subsequent Transfer
Date, "Subsequent Mortgage Loan" means a Subsequent Mortgage Loan conveyed to
the Trust Fund on the Subsequent Transfer Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit Q, executed and delivered by the Seller,
the Depositor, and the Trustee as provided in Section 2.09(a).
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in the Subsequent Transfer Agreement.
The Subsequent Transfer Date for any Subsequent Transfer Agreement may not be
a date earlier than the date on which the Subsequent Transfer Agreement is
executed and delivered by the parties thereto pursuant to Section 2.09(a).
Subservicer: As defined in Section 3.02(a).
Subsidiary REMIC: As defined in the Preliminary Statement.
Subsidiary REMIC Accretion Directed Classes: As defined in the
Preliminary Statement.
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 or Combined Loan-to-Value Ratio (as
applicable) no higher than that of the Deleted Mortgage Loan;
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(iv) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan;
(v) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; and
(vi) comply with each representation and warranty in Section 2.03; and
(vii) satisfy the criteria for inclusion in the applicable Loan Group.
Substitution Adjustment Amount: As defined in Section 2.03.
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).
Total Monthly Excess Spread: For either Loan Group and any Distribution
Date, the excess of (i) Available Funds for that Loan Group and that
Distribution Date over (ii) the sum of the amounts paid to the Certificates on
the Distribution Date pursuant to Section 4.02(I).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trigger Event: (x) with respect to Loan Group 1, the occurrence of either
(a) a Group 1 Delinquency Trigger Event or (b) ) a Group 1 Cumulative Net Loss
Trigger Event or (y) with respect to Loan Group 2, the occurrence of either
(a) a Group 2 Delinquency Trigger Event or (b)) a Group 2 Cumulative Net Loss
Trigger Event..
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 related Cut-off Date, other than amounts due on the Mortgage Loans
by the related Cut-off Date;
(ii) the Certificate Account, the Excess Reserve Fund Account, the Cap
Contract Reserve Fund, the Distribution Account, the Pre-Funding Account, and
the Capitalized Interest Account, as of the last day of the related Remittance
Period, and all amounts deposited therein pursuant to this Agreement
(including amounts received from the Seller on the Closing Date that will be
deposited by the Trustee in the Certificate Account pursuant to Section 2.01);
(iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure, or otherwise;
(iv) the right to collect any amounts under any mortgage insurance
policies covering any Mortgage Loan and any collections received under any
mortgage insurance policies covering any Mortgage Loan;
(v) all rights to receive amounts under, and to enforce remedies in, the
Cap Contract, and
(vi) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing.
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Trustee: Deutsche Bank National Trust Company and its successors and, if
a successor trustee is appointed under this Agreement, the successor.
Trustee Fee: As to each Mortgage Loan and any Distribution Date, one
month's interest at the related Trustee Fee Rate on the Stated Principal
Balance of the Mortgage Loan as of the Due Date occurring in the preceding
calendar month or, whenever a payment of interest accompanies a Principal
Prepayment in Full made by the Mortgagor during the preceding calendar month,
interest at the Trustee Fee Rate on the Stated Principal Balance of the
Mortgage Loan for the period covered by the payment of interest, and the
Pre-Funding Amount.
Trustee Fee Rate: For each Mortgage Loan, the per annum rate agreed upon
in writing by the Closing Date by the Trustee and the Depositor.
UCC: The Uniform Commercial Code for the State of New York.
Underwriter Exemption: Prohibited Transaction Exemption 2002-41,67
Fed.Reg. 54487 (2002) (or any successor thereto), or any substantially similar
administrative exemption granted by the U.S. Department of Labor.
United States Person or U.S. Person: (i) A citizen or resident of the
United States;
(ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United
States or of any state thereof, including, for this purpose, the District of
Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of
any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations);
(iv) an estate whose income is includible in gross income for United
States income tax purposes regardless of its source; or
(v) a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
Persons have authority to control all substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons before that date, may elect to continue to
be U.S. Persons.
Unpaid Interest Amounts: As of any Distribution Date and any Class of
Certificates, the sum of
(a) the excess of
(i) the sum of the Accrued Certificate Interest Distribution Amount
for the Distribution Date and any portion of the Accrued Certificate
Interest Distribution Amount from prior Distribution Dates remaining
unpaid over
(ii) the amount in respect of interest on the Class of Certificates
actually distributed on the preceding Distribution Date and
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(b) interest on that excess for the related Interest Accrual Period at the
applicable Pass-Through Rate (to the extent permitted by applicable law).
Unpaid Realized Loss Amount: For any Class of Subordinated Certificates
and any Distribution Date, is the excess of (i) Applied Realized Loss Amounts
for the Class over (ii) the sum of all distributions in reduction of Applied
Realized Loss Amounts for the Class on all previous Distribution Dates. Any
amounts distributed to a Class of Subordinated Certificates with respect to
any Unpaid Realized Loss Amount will not be applied to reduce the Class
Certificate Balance of the Class.
Unused Pre-Funding Amount: For either Loan Group, the Pre-Funding Amount
related to that Loan Group immediately after the end of the Pre-Funding
Period.
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 any Class C
Certificates and (b) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on the date (the Voting
Rights to be allocated among the holders of Certificates of each Class in
accordance with their respective Percentage Interests).
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]"
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is any of it. A reference to the plural of anything as to which there could be
either one or more than one does not imply the existence of more than one (for
instance, the phrase "the obligors on a note" means "the obligor or obligors
on a note"). "Until [something occurs]" does not imply that it must occur, and
will not be modified by the word "unless." The word "due" and the word
"payable" are each used in the sense that the stated time for payment has
passed. The word "accrued" is used in its accounting sense, i.e., an amount
paid is no longer accrued. In the calculation of amounts of things,
differences and sums may generally result in negative numbers, but when the
calculation of the excess of one thing over another results in zero or a
negative number, the calculation is disregarded and an "excess" does not
exist. Portions of things may be expressed as fractions or percentages
interchangeably.
(f) All accounting terms used in an accounting context and not otherwise
defined, and accounting terms partly defined in this Agreement, to the extent
not completely defined, shall be construed in accordance with generally
accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement are inconsistent with their meanings under
generally accepted accounting principles, the definitions contained in this
Agreement shall control. Capitalized terms used in this Agreement without
definition that are defined in the UCC are used in this Agreement as defined
in the UCC.
(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 "on or before." 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.
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ARTICLE TWO
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(i) 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 Initial Mortgage Loan, including all interest
and principal due to the Seller on each Initial Mortgage Loan after the
related Cut-off Date and all interest and principal payments on each Initial
Mortgage Loan received by the related Cut-off Date for installments of
interest and principal due after the related Cut-Off Date but not including
payments of principal and interest due on each Initial Mortgage Loan by the
related 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 Initial Mortgage Loan listed in
the Mortgage Loan Schedule (except that, in the case of Initial 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
Initial Mortgage Loans. Also on the Closing Date the Depositor shall deposit
$100 into the Certificate Account.
(ii) 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 Initial Mortgage Loan
in accordance with this Agreement.
(iii) In connection with the transfer and assignment of each Initial
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), and, in
connection with the transfer and assignment of each Subsequent Mortgage Loan,
will deliver to the Trustee 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, the original recorded Mortgage or a
copy of the Mortgage certified by the Seller (or, in the case of a
Mortgage for which the related Mortgaged Property is located in the
Commonwealth of Puerto Rico, a copy of the Mortgage certified by the
applicable notary) as being a true and complete copy of the Mortgage.
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(iii) A duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with, except
as provided below, all interim recorded assignments of 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 Coop 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 Coop
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) satisfying the
requirements of clause (ii), (iii), or (v) above, respectively, concurrently
with the execution and delivery of this Agreement because any of them have not
been returned from the applicable public recording office in the case of
clause (ii) or (iii) above, or because the title policy has not been delivered
to either the Master Servicer or the Depositor by the applicable title insurer
in the case of clause (v) above, then the Depositor shall promptly deliver to
the Trustee, in the case of clause (ii) or (iii) above, the original Mortgage
or the interim assignment, as the case may be, with evidence of recording
indicated on it 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, for a
Subsequent Mortgage Loan, the Subsequent Transfer Date), or, in the case of
clause (v) above, later than 120 days following the Closing Date (or, for
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a Subsequent Mortgage Loan, the Subsequent Transfer 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 (or, for a Subsequent Mortgage Loan, the Subsequent Transfer Date).
The Depositor shall forward to the Trustee (a) from time to time
additional original documents evidencing an assumption or modification of a
Mortgage Loan and (b) any other documents required to be delivered by the
Depositor or the Master Servicer to the Trustee. If the original Mortgage is
not delivered and in connection with the payment in full of the related
Mortgage Loan the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only
a copy of the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver the required
document to the public recording office. If a public recording office retains
the original recorded Mortgage or if a Mortgage is lost after recordation in a
public recording office, the Seller shall deliver to the Trustee a copy of the
Mortgage certified by the public recording office to be a true and complete
copy of the original recorded Mortgage.
As promptly as practicable after any transfer of a Mortgage Loan under
this Agreement, and in any event within thirty days after the transfer, the
Trustee shall (i) affix the Trustee's name to each assignment of Mortgage, as
its assignee, and (ii) cause to be delivered for recording in the appropriate
public office for real property records the assignments of the Mortgages to
the Trustee, except that, if the Trustee has not received the information
required to deliver any assignment of a Mortgage for recording, the Trustee
shall deliver it for 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 under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Seller (at the
Seller's expense) to the Trustee, recording the assignment is not necessary to
protect the Trustee's and the Certificateholders' interest in the related
Mortgage Loan.
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 (in the case of Initial Mortgage Loans)
or within thirty days of the Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), the Seller shall either
(i) deliver to the Trustee the Mortgage File as required pursuant to this
Section 2.01 for each Delay Delivery Mortgage Loan or
(ii) (A) repurchase the Delay Delivery Mortgage Loan or (B) substitute
the Delay Delivery Mortgage Loan for a Substitute Mortgage Loan, which
repurchase or substitution shall be accomplished in the manner and subject to
the conditions in Section 2.03.
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If the Seller fails to deliver a Mortgage File for any Delay Delivery
Mortgage Loan within thirty days of the Subsequent Transfer Date, 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 the Delay Delivery Mortgage Loan,
but rather the Seller shall have five Business Days to cure the failure to
deliver, and shall promptly provide each Rating Agency with written notice of
any cure, repurchase, or substitution. By the fifth Business Day after the
Closing Date (in the case of Initial Mortgage Loans) or the thirtieth day (or
if that day is not a Business Day, the next Business Day) after the Subsequent
Transfer Date (in the case of Subsequent Mortgage Loans), the Trustee shall,
in accordance with Section 2.02, send a Delay Delivery Certification
substantially in the form of Exhibit G-1 (with any applicable exceptions noted
thereon) for all Delay Delivery Mortgage Loan delivered within the specified
numbers of days after the pertinent date. The Trustee will promptly send a
copy of such Delay Delivery Certification to each Rating Agency. The Seller
shall use its best reasonable efforts to effect a substitution, rather than a
repurchase of, any Deleted Mortgage Loan.
The Seller agrees to treat the transfer of the Mortgage Loans to the
Depositor as a sale for all tax, accounting, and regulatory purposes.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form of Exhibit G, and receipt of an amount equal
to the sum of the Group 1 Pre-Funding Amount and Group 2 Pre-Funding Amount
for deposit in the Pre-Funding Account and declares that it holds and will
hold such documents and the other documents delivered to it constituting the
Mortgage Files for the Initial Mortgage Loans, that it holds and will hold all
amounts in the Pre-Funding Account and the Capitalized Interest Account, and
that it holds or will hold such other assets as are included in the Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession
of the related Mortgage Notes in the State of California, unless otherwise
permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer, the Seller and the Backup Servicer an Initial
Certification in the form of Exhibit G. Based on its review and examination,
and only as to the documents identified in the Initial Certification, the
Trustee acknowledges that the documents appear regular on their face and
relate to the Initial Mortgage Loans. The Trustee shall be under no duty 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.
By the thirtieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall deliver to the
Depositor, the Master Servicer, the Seller and the Backup Servicer a Delay
Delivery Certification with respect to the Initial Mortgage Loans
substantially in the form of Exhibit G-1, with any applicable exceptions noted
thereon.
Not later than 90 days after the Closing Date, the Trustee shall deliver
to the Depositor, the Master Servicer, the Seller and the Backup Servicer a
Final Certification in the form of Exhibit H, with any applicable exceptions
noted thereon.
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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 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 Initial Mortgage Loan a Substitute Mortgage Loan,
which substitution shall be accomplished in the pursuant Section 2.03, or (b)
purchase the Initial 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 an Initial Mortgage Loan pursuant to
this provision is required because of a delay in delivery of any documents by
the appropriate recording office, or there is a dispute between either the
Master Servicer or the Seller and the Trustee over the location or status of
the recorded document, then the substitution or purchase shall occur within
720 days from the Closing Date. In no other case may a substitution or
purchase occur more than 540 days from the Closing Date.
The Trustee shall deliver written notice to each Rating Agency within 270
days from the Closing Date indicating each Initial 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 Initial Mortgage Loan. The notice
shall be delivered every 90 days thereafter until the related Initial Mortgage
Loan is returned to the Trustee. Any substitution pursuant to (a) above or
purchase pursuant to (b) above shall not be effected before the delivery to
the Trustee of the Opinion of Counsel required by Section 2.05, and any
substitution pursuant to (a) above shall not be effected before the additional
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit N. No substitution is permitted to be made in any calendar month after
the Determination Date for the month.
The Purchase Price for any Initial 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 Initial Mortgage Loan released pursuant hereto.
The Trustee shall retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions herein. The Master
Servicer shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File as come into the possession of the Master Servicer from time to
time.
The obligation of the Seller to substitute for or to purchase any Initial
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, the Backup Servicer and any Certificateholder against the Seller.
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(b) The Trustee agrees to execute and deliver to the Depositor, the
Master Servicer, the Seller and the Backup Servicer on the Subsequent Transfer
Date an Initial Certification in the form of Exhibit G acknowledging receipt
of the documents identified in such Initial Certification and declaring that
it holds and will hold such documents and the other documents delivered to it
constituting the Mortgage Files for the related Subsequent 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.
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 Subsequent Mortgage
Loan. The Trustee shall be under no duty to inspect, review, or examine said
documents, instruments, certificates, or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded in the real estate records or that they
are other than what they purport to be on their face.
Not later than 90 days after the Subsequent Transfer Date, the Trustee
shall deliver to the Depositor, the Master Servicer, the Seller and the Backup
Servicer a Final Certification 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 Subsequent 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 Subsequent Mortgage Loan a Substitute Mortgage
Loan, which substitution shall be accomplished pursuant to Section 2.03, or
(b) purchase the Subsequent Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of the defect in writing at the Purchase
Price of the Subsequent Mortgage Loan.
If the substitution or purchase of a Subsequent Mortgage Loan pursuant to
this provision is required because of a delay in delivery of any documents by
the appropriate recording office, or there is a dispute between either the
Master Servicer or the Seller and the Trustee over the location or status of
the recorded document, then the substitution or purchase shall occur within
720 days from the Subsequent Transfer Date. In no other case shall the
substitution or purchase occur more than 540 days from the Subsequent Transfer
Date. The Trustee shall deliver written notice to each Rating Agency within
270 days from the Subsequent Transfer Date indicating each Subsequent 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
Subsequent 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
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Counsel required by Section 2.05, and any substitution pursuant to (a) above
shall not be effected before the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit N. No substitution is
permitted to be made in any calendar month after the Determination Date for
the month. The Purchase Price for any Subsequent 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 Subsequent Mortgage Loan released pursuant
hereto.
The Trustee shall retain possession and custody of each related Mortgage
File in accordance with and subject to the terms and conditions of this
Agreement. The Master Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of any other documents or
instruments constituting the Subsequent Mortgage File that come into the
possession of the Master Servicer from time to time.
The obligation of the Seller to substitute for or to purchase any
Subsequent 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, the Backup Servicer and any Certificateholder against
the Seller.
Section 2.03 Representations, Warranties, and Covenants of the Seller,
the Master Servicer and the Backup Servicer.
(a) IndyMac, in its capacities as Seller and Master Servicer makes the
representations and warranties in Schedule II, and by this reference
incorporated herein, to the Depositor, the Backup Servicer 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 herein, to the
Depositor, the Backup Servicer and the Trustee, as of the Closing Date, or if
so specified therein, as of the related Cut-off Date.
(c) The Backup Servicer, in its capacity as Backup Servicer, makes the
representations and warranties in Schedule IV to the Depositor, the Seller,
the Master Servicer and the Trustee, as of the Closing Date.
(d) Upon discovery by any of the parties to this Agreement of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to
the other parties. The Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made pursuant to Section 2.03(b) that
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 stated below. Any substitution pursuant to
(i) above shall not be effected before the delivery to the Trustee of
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the Opinion of Counsel required by Section 2.05 and a Request for Release
substantially in the form of Exhibit N, and the Mortgage File for any
Substitute Mortgage Loan. Anything to the contrary herein notwithstanding,
Seller shall have no obligation to cure any breach or to repurchase or
substitute for the affected Mortgage Loan if the substance of the breach
constitutes fraud in the origination of the affected Mortgage Loan and the
Seller, at the time of origination and on the Closing Date, did not have
actual knowledge of the fraud. The Seller shall promptly reimburse the Master
Servicer, the Backup Servicer and the Trustee for any expenses reasonably
incurred by the Master Servicer, the Backup 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 any other
documents and agreements 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 the month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the Remittance Period of substitution shall not
be part of the Trust Fund and will be retained by the Seller on the next
Distribution Date. For the Remittance Period of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for the Remittance Period and thereafter the Seller shall be
entitled to retain all amounts received with respect to the Deleted Mortgage
Loan.
The Master Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of the Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loans and the
Master Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee, and shall give written notice to the Backup Servicer that such
substitution has occurred. Upon the substitution, the Substitute Mortgage
Loans shall be subject to this Agreement in all respects, and the Seller shall
be deemed to have made with respect to the Substitute Mortgage Loans, as of
the date of substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to the Mortgage Loan. Upon any substitution and
the deposit to the Certificate Account of the amount required to be deposited
therein in connection with the substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the benefit of
the Certificateholders relating to the Deleted Mortgage Loan to the Seller and
shall execute and deliver at the Seller's direction such instruments of
transfer or assignment prepared by the Seller, in each case without recourse,
as shall be necessary to vest title in the Seller, or its designee, the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to
this Section 2.03.
For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer
will determine the amount 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 the Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the Remittance Period of substitution and any adjustment due to any costs or
damages incurred by the Trust Fund in connection with any violation of the
Mortgage Loan of any predatory or abusive lending law). The amount of the
shortage (the "Substitution Adjustment Amount") plus, if the Seller is not the
Master Servicer, the aggregate of any unreimbursed Advances and Servicing
Advances with respect to the 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.
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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, the delivery of the Opinion of Counsel required by Section 2.05 and
receipt of a Request for Release in the form of Exhibit N, 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,
the Backup Servicer or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor as to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to each Mortgage Loan as of the date hereof or such other date set forth in
this Agreement that as of the Closing Date (or, for a Subsequent Mortgage
Loan, the Subsequent Transfer Date), and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, defenses, or
counterclaims.
The Depositor hereby transfers to the Trustee all of its rights with
respect to the Mortgage Loans including the representations and warranties of
the Seller made pursuant to Section 2.03(b), together with all rights of the
Depositor to require the Seller to cure any breach thereof or to repurchase or
substitute for any affected Mortgage Loan in accordance with this Agreement.
The representations and warranties in this Section 2.04 shall survive
delivery of the Mortgage Files to the Trustee. Upon discovery by the Depositor
or the Trustee of any breach of any of the representations and warranties in
this Section that materially and adversely affects the interest of the
Certificateholders, the party discovering the breach shall give prompt written
notice to the others and to each Rating Agency.
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or 2.03 shall be made more than 90 days
after the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause any REMIC created under this Agreement to fail to qualify as a REMIC at
any time that any Certificates are outstanding.
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(b) Upon discovery by the Depositor, the Seller, the Master Servicer, the
Backup 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, 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 the 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 hereby. The "Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date.
Section 2.08 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor, or the Trustee and prepared by the Master Servicer
pursuant to this Agreement will contain any untrue statement of a material
fact or omit to state a material fact necessary to make such information,
certificate, statement, or report not misleading.
Section 2.09 Subsequent Transfers.
(a) Upon five Business Days prior written notice to the Trustee, the
Depositor, the Seller, and the Trustee shall complete, execute, and deliver a
Subsequent Transfer Agreement,. Subject to the satisfaction of the conditions
in Article II and paragraph (b) below and pursuant to the related Subsequent
Transfer Agreement, in consideration of the Trustee's delivery on each
Subsequent Transfer Date to the order of the Seller of all or a portion of the
balance of funds in the Pre-Funding Account (net of investment earnings), the
Seller shall on each Subsequent Transfer Date transfer to the Depositor,
without recourse, all the interest of the Seller in each Subsequent Mortgage
Loan listed on the Mortgage Loan Schedule delivered by
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the Seller on the Subsequent Transfer Date, including all interest and
principal received or receivable by the Seller on or with respect to each
Subsequent Mortgage Loan after the related Cut-off Date and all interest and
principal payments on each Subsequent Mortgage Loan received by the related
Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and
payable on each Subsequent Mortgage Loan by the related Cut-off Date, and the
Depositor shall simultaneously transfer to the Trustee for the benefit of the
Certificateholders, without recourse, all the interest of the Depositor in
each Subsequent Mortgage Loan listed on the Mortgage Loan Schedule delivered
by the Seller on the Subsequent Transfer Date, including all interest and
principal received or receivable by the Depositor on or with respect to each
Subsequent Mortgage Loan after the related Cut-off Date and all interest and
principal payments on each Subsequent Mortgage Loan received before the
related Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and
payable on each Subsequent Mortgage Loan by the related Cut-off Date.
(b) If the assignment and transfer of the Subsequent Mortgage Loans and
the other property specified in this Section 2.09 from the Seller to the
Depositor pursuant to this Agreement is held or deemed not to be a sale or is
held or deemed to be a pledge of security for a loan, the Seller intends that
the rights and obligations of the parties shall be established pursuant to
this Agreement and that, in such event, (i) the Seller shall be deemed to have
granted and does hereby grant to the Depositor as of each Subsequent Transfer
Date a perfected, first priority security interest in the entire interest of
the Seller in the related Subsequent Mortgage Loans and all other property
conveyed to the Depositor pursuant to this Section 2.09 and all proceeds
thereof, and (ii) this Agreement shall constitute a security agreement under
applicable law.
If the assignment and transfer of the Subsequent Mortgage Loans and the
other property specified in this Section 2.09 from the Depositor to the
Trustee pursuant to this Agreement is held or deemed not to be a sale or is
held or deemed to be a pledge of security for a loan, the Depositor intends
that the rights and obligations of the parties shall be established pursuant
to this Agreement and that, in such event, (i) the Depositor shall be deemed
to have granted and does hereby grant to the Trustee as of each Subsequent
Transfer Date a perfected, first priority security interest in the entire
interest of the Depositor in the related Subsequent Mortgage Loans and all
other property conveyed to the Trust Fund pursuant to this Section 2.09 and
all proceeds thereof, and (ii) this Agreement shall constitute a security
agreement under applicable law.
(c) The amount released from the Pre-Funding Account by the Trustee
pursuant to this Section 2.09 shall be the aggregate Cut-off Date Principal
Balance of the Subsequent Mortgage Loans.
(d) The Trustee shall contribute from the Pre-Funding Account funds in an
amount equal to the aggregate Cut-off Date Principal Balance of the Subsequent
Mortgage Loans so transferred to the Trust Fund to purchase the Subsequent
Mortgage Loans on behalf of the Trust Fund, along with the other property and
rights related thereto described in Section 2.09(a) only upon the satisfaction
of each of the following conditions:
(i) the Trustee will be provided Opinions of Counsel addressed to
the Rating Agencies with respect to the sale of the Subsequent Mortgage
Loans conveyed on the Subsequent Transfer Date (the opinions being
substantially similar to the opinions delivered on the Closing Date to
the Rating Agencies with respect to the sale of the Initial Mortgage
Loans on the Closing Date);
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(ii) the execution and delivery of the Subsequent Transfer Agreement
or conveyance of the related Subsequent Mortgage Loans does not result in
a reduction or withdrawal of the any ratings assigned to the Certificates
by the Ratings Agencies;
(iii) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions in
Article II and this Section 2.09(d) required to be satisfied by the
Subsequent Transfer Date;
(iv) each Subsequent Mortgage Loan conveyed on the Subsequent
Transfer Date satisfies the representations and warranties applicable to
it under this Agreement;
(v) the Subsequent Mortgage Loans conveyed on the Subsequent
Transfer Date were selected in a manner reasonably believed not to be
adverse to the interests of the Certificateholders;
(vi) no Subsequent Mortgage Loan conveyed on the Subsequent Transfer
Date was 60 or more days delinquent;
(vii) each Subsequent Mortgage Loan conveyed on the Subsequent
Transfer Date that is an Adjustable Rate Mortgage Loan is secured by a
first lien on the related Mortgaged Property;
(viii) following the conveyance of the Subsequent Mortgage Loans on
the Subsequent Transfer Date to the related Loan Group, the
characteristics of the Loan Group listed below will not vary by more than
the permitted variance listed below for each characteristic with respect
to the Initial Mortgage Loans as set forth on the Mortgage Loan Schedule
delivered on the Closing Date; provided that for the purpose of making
the calculations, the characteristics for each Mortgage Loan made will be
taken as of the related Cut-off Date for the Mortgage Loan:
Loan Group 1: Variance
Loan Weighted Average Coupon: 0.05%
Weighted Average Original Term-to-Maturity 2 months
Weighted Average Original Loan-to-Value Ratio*: 0.75%
Weighted Average FICO Score 5 points
Balloon Loans: 1.30%
Maximum Principal Balance 2.00%
State Concentration: 1.01%
Zip Code Concentration: 2.00%
Non-Owner Occupied: 0.75%
Second Liens: 0.12%
Loan Group 2: Variance
Loan Weighted Average Coupon: 0.05%
Weighted Average Maturity 2 months
Weighted Average Original Loan-to-Value Ratio*: 0.45%
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Weighted Average FICO Score 5 points
Balloon Loans: 0.25%
Performance Loans: 2.00%
Maximum Principal Balance 2.00%
State Concentration: 1.00%
Zip Code Concentration: 2.00%
Non-Owner Occupied: 0.50%
Second Liens: 0.15%
-------
* Represents Combined Loan-to-Value Ratios for second lien
mortgage loans.
(ix) neither the Seller nor the Depositor is insolvent and neither
the Seller nor the Depositor will be rendered insolvent by the conveyance
of Subsequent Mortgage Loans on the Subsequent Transfer Date;
(x) delivery to the Trustee of 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 the purchase of
Subsequent Mortgage Loans 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; and
(xi) delivery to the Trustee of the Mortgage File for each
Subsequent Mortgage Loan to be transferred pursuant to the related
Subsequent Transfer Agreement.
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(e) In connection with each Subsequent Transfer Date and on the related
Distribution Date, the Seller shall determine (i) the amount and correct
dispositions of the funds distributed from the Capitalized Interest Account
and the Pre-Funding Account and (ii) any other necessary matters in connection
with the administration of the Capitalized Interest Account and the
Pre-Funding Account. If the Trustee releases any amounts from the Pre-Funding
Account or from the Capitalized Interest Account because of the Seller's
calculation error, the Trustee shall not be liable therefor, and the Seller
shall immediately repay the amounts to the Trustee.
(f) Within five Business Days of the final Subsequent Transfer Date, a
letter addressed from an independent accountant retained by the Depositor
confirming that the characteristics of the Mortgage Loans, following the
acquisition of the related Subsequent Mortgage Loans, conform to the
characteristics identified in Section 2.09(d) will be addressed to and
delivered to the Trustee. If the characteristics of the Mortgage Loans do not
conform to these characteristics, within five Business Days of notice of this
non-conformity, the Seller shall purchase sufficient Subsequent Mortgage Loans
so that the characteristics of the Mortgage Loans conform to the
characteristics identified in Section 2.09(d).
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Section 2.10 Mandatory Prepayment.
Any Unused Pre-Funding Amount shall be distributed to Holders of the
Certificates in accordance with Section 4.02 on the Distribution Date
following the end of the Pre-Funding Period.
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ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with this Agreement
and the Servicing Standard.
The Master Servicer shall not make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would cause any REMIC created
under this Agreement to fail to qualify as a REMIC or result in the imposition
of any tax under section 860F(a) or section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer, in
its own name or in the name of the Backup Servicer or the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor, Backup Servicer,
and the Trustee, when the Master Servicer or the Backup Servicer, as the case
may be, believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Backup Servicer, the Depositor, the
Certificateholders, or any of them, any instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Master Servicer shall prepare and deliver to the Depositor or the Trustee
any documents requiring execution and delivery by either or both of them
appropriate to enable the Master Servicer or the Backup Servicer to service
and administer the Mortgage Loans to the extent that the Master Servicer or
the Backup Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of the documents, the
Depositor or the Trustee shall execute the documents and deliver them to the
Master Servicer or the Backup Servicer, as applicable.
In accordance with and to the extent of the Servicing Standard, the
Master Servicer shall advance funds necessary to effect the payment of taxes
and assessments on the Mortgaged Properties, which advances shall be
reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.07, and further as provided in Section 3.09.
The costs incurred by the Master Servicer in effecting the timely payments of
taxes and assessments on the Mortgaged Properties and related insurance
premiums shall not, for the purpose of calculating monthly distributions to
the Certificateholders, be added to the Stated Principal Balances of the
related Mortgage Loans, notwithstanding that the Mortgage Loans so permit.
Section 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Master Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer (a "Subservicer") pursuant to a subservicing agreement
reasonably. The Master Servicer shall give notice to the Backup Servicer of
the appointment of any Subservicer and shall furnish to the Backup Servicer a
copy of the subservicing agreement. The Master Servicer may not enter into any
subservicing agreement if as a result any Class of the Certificates would be
downgraded or have their rating withdrawn by any Rating Agency. The
subservicing arrangement and the related subservicing agreement must provide
for the servicing of the
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Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder. Unless the context otherwise requires, references in
this Agreement to actions taken or to be taken by the Master Servicer in
servicing the Mortgage Loans include actions taken or to be taken by a
Subservicer on behalf of the Master Servicer. Notwithstanding anything in any
subservicing agreement or this Agreement relating to agreements or
arrangements between the Master Servicer and a Subservicer or references to
actions taken through a Subservicer or otherwise, the Master Servicer shall
remain obligated and liable to the Trustee and Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with this
Agreement without diminution of its obligation or liability by virtue of the
subservicing agreements or arrangements or by virtue of indemnification from
the Subservicer and to the same extent and under the same terms as if the
Master Servicer alone were servicing and administering the Mortgage Loans. All
actions of each Subservicer performed pursuant to the related subservicing
agreement shall be performed as agent of the Master Servicer with the same
effect as if performed directly by the Master Servicer. The Master Servicer
may terminate any subservicing agreement and the rights and obligations of any
Subservicer pursuant to any subservicing agreement in accordance with the
terms of the subservicing agreement.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries, or payments with respect to the
Mortgage Loans that are received by the Subservicer regardless of whether the
payments are remitted by the Subservicer to the Master Servicer.
Every subservicing agreement entered into by the Master Servicer shall
contain a provision giving the successor Master Servicer the option to
terminate the agreement if a successor Master Servicer is appointed. In the
event that the Backup Servicer is the successor Master Servicer, the Backup
Servicer, as successor Master Servicer, shall have the right to terminate any
subservicing agreement entered into by any predecessor Master Servicer without
incurring any termination or release costs charged by the subservicer.
If the Master Servicer is no longer the Master Servicer for any reason
(including because of any Servicer Event of Default), the Backup Servicer or
the Trustee (or any other successor Master Servicer) may, at its option,
succeed to any rights and obligations of the Master Servicer under any
subservicing agreement in accordance with its terms. The Backup Servicer or
the Trustee (or any other successor Master Servicer) shall not incur any
liability or have any obligations in its capacity as successor Master Servicer
under a subservicing agreement arising before the date of succession unless it
expressly elects to succeed to the rights and obligations of the Master
Servicer thereunder; and the Master Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising before
the date of succession.
The Master Servicer shall, upon request of the Backup Servicer or the
Trustee, as applicable, but at the expense of the Master Servicer, deliver to
the assuming party all documents and records relating to each subservicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the subservicing agreement to
the assuming party.
Notwithstanding anything else in this Agreement to the contrary, in no
event shall the Backup Servicer or 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
III-2
successor Master Servicer to act as successor Master Servicer under this
Agreement and the transactions provided for in this Agreement
Section 3.03 [Reserved].
Section 3.04 No Contractual Relationship Between Subservicers, the Backup
Servicer and the Trustee.
Any subservicing arrangement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be solely between the
Subservicer and the Master Servicer alone, and the Backup Servicer, the
Trustee, and Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties, or liabilities with respect to
the Subservicer in its capacity as such except as stated in Section 3.05.
Section 3.05 Trustee to Act as Master Servicer.
If the Master Servicer for any reason is no longer the Master Servicer
hereunder (including because of a Servicer Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Master Servicer hereunder arising thereafter (except that the Trustee shall
not be
(i) liable for losses of the Master Servicer pursuant to Section 3.10 or
any acts or omissions of the predecessor Master Servicer hereunder),
(ii) obligated to make Advances if it is prohibited from doing so by
applicable law,
(iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder, including repurchases or substitutions pursuant to Section
2.02 or 2.03,
(iv) responsible for expenses of the Master Servicer pursuant to Section
2.03, or
(v) deemed to have made any representations and warranties of the Master
Servicer hereunder. Any assumption shall be subject to Section 7.02.
Section 3.06 Collection of Mortgage Loan Payments; Servicing Accounts;
Collection Account; Certificate Account; Distribution
Account; Excess Reserve Fund Account; Cap Contract Reserve
Fund; Pre-Funding Account; Capitalized Interest Account.
(a) In accordance with and to the extent of the Servicing Standard, the
Master Servicer shall make reasonable efforts in accordance with the customary
and usual standards of practice of prudent mortgage servicers to collect all
payments called for under the Mortgage Loans to the extent the procedures are
consistent with this Agreement and any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or, subject to Section 3.21, any prepayment
charge or penalty interest in connection with the prepayment of a Mortgage
Loan, (ii) modify any delinquent or defaulted 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), provided
such modification is consistent with the Servicing Standard and if in the
Master Servicer's determination such modification 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 of such Mortgage Loan, provided, however, that the Master Servicer shall
not initiate new lending to such mortgagor through the trust and (iii) extend
the
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due dates for payments due on a Mortgage Note for a period not greater than
125 days. However, the Master Servicer cannot extend the maturity of any
Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan in the applicable Loan Group as of the related Cut-off
Date. In the event of any such arrangement, the Master Servicer shall make
Advances on the related Mortgage Loan in accordance with Section 4.01 during
the scheduled period in accordance with the amortization schedule of the
Mortgage Loan without modification thereof because of the arrangements. The
Master Servicer shall not be required to institute or join in litigation with
respect to collection of any payment (whether under a Mortgage, Mortgage Note,
or otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which the payment is required
is prohibited by applicable law. The Master Servicer shall not sell any
delinquent or defaulted Mortgage Loan.
(b) The Master Servicer shall establish and maintain (or, if a Mortgage
Loan is subserviced by another Person, cause the related Subservicer to
establish and maintain) one or more Servicing Accounts into which the Master
Servicer shall deposit on a daily basis within one Business Day of receipt,
the following payments and collections received by it or remitted by any
Subservicer in respect of Mortgage Loans after the related Cut-off Date (other
than in respect of principal and interest due on the Mortgage Loans by the
related 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 any Additional Servicing Compensation
and, in cases where the Master Servicer maintains the Servicing Account,
the related Master Servicer Fee; and
(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures.
By the Determination Date in each calendar month, the Master Servicer
shall (a) withdraw from the Servicing Account all amounts on deposit therein
pursuant to clauses (i) and (ii) above (other than amounts attributable to a
Principal Prepayment in Full) and (b) deposit such amounts in the Collection
Account. By the Business Day in each calendar month following the deposit in
the Servicing Account of amounts on deposit therein pursuant to clause (iii)
above or pursuant to any Principal Prepayment in Full, the Master Servicer
shall (a) withdraw such amounts from the Servicing Account and (b) deposit
such amounts in the Collection Account.
(c) The Master Servicer shall establish and maintain a Collection Account
(the "Collection Account") into which the Master Servicer shall deposit, as
and when required by paragraph (b) of this Section 3.06, all amounts required
to be deposited into the Collection Account pursuant to that paragraph.
(d) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit on a daily basis (i)
within one Business Day of deposit in the Collection Account (in the case of
items (i) through (iii) below) and (2) within one Business Day of receipt (in
the case of all other items), except as otherwise specified herein, the
following payments and collections received by it or remitted by any
Subservicer in respect of Mortgage Loans after the related Cut-off Date (other
than in respect of principal and interest
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due on the Mortgage Loans by the related 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 related Servicing Fee, any Additional Servicing Compensation and
the related Master Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master Servicer
pursuant to Section 3.06(f) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.12;
(vi) all Purchase Prices from the Master Servicer or Seller and all
Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to Section
4.01;
(viii) any other amounts required to be deposited hereunder; and
(ix) all Prepayment Charges collected.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for the Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Master Servicer shall cause
funds to be deposited into the Certificate Account in an amount required to
cause an amount of interest to be paid with respect to the Mortgage Loan equal
to the amount of interest that has accrued on the Mortgage Loan from the
preceding Due Date at the Mortgage Rate net of the Master Servicing Fee on
that date.
The foregoing requirements for remittance by the Master Servicer shall be
exclusive. Without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. If the Master Servicer remits any amount not
required to be remitted, it may at any time withdraw that amount from the
Certificate Account, any provision herein to the contrary notwithstanding. The
withdrawal or direction may be accomplished by delivering written notice of it
to the Trustee or any other institution maintaining the Certificate Account
that describes the amounts deposited in error in the Certificate Account. The
Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section 3.06. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.09.
(e) The Trustee shall establish and maintain the Excess Reserve Fund
Account, (the "Excess Reserve Fund Account") on behalf of the Class C
Certificateholder to secure its
III-5
limited recourse obligation to pay to the other Certificateholders Net WAC Cap
CarryForward Amounts.
(i) On the Closing Date, the Depositor shall deposit $10,000 into
the Excess Reserve Fund Account, 50% of which shall be allocated to Loan
Group 1 and 50% of which shall be allocated to Loan Group 2.
(ii) On each Distribution Date, the Trustee shall deposit the amount
of any Net WAC Cap Payment for that date into the Excess Reserve Fund
Account.
(iii) The Trustee shall invest amounts held in the Excess Reserve
Fund Account only in Permitted Investments, which shall mature not later
than the Business Day next preceding the next Distribution Date (except
that if such Permitted Investment is an obligation of the institution
that maintains such account, then such Permitted Investment shall mature
not later than the next Distribution Date) and, in each case, shall not
be sold or disposed of before its maturity. The Master Servicer shall
direct the Trustee in writing with respect to investment of amounts in
the Excess Reserve Fund Account.
(iv) On each Distribution Date on which a Net WAC Cap CarryForward
Amount exists for any Class of Certificates after applying available
amounts in the Cap Contract Reserve Fund for that Distribution Date, the
Trustee shall withdraw from the Excess Reserve Fund Account amounts
necessary to pay to the Class of Certificates the Net WAC Cap
CarryForward Amount. Such payments shall be allocated to those Classes in
a particular certificate group on a pro rata basis based first, on their
respective Class Certificate Balances and second, on the amount of Net
WAC Cap CarryForward Amount owed to each Class.
(v) The Trustee shall account for the Excess Reserve Fund Account as
an outside reserve fund within the meaning of Treasury regulation
1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The owner of the Excess Reserve Fund Account is the Class C
Certificateholder. The Trustee shall treat amounts transferred by the
Master REMIC to the Excess Reserve Fund Account as distributions to the
Class C Certificateholder (and from the Class C Certificateholder to the
Excess Reserve Fund Account) for all federal tax purposes. Accordingly,
each Class of Certificates, other than the Class C Certificate, and Class
P Certificate will comprise two components: a Master Regular Interest and
an interest in a cap contract. The Trustee shall allocate the issue price
for a Class of Certificates between the two components for purposes of
determining the issue price of the Master REMIC Regular Interest
component. For purposes of determining the issue price of the Master
REMIC regular interests, the Trustee shall assume that the interest rate
cap has a value of $10,000.
(vi) Any Net WAC Cap CarryForward Amounts paid by the Trustee to the
Certificateholders shall be accounted for by the Trustee as amounts paid
to the Holder of the Class C Certificate. In addition, the Trustee shall
account for the Certificateholders' rights to receive payments of Net WAC
Cap CarryForward Amounts as rights in a limited recourse interest rate
cap contract written by the Class C Certificateholder in favor of the
other Certificateholders.
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(vii) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess
Reserve Fund Account except as expressly stated in this Section 3.06(f).
(f) (i) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Classes of Group 2
Certificates, the Cap Contract Reserve Fund. The Cap Contract Reserve Fund
shall be an Eligible Account, and funds on deposit in the account 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.
(ii) The Trustee shall deposit in the Cap Contract Reserve Fund all
amounts received from the counterparty on any Distribution Date pursuant to
the Cap Contract. If the Trustee shall also deposit into the Cap Contract
Reserve Fund any amount not required to be deposited in that account, it may
at any time withdraw such amount from the Cap Contract Reserve Fund, any
provision in this Agreement to the contrary notwithstanding. Funds in the Cap
Contract Reserve Fund shall be invested in Permitted Investments, which shall
mature on or before the next Distribution Date, by the Trustee at the
direction of the Master Servicer. Any net investment earnings on such amounts
shall be payable to the Seller. The amount of any realized losses on Permitted
Investments in the Cap Contract Reserve Fund shall promptly be deposited by
the Seller in the Cap Contract Reserve Fund. The Seller shall be the owner of
the Cap Contract Reserve Fund for federal tax purposes. The Trustee shall have
no liability for losses on investments in Permitted Investments made pursuant
to this Section (other than as an obligor on such investments). The Trustee
shall account for the Cap Contract Reserve Fund as an outside reserve fund
within the meaning of Treasury regulation 1.860G-2(h) and not an asset of any
REMIC created pursuant to this Agreement. For purposes of determining the
issue price of the Master REMIC regular interests, the Trustee shall assume
that the cap contract has a value of $87,500.
(iii) Amounts on deposit in a Cap Contract Reserve Fund can be
withdrawn by the Trustee in connection with any Distribution Date on which
there exists a Group 2 Net WAC Shortfall for a Class of Group 2 Certificates
to pay the amount of such Group 2 Net WAC Shortfall (to the extent of funds on
deposit in the Cap Contract Reserve Fund) to the related Class of Group 2
Certificates. On any Distribution Date, any amounts on deposit in the Cap
Contract Reserve Fund in excess of the Group 2 Net WAC Shortfall shall be paid
to the Holder of the Class C Certificates.
(g) 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 therein the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee pursuant to Section 3.09(a);
(ii) any amount deposited by the Master Servicer pursuant to Section
3.06(h) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder that are required to be
deposited in the Distribution Account.
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If the Master Servicer remits any amount not required to be remitted, it
may at any time direct the Trustee in writing to withdraw that amount from the
Distribution Account, any provision herein to the contrary notwithstanding.
The direction may be accomplished by delivering an Officer's Certificate to
the Trustee that describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 3.09. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at
the direction of the Master Servicer.
(h) Each institution at which the Certificate Account is maintained shall
invest the funds therein as directed in writing by the Master Servicer in
Permitted Investments, which shall mature not later than 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 shall not be
sold or disposed of before its maturity. All Permitted Investments shall be
made in the name of the Trustee, for the benefit of the Certificateholders.
All income realized from any investment of funds on deposit in the Certificate
Account shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The
amount of any realized losses on Permitted Investments in the Certificate
Account shall promptly be deposited by the Master Servicer in the Certificate
Account. The Trustee shall not be liable for the amount of any loss incurred
in respect of any investment or lack of investment of funds held in the
Certificate Account and made in accordance with this Section 3.06.
The Trustee shall invest funds in the Capitalized Interest Account or
Pre-Funding Account as directed in writing by the Master Servicer in Permitted
Investments, which shall mature not later than the Business Day next preceding
the Distribution Date (except that if such Permitted Investment is an
obligation of the institution that maintains such account, then such Permitted
Investment shall mature not later than the Distribution Date) and, in each
case, shall not be sold or disposed of before its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Seller.
(i) The Trustee shall establish and maintain, on behalf of the
Certificateholders, a separate account denominated the Pre-Funding Account in
the name of the Trustee. The Pre-Funding Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of any REMIC. Any investment earnings on the Pre-Funding Account shall be
treated as owned by the Seller and will be taxable to the Seller. The amount
of any realized losses on Permitted Investments in the Pre-Funding Account
shall promptly be deposited by Seller in the Pre-Funding Account. On the
Closing Date, the Seller shall remit the Pre-Funding Amount to the Trustee for
deposit in the Pre-Funding Account for purchase of Subsequent Mortgage Loans
to be included in the Trust Fund.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a separate account denominated the Capitalized Interest
Account in the name of the Trustee if the Capitalized Interest Requirement is
greater than zero. The Capitalized Interest Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of the REMIC. Any investment earnings on the Capitalized Interest Account
shall be treated as owned by the Seller and will be taxable to the Seller. The
amount of any realized losses on Permitted Investments in the Capitalized
Interest Account shall promptly be deposited by the Seller in the Capitalized
Interest Account.
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On each Subsequent Transfer Date, upon satisfaction of the conditions in
Section 2.09, the Trustee shall withdraw from the Pre-Funding Account 100% of
the aggregate of the Cut-off Date Principal Balances of the Subsequent
Mortgage Loans sold to the Trust Fund on the Subsequent Transfer Date and pay
that amount to the order of the Seller.
On the Business Day before the Distribution Date following the Remittance
Period in which the Pre-Funding Period ends, the Trustee shall (i) withdraw
the Unused Pre-Funding Amount from the Pre-Funding Account, (ii) promptly
deposit the amount in the Distribution Account, and (iii) distribute the
amount on the Distribution Date pursuant to Section 4.02.
The amount deposited in the Distribution Account pursuant to the
preceding paragraph shall be net of any investment earnings on the amounts on
deposit in the Pre-Funding Account.
On the Business Day before each Distribution Date, through the
Distribution Date following the Remittance Period in which the Pre-Funding
Period ends, the Trustee shall transfer from the Capitalized Interest Account
to the Distribution Account the Capitalized Interest Requirement and shall
distribute such amount on the Distribution Date pursuant to Section 4.02. To
the extent that a Capitalized Interest Requirement on any the Distribution
Date exceeds the amounts on deposit in the Capitalized Interest Account, the
Trustee shall transfer to the Distribution Account, to the extent of the
shortfall in the Capitalized Interest Requirement, the investment earnings on
the amounts on deposit in the Capitalized Interest Account and Pre-Funding
Account. The remaining investment earnings on deposit in the Capitalized
Interest Account and the Pre-Funding Account shall be transferred to the
Seller.
All amounts remaining in the Capitalized Interest Account and any
investment earnings remaining in the Pre-Funding Account on the Distribution
Date following the Remittance Period in which the Pre-Funding Period ends
shall be transferred to the Seller.
(j) The Master Servicer shall notify the Trustee, the Seller, each Rating
Agency, and the Depositor of any proposed change of the location of the
Certificate Account, the Collection Account, the Excess Reserve Fund Account,
the Cap Contract Reserve Fund, the Distribution Account, the Pre-Funding
Account, or the Capitalized Interest Account not later than 30 days and not
more than 45 days before 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 Master Servicer shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse (without duplication) the Master Servicer out of related collections
for any payments made pursuant to Sections 3.01 (with respect to taxes and
assessments and insurance premiums) and 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
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Escrow Account or to clear and terminate the Escrow Account at the termination
of this Agreement in accordance with Section 9.01. The Escrow Accounts shall
not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to in Section
3.07(a) that are not timely paid by the Mortgagors on the date when the tax,
premium or other cost for which such payment is intended is due, but the
Master Servicer shall be required so to advance only to the extent that such
advances, in the good faith judgment of the Master Servicer, will be
recoverable by the Master Servicer out of Insurance Proceeds, Liquidation
Proceeds, or otherwise.
Section 3.08 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor, the Backup Servicer and
the Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance information, and other matters
relating to this Agreement, such access being afforded without charge, but
only upon reasonable request and during normal business hours at the office
designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder or Certificate Owner that is a savings and
loan association, bank, or insurance company certain reports and reasonable
access to information and documentation regarding the Mortgage Loans
sufficient to permit the Certificateholder or Certificate Owner to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates. The Master Servicer shall be entitled to be
reimbursed by each such Certificateholder or Certificate Owner for actual
expenses incurred by the Master Servicer in providing the reports and access.
Section 3.09 Permitted Withdrawals from the Certificate Account, the
Distribution Account, the Excess Reserve Fund Account and
the Cap Contract Reserve Fund.
(a) The Master Servicer may (and, in the case of clause (x) below, shall)
from time to time make withdrawals from the Certificate Account for the
following purposes:
(i) to pay to the Master Servicer or the related Subservicer (to the
extent not previously retained) the servicing compensation to which it is
entitled pursuant to Section 3.15, and to pay to the Master Servicer, as
additional master servicing compensation, earnings on or investment
income with respect to funds in or credited to the Certificate Account;
(ii) to reimburse the Master Servicer for 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) without duplication, and solely out of amounts that are
payable to a former master servicer pursuant to Section 3.15, to pay to
the Backup Servicer, the Trustee or any successor master servicer amounts
paid by them in connection with the transfer of the Master Servicer's
servicing obligations pursuant to Article V and required to be borne by
the Master Servicer.
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(iv) to reimburse the Master Servicer for any Nonrecoverable Advance
previously made;
(v) to reimburse the Master Servicer for Insured Expenses from the
related Insurance Proceeds;
(vi) to reimburse the Master Servicer for (a) unreimbursed Servicing
Advances, the Master Servicer's right to reimbursement pursuant to this
clause (a) with respect to any Mortgage Loan being limited to amounts
received on the Mortgage Loans that represent late recoveries of the
payments for which the advances were made pursuant to Section 3.01 or
Section 3.07 and (b) for unpaid Master Servicing Fees as provided in
Section 3.12;
(vii) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03, or 3.14, all amounts received thereon after the date
of such purchase;
(viii) to reimburse the Seller, the Master Servicer, or the
Depositor for expenses incurred by any of them and reimbursable pursuant
to Section 6.03;
(ix) to withdraw any amount deposited in the Certificate Account and
not required to be deposited therein;
(x) by the Distribution Account Deposit Date, to withdraw (1)
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
(xi) to clear and terminate the Certificate Account upon termination
of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, to justify any withdrawal from the
Certificate Account pursuant to subclauses (i), (ii), (v), (vi), and (vii).
Before making any withdrawal from the Certificate Account pursuant to
subclause (iii), the Master Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Master Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans and their respective portions of the
Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related Distribution
Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds in
the Distribution Account;
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(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein;
(iv) to clear and terminate the Distribution Account upon
termination of this Agreement pursuant to Section 9.01; and
(v) to reimburse the Backup Servicer for costs and expenses incurred
in connection with a transfer of servicing as provided in Section 7.02.
(c) On each Distribution Date, the Trustee shall make withdrawals from
the Excess Reserve Fund Account for deposit in the Distribution Account of the
amount required pursuant to Section 3.06(f). On the earlier of (i) the
termination of this Agreement pursuant to Section 9.01 and (ii) the
Distribution Date on which all of the Certificates (other than the Class C
Certificates) are reduced to zero , any amount remaining on deposit in the
Excess Reserve Fund Account after giving effect to the requirements of the
preceding sentence shall be withdrawn by the Trustee and paid to the Class C
Certificateholders.
(d) On each Distribution Date, the Trustee shall make withdrawals from
the Cap Contract Reserve Fund for deposit in the Distribution Account of the
amount required pursuant to Section 3.06(f). On the earlier of (i) the
termination of this Agreement pursuant to Section 9.01, (ii) the Distribution
Date on which the aggregate Class Certificate Balance of the Classes of Group
2 Certificates are reduced to zero and (iii) the Cap Contract termination
date, any amount remaining on deposit in the related Cap Contract Reserve Fund
after giving effect to the requirements of the preceding sentence shall be
withdrawn by the Trustee and paid to the Class C Certificates.
Section 3.10 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Master Servicer shall maintain, for each Mortgage Loan, hazard
insurance with extended coverage in an amount that is at least equal to the
lesser of
(i) the maximum insurable value of the improvements securing the
Mortgage Loan and
(ii) the greater of (y) the outstanding principal balance of the
Mortgage Loan and (z) an amount such that the proceeds of the policy are
sufficient to prevent the Mortgagor or the mortgagee from becoming a
co-insurer.
Each policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. Any
amounts collected under the policies (other than the amounts to be applied to
the restoration or repair of the related Mortgaged Property or amounts
released to the Mortgagor in accordance with the Master Servicer's normal
servicing procedures) shall be deposited in the Certificate Account. Any cost
incurred in maintaining any insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the
Mortgage Loan, notwithstanding that the Mortgage Loan so permits. Such costs
shall be recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 3.09. No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage
other than pursuant to any applicable laws and regulations in force that
require additional
III-12
insurance. If the Mortgaged Property is located at the time of origination of
the Mortgage Loan in a federally designated special flood hazard area and the
area is participating in the national flood insurance program, the Master
Servicer shall maintain flood insurance for the Mortgage Loan. The flood
insurance shall be in an amount equal to the least of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of the Mortgaged Property, and (iii) the
maximum amount of flood insurance available for the related Mortgaged Property
under the national flood insurance program.
If the Master Servicer obtains and maintains a blanket policy insuring
against hazard losses on all of the Mortgage Loans, it shall have satisfied
its obligations in the first sentence of this Section 3.10. The policy may
contain a deductible clause on terms substantially equivalent to those
commercially available and maintained by comparable servicers. If the policy
contains a deductible clause and a policy complying with the first sentence of
this Section 3.10 has not been maintained on the related Mortgaged Property,
and if a loss that would have been covered by the required policy occurs, the
Master Servicer shall deposit in the Certificate Account the amount not
otherwise payable under the blanket policy because of the deductible clause.
In connection with its activities as Master Servicer of the Mortgage Loans,
the Master Servicer agrees to present, on behalf of itself, the Depositor, and
the Trustee for the benefit of the Certificateholders, claims under any
blanket policy.
(b) The Master Servicer shall not take any action that would result in
non-coverage under any applicable Primary Insurance Policy of any loss that,
but for the actions of the Master Servicer, would have been covered
thereunder. The Master Servicer shall not cancel or refuse to renew any
Primary Insurance Policy that is in effect at the date of the initial issuance
of the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for the canceled or non-renewed policy is
maintained with a Qualified Insurer. The Master Servicer need not maintain any
Primary Insurance Policy if maintaining the Primary Insurance Policy is
prohibited by applicable law. The Master Servicer agrees, to the extent
permitted by applicable law, to effect the timely payment of the premiums on
each Primary Insurance Policy, and any costs not otherwise recoverable shall
be recoverable by the Master Servicer from the related liquidation proceeds.
The Master Servicer shall maintain for as long as each relevant Mortgage Loan
is outstanding the mortgage insurance associated with the Mortgage Loans
identified on the Mortgage Loan Schedule as having lender acquired mortgage
insurance, and as to any other Mortgage Loans the Master Servicer need not
maintain any Primary Insurance Policy with respect to any Mortgage Loan with a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio (as applicable) less than
or equal to 80% as of any date of determination or, based on a new appraisal,
the principal balance of the Mortgage Loan represents 80% or less of the new
Appraised Value.
In connection with its activities as Master Servicer of the Mortgage
Loans, the Master Servicer agrees to present, on behalf of itself, the
Trustee, and the Certificateholders, claims to the insurer under any Primary
Insurance Policies and, in this regard, to take any reasonable action in
accordance with the Servicing Standard necessary to permit recovery under any
Primary Insurance Policies respecting defaulted Mortgage Loans. Any amounts
collected by the Master Servicer under any Primary Insurance Policies shall be
deposited in the Certificate Account or the Collection Account (as
applicable).
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Master Servicer
shall to the extent that it
III-13
has knowledge of the conveyance and in accordance with the Servicing Standard,
enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent permitted under applicable law and governmental regulations, but
only to the extent that enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing,
the Master Servicer is not required to exercise these rights with respect to a
Mortgage Loan if the Person to whom the related Mortgaged Property has been
conveyed or is proposed to be conveyed satisfies the conditions contained in
the Mortgage Note and Mortgage related thereto and the consent of the
mortgagee under the Mortgage Note or Mortgage is not otherwise so required
under the Mortgage Note or Mortgage as a condition to the transfer.
If (i) the Master Servicer is prohibited by law from enforcing any
due-on-sale clause, (ii) coverage under any Required Insurance Policy would be
adversely affected, (iii) the Mortgage Note does not include a due-on-sale
clause, or (iv) nonenforcement is otherwise permitted hereunder, the Master
Servicer is authorized, subject to Section 3.11(b), to take or enter into an
assumption and modification agreement from or with the person to whom the
property has been or is about to be conveyed, pursuant to which the person
becomes liable under the Mortgage Note and, unless prohibited by applicable
state law, the Mortgagor remains liable thereon. The Mortgage Loan must
continue to be covered (if so covered before the Master Servicer enters into
the agreement) by the applicable Required Insurance Policies.
The Master Servicer, subject to Section 3.11(b), is also authorized with
the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with the Person, pursuant to
which the original Mortgagor is released from liability and the Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be
in default under this Section 3.11 because of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent provided in Section 3.11(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and the
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master
Servicer shall prepare and deliver to the Trustee for signature and shall
direct the Trustee, in writing, to execute the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed, and the modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments
appropriate to carry out the terms of the Mortgage Note or Mortgage or
otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to the Person. In connection with any such
assumption, no material term of the Mortgage Note may be changed.
In addition, the substitute Mortgagor and the Mortgaged Property must be
acceptable to the Master Servicer in accordance with its underwriting
standards as then in effect. Together with each substitution, assumption, or
other agreement or instrument delivered to the Trustee for execution by it,
the Master Servicer shall deliver an Officer's Certificate signed by a
Servicing Officer stating that the requirements of this subsection have been
met in connection therewith. The Master Servicer shall notify the Trustee that
any substitution or assumption agreement has been completed by forwarding to
the Trustee the original of the substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of the Mortgage File to the same
extent as
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all other documents and instruments constituting a part thereof. The Master
Servicer will retain any fee collected by it for entering into an assumption
or substitution of liability agreement as additional master servicing
compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.
The Master Servicer shall use reasonable efforts in accordance with the
Servicing Standard to foreclose on or otherwise comparably convert the
ownership of Mortgaged Properties in respect of which the related Mortgage
Loans as come into and continues in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with the foreclosure or other conversion, the Master Servicer shall follow the
Servicing Standard and shall follow the requirements of the insurer under any
Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer shall not be required
to expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it 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 Master Servicer shall be responsible for all other
costs and expenses incurred by it in any foreclosure proceedings. The Master
Servicer is entitled to reimbursement thereof from the liquidation proceeds
with respect to the related Mortgaged Property, as provided in the definition
of Liquidation Proceeds. If the Master Servicer has knowledge that a Mortgaged
Property that the Master Servicer is contemplating acquiring in foreclosure or
by deed in lieu of foreclosure is located within one mile of any site listed
in the Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984
or other site with environmental or hazardous waste risks known to the Master
Servicer, the Master Servicer will, before acquiring the Mortgaged Property,
consider the risks and only take action in accordance with its established
environmental review procedures. The Master Servicer shall not foreclose any
Mortgaged Property or accept a deed in lieu of foreclosure for any Mortgaged
Property if the Master Servicer has actual knowledge or notice that the
Mortgaged Property contains material hazardous wastes or substances subject to
the Hazardous Substance Clean Up Bond Act of 1984.
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 Master 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 Master Servicer shall either itself or through an agent selected
by the Master Servicer protect and conserve the REO Property in accordance
with the Servicing Standard as the Master Servicer deems to be in the best
interest of the Certificateholders for the period before the sale of the REO
Property.
The Master Servicer shall perform the tax reporting and withholding
required by sections 1445 and 6050J of the Code with respect to foreclosures
and abandonments, the tax reporting required by section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and, if required
by section 6050P of the Code with respect to the cancellation of indebtedness
by certain financial entities, by preparing any required tax and information
returns, in the form required, and delivering the same to the Trustee for
filing.
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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 Master 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 Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master 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 Master 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
proceeds received during any calendar month exceeds the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan for the calendar month, the excess shall be considered
to be a partial prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
proceeds from an REO Property, will be applied in the following order of
priority:
first, to reimburse the Master Servicer for any related unreimbursed
Servicing Advances or Master Servicing Fees or for any unreimbursed
Advances as applicable;
second, to reimburse the Master Servicer, as applicable, and to
reimburse the Certificate Account for any Nonrecoverable Advances (or
portions thereof) that were previously withdrawn by the Master Servicer
pursuant to Section 3.09(a)(ii) that related to the Mortgage Loan;
third, to accrued and unpaid interest (to the extent no Advance has
been made for the amount or the Advance has been reimbursed) on the
Mortgage Loan or related REO Property, at the Adjusted Net Mortgage Rate
through the Remittance Period preceding the Distribution Date on which
the amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan. The Master
Servicer will retain any Excess Proceeds from the liquidation of a
Liquidated Mortgage Loan as additional servicing compensation pursuant to
Section 3.15
The Master Servicer may agree to a modification of any Mortgage Loan (the
"Relevant Mortgage Loan") at the request of the related Mortgagor if (i) the
modification is in lieu of a refinancing and the Mortgage Rate on the Relevant
Mortgage Loan, as modified, is approximately a prevailing market rate for
newly-originated mortgage loans having similar terms and (ii) the Master
Servicer purchases the Relevant Mortgage Loan from the Trust Fund as described
below. Effective immediately after the modification, and, in any event, on the
same
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Business Day on which the modification occurs, all interest of the Trustee in
the Modified Mortgage Loan shall automatically be deemed transferred and
assigned to the Master Servicer and all benefits and burdens of ownership
thereof, including the right to accrued interest thereon from the date of
modification and the risk of default thereon, shall pass to the Master
Servicer. The Master Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of
the first paragraph of this subsection (c) have been satisfied with respect to
the Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Certificate Account pursuant to Section 3.06 within one
Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by
the Trustee of written notification of any such deposit signed by a Servicing
Officer, the Trustee shall release to the Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be necessary to vest in the Master
Servicer any Modified Mortgage Loan previously transferred and assigned
pursuant hereto.
The Master Servicer covenants and agrees to indemnify the Trust Fund
against any liability for any taxes (including 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 subsection (c), any holding of a Modified Mortgage
Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by the
Master Servicer (but such obligation shall not prevent the Master Servicer or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Master Servicer from withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings).
The Master Servicer shall have no right of reimbursement for any amount paid
pursuant to the foregoing indemnification, except to the extent that the
amount of any tax, interest, and penalties, together with interest thereon, is
refunded to the Trust Fund or the Master Servicer.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering 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 Master Servicer, and the Trustee
shall at the Master Servicer's direction execute and deliver to the Master
Servicer the request for reconveyance, deed of reconveyance, or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. Expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the related Mortgagor.
From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under
any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request
for Release in the form of Exhibit M signed by a Servicing Officer, release
the Mortgage File to the Master Servicer or its designee. Subject to the
further limitations stated below, the Master Servicer shall cause the Mortgage
File or documents so released to be returned to the Trustee when the need
therefor by the
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Master Servicer no longer exists, unless the Mortgage Loan is liquidated and
the proceeds thereof are deposited in the Certificate Account, in which case
the Master Servicer shall deliver to the Trustee a Request for Release in the
form of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver 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 Master
Servicer to be Held for the Trustee.
The Master 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 Master 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 Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, 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 Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer may
retain or withdraw from the Servicing Account, the Collection Account, or the
Certificate Account the Master Servicing Fee for each Mortgage Loan for the
related Distribution Date. Notwithstanding the foregoing, the aggregate Master
Servicing Fee, Servicing Fee and any Additional Servicing Compensation payable
to the Master 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.
The Master Servicer may retain or withdraw from the Servicing Account,
the Collection Account, or the Certificate Account the Servicing Fee and any
Additional Servicing Compensation for each Mortgage Loan for the related
Distribution Date. If the Master Servicer directly services a Mortgage Loan,
the Master Servicer may retain the Servicing Fee and any Additional Servicing
Compensation for its own account as compensation for performing services. If a
Subservicer directly services a Mortgage Loan, unless the Subservicer retains
the Servicing Fee, the Master Servicer shall remit the Servicing Fee to the
related Subservicer as compensation for performing services.
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Additional master servicing compensation in the form of Excess Proceeds,
assumption fees, late payment charges and all income and gain net of any
losses realized from Permitted Investments shall be retained by the Master
Servicer to the extent not required to be deposited in the Certificate Account
pursuant to Section 3.06. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the fees of any Subservicer, 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 Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Certificate Owners and Holders
of Certificates 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 Master Servicer.
Nothing in this Section 3.16 shall limit the obligation of the Master Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Mortgagors and the failure of the Master Servicer 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.
By March 1st of each year, commencing with 2004, the Master Servicer
shall deliver to the Backup Servicer, the Depositor and the Trustee an
Officer's Certificate signed by two servicing officers stating, as to the
signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under the officer's supervision,
and (ii) to the best of the officer's knowledge, based on the review, the
Master Servicer has fulfilled all its obligations under this Agreement
throughout the year, or, if there has been a default in the fulfillment of any
obligation, specifying each default known to the officer and its nature and
status. The Trustee shall forward a copy of each compliance statement to each
Rating Agency.
Section 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
By March 1st of each year, commencing with 2004, the Master Servicer at
its expense shall cause a nationally or regionally recognized firm of
independent public accountants (who may also render other services to the
Master Servicer, the Seller or any affiliate thereof) that is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Backup Servicer, the Trustee and the Depositor to the effect that the firm
has examined certain documents and records relating to the servicing of the
Mortgage Loans under this Agreement or of mortgage loans under pooling and
servicing agreements substantially similar to this Agreement (the statement to
have attached to it a schedule of the pooling and servicing agreements covered
by it) and that, on the basis of its examination, conducted substantially in
compliance with the Audit Guide for Audits of HUD Approved Nonsupervised
Mortgagees, the Uniform Single Attestation Program for Mortgage Bankers, or
the Audit Program for Mortgages serviced for FNMA and FHLMC, such servicing
has been conducted in compliance with this Agreement except for any
significant exceptions or errors in records that, in the
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opinion of the firm, the Audit Guide for Audits of HUD Approved Nonsupervised
Mortgagees, the Uniform Single Attestation Program for Mortgage Bankers, or
the Audit Program for Mortgages serviced for FNMA and FHLMC requires it to
report. In rendering the statement, the firm may rely, as to matters relating
to direct servicing of mortgage loans by the subservicers, upon comparable
statements for examinations conducted substantially in compliance with the
Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees, the Uniform
Single Attestation Program for Mortgage Bankers, or the Audit Program for
Mortgages serviced for FNMA and FHLMC (rendered within one year of the
statement) of independent public accountants with respect to the related
Subservicer. The Master Servicer shall deliver the statement to the Trustee so
that the Trustee can provide copies of the statement to any Certificateholder
on request at the Master Servicer's expense.
Section 3.19 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall obtain and maintain in force (a) policies of
insurance covering errors and omissions in the performance of its obligations
as Master 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. The Master Servicer
shall provide the Trustee, upon request, with a certificate of insurance
relating to the insurance policies and fidelity bond. If any policy or bond
ceases to be in effect, the Master Servicer shall obtain a comparable
replacement policy or bond from an insurer or issuer meeting the above
requirements as of the date of the replacement. The Master Servicer shall also
cause each Subservicer to maintain a policy of insurance covering errors and
omissions and fidelity bond that meets these requirements.
Section 3.20 Notification of Adjustments
On each Adjustment Date, the Master Servicer shall make interest rate
adjustments for each Mortgage Loan in compliance with the requirements of the
related Mortgage and Mortgage Note and applicable regulations. The Master
Servicer shall execute and deliver the notices required by each Mortgage and
Mortgage Note and applicable regulations regarding interest rate adjustments.
The Master Servicer also shall provide timely notification to the Trustee of
all applicable data and information regarding such interest rate adjustments
and the Master Servicer's methods of implementing such interest rate
adjustments. Upon the discovery by the Master Servicer or the Trustee that the
Master Servicer has filed to adjust or has incorrectly adjusted a Mortgage
Rate or a monthly payment pursuant to the terms of the related Mortgage Note
and Mortgage, the Master Servicer shall immediately deposit in the Certificate
Account from its own funds the amount of any loss caused thereby without
reimbursement therefor; provided, however, the Master Servicer shall not be
liable with respect to any interest rate adjustments made by any servicer
prior to the Master Servicer.
Section 3.21 Prepayment Charges.
(a) The Master Servicer will not waive any part of any Prepayment Charge
unless the waiver relates to a default or a reasonably foreseeable default,
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
III-20
Loan that is related to a default or a reasonably foreseeable default). The
Master Servicer will not waive a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is not related to a default or a
reasonably foreseeable default.
(b) The Seller represents and warrants to the Depositor and the Trustee,
as of the Closing Date, that the information in the Prepayment Charge Schedule
(including the attached prepayment charge summary) is complete and accurate in
all material respects at the dates as of which the information is furnished
and each Prepayment Charge is permissible and enforceable in accordance with
its terms under applicable state law.
(c) Upon discovery by the Seller or a Responsible Officer of the Trustee
of a breach of the foregoing clause (b) that materially and adversely affects
right of the Holders of the Class P Certificate to any Prepayment Charge, the
party discovering the breach shall give prompt written notice to the other
parties. Within 60 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of breach, the Master Servicer shall
cure the breach in all material respects or shall pay into the Collection
Account the amount of the scheduled Prepayment Charge, less any amount
previously collected and paid by the Master Servicer into the Collection
Account. If the covenant made by the Master Servicer in clause (a) above is
breached, the Master Servicer must pay into the Collection Account the amount
of the waived Prepayment Charge.
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ARTICLE FOUR
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances.
The Master Servicer shall determine by each Master Servicer Advance Date
whether it is required to make an Advance pursuant to the definition of
Advance. The Master Servicer shall deliver, one Business Day after the Master
Servicer Advance Date, a magnetic tape, diskette, or other such electronic
medium used by the Master Servicer for such purpose(in form and substance
mutually satisfactory to the Backup Servicer and the Master Servicer) to the
Backup Servicer indicating the payment status of each Mortgage Loan as of the
date that is two Business Days prior to such Master Servicer Advance Date. If
the Master Servicer determines it is required to make an Advance, it shall, by
the Master Servicer Advance Date, either (i) deposit into the Certificate
Account the Advance or (ii) make an appropriate entry in its records relating
to the Certificate Account that any Amount Held for Future Distribution has
been used by the Master Servicer in discharge of its obligation to make the
Advance. The Master Servicer shall replace any funds so applied by making a
deposit in the Certificate Account no later than the close of business on the
next Master Servicer Advance Date. The Master Servicer shall be entitled to be
reimbursed from the Certificate Account for all Advances of its own funds made
pursuant to this Section 4.01 as provided in Section 3.09. The obligation to
make Advances with respect to any Mortgage Loan shall continue if the Mortgage
Loan has been foreclosed or otherwise terminated and the related Mortgaged
Property has not been liquidated. The Master Servicer shall inform the Trustee
of the amount of the Advance to be made on each Master Servicer Advance Date
no later than the second Business Day before the related Distribution Date.
The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02 Priorities of Distribution.
(I) On each Distribution Date, the Trustee will make the disbursements
and transfers from amounts then on deposit in the Distribution Account in the
following order of priority for each Certificate Group and, in each case, to
the extent of the remaining Available Funds:
(i) (x) from collections related to the Group 1 Mortgage Loans, to the Group 1
Certificates in the following order of priority:
(1) concurrently, to the Class AF-1, Class AF-2, Class AF-3, Class AF-4
and Class AF-5 Certificates, the Accrued Certificate Interest and any
Unpaid Interest Amounts for those Classes, on that Distribution Date; and
(2) sequentially, to the Class MF-l, Class MF-2 and Class BF
Certificates, in that order, the Accrued Certificate Interest for those
Classes on that Distribution Date, and
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(y) from collections related to the Group 2 Mortgage Loans, to the Group
2 Certificates in the following order of priority:
(1) concurrently, to the Class AV-1 and Class AV-2 Certificates, the
Accrued Certificate Interest and any Unpaid Interest Amounts for those
Classes on that Distribution Date; and
(2) sequentially, to the Class MV-l, Class MV-2, Class MV-3, Class MV-4,
Class MV-5 and Class BV Certificates, in that order, the Accrued
Certificate Interest for that Class on that Distribution Date; and
(ii) A. With respect to each Certificate Group on each Distribution Date (a)
before the related Stepdown Date or (b) if a Trigger Event for that
Certificate Group is in effect, to the holders of the following Class
or Classes of Certificates , an amount equal to the applicable
Principal Distribution Amount as follows:
(x) from collections related to the Group 1 Mortgage Loans, to the Group
1 Certificates, in the following order of priority:
(1) to the Class AF-5 Certificates an amount equal to the product of
the Principal Distribution Amount for Loan Group 1 times Class AF-5
Percentage times the Lockout Percentage;
(2) sequentially, to the Class AF-1, Class AF-2, Class AF-3, Class
AF-4 and Class AF-5 Certificates, in that order, until the respective Class
Certificate Balances thereof are reduced to zero; provided, provided,
however, that on any Distribution Date on which the aggregate Class
Certificate Balance of the Group 1 Subordinate Certificates has been
reduced to zero, such amounts will be distributed concurrently on a pro
rata basis, and
(3) sequentially, to the Class MF-1, Class MF-2 and Class BF
Certificates, in that order, until the respective Class Certificate
Balances thereof are reduced to zero, and
(y) from collections related to the Group 2 Mortgage Loans, to the Group
2 Certificates, in the following order of priority:
first, sequentially, to the Class AV-1 and AV-2 Certificates until
the respective Class Certificate Balances thereof are reduced to zero;
provided, however, that on any Distribution Date on which the aggregate
Class Certificate Balance of the Group 1 Subordinate Certificates has been
reduced to zero, such amounts will be distributed pro rata; and
second, sequentially, to the Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5 and Class BV Certificates, in that order, until the
respective Class Certificate Balances thereof are reduced to zero, and
B. With respect to each Certificate Group on each Distribution Date on
and after the related Stepdown Date and (b) as long as a Trigger Event for
that Certificate Group is not in effect, to the holders of the related
Class or Classes of Certificates then entitled to distributions of
principal an amount equal to the applicable Principal Distribution Amount
in the following amounts as follows:
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(x) from collections related to the Group 1 Mortgage Loans, to the Group
1 Certificates, in the following order of priority:
the lesser of (a) the Principal Distribution Amount for Loan Group 1 and
(b) the Group 1 Senior Principal Distribution Amount, in the following
order of priority
first, to the Class AF-5 Certificates an amount equal to the product
of (x) the lesser of the Principal Distribution Amount for Loan
Group 1 and the Group 1 Senior Principal Distribution Amount times
the Class AF-5 Percentage times the Lockout Percentage;
second, sequentially, to the Class AF-1, Class AF-2, Class AF-3,
Class AF-4 and Class AF-5 Certificates, in that order, until the
respective Class Certificate Balances thereof are reduced to zero;
provided, however, that on any Distribution Date on which the
aggregate Class Certificate Balance of the Group 1 Subordinate
Certificates has been reduced to zero, such amounts will be
distributed concurrently on a pro rata basis;
(1) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan group 2 over (ii) the amount distributed to the Group 1 Senior
Certificates in priority (1) above and (y) the Class MF-1 Principal
Distribution Amount, to the Class MF-1 Certificates, until the Class
Certificate Balance thereof has been reduced to zero;
(2) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 1 over (ii) the amount distributed to the Group 1 Senior
Certificates in priority (1) above and to the Class MF-1 Certificates in
priority (2) above, and (y) the Class MF-2 Principal Distribution Amount,
to the Class MF-2 Certificates, until the Class Certificate Balance
thereof has been reduced to zero; and
(3) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 1 over (ii) the amount distributed to the Group 1 Senior
Certificates in priority (1) above, to the Class MF-1 Certificates in
priority (2) above and to the Class MF-2 Certificates in priority (3)
above, and (y) the Class BF Principal Distribution Amount, to the Class
BF Certificates, until the Class Certificate Balance thereof has been
reduced to zero, and
(y) from collections related to the Group 2 Mortgage Loans, to the Group
2 Certificates, in the following order of priority:
(1) the lesser of (a) the Principal Distribution Amount for Loan Group 2
and (b) the Group 2 Senior Distribution Amount, sequentially, to the
Class AV-1 and Class AV-2 Certificates, in that order, until the
respective Class Certificate Balances thereof are reduced to zero;
provided, however that on any Distribution Date on which the aggregate
Class Certificate Balance of the Group 2 Subordinate Certificates has
been reduced to zero, such amounts will be distributed concurrently on a
pro rata basis;
(2) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above and (y) the Class MV-1 Principal
Distribution Amount, to the Class MV-1 Certificates, until the Class
Certificate Balance thereof has been reduced to zero;
IV-3
(3) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above and to the Class MV-1 Certificates in
priority (2) above, and (y) the Class MV-2 Principal Distribution Amount,
to the Class MV-2 Certificates, until the Class Certificate Balance
thereof has been reduced to zero;
(4) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above, to the Class MV-1 Certificates in
priority (2) above and to the Class MV-2 Certificates in priority (3)
above, and (y) the Class MV-3 Principal Distribution Amount, to the Class
MV-3 Certificates, until the Class Certificate Balance thereof has been
reduced to zero;
(5) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above, to the Class MV-1 Certificates in
priority (2) above, to the Class MV-2 Certificates in priority (3) above
and to the Class MV-3 Certificates in priority (4) above, and (y) the
Class MV-4 Principal Distribution Amount, to the Class MV-4 Certificates,
until the Class Certificate Balance thereof has been reduced to zero;
(6) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above, to the Class MV-1 Certificates in
priority (2) above, to the Class MV-2 Certificates in priority (3) above,
to the Class MV-3 Certificates in priority (4) above and to the Class
MV-4 Certificates in priority (5) above, and (y) the Class MV-5 Principal
Distribution Amount, to the Class MV-5 Certificates, until the Class
Certificate Balance thereof has been reduced to zero; and
(7) the lesser of (x) the excess of (i) the Principal Distribution Amount
for Loan Group 2 over (ii) the amount distributed to the Group 2 Senior
Certificates in priority (1) above, to the Class MV-1 Certificates in
priority (2) above, to the Class MV-2 Certificates in priority (3) above,
to the Class MV-3 Certificates in priority (4) above, to the Class MV-4
Certificates in priority (5) above and to the Class MV-5 Certificates in
priority (6) above, and (y) the Class BV Principal Distribution Amount,
to the Class BV Certificates, until the Class Certificate Balance thereof
has been reduced to zero; and
(iii) (x) any amounts of Available Funds for Loan Group 1 remaining after the
distributions in clauses (i) and (ii) above shall be distributed as
follows:
(1) to fund the Group 1 Extra Principal Distribution Amount for that
Distribution Date to be paid as a component of the Principal
Distribution Amount for Loan Group 1 in the same order of priority
as described in clause (ii) above;
(2) to the holders of the Class MF-1 Certificates, any Unpaid
Interest Amounts for that Class;
(3) to the holders of the Class MF-1 Certificates, any Unpaid
Realized Loss Amounts for that Class;
IV-4
(4) to the holders of the Class MF-2 Certificates, any Unpaid
Interest Amounts for that Class;
(5) to the holders of the Class MF-2 Certificates, any Unpaid
Realized Loss Amounts for that Class;
(6) to the holders of the Class BF Certificates, any Unpaid Interest
Amounts for that Class;
(7) to the holders of the Class BF Certificates, any Unpaid Realized
Loss Amounts for that Class;
(8) to the Excess Reserve Fund Account, the amount of any Net WAC
Cap Payment for the Group 1 Certificates for such Distribution Date;
(9) to the extent a Subordination Deficiency for Loan Group 2 exists
after distributions pursuant to clause (y)(1) below, to fund a
principal distribution for that Distribution Date to be paid as a
component of the Principal Distribution Amount for Loan Group 2 in
the same order of priority as described in clause (ii) above;
(10) to the extent that any Class of Group 2 Certificates has Unpaid
Realized Loss Amounts after distributions from Available Funds for
Loan Group 2 on that Distribution Date, to the Holders of the Group
2 Certificates to pay Unpaid Realized Loss Amounts in the same order
of priority as described in clause (iii)(y) below;
(11) to the holders of the Class C Certificates, Class C
Distributable Amount; and
(12) to the holders of the Class R Certificates, any remaining
amount, and
(y) any amounts of Available Funds for Loan Group 2 remaining after the
distributions in clauses (i) and (ii) above shall be distributed as
follows:
(1) to fund the related Extra Principal Distribution Amount for that
Distribution Date to be paid as a component of the Principal
Distribution Amount for Loan Group 2 in the same order of priority
as described in clause (ii) above;
(2) to the holders of the Class MV-1 Certificates, any Unpaid
Interest Amounts for that Class;
(3) to the holders of the Class MV-1 Certificates, any Unpaid
Realized Loss Amounts for that Class;
(4) to the holders of the Class MV-2 Certificates, any Unpaid
Interest Amounts for that Class;
(5) to the holders of the Class MV-2 Certificates, any Unpaid
Realized Loss Amounts for that Class;
IV-5
(6) to the holders of the Class MV-3 Certificates, any Unpaid
Interest Amounts for that Class;
(7) to the holders of the Class MV-3 Certificates, any Unpaid
Realized Loss Amounts for that Class;
(8) to the holders of the Class MV-4 Certificates, any Unpaid
Interest Amounts for that Class;
(9) to the holders of the Class MV-4 Certificates, any Unpaid
Realized Loss Amounts for that Class;
(10) to the holders of the Class MV-5 Certificates, any Unpaid
Interest Amounts for that Class;
(11) to the holders of the Class MV-5 Certificates, any Unpaid
Realized Loss Amounts for that Class;
(12) to the holders of the Class BV Certificates, any Unpaid
Interest Amounts for that Class;
(13) to the holders of the Class BV Certificates, any Unpaid
Realized Loss Amounts for that Class;
(14) to the Excess Reserve Fund Account, the amount of any Net WAC
Cap Payment for the Group 2 Certificates for such Distribution Date;
(15) to the extent a Subordination Deficiency for Loan Group 1
exists after distributions pursuant to clause (x)(1) above, to fund
a principal distribution for that Distribution Date to be paid as a
component of the Principal Distribution Amount for Loan Group 2 in
the same order of priority as described in clause (ii) above;
(16) to the extent that any Class of Group 1 Certificates has Unpaid
Realized Loss Amounts after distributions from Available Funds for
Loan Group 1 on that Distribution Date, to the Holders of the Group
1 Certificates to pay Unpaid Realized Loss Amounts in the same order
of priority as described in clause (iii)(x) above;
(17) to the holders of the Class C Certificates, the Class C
Distributable Amount; and
(18) to the holders of the Class R Certificates, any remaining
amount; provided such amounts shall not include the $100 held in
trust for the Class P Certificates; and provided further, that if
such Distribution Date is the Distribution Date immediately
following the expiration of the latest prepayment penalty term or
any Distribution Date thereafter, then any such remaining amounts
will be distributed first, to the holders of the Class P
Certificates, until the Class Certificate Balance thereof has been
reduced to zero; and second, to the holders of the Class R
Certificates.
IV-6
(II) On each Distribution Date, an amount equal to all 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 penalty term 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.
(III) If on any Distribution Date the Group 1 or Group 2 Certificates are
still outstanding and the other group of Certificates is not outstanding, then
the remaining group of Certificates will receive 100% of the Principal
Distribution Amount or the applicable Senior Principal Distribution Amount, as
applicable, until their aggregate Class Certificate Balance has been reduced
to zero.
(IV) Without limiting the provisions of Section 9.02, by acceptance of
the Class R Certificates the holders of the Class R Certificates agree, and it
is the understanding of the parties hereto, for so long as the NIM Notes are
outstanding, to assign and transfer their rights to receive any amounts
otherwise distributable to the holders of the Class R Certificates (and such
rights are hereby assigned and transferred) to the holders of the Class C
Certificates, to be paid to the holders of the Class C Certificates.
Section 4.03 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare and
make available to each Certificateholder, the Master Servicer, the Depositor,
the Backup Servicer, and each Rating Agency on its Internet website a
statement for the related distribution of:
(i) the amount of the distribution allocable to principal,
separately identifying the aggregate amount of any Principal Prepayments
and Liquidation Proceeds included therein;
(ii) the amount of the distribution allocable to interest, any
Unpaid Interest Amounts included in the distribution and any remaining
Unpaid Interest Amounts after giving effect to the distribution, any Net
WAC Cap CarryForward Amount for the Distribution Date, and the amount of
all Net WAC Cap Carry Forward Amount covered by withdrawals from the
Excess Reserve Fund Account on the Distribution Date;
(iii) 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, including
any Net WAC Cap CarryForward Amount not covered by amounts in the Excess
Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on the Distribution
Date;
(v) the Pool Stated Principal Balance;
(vi) the amount of the Master Servicing Fees, Servicing Fees and any
Additional Servicing Compensation paid to or retained by the Master
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to the Distribution Date;
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(vii) the Pass-Through Rate for each Class of Certificates with
respect to the Distribution Date;
(viii) 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;
(ix) the number and aggregate outstanding balance of Mortgage Loans
in each Loan Group 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,
as of the close of business on the last day of the calendar month
preceding the Distribution Date;
(x) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on the Due Date in the month and (B) delinquent 60 days or
more (determined in the same manner as for determining Scheduled Payment
delinquencies that result in a Mortgage Loan being a 60+ Day Delinquent
Loan) on the Due Date in the month;
(xi) 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 and the date of
acquisition thereof;
(xii) 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;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on the Distribution Date);
(xv) the amounts on deposit in the Cap Contract Reserve Fund (after
giving effect to distributions on the Distribution Date);
(xvi) the amount due and the amount received under the Cap Contract;
(xvii) the aggregate amount of Applied Realized Loss Amounts
incurred during the preceding calendar month and aggregate Unpaid
Realized Loss Amounts through the Distribution Date;
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(xviii) with respect to each Loan Group, the amount of any Total
Monthly Excess Cash Flow on the Distribution Date and the allocation
thereof to the Certificateholders with respect to Unpaid Realized Loss
Amounts and Unpaid Interest Amounts;
(xix) with respect to the second Distribution Date, the number and
aggregate balance of any Delay Delivery Mortgage Loans not delivered
within the time periods specified in the definition of Delay Delivery
Mortgage Loans;
(xx) with respect to each Loan Group, the Subordinated Amount and
Required Subordinated Amount; and
(xxi) Prepayment Charges collected, waived, and paid by the Master
Servicer.
For the purposes of determining delinquency periods in reporting under
(ix) above, for any monthly statement a Mortgage Loan's delinquency period
shall be determined as of the Due Date falling in the month in which the
monthly statement is provided and a Mortgage Loan is first delinquent only
after the first Due Date following the Due Date for which any part of a
Scheduled Payment has not been paid, and each calendar month shall be treated
as having 30 days. Thus, for the July monthly statement a Mortgage Loan whose
June Due Date payment has not been paid by the July Due Date is not
delinquent. On the day after the July Due Date it would be one day delinquent.
A Mortgage Loan whose May Due Date payment has not been paid by the July Due
Date is 30 days past due as of the July Due Date, and would be reported as
such in the July monthly statement.
If the statement is not accessible to any of the Certificateholders, the
Master Servicer, the Depositor, the Backup Servicer or any Rating Agency on
the Trustee's Internet website, the Trustee shall forward a hard copy of it to
each Certificateholder, the Master Servicer, the Depositor, the Backup
Servicer and each Rating Agency immediately after the Trustee becomes aware
that it is not accessible to any of them via its website. The address of the
Trustee's Internet website where the statement will be accessible is
▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇.▇▇▇/▇▇▇▇. Assistance in using the Trustee's
internet website may be obtained by calling the Trustee's customer service
desk at (▇▇▇) ▇▇▇-▇▇▇▇. The Trustee shall notify each Certificateholder, the
Master Servicer, the Depositor, the Backup Servicer and each Rating Agency in
writing of any change in the address or means of access to the Internet
website where the statement is accessible.
(b) The Trustee's responsibility for disbursing the above information to
the Certificateholders is limited to the availability, timeliness, and
accuracy of the information derived from the Master Servicer. The Trustee is
not responsible for any inaccuracies in or caused by the data provided by the
Master Servicer.
By each Determination Date the Master 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 3.09(b)(ii) and any
other information on which the Master Servicer and the Trustee mutually agree.
(c) In addition to the contingent obligations of the Backup Servicer
under this Agreement, the Backup Servicer shall establish and maintain a
system of transaction accounting in regard to the Mortgage Loans substantially
similar to that maintained by the Master Servicer and post to such system all
information relating to the Mortgage Loans obtained by the Backup
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Servicer provide the initial mapping of data fields and assure data
compatibility between the Master Servicer's servicing system and the Backup
Servicer's servicing system in order, to enable the Backup Servicer to perform
the obligations of a successor master servicer immediately upon any
termination or resignation of the Master Servicer. The Backup Servicer shall
post to its servicing system such information relating to the Mortgage Loans
no more than once every calendar year. The Backup Servicer's obligations
described in this Section 4.03 and its obligations pursuant to Section 7.02
shall be the only obligations of the Backup Servicer under this Agreement. All
such obligations of the Backup Servicer are effective as of the date of this
Agreement. In order to permit the Backup Servicer to perform its obligations
under this Agreement, the Master Servicer shall provide a complete and
readable data file, data file layout and data dictionary to ensure accurate
mapping. The information described in the foregoing sentence and all other
information provided by the Master Servicer to the Backup Servicer pursuant to
this Agreement shall be in form and substance satisfactory to the Backup
Servicer.
(d) 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 in clauses (a)(i), (a)(ii), and (a)(vii) of this Section 4.03
aggregated for the calendar year or applicable portion thereof during which
the Person was a Certificateholder. This obligation of the Trustee shall be
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 4.04 Cap Contract
(a) On or prior to the Closing Date, the Trustee, on behalf of the Trust
Fund, will enter into the Cap Contract for the benefit of the Holders of the
Group 2 Certificates. The Cap Contract will be an asset of the Trust Fund but
will not be an asset of any REMIC. The Trustee shall deposit any amounts with
respect to Cap Contract into the Cap Contract Reserve Fund.
(b) The Trustee will prepare and deliver any notices required to be
delivered to Bank of America, N.A. under the Cap Contract.
(c) The Trustee shall terminate Bank of America, N.A. with respect to the
Cap Contract upon the occurrence of an event of default under the Cap Contract
of which a Responsible Officer of the Trustee has actual knowledge. Upon such
termination, Bank of America, N.A. may be required to pay an amount to the
Trustee in respect of market quotations for the replacement cost of the Cap
Contract. Any such amounts shall be held in the Reserve Fund and applied as
necessary until the Cap Contract termination date.
Section 4.05 [Reserved]
Section 4.06 [Reserved]
Section 4.07 Certain Matters Relating to the Determination of LIBOR.
Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each Interest Determination Date. The Master Servicer
initially shall designate the Reference Banks. Each "Reference Bank" shall be
a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Master Servicer should terminate its appointment as
Reference Bank, the Master Servicer shall promptly appoint
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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 that is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each 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. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a
good-faith reasonable effort, to obtain quotations from the Reference Banks or
to determine the arithmetic mean referred to in the definition of LIBOR, all
as provided for in this Section 4.07 and the definition of LIBOR. 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.
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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 in the Preliminary Statement, integral multiples of
$1,000 in excess thereof (except that one Certificate in each Class may be
issued in a different amount that 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 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 to the Trustee on a continuous basis, an
adequate inventory of Certificates to facilitate transfers.
Section 5.02 Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, 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.
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At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
countersign, 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 or his attorney duly
authorized in writing shall accompany every Certificate presented or
surrendered for registration of transfer or exchange.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and any applicable state securities
laws. If a transfer is to be made in reliance on an exemption from the
Securities Act and any applicable state securities laws, to assure compliance
with the Securities Act and any applicable state securities laws, the
Certificateholder desiring to effect the transfer shall certify to the Trustee
in writing the facts surrounding the transfer in substantially the form in
Exhibit J (the "Transferor Certificate") and either (i) deliver to the Trustee
a letter in substantially the form of Exhibit L (the "Rule 144A Letter") or
(ii) deliver to the Trustee 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 the Holder of a
Private Certificate, 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 Master Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such
information regarding the Certificates, the Mortgage Loans, and other matters
regarding the Trust Fund 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 Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either
(i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (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 L, and if the Certificate
is a Residual Certificate, the requirement is satisfied only by the
Trustee's receipt of a Transfer Affidavit from the transferee
substantially in the form of Exhibit I), to the effect that the
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transferee is not an employee benefit plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a
Person acting on behalf of any such plan or arrangement nor using the
assets of any such plan or arrangement to effect the transfer, or
(ii) if the ERISA-Restricted Certificate has been the subject of an
ERISA-Qualifying Underwriting and the purchaser is an insurance company,
a representation that the purchaser is an insurance company that is
purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, or
(iii) in the case of any such ERISA-Restricted Certificate presented
for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactment), 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 and the Master Servicer, which
Opinion of Counsel shall not be an expense of the Trustee, the Master
Servicer, or the Trust Fund, addressed to the Trustee and the Master
Servicer, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a nonexempt prohibited
transaction under ERISA or the Code and will not subject the Trustee or
the Master Servicer to any obligation in addition to those expressly
undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Private Certificate or a Residual Certificate, if
the representation letter referred to in the preceding sentence is not
furnished, the representation in clause (i) or clause (ii) 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 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, the attempted transfer or acquisition shall be void.
To the extent permitted under applicable law (including ERISA), the
Trustee shall not be liable 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.
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(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee
under subparagraph (b) above, the Trustee shall have been furnished with
an affidavit (a "Transfer Affidavit") of the initial owner or the
proposed transferee in the form of Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree
(A) to obtain a Transfer Affidavit from any other Person to
whom such Person attempts to Transfer its Ownership Interest in a
Residual Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom
such Person is acting as nominee, trustee or agent in connection
with any Transfer of a Residual Certificate, and
(C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge
that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of this Section 5.02(c) shall be
absolutely null and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a Holder of a
Residual Certificate in violation of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of registration of Transfer of such
Residual Certificate. The Trustee shall not be liable 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 in this Section
5.02(c) shall cease to apply (and the applicable portions of the legend on a
Residual Certificate may be deleted) with respect to Transfers occurring after
delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trust Fund, the Trustee, the Seller, or the
Master Servicer, to the effect that the elimination of such restrictions will
not cause any
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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 any other Person. The Opinion of
Counsel shall be accompanied by written notification from each Rating Agency
that the removal of the restriction will not cause the Rating Agency to
downgrade its ratings of the Certificates. Each Person holding or acquiring
any Ownership Interest in a Residual Certificate hereby consents to any
amendment of this Agreement that, 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 that
is held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times:
(i) registration of the Certificates may not be transferred by the
Trustee except to another Depository;
(ii) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of
such Book-Entry Certificates;
(iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees,
charges, and expenses from its Depository Participants;
(v) the Trustee shall deal with the Depository, Depository
Participants, and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of
exercising the rights of holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to
be inconsistent if they are made with respect to different Certificate
Owners; and
(vi) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of
such indirect participating firms as direct or indirect Certificate
Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing 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.
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If (x)
(i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and
(ii) the Trustee or the Depositor is unable to locate a qualified
successor,
(y) the Depositor at its option advises the Trustee in writing that it
elects to terminate the book-entry system through the Depository, or
(z) after the occurrence of a Servicer Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Certificate Owners.
The Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor, nor the Trustee
shall be liable for any delay in delivery of such instruction, and each may
conclusively rely on, and shall be protected in relying on, such instructions.
The Master Servicer shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall
be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder; provided that the Trustee shall not by virtue of its assumption of
such obligations become liable to any party for any act or failure to act of
the Depository.
Section 5.03 Mutilated, Destroyed, Lost, or Stolen Certificates.
If
(a) any mutilated Certificate is surrendered to the Trustee, or
(b) the Trustee receives evidence to its satisfaction of the destruction,
loss, or theft of any Certificate and the Master 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
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
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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 Master Servicer, the Trustee, and any agent of the Master Servicer or
the Trustee may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer, the Trustee, nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders and/or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that those
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 that those Certificateholders and/or Certificate Owners propose
to transmit, or if the Depositor or Master Servicer requests such information
in writing from the Trustee, then the Trustee shall, within ten Business Days
after the receipt of the request, provide the Depositor, the Master Servicer,
or those Certificateholders and/or Certificate Owners at the recipients'
expense the most recent list of the Certificateholders of the 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 the information was derived.
Section 5.06 Maintenance of Office or Agency.
The Trustee will maintain at its expense an office or agency in
Manhattan, New York City. Currently, that office is located at c/o DTC
Transfer Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ Attn: IN030A, 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 the location of its office or agency.
V-7
ARTICLE SIX
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer, and the Backup Servicer.
The Depositor, the Master Servicer, and the Backup Servicer shall each be
liable in accordance herewith 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, the Master
Servicer, or the Backup Servicer.
The Depositor, the Master Servicer, and the Backup Servicer will each
keep in full effect its existence, rights, and franchises as a corporation or
federal savings bank, as the case may be, 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, the Master Servicer, or the Backup
Servicer may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer, or the
Backup Servicer shall be a party, or any person succeeding to the business of
the Depositor, the Master Servicer, or the Backup Servicer shall be the
successor of the Depositor, the Master Servicer or the Backup 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. The successor or surviving Person to the Master
Servicer must be qualified to sell mortgage loans to, and to service mortgage
loans on behalf of, FNMA or FHLMC.
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Master Servicer, the Backup Servicer and Others.
None of the Depositor, the Seller, the Master Servicer, the Backup
Servicer, or any of the directors, officers, employees, or agents of the
Depositor, the Seller, the Backup Servicer, or the Master Servicer shall be
liable to the Certificateholders for any action taken or for refraining from
taking any action in good faith pursuant to this Agreement, or for errors in
judgment. This provision shall not protect the Depositor, the Seller, the
Master Servicer, the Backup Servicer, or any such person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Seller, the Master Servicer, the Backup Servicer, or any such person from any
liability that would otherwise be imposed for willful misfeasance, bad faith,
or gross negligence in the performance of duties or because of reckless
disregard of duties hereunder.
The Depositor, the Seller, the Master Servicer, the Backup Servicer, and
any director, officer, employee, or agent of the Depositor, the Seller, the
Backup Servicer, or the Master Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
VI-1
The Depositor, the Seller, the Master Servicer, the Backup Servicer, and
any director, officer, employee, or agent of the Depositor, the Seller, the
Backup Servicer, or the Master Servicer shall be indemnified by the Trust Fund
for 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 Mortgage
Loans (except any loss, liability, or expense 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 duties hereunder.
None of the Depositor, the Backup Servicer, the Seller, or the Master
Servicer need appear in, prosecute, or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability. Any of the Depositor, the Backup
Servicer, the Seller, or the Master Servicer may in its discretion undertake
any such action that it deems 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
the action and any liability resulting from it shall be expenses, costs, and
liabilities of the Trust Fund, and the Depositor, the Backup Servicer, the
Seller, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Certificate Account.
Section 6.04 Limitation on Resignation of the Master Servicer and the
Backup Servicer.
Neither the Master Servicer nor the Backup Servicer shall resign from the
obligations hereby imposed on it except (a) upon appointment of a successor
servicer that is reasonably acceptable to the Trustee and receipt by the
Trustee of a letter from each Rating Agency that the resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Master Servicer or the Backup Servicer, as
applicable, shall be evidenced by an Opinion of Counsel to that effect
delivered to the Trustee. No such resignation shall become effective until the
Trustee, the Backup Servicer, or a successor master servicer shall have
assumed the Master Servicer's obligations under this Agreement or until a
successor backup servicer shall have assumed the Backup Servicer's obligations
under this Agreement, as applicable.
Section 6.05 Inspection.
The Master Servicer, in its capacity as Master Servicer, shall afford the
Trustee, upon reasonable advance notice, during normal business hours, access
to all records maintained by the Master Servicer in respect of its rights and
obligations hereunder and access to officers of the Master Servicer
responsible for such obligations. Upon request, the Master Servicer shall
furnish to the Trustee its most recent publicly available financial
statements. To the extent necessary for the Backup Servicer to carry out its
duties under this Agreement, the Master Servicer shall afford the Backup
Servicer, upon reasonable advance notice and during normal business hours,
access to all records maintained by the Master Servicer in respect of its
duties and obligations under this Agreement.
VI-2
ARTICLE SEVEN
DEFAULT
Section 7.01 Events of Default.
I. "Servicer Event of Default," wherever used herein, means any one of
the following events:
(a) any failure by the Master Servicer to deposit in the Certificate
Account or remit to the Trustee any payment (other than a payment required to
be made under Section 4.01) 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 Master Servicer by the
Trustee, or the Depositor, or to the Master 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 Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Agreement, 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 Master Servicer by the Trustee, or the Depositor, or to the
Master 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 Master
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or
(d) the Master 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 Master
Servicer or all or substantially all of the property of the Master Servicer;
or
(e) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations.
If a Servicer Event of Default described in clauses (a) through (e) of
this Section 7.01(I) shall occur, then, and in each and every such case, so
long as such Servicer 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 Master Servicer (with a copy to each
Rating Agency), terminate
VII-1
all of the rights and obligations of the Master Servicer under this Agreement
and in the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On and after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall make any Advance that the
Master Servicer failed to make, whether or not the obligations of the Master
Servicer have been terminated pursuant to this Section. For the avoidance of
doubt, the Trustee is only obligated to make such Advances to the extent that
the Master Servicer would have been obligated to make such Advances under
Section 3.09 and 4.01. Furthermore, for the avoidance of doubt, the Trustee
shall be entitled to reimbursement for such Advances in accordance with
Sections 3.09(a) and 4.01.
The Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Master 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 Master
Servicer to pay amounts owed pursuant to Article VIII. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Master Servicer's responsibilities and rights hereunder, including the
transfer to the Trustee of all cash amounts that shall at the time be credited
to the Certificate Account, or thereafter be received with respect to the
Mortgage Loans.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due before the
notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after the notice, that portion thereof to
which the Master Servicer would have been entitled pursuant to Sections
3.11(a)(i) through (viii), and any other amounts payable to the Master
Servicer hereunder the entitlement to which arose before the termination of
its activities hereunder.
II. "Backup Servicer Event of Default," wherever used herein, means any
one of the following events:
(a) any failure by the Backup Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Backup Servicer contained in this Agreement, 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 Backup Servicer by the Master Servicer, the Trustee, or the
Depositor, or to the Backup Servicer, the Master Servicer, and the Trustee by
the Holders of Certificates of any Class evidencing not less than 25% of the
Percentage Interests of the Class; or
(b) 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 Backup
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or
VII-2
(c) the Backup 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 Backup
Servicer or all or substantially all of the property of the Backup Servicer;
or
(d) the Backup Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations.
If a Backup Servicer Event of Default described in clauses (a) through
(d) of this Section 7.01(II) shall occur, then, and in each and every such
case, so long as such Backup Servicer Event of Default shall not have been
remedied, the Trustee may, or at the direction of the Master Servicer or the
Holders of Certificates of any Class evidencing not less than 662/3% of the
Percentage Interests of the Class, the Trustee shall by notice in writing to
the Backup Servicer, terminate all of the rights and obligations of the Backup
Servicer under this Agreement. On and after the receipt by the Backup Servicer
of such written notice, all authority and power of the Backup Servicer under
this Agreement shall pass to and be vested in the Trustee, subject to Section
7.02.
Section 7.02 Backup Servicer or Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(I), or the Trustee receives the
resignation of the Master Servicer evidenced by an Opinion of Counsel pursuant
to Section 6.04, or the Master Servicer is removed as Master Servicer pursuant
to this Article VII, in which event the Trustee shall promptly notify the
Rating Agencies, and except as otherwise provided in this Section 7.02, the
Backup Servicer (provided the Backup Servicer receives 20 days prior written
notice) shall be the successor in all respects to the Master Servicer in its
capacity as master servicer under this Agreement and the transactions set
forth or provided for in this Agreement, and shall be subject to all the
responsibilities, restrictions, duties, liabilities and termination provisions
relating thereto placed on the Master Servicer by the terms and provisions of
this Agreement. The Backup Servicer or another successor master servicer and
the Trustee shall take such action, consistent with this Agreement, as shall
be necessary to effect any such succession. If the Backup Servicer or any
other successor master servicer is acting as Master Servicer under this
Agreement, it shall be subject to termination under Section 7.01(I) upon the
occurrence or continuation of a Servicer Event of Default applicable to it as
Master Servicer. The Backup Servicer hereby agrees to act as successor master
servicer pursuant to the terms of this Agreement upon the termination or
resignation of the Master Servicer as provided in this Section 7.02, provided
that the Backup Servicer receives all of the necessary documents relating to
the Mortgage Loans and computer records reflecting the status of the Mortgage
Loans as of the date of such transfer of servicing. The Backup Servicer will
not be obligated to incur any expenses or costs (including, without
limitation, legal fees and the preparation and recording of all intervening
assignments of mortgage) in connection with the transfer of servicing of the
Mortgage Loans to the Backup Servicer, or to compel the performance of any
obligations by any party to this Agreement. Notwithstanding the foregoing, any
such expenses or costs incurred by the Backup Servicer in connection with the
transfer of servicing for the Mortgage Loans to the Backup Servicer shall be
reimbursed in full by the Trustee out of funds in the Distribution Account.
Any successor master servicer and the Backup Servicer prior to its becoming
the successor master servicer shall not be liable for any actions, omissions
or defaults of any master servicer prior to it or breaches of representations
and warranties of the master servicer prior to it. The Backup
VII-3
Servicer or any other successor master servicer, as successor master servicer,
shall be obligated to pay Compensating Interest pursuant to Section 3.15 in
any event and to make Advances pursuant to Section 4.01 unless, and only to
the extent the Backup Servicer determines reasonably and in good faith that
such advances would not be recoverable from the proceeds of the related
Mortgage Loan pursuant to Section 3.15, such determination to be evidenced by
a certification of a Responsible Officer of the Backup Servicer delivered to
the Trustee. Furthermore, the Backup Servicer shall not be obligated to fund
any resulting discrepancy or shortfall in the Certificate Account. Upon the
transfer of the servicing of the Mortgage Loans, the Trustee shall provide the
Backup Servicer with an officer's certificate that contains: (i) a complete
description of all material breaches by the Master Servicer under this
Agreement known by the Trustee which have not been fully cured and (ii)
confirmation that all reports required to be filed with the Trustee have been
timely filed by the Master Servicer.
In the event that the Backup Servicer is terminated or resigns pursuant
to this Agreement or otherwise becomes unable to perform its obligations under
this Agreement, the Trustee will appoint, or petition a court to appoint, a
successor backup servicer in accordance with the provisions of this Section
7.02; provided, that any successor backup servicer shall satisfy the
requirements set forth in Section 7.02(b) and shall be approved by the Rating
Agencies.
Any successor to the Master Servicer shall be an institution that is
a FNMA and FHLMC approved seller/servicer in good standing, that has a net
worth of at least $15,000,000, that is willing to service the Mortgage Loans,
and that executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, containing an assumption by it of
the rights and obligations of the Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 incurred before termination of the
Master Servicer under Section 7.01(I)), 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
the assignment and delegation will not be qualified or reduced, as a result of
the assignment and delegation.
In the event the Backup Servicer is the successor master servicer, it
shall be entitled to the same servicing compensation (including the Servicing
Fee and any Additional Servicing Compensation as adjusted pursuant to the
definition thereof) and other funds pursuant to Section 3.15 hereof as the
Master Servicer if the Master Servicer had continued to act as master servicer
under this Agreement.
The Trustee, the Backup Servicer and any successor master servicer or
backup servicer shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. The Master Servicer
agrees to cooperate with the Trustee, the Backup Servicer and any successor
master servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights under this Agreement and shall promptly
provide the Trustee, the Backup Servicer or such successor master servicer, as
applicable, at the Master Servicer's cost and expense, all documents and
records reasonably requested by it to enable it to assume the Master
Servicer's functions hereunder and shall promptly also transfer to the
Trustee, the Backup Servicer or such successor master servicer, as applicable,
all amounts that then have been or should have been deposited in the
Certificate Account by the Master Servicer or that are thereafter received
with respect to the Mortgage Loans, including without limitation all
Liquidation Proceeds and Insurance Proceeds, and payments of insurance
deductible amounts by the Master Servicer with respect to all insurance claims
arising during the Master Servicer's tenure. Any collections received by the
Master Servicer after such removal or resignation shall
VII-4
be endorsed by it to the Backup Servicer or (if the Backup Servicer is not the
successor master servicer) to the Trustee and remitted directly to the Backup
Servicer or the Trustee, as applicable (or, at the direction of the Trustee,
to any other successor master servicer). Neither the Backup Servicer, the
Trustee nor any other successor master servicer shall be held liable by reason
of any failure to make, or any delay in making, any payment hereunder or any
portion thereof caused by (i) the failure of the Master Servicer to deliver,
or any delay in delivering, cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
Master Servicer under this Agreement. Notwithstanding anything to the contrary
in this Agreement, no appointment of a successor master servicer under this
Agreement shall be effective until written notice of such proposed appointment
shall have been provided by the Trustee to the Backup Servicer. The Backup
Servicer or the Trustee, as applicable, shall not resign as Master Servicer
until a successor master servicer has been appointed.
In the event that the Master Servicer is terminated under this Agreement
and no Backup Servicer is obligated to act as successor master servicer and no
other successor master servicer has been appointed under this Agreement, the
Trustee may appoint a successor master servicer (which may be an affiliate of
the Trustee) or petition a court of competent jurisdiction to appoint a
successor master servicer. Pending appointment of such a successor master
servicer hereunder, the Trustee shall be the successor master servicer and act
in such capacity; provided, however, that the Trustee, in its capacity as
successor master servicer pending appointment of another successor master
servicer, (i) shall be obligated to make Advances only to the extent that the
Trustee deems such advances to be recoverable, (ii) shall be obligated to make
Compensating Interest payments in respect of any Distribution Date only to the
extent of any Servicing Fee received by the Trustee in respect of such
Distribution Date, (iii) shall not be obligated to perform any other duties or
obligations of the Master Servicer under this Agreement until the Trustee has
received all master servicing records and files from the predecessor master
servicer or backup servicer and in no event later than 90 days following the
termination of the Master Servicer; provided, however, the Trustee shall use
its reasonable efforts to perform the duties and obligations of the Master
Servicer prior to the end of such 90 day period, (iv) shall not be obligated
to perform any of the administrative duties specified in Section 5.23 hereof,
and (v) shall be entitled to payment of all servicing compensation. In
connection with any appointment and assumption of duties of a successor master
servicer, the Trustee may make such arrangements for the compensation of such
successor master servicer out of payments on Mortgage Loans as such successor
shall agree; provided, however, that such compensation may not be in excess of
that permitted the Master Servicer, together with other servicing
compensation. The Master Servicer, the Trustee and such successor Master
Servicer shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
In the event the Backup Servicer, the Trustee, or any successor master
servicer incurs out-of-pocket expenses other than Advances in connection with
the transfer of master servicing hereunder, which expenses are required to be
borne by the Master Servicer under this Agreement, and such expenses are not
promptly reimbursed by the Master Servicer or recoverable out of amounts
reimbursable to the Master Servicer out of the Certificate Account, the
Trustee shall make such reimbursement to the applicable party out of funds in
each Distribution Account on any Distribution Date after all payments to
Certificateholders on such Distribution Date have been made.
In the event that the Master Servicer is terminated or resigns, and at
such time the Master Servicer has made unreimbursed Advances out of its own
funds, any such Advances shall be allocated by the successor master servicer
in whole or in part to specific Mortgage
VII-5
Loans that are delinquent at the time of the transfer of master servicing,
which allocation shall be based on loan-level accounts of the portion of each
Advance that has been funded by the Master Servicer from its own funds
consistently maintained by the former Master Servicer, or, if no such accounts
exist, then in the successor master servicer's discretion. Following the
transfer of master servicing, the successor master servicer shall reimburse
the former Master Servicer for such Advances in accordance with the
allocations determined in accordance with the previous sentence only out of
the proceeds of the Mortgage Loans to which they relate, or, to the extent the
successor master servicer determines any such Advance to be a Nonrecoverable
Advance, out of any funds in the Certificate Account. Notwithstanding the
foregoing, in the event the Backup Servicer is the successor Master Servicer,
the Backup Servicer, as successor Master Servicer, shall be reimbursed for any
payments made out of its own funds with respect to any such Advances made by
the predecessor Master Servicer or any such Nonrecoverable Advance.
Neither the Trustee nor any other successor Master 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 hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any
delay in delivering or providing, any cash, information, documents, or records
to it. The appointment of a successor Master Servicer shall not affect any
liability of the predecessor Master Servicer that may have arisen under this
Agreement before its termination as Master Servicer to pay any deductible
under an insurance policy, to indemnify any person, or otherwise, nor shall
any successor Master Servicer be liable for any acts or omissions of the
predecessor Master Servicer or for any breach by the Master Servicer of any of
its representations and warranties contained in this Agreement.
Any successor to the Master Servicer as Master Servicer shall give notice
to the Mortgagors of the change of servicer and shall, during the term of its
service as Master Servicer, maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and each Rating Agency.
(b) Within 60 days after the occurrence of any Servicer Event of Default,
the Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each Servicer Event of Default hereunder known to the
Trustee, unless the Servicer Event of Default has been cured or waived.
VII-6
ARTICLE EIGHT
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
The Trustee, before the occurrence of a Servicer Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only the duties specifically set forth in
this Agreement. If a Servicer 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. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the
Trustee shall take any action it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee shall notify the Certificateholders of the defect.
The Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order, or other
instrument.
Whenever the Trustee, as counterparty of the Cap Contract, is requested
in that capacity to take any action or to give any consent, approval, or
waiver that it is entitled to take or give in that capacity, including in
connection with an amendment of the Cap Contract, or the occurrence of a
default under the Cap Contract, the Trustee shall promptly notify the
Depositor, the Master Servicer, and the Backup Servicer of the request and
shall, on behalf of the Certificateholders, take any action in connection with
the exercise or enforcement of any rights or remedies available to it in that
capacity with respect to the request that the Master Servicer directs in
writing.
If no direction is received before the date that is established for
taking action or giving consent, approval, or waiver (notice of which date
shall be given by the Trustee to the Depositor, the Master Servicer, and the
Backup Servicer), the Trustee shall abstain from taking action or giving
consent, approval, or waiver. The Trustee shall in no event be required to
expend or risk its own funds or otherwise incur financial liability in
connection with exercising these rights or remedies and may require indemnity
satisfactory to it against any expense or liability as a condition to taking
any action.
The Trustee agrees, promptly but no later than five Business Days after a
Responsible Officer of the Trustee acquires knowledge of the occurrence of any
material default under the Cap Contract, to notify the Depositor, the Master
Servicer, the Certificateholders, and the Rating Agencies of the default.
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.
VIII-1
Unless a Servicer 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 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 that 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.
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, 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;
(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
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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 a Servicer Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof;
(i) the Trustee need not exercise any of the trusts, rights, or powers
vested in it by this Agreement or to institute, conduct, or defend any
litigation in connection with this Agreement at the request, order, or
direction of any of the Certificateholders pursuant to this Agreement unless
the Certificateholders shall have offered to the Trustee reasonable security
or indemnity satisfactory to the Trustee against the costs, expenses, and
liabilities that may be incurred in connection therewith; and
(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
Investments.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Seller, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with
respect to the Trustee's execution and countersignature of the Certificates.
The Trustee shall not be accountable for the use or application by the
Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Certificate Account by the Depositor or the Master Servicer.
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 Master Servicer).
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.
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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, the Trustee may
withdraw from the Distribution Account on each Distribution Date the Trustee
Fee for the Distribution Date. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Seller against
any loss, liability, or expense (including reasonable attorney's fees)
resulting from any error in any tax or information return prepared by the
Master Servicer or incurred in connection with any claim or legal action
relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this Agreement,
other than any loss, liability, or expense incurred because of willful
misfeasance, bad faith, or negligence in the performance of any of the
Trustee's duties 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 Seller 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,
(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, and
(C) printing and engraving expenses in connection with
preparing any Definitive Certificates.
Except as otherwise provided in this Agreement, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, 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
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credit rating that 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 disclosed in its most recent report of condition so published. If
at any time the Trustee ceases 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
Master Servicer and its affiliates. The Trustee may not be an affiliate of the
Seller, the Depositor, or the Master Servicer, other than the Trustee in its
role as successor to the Master Servicer. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to the Trustee at the time the Trustee
is appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of that state.
Section 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Master Servicer, and each Rating Agency not less than 60 days before the date
specified in the notice, when, subject to Section 8.08, the resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications in Section 8.06. If no successor trustee
meeting those qualifications shall have been so appointed and have accepted
appointment within 30 days after the notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is
located and the imposition of the tax would be avoided by the appointment of a
different trustee, then the Depositor, or the Master Servicer may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which shall be delivered to the Trustee, one copy to the Master
Servicer, and one copy to the successor trustee.
The Holders of Certificates (other than the Master Servicer, Seller,
Depositor, or any affiliates or agents thereof) 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 the
Holders or their attorneys-in-fact duly authorized, as the case may be, one
complete set of which shall be delivered by the successor Trustee to the
Master Servicer, one complete set to the Trustee so removed, and one complete
set to the successor so appointed. 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.
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Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge, and deliver to the Depositor, its predecessor trustee,
and the Master Servicer an instrument accepting its appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and the successor trustee, without any further act, deed, or
conveyance, shall become fully vested with all the rights and obligations of
its predecessor hereunder, with the like effect as if originally named as
trustee herein. The Depositor, the Master Servicer, and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights 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 adversely affect the then
current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail the notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause the 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 if the successor corporation is 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.
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 Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in them, in such capacity and for the benefit
of the Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights, and trusts as the Master
Servicer and the Trustee may consider appropriate. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by
it of a request to do so, or in the case a Servicer 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.
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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 and obligations conferred or imposed upon the Trustee, except
for the obligation of the Trustee under this Agreement to advance funds on
behalf of the Master Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except
to the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as successor
to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights and
obligations (including holding 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 Master Servicer, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement, and indemnification to any
such separate trustee or co-trustee.
Any notice, request, or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign, or be removed, all of its
estates, properties, rights, remedies, and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11 Tax Matters.
It is intended that the assets with respect to which any REMIC election
pertaining to the Trust Fund is to be made, as described 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
VIII-7
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 any REMIC created hereunder 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) 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 created
hereunder 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;
(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 8811, 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 (as defined in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed on
the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee, or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of any REMIC created hereunder as a REMIC under the
REMIC Provisions;
(g) 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 created under this Agreement
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);
(h) 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;
VIII-8
(i) 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;
(j) as and when necessary and appropriate, represent any 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 any REMIC created under
this Agreement, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any
REMIC created under this Agreement, and otherwise act on behalf of any REMIC
created under this Agreement in relation to any tax matter or controversy
involving it; and
(k) none of the Depositor, Master Servicer or the Trustee shall knowingly
or intentionally take any action or omit to take any action that would cause
the termination of any REMIC, or result in the imposition of any
non-indemnification taxes on any REMIC, created under this Agreement.
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. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Net WAC Cap CarryForward Amounts from the
Excess Reserve Fund Account. 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" of the REMIC as
defined in Section 860F(a)(2) of the Code, 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 under this Agreement 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 such tax or any 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 Master Servicer or the
Seller, in the case of any such minimum tax, if such tax arises out of or
results from a breach by the Master Servicer or Seller of any of their
obligations under this Agreement, (iii) the Seller if 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
Master 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).
VIII-9
Section 8.12 Periodic Filings.
Beginning with the first Distribution Date, the Trustee, pursuant to
written instructions of the Depositor (which instructions shall be deemed to
be this Section 8.12), shall prepare and file all periodic reports required
under the Exchange Act in conformity with the terms of the relief granted to
issuers similar to the Trust Fund. The Trustee shall execute the Form 8-Ks
pursuant to a limited power of attorney from the Depositor which shall
terminate upon written notice from the Depositor or the termination of this
Agreement. In connection with the preparation and filing of such periodic
reports, the Depositor and the Master Servicer shall timely provide to the
Trustee all material information available to them that is required to be
included in such reports and not known to them to be in the possession of the
Trustee and such other information as the Trustee reasonably may request from
either of them (including any certification required pursuant to Section
3.02(a) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and any regulations promulgated
thereunder (the "Required Certifications")) and otherwise reasonably shall
cooperate with the Trustee. The Depositor shall execute the Form 10-Ks and the
Required Certifications. The Trustee shall have no responsibility for making
any of the Required Certifications; provided, however, that upon the request
of the Master Servicer or the Depositor in connection with the delivery of the
Required Certifications on behalf of the Trust Fund, the Trustee shall furnish
to the Master Servicer or the Depositor, as applicable, a certificate signed
by an officer of the Trustee (the "Trustee Certification"), which is attached
as Exhibit O to this Agreement. The Trustee shall indemnify and hold harmless
the Master Servicer and the Depositor, their respective officers and directors
from and against any and all losses, claims, expenses, damages or liabilities,
as and when such losses, claims, expenses, damages or liabilities are
incurred, insofar as such losses, claims, expenses, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in the Trustee Certification. The
Trustee shall prepare the Form 10-K and provide such to the Depositor by March
10th of each year, commencing in 2003. The Depositor shall execute such Form
10-K upon its receipt and shall provide the original of such executed Form
10-K to the Trustee no later than five Business Days following its receipt
from the Trustee.
Prior to January 30th of the first year in which the Trustee is able to
do so under applicable law, the Trustee shall file under the Exchange Act a
Form 15D Suspension Notification with respect to the Trust Fund. The Trustee
shall have no liability with respect to any failure to properly prepare or
file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct.
The Trustee and any director, officer, employee, or agent of the Trustee
shall be indemnified by the Master Servicer against any loss, liability, or
expense (including reasonable attorney's fees) incurred in connection with any
claim or legal action relating to the preparation of the Required
Certification, 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 under this Agreement 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.
VIII-10
Section 8.13 [Reserved]
Section 8.14 Tax Classification of the Cap Contract Reserve Fund
For federal income tax purposes, the Trustee shall treat the Cap Contract
Reserve Fund as an outside reserve fund, within the meaning of Treasury
Regulation Section 1.860-2(h), that is beneficially owned by the Seller.
Section 8.15 Access to Records of Trustee.
The Trustee shall afford the Seller, the Depositor, the Master Servicer,
and each Certificateholder or Certificate Owner upon reasonable notice during
normal business hours, access to all records maintained by the Trustee in
respect of its duties under this Agreement and access to officers of the
Trustee responsible for performing its duties. Upon request, the Trustee shall
furnish the Depositor, the Master Servicer, and any requesting
Certificateholder or Certificate Owner with its most recent financial
statements. The Trustee shall cooperate fully with the Seller, the Master
Servicer, the Depositor, and the Certificateholder or Certificate Owner for
review and copying any books, documents, or records requested with respect to
the Trustee's duties under this Agreement. The Seller, the Depositor, the
Master Servicer, and the Certificateholder or Certificate Owner shall not have
any responsibility or liability for any action for failure to act by the
Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
Section 8.16 Suits for Enforcement.
If a Servicer Event of Default or other material default by the Master
Servicer or the Depositor under this Agreement occurs and is continuing, at
the direction of the Majority Certificateholders the Trustee shall proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action, or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal, equitable, or other
remedy, as the Trustee, being advised by counsel, and subject to the
foregoing, shall deem most effectual to protect and enforce any of the rights
of the Trustee, and the Certificateholders.
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ARTICLE NINE
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.
Subject to Section 9.03, the obligations of the Depositor, the Master
Servicer, and the Trustee created hereby with respect to the Trust Fund shall
terminate upon the earlier of
(a) the purchase by the Master Servicer of all Mortgage Loans (and REO
Properties) at the price equal to the sum of
(i) 100% of the Stated Principal Balance of each Mortgage Loan
(other than for REO Property) plus one month's accrued interest thereon
at the applicable Mortgage Rate less the Master Servicing Fee Rate and
(ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Master Servicer at the expense of the Master
Servicer and (y) the Stated Principal Balance of each Mortgage Loan
related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Adjusted Net Mortgage Rate and
(b) the later of
(i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall
the trusts created hereby continue beyond the 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 hereof or the Latest Possible Maturity Date (as defined in
the Preliminary Statement).
The Master Servicer may repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) above if the aggregate Stated Principal Balance of the
Mortgage Loans, at the time of the repurchase, is ten percent or less of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans and the
Subsequent Mortgage Loans.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Certificate Account, or the Master Servicer
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days before the date
notice is to be mailed to the affected Certificateholders, the Master Servicer
shall notify the Depositor and the Trustee of the date the Master Servicer
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
IX-1
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 10th day
and not later than the 15th 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 Master Servicer will give
such notice to each Rating Agency at the time such notice is given to
Certificateholders.
If the notice is given, the Master 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 Master 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 stated 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 (except the Class C Certificate), its Certificate
Balance plus for each such Class accrued interest thereon 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. By acceptance of the Residual Certificates, the holders of the Residual
Certificates agree, in connection with any termination hereunder, that their
rights to receive any amounts pursuant to clause (ii) in the immediately
preceding sentence hereby are assigned and transferred and, to the extent
received in respect of such termination, to pay any such amounts to the
holders of the Class C Certificates.
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 that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
of the Trust Fund that remain subject hereto.
Section 9.03 Additional Termination Requirements.
If the Master 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
IX-2
expense of the Master Servicer, to the effect that the failure to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on 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:
The Trustee shall sell all of the assets of the Trust Fund to the Master
Servicer and, within 90 days of the sale, shall distribute to the
Certificateholders the proceeds of the sale in complete liquidation of any
REMIC created hereunder.
The Trustee shall attach a statement to the final federal income tax
return for each of any REMIC created hereunder stating that pursuant to
Treasury Regulation Section 1.860F-1, the first day of the 90-day liquidation
period for each the REMIC was the date on which the Trustee sold the assets of
the Trust Fund to the Master Servicer.
IX-3
ARTICLE TEN
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Backup Servicer and the Trustee without the consent of
any of the Certificateholders:
(i) to cure any ambiguity or mistake,
(ii) to correct any defective provision herein or to supplement any
provision herein that may be inconsistent with any other provision herein,
(iii) to conform this Agreement to the Prospectus Supplement;
(iv) to add to the duties of the Depositor, the Seller, the Backup
Servicer or the Master Servicer,
(v) to add any other provisions with respect to matters or questions
arising hereunder, or
(vi) to modify, alter, amend, add to, or rescind any of the provisions of
this Agreement.
No action pursuant to clauses (v) or (vi) 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 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.
The Trustee, the Depositor, the Backup Servicer, and the Master Servicer
also may at any time and from time to time amend this Agreement and 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 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,
X-1
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 those purposes.
This Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Backup Servicer, and the Trustee with the consent of the
Holders of Certificates of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates. 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 the Certificate,
(ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of the Class
evidencing, as to the Class, Percentage Interests aggregating not less
than 66 2/3%,
(iii) 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%, and for this purpose no
Certificates held by the Seller, the Depositor, or any Affiliate of
either of them shall be eligible to vote or be considered Outstanding, or
(iv) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent
of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that the amendment will not cause
the imposition of any tax on any REMIC or the Certificateholders or cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of the 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 the consent approves its substance. The manner
of obtaining consents and of evidencing the authorization of their execution
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) the amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied
X-2
with; and (ii) either (A) the amendment does not adversely affect in any
material respect the interests of any Certificateholder or (B) the conclusion
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, the recordation to be effected by the Master Servicer at its
expense, but only upon receipt of an Opinion of Counsel to the effect that the
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be an original, and all of which shall constitute but one 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 or any
Subsequent Transfer 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 this Agreement. The
Depositor shall arrange for filing any UCC continuation statements in
connection with any security interest granted or assigned to the Trustee for
the benefit of the Certificateholders.
X-3
Section 10.05 Notices.
(a) The Trustee shall promptly notify each Rating Agency of each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
2. Each annual statement as to compliance described in Section 3.17;
3. Each annual independent public accountants' servicing report
described in Section 3.18; 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 be duly given when delivered to
(i) in the case of the Depositor, IndyMac ABS, Inc., ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Capital
Markets, or such other address as may be hereafter furnished to the
Master Servicer and the Trustee by the Depositor;
(ii) in the case of the Master Servicer, IndyMac Bank, F.S.B., ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Master
Servicing, or such other address as may be hereafter furnished to the
Depositor and the Trustee by the Master Servicer;
(iii) in this case of the Backup Servicer, Countrywide Home Loans
Servicing LP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
IndyMac Services SPMD 2003-A, or such other address as may hereafter be
furnished to the Depositor, the Master Servicer and the Trustee by the
Backup Servicer;
(iv) in the case of the Trustee to the Corporate Trust Office,
Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-
X-4
4934, Attention: Trust Administration IN030A, Series SPMD 2003-A, or such
other address as the Trustee may hereafter furnish to the Depositor and
Master Servicer; and
(v) 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 provisions of this Agreement shall be for any
reason whatsoever held invalid, then those provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee and Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights and
obligations of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything in
this Agreement or 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 liable to any third party because of any
action taken by the parties to this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of a Servicer Event of Default and of the continuance thereof,
as herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit, or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request, and offer of indemnity
shall have neglected or refused to institute any such action, suit, or
proceeding. Each Certificateholder expressly covenants 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
X-5
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.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor or the Trustee during such Person's
normal business hours, to examine all the books of account, records, reports,
and other papers of such Person relating to the Mortgage Loans, to make copies
and extracts therefrom and to discuss its affairs, finances, and accounts
relating to the Mortgage Loans with its officers, employees, and independent
public accountants (and by this provision the Master Servicer hereby
authorizes said accountants to discuss with such representative such affairs,
finances, and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by
the Depositor, or the Trustee of any right under this Section 10.09 shall be
borne by the Master 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.
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; or
(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.
X-6
Section 10.13 Qualifying Special Purpose Entity.
Notwithstanding any contrary provision of this Agreement the Trust shall
not engage in any activity or knowingly hold any property that would
disqualify the Trust from being a qualifying special purpose entity under
generally accepted accounting principles.
X-7
In witness whereof, the Depositor, the Trustee, and the Seller and Master
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
INDYMAC ABS, INC.,
as Depositor
By:
---------------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
INDYMAC BANK, F.S.B.,
as Seller and Master Servicer
By:
---------------------------------------------
Name:
Title:
Countrywide Home Loans Servicing, LP,
as Backup Servicer
By: Countrywide GP, Inc.
By:
---------------------------------------------
Name:
Title:
S-I-1
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-2
SCHEDULE II
Home Equity Mortgage Loan Asset-Backed Certificates,
Series SPMD 2003-A
Representations and Warranties of the Seller/Master Servicer
Indy Mac Bank, F.S.B. ("IndyMac") hereby makes the representations and
warranties 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 ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among IndyMac, as seller and Master Servicer, IndyMac
ABS, Inc., as depositor, Countrywide Home Loans Servicing LP, as backup
servicer, and Deutsche Bank National Trust Company, as 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
S-II-1
other material agreement or instrument to which IndyMac is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to IndyMac of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over IndyMac (including the Office of Thrift Supervision,
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 Office of Thrift Supervision, 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.
S-II-2
SCHEDULE III
Home Equity Mortgage Loan Asset-Backed Certificates,
Series SPMD 2003-A
Representations and Warranties as to the Mortgage Loans
IndyMac Bank, F.S.B. ("IndyMac") hereby makes the representations and
warranties in this Schedule III to the Depositor and the Trustee, as of the
Closing Date or Subsequent Transfer Date, as applicable, or if so specified
herein, as of the related Cut-off Date or date of origination of the Mortgage
Loan (as applicable). Capitalized terms used but not otherwise defined in this
Schedule III shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series, among IndyMac, as seller and Master Servicer, IndyMac
ABS, Inc., as depositor, Countrywide Home Loans Servicing LP, as backup
servicer, and Deutsche Bank National Trust Company, as trustee.
(6) The information 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 or Subsequent Transfer Date, as
applicable.
(7) As of the Closing Date, all regularly scheduled monthly payments due
with respect to each Mortgage Loan up to and including the Due Date
before the related Cut-off Date have been made; and as of the related
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
related Cut-off Date.
(8) With respect to any Mortgage Loan that is not a Cooperative Loan,
each Mortgage is a valid and enforceable first or second 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 that do not materially interfere
with the benefits of the security intended to be provided by such
Mortgage.
(9) 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
S-III-1
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.
(10) As of the date of origination of each Mortgage Loan, there was no
delinquent tax or assessment lien against the related Mortgaged Property.
(11) 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.
(12) There are no mechanics' liens or claims for work, labor or material
affecting any Mortgaged Property that are or may be a lien before, or
equal with, the lien of such Mortgage, except those that are insured
against by the title insurance policy referred to in item (11) below.
(13) To the best of the Seller's knowledge, no Mortgaged Property has
been materially damaged by water, fire, earthquake, windstorm, flood,
tornado or similar casualty (excluding casualty from the presence of
hazardous wastes or hazardous substances, as to which the Seller makes no
representation) so as to affect adversely the value of the related
Mortgaged Property as security for the Mortgage Loan.
(14) Each Mortgage Loan at origination complied in all material respects
with applicable state and federal laws, including usury, equal credit
opportunity, real estate settlement procedures, truth-in-lending, HOEPA,
applicable predatory and abusive lending laws and disclosure laws, or any
noncompliance does not have a material adverse effect on the value of the
related Mortgage Loan.
(15) As of the Closing Date or Subsequent Transfer Date, as applicable,
the Seller has not modified the Mortgage in any material respect (except
that a Mortgage Loan may have been modified by a written instrument that
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and that 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.
(16) 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 the
Mortgage Loan or a commitment (binder) to issue the same was effective on
the date of the origination of each Mortgage Loan, each such policy is
valid and remains in full force and effect.
(17) 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.
(18) To the best of the Seller's knowledge, all of the improvements that
were included for the purpose of determining the Appraised Value of the
Mortgaged Property lie wholly
S-III-2
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.
(19) To the best of the Seller's knowledge, as of the date of origination
of each Mortgage Loan, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation unless such violation would not have a material adverse effect
on the value of the related Mortgaged Property. To the best of the
Seller's knowledge, all inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including 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.
(20) 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.
(21) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder.
(22) The related Mortgage contains customary and enforceable provisions
that 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.
(23) 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.
(24) At the related Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with
a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customarily required
by institutional single family mortgage lenders in the area where the
Mortgaged Property is located, and the Seller has received no notice that
any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance
including flood insurance at the Mortgagor's cost and expense. Anything
to the contrary in this item (19) notwithstanding, no breach of this item
(19) shall be deemed to give rise to any obligation of the Seller to
repurchase or substitute for such affected Mortgage Loan or Loans so
S-III-3
long as the Master Servicer maintains a blanket policy pursuant to the
second paragraph of Section 3.10(a) of the Pooling and Servicing
Agreement.
(25) 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.
(26) To the best of the Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property, nor is such a proceeding currently occurring.
(27) To the best of the Seller's knowledge, there is no material event
that, 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.
(28) Each Mortgage File contains an Appraisal Form 1004 of the related
Mortgaged Property.
(29) Any leasehold estate securing a Mortgage Loan has a stated term at
least as long as the term of the related Mortgage Loan.
(30) Each Mortgage Loan was selected from among the outstanding one- to
four-family sub-prime mortgage loans in the Seller's sub-prime mortgage
portfolio at the Closing Date as to which the representations and
warranties made with respect to the Mortgage Loans in this Schedule III
can be made. No such selection was made in a manner intended to adversely
affect the interests of the Certificateholders.
(31) No more than 1.18% and 0.61% (by aggregate Stated Principal Balance
as of the related Cut-off Date) of the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively, are Cooperative Loans.
(32) Each Cooperative Loan is secured by a valid, subsisting and
enforceable perfected first and second liens and security interest in the
related Mortgaged Property, subject only to (i) the rights of the
Cooperative Corporation to collect maintenance and assessments from the
Mortgagor, (ii) the lien of the Blanket Mortgage on the Cooperative
Property and of real property taxes, water and sewer charges, rents and
assessments on the Cooperative Property not yet due and payable, and
(iii) other matters to which like Cooperative Units are commonly subject
that do not materially interfere with the benefits of the security
intended to be provided by the Security Agreement or the use, enjoyment,
value or marketability of the Cooperative Unit. Each original UCC
financing statement, continuation statement or other governmental filing
or recordation necessary to create or preserve the perfection and
priority of the first priority lien and security interest in the
Cooperative Shares and Proprietary Lease has been timely and properly
made. Any security agreement, chattel mortgage or equivalent document
related to the Cooperative
S-III-4
Loan and delivered to the sponsor or its designee establishes in the
Seller a valid and subsisting perfected first or second lien on and
security interest in the property described therein, and the Seller has
full right to sell and assign the same.
(33) Each Cooperative Corporation qualifies as a "cooperative housing
corporation" as defined in Section 216 of the Code.
(34) 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.
S-III-5
SCHEDULE IV
Home Equity Mortgage Loan Asset-Backed Certificates,
Series SPMD 2003-A
Representations and Warranties of the Seller/Master Servicer
Countrywide Home Loans Servicing LP ("Countrywide Servicing") hereby
makes the representations and warranties in this Schedule II to the Depositor,
the Master Servicer, the Seller, and the Trustee as of the Closing Date.
Capitalized terms used but not otherwise defined in this Schedule II shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") relating to the above-referenced Series,
among IndyMac Bank, F.S.B, as seller and Master Servicer, IndyMac ABS, Inc.,
as depositor, Countrywide Home Loans Servicing LP, as backup servicer, and
Deutsche Bank National Trust Company, as trustee.
(1) Countrywide Servicing is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws
of the state of Texas and is duly authorized and qualified to transact
any business contemplated by the Pooling and Servicing Agreement to be
conducted by Countrywide Servicing 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) Countrywide Servicing has the full power and authority to 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 action on
the part of Countrywide Servicing 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 Countrywide Servicing, enforceable against Countrywide
Servicing 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
Countrywide Servicing, the servicing of the Mortgage Loans by Countrywide
Servicing 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
S-IV-1
Countrywide Servicing and will not (A) result in a material breach of any
term or provision of the charter or by-laws of Countrywide Servicing 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 Countrywide Servicing is a
party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to Countrywide Servicing
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over Countrywide Servicing; and Countrywide Servicing
is not in breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which breach or violation
may materially impair Countrywide Servicing's ability to perform or meet
any of its obligations under the Pooling and Servicing Agreement.
(4) Countrywide Servicing 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 Countrywide Servicing's
knowledge, threatened against Countrywide Servicing that would prohibit
the execution or delivery of, or performance under, the Pooling and
Servicing Agreement by Countrywide Servicing.
S-IV-2
SCHEDULE V
PREPAYMENT CHARGE SCHEDULE
[ON FILE WITH SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP]
S-V-1
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO 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").
Certificate No. : [ ]
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Initial Certificate Balance
of this Certificate
("Denomination") : $[__]
Initial Certificate Balances
of all Certificates
of this Class : $[__]
CUSIP : [_______]
A-2
INDYMAC ABS, INC.
Home Equity Mortgage Loan Asset-Backed Trust
Home Equity Mortgage Loan Asset-Backed Certificates, Series SPMD 2003-A
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
stated herein. Accordingly, the Certificate 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 Master 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 pursuant to a Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among IndyMac ABS, Inc.,
as depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller (in such
capacity, the "Seller") and as master servicer (in such capacity, the "Master
Servicer"), Countrywide Home Loans Servicing LP, as backup servicer (in such
capacity, the "Backup Servicer"), and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
[The Class [__] Certificates are subordinated securities and they will
not satisfy the requirements of certain prohibited transaction exemptions. As
a result, the purchase or holding of any of the Class [__] Certificates by a
plan investor may constitute a non-exempt prohibited transaction or result in
the imposition of excise taxes or civil penalties under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or the Code.
Accordingly, none of the Class [__] Certificates are offered for sale, and are
not transferable, to plan investors unless an exemption from the prohibited
transaction rules of ERISA and the Code applies to the acquisition, holding,
and resale of such certificate. Each purchaser of a Class [__] Certificate, by
virtue of its purchase of such Certificate, will be deemed to have represented
either that it is not a plan investor or that certain exemptions from the
prohibited transaction provisions of ERISA and the Code apply to the plan
investor's acquisition, holding, and resale of such Certificates.]
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-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
---------------------------------------
Countersigned:
By:
---------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
A-4
EXHIBIT B
FORM OF CLASS P CERTIFICATE
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.
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"). 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 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, ANY PURPORTED TRANSFER
OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO
ERISA OR TO THE CODE WITHOUT THE REPRESENTATION LETTER OR THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : [ ]
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Percentage Interest
of this Certificate
("Denomination") : [ ]%
CUSIP :
A-2
INDYMAC ABS, INC.
Home Equity Mortgage Loan Asset-Backed Trust,
Home Equity Mortgage Loan Asset-Backed Certificates, Series SPMD 2003-A
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class payable solely from
Prepayment Charges.
Distributions in respect of this Certificate are distributable monthly 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 Master
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 pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among IndyMac ABS, Inc., as
depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller (in such
capacity, the "Seller") and as master servicer (in such capacity, the "Master
Servicer"), Countrywide Home Loans Servicing LP, as backup servicer (in such
capacity, the "Backup Servicer"), and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate represents an interest in the Trust, but does not represent
an interest in any REMIC.
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 and solely payable from Prepayment Charges. 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.
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-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By:
---------------------------------------
Countersigned:
By:
------------------------------------------------
Authorized Signatory of
Deutsche Bank National Trust Company
not in its individual capacity,
but solely as Trustee
A-4
EXHIBIT C
FORM OF CLASS 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 DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER
TO THE EFFECT THAT SUCH TRANSFEREE IS NOT 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 AND IS NOT INVESTING ON BEHALF OF OR WITH
PLAN ASSETS OF, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT 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 SUCH OPINION OF COUNSEL, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [ ]
Cut-off Date : August 1, 2003
Initial Certificate Balance
of this Certificate
("Denomination") : $[__________]
Initial Certificate Balances
of all Certificates of
this Class : $[__________]
CUSIP : [___________]
C-2
INDYMAC ABS, INC.
Home Equity Mortgage Loan Asset-Backed Trust,
Home Equity Mortgage Loan Asset-Backed Certificates, Series SPMD 2003-A
Class R
evidencing the distributions allocable to the Class R Certificates with
respect to a Trust Fund consisting primarily of a pool of fixed-rate and
adjustable-rate conventional loans (the "Mortgage Loans") secured by
first liens on one- to four-family residential properties IndyMac ABS,
Inc., as Depositor
Principal in respect of this Certificate is 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 Master 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 all Certificates of the Class to
which this Certificate belongs) in certain monthly distributions pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement") among IndyMac ABS, Inc., as depositor (the "Depositor"),
IndyMac Bank, F.S.B., as seller (in such capacity, the "Seller") and as master
servicer (in such capacity, the "Master Servicer"), Countrywide Home Loans
Servicing LP, as backup servicer (in such capacity, the "Backup Servicer"),
and Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class 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 or
arrangement subject to Section 406 of ERISA, nor a plan or arrangement subject
to Section 4975 of the Code nor a person acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect
such transfer, which representation letter shall not be an expense of the
Trustee, the Master Servicer or the Trust Fund or (ii) an Opinion of Counsel
satisfactory to the Trustee and the Master Servicer to the effect that the
purchase or holding of such Class R 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 Master Servicer to any obligation in
addition to those expressly undertaken in the Agreement or to any liability,
which Opinion of Counsel shall not be an expense of the Trustee, the Master
Servicer or the Trust Fund. In the event that such representation is violated,
or any attempt 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 such Opinion of Counsel, such attempted transfer or
acquisition shall be void and of no effect.
C-3
(i) Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R
Certificate to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in
this Class R Certificate are expressly subject to the following
provisions: (i) each Person holding or acquiring any Ownership
Interest in this Class R Certificate shall be a Permitted Transferee
and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the
Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Trustee under Section
5.02(b) of the Agreement, the Trustee shall have been furnished with
a Transfer Affidavit of the initial owner or the proposed transferee
in the form attached as Exhibit I to the Agreement, (iii) each
Person holding or acquiring any Ownership Interest in this Class R
Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership
Interest this Class R 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 this Class R
Certificate and (C) not to Transfer the Ownership Interest in this
Class R Certificate or to cause the Transfer of the Ownership
Interest in this Class R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee and
(iv) any attempted or purported Transfer of the Ownership Interest
in this Class R Certificate in violation of the provisions herein
shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this 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-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By:
-----------------------------------------
Countersigned:
By:
-----------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
C-5
EXHIBIT D
FORM OF CLASS C 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").
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 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 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, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE
REPRESENTATION LETTER OR THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [ ]
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Percentage Interest
of this Certificate
("Denomination") : [ ]%
CUSIP :
D-2
INDYMAC ABS, INC.
Home Equity Mortgage Loan Asset-Backed Trust,
Home Equity Mortgage Loan Asset-Backed Certificates, Series SPMD 2003-A
Class C
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable monthly 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 Master
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 pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among IndyMac ABS, Inc., as
depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller (in such
capacity, the "Seller") and as master servicer (in such capacity, the "Master
Servicer"), Countrywide Home Loans Servicing LP, as backup servicer (in such
capacity, the "Backup Servicer"), and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a 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 or other benefit plan or arrangement subject to Section
406 of ERISA or Section 4975 of the Code, nor a person acting on behalf of any
such plan or investing plan assets of any such plan, which representation
letter shall not be an expense of the Trustee, or (ii) in the case of a
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
D-3
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 and the Master Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer or the Trust Fund, addressed to
the Trustee, to the effect that the purchase or 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 Master 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.
D-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By:
----------------------------------------
Countersigned:
By:
----------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
D-5
EXHIBIT E
[Reserved].
EXHIBIT F
FORM OF REVERSE OF CERTIFICATES
INDYMAC ABS, INC.
Home Equity Mortgage Loan Asset-Backed Trust,
Home Equity Mortgage Loan Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as IndyMac ABS, Inc., Home Equity Mortgage Loan Asset-Backed
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 Master Servicer, the Backup 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.
F-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 in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or
more new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest in the Trust 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 Master 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 or equal to 10% of the aggregate Cut-off
Date Principal Balances of the Mortgage Loans, the Master 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. The obligations and
responsibilities created by the Agreement will terminate as provided in
Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
F-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
F-3
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ,
-----------------------------------------------
------------------------------------------------------------------------------,
for the account of
-----------------------------------------------------------,
account number , or, if mailed by check, to .
------------- --------------------
Applicable statements should be mailed to ,
------------------------------------
------------------------------------------------------------------------------.
This information is provided by ,
-----------------------------------------
the assignee named above, or ,
-------------------------------------------------,
as its agent.
STATE OF )
) ss.:
COUNTY OF )
On the ___ th day of __________, 200_ 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-4
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
----------------------
----------------------
Re: Pooling and Servicing Agreement among IndyMac ABS, Inc.,
as Depositor, IndyMac Bank, F.S.B., as Seller and Master
Servicer, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee, Home Equity Mortgage Loan Asset-Backed Trust,
Series SPMD 2003-A, Home Equity Mortgage Loan Asset-Backed
Certificates, Series SPMD 2003-A [and the Subsequent
Transfer Agreement dated as of [______ __], 2003, among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as
Seller, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee]
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), [and the
above-captioned Subsequent Transfer Agreement] the undersigned, as Trustee,
hereby certifies that, as to each [Initial][Subsequent] Mortgage Loan listed
in the Mortgage Loan Schedule (other than any [Initial][Subsequent] 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 related 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 related to such
[Initial][Subsequent] 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
[Initial][Subsequent] Mortgage Loans identified on the Mortgage Loan Schedule,
or (ii) the collectability, insurability, effectiveness, or suitability of any
such [Initial][Subsequent] Mortgage Loan.
G-1
Capitalized words and phrases used herein 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
EXHIBIT G-1
FORM OF DELAY DELIVERY CERTIFICATION
[date]
[Depositor]
[Master Servicer]
Re: Pooling and Servicing Agreement among IndyMac ABS, Inc.,
as Depositor, IndyMac Bank, F.S.B., as Seller and Master
Servicer, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee, Home Equity Mortgage Loan Asset-Backed Trust,
Series SPMD 2003-A, Home Equity Mortgage Loan Asset-Backed
Certificates, Series SPMD 2003-A [and the Subsequent
Transfer Agreement dated as of [_______ __], 2003, among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as
Seller, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee]
Gentlemen:
[Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
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
undersigned hereby certifies that [, with respect to the Subsequent Mortgage
Loans delivered in connection with the Subsequent Transfer Agreement,] as to
each Delay Delivery Mortgage Loan listed on the Schedule A attached hereto
(other than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full
or listed on Schedule B attached hereto) it has received:
(i) (A) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order of ______________________________ without recourse," with all
intervening endorsements showing a complete chain of endorsement
from the originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all interest of the
party so endorsing, as noteholder or assignee thereof, in that
Mortgage Note) and (B) with respect to any Lost Mortgage Note, a
lost note affidavit from the Seller stating that the original
Mortgage Note was lost or destroyed, together with a copy of such
Mortgage Note;
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together with,
except as provided below, all interim recorded assignments of such
mortgage (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the
assignment relates); provided that such assignment of
G-3
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.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to the
Mortgage Loan.
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 [Initial Mortgage Loans][Subsequent 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 [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein have the respective meanings
assigned to them in the above-captioned Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:
--------------------------------------------
Name:
Title:
G-4
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
------------------------
------------------------
Re: Pooling and Servicing Agreement among IndyMac ABS, Inc.,
as Depositor, IndyMac Bank, F.S.B., as Seller and Master
Servicer, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee, Home Equity Mortgage Loan Asset-Backed Trust,
Series SPMD 2003-A, Home Equity Mortgage Loan Asset-Backed
Certificates, Series SPMD 2003-A [and the Subsequent
Transfer Agreement dated as of [_______ __], 2003, among
IndyMac ABS, Inc., as Depositor, IndyMac Bank, F.S.B., as
Seller, Countrywide Home Loans Servicing LP, as Backup
Servicer, and Deutsche Bank National Trust Company, as
Trustee]
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") [and the
above-captioned Subsequent Transfer Agreement], the undersigned, as Trustee,
hereby certifies that as to each [Initial][Subsequent] Mortgage Loan listed in
the Mortgage Loan Schedule (other than any [Initial][Subsequent] 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)(i) 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)(iii) of the Pooling and Servicing Agreement; provided,
however, that it has received no assignment with respect to any Mortgage for
which the related Mortgaged Property is located in the Commonwealth of Puerto
Rico, or, if the Depositor has certified or the Trustee otherwise knows that
the related 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.
H-1
(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
[Initial][Subsequent] 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.
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 [Initial][Subsequent]
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 interest of the party so endorsing,
as Noteholder or assignee thereof, in 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
FORM OF TRANSFER AFFIDAVIT
IndyMac ABS, Inc.,
Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2003-A
Home Equity Mortgage Loan Asset-Backed Certificates,
Series SPMD 2003-A
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ____________________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, by and among IndyMac
ABS, Inc., as depositor (the "Depositor"), IndyMac Bank, F.S.B., as seller and
master servicer and Deutsche Bank National Trust Company, as trustee.
Capitalized terms used, but not defined herein or in Exhibit 1, 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 Transferee furnishes to such Person an affidavit that such
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.)
I-1
5. The Transferee has reviewed 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) 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's taxpayer identification number is ________________.
8. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
9. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of 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. 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.
10. Transferee has historically paid the Transferee's debts as they
become due, and Transferee intends, and believes that the Transferee will be
able, to continue to pay Transferee's debts as such debts become due in the
future. Transferee has a valid business purpose for purchasing the Residuals.
11. Transferee is not a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) ("Foreign Base") of a
U.S. taxpayer. In addition, the Transferee will not (a) transfer the Class R
Certificates, directly or indirectly, to a Foreign Base, and (b) cause income
from the Class R Certificates to be attributable to a Foreign Base of the
Transferee or another U.S. taxpayer.
12. 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 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
12(a); and (ii) the Transferee is an Eligible Corporation and hereby agrees
that any subsequent transfer of the interest will be to another Eligible
Corporation in a
I-2
transaction that satisfies this Transfer Affidavit, including this paragraph
12(a). For the purpose of this affidavit, 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, and 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; or
(b)(i) The Transferee is a United States Person; and (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 the REMIC generates losses. For purposes of calculating the
aforementioned present values: (i) 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
Section 55 of the Code 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
Section 55(b)(1)(B) of the Code 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 Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate), and (ii) The Transferee uses a
discount rate equal to the Federal short-term rate prescribed by section
1274(d) of the Code for the month of the transfer and the compounding period
used by the Transferee.
13. The Transferee hereby represents to and for the benefit of the transferor
that the Transferee intends to pay any taxed associated with holding the
Ownership Interest as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by its Ownership
Interest.
14. 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 using plan assets of such a plan.
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
the Certificate, including any interest in the Certificate as its Holder and
any other interest in it, 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) that 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 R Certificate, (iv) rural electric and telephone cooperatives described
in Code Section 1381(a)(2)(c), (v) a Person that is not a U.S. Person, 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 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" have the meanings 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.
"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; (v) a trust, if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. Persons have authority to
control all substantial decisions of the trust; or (vi) to the extent provided
in Treasury regulations, certain trusts in existence on August 20, 1996 that
are treated as U.S. Persons before that date and that elect to continue to be
treated as U.S. Persons.
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 the
Residual Certificates 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 the
Residual Certificates 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 the Residual Certificates may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificates unless, in
addition to the certificates required to be delivered to the Trustee
under subparagraph (b) above, the Trustee shall have been furnished with
an affidavit (a "Transfer Affidavit") of the initial owner or the
proposed transferee in the form of Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of this Section 5.02(c) shall be
absolutely void. 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
I-6
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.
I-7
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: : [___________]
Series SPMD 2003-A
Re: IndyMac ABS, Inc. Home Equity Loan Asset-Backed Trust,
Series SPMD 2003-A, Home Equity Mortgage Loan Asset-Backed
Certificates, Series SPMD 2003-A, 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 that would result in, a violation of Section
5 of the Act and (c) to the extent we are disposing of a Residual 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
[RESERVED]
K-1
EXHIBIT L
RULE 144A LETTER
____________, 20__
IndyMac ABS, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: : [___________]
Series SPMD 2003-A
Re: Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD
2003-A Home Equity Mortgage Loan Asset-Backed
Certificates, Series SPMD 2003-A, Class [_]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have 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) 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, (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 Securities Act or that
would render the disposition of the Certificates a violation of Section 5 of
the Securities Act or require registration pursuant thereto, nor will act, nor
has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) to the extent that the Certificate
transferred is a Class C Certificate, we are a bankruptcy-remote entity and
(g) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to
L-1
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Securities Act.
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 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, that 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 that is subject to supervision
by the 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.
------------------------
1 Buyer must own 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 or
invest on a discretionary basis at least $10,000,000 in securities.
L-3
___ 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
or invested on a discretionary basis by the Buyer, the Buyer used the cost of
such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes
in the information and conclusions herein. Until such notice is given, the
Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
---------------------------------------------
Print Name of Transferee
By:
-----------------------------------------
Name:
Title:
L-4
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, 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 that owned in the
aggregate $________ in securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by the
U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates
of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the
L-6
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 or Advisor
By: ------------------------------------------
Name:
Title:
IF AN ADVISER:
-----------------------------------------------
Print Name of Buyer
Date:
-----------------------------------------
L-7
EXHIBIT M
FORM OF REQUEST FOR RELEASE
(for Trustee)
IndyMac ABS, Inc.,
Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2003-A
Home Equity Mortgage Loan Asset-Backed Certificates,
Series SPMD 2003-A
Loan Information
Name of Mortgagor
-------------------------------------
Servicer
Loan No.:
-------------------------------------
Trustee
Name:
-------------------------------------
Address:
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Trustee
Mortgage File No.:
-------------------------------------
The undersigned Master Servicer hereby acknowledges that it has received
from Deutsche Bank National Trust Company, as Trustee for the Holders of Home
Equity Mortgage Loan Asset-Backed Certificates, of the above-r eferenced
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 Master Servicer and IndyMac ABS,
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
M-1
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
_____________.
(__) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
(__)
------------------------------------------------------------------
(__)
------------------------------------------------------------------
(__)
------------------------------------------------------------------
(__)
------------------------------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master 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 Master 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 Master 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.
M-2
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
INDYMAC BANK, F.S.B.
By:
--------------------------------
Its:
--------------------------------
Date:
---------------------
M-3
EXHIBIT N
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company Attn: [____________]
Re: The Pooling & Servicing Agreement dated as of August 1, 2003 among
IndyMac Bank, F.S.B., as Seller and Master Servicer, IndyMac ABS, Inc.,
as Depositor, Countrywide Home Loans Servicing LP, as Backup Servicer,
and Deutsche Bank National Trust Company as Trustee
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for IndyMac ABS, Inc., we request the release of the Mortgage Loan
File for the Mortgage Loans 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.
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INDYMAC BANK, F.S.B. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
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Name:
Title:
Date:
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TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGMENT OF RECEIPT
By:
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Name:
Title:
Date:
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EXHIBIT O
FORM OF TRUSTEE CERTIFICATION
To: IndyMac MBS, Inc.
IndyMac Bank, F.S.B.
Re: The Pooling & Servicing Agreement dated as of August 1, 2003 among
IndyMac Bank, F.S.B., as Seller and Master Servicer, IndyMac ABS, Inc.,
as Depositor, Countrywide Home Loans Servicing LP, as Backup Servicer,
and Deutsche Bank National Trust Company as Trustee
Ladies and Gentlemen:
In connection with the delivery of the Required Certifications on behalf
of the Trust Fund, we certify that, based on our knowledge, the information
contained in the Monthly Statements, taken as a whole, does not contain an
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
they were made, not misleading as of the last day of the period covered by any
Required Certification.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:
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Name:
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Title:
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Date:
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EXHIBIT P
[RESERVED]
P-1
EXHIBIT Q
FORM OF SUBSEQUENT TRANSFER AGREEMENT
Subsequent Transfer Agreement, dated as of [____________], 2003, among
IndyMac ABS, Inc., a Delaware corporation, as depositor (the "Depositor"),
IndyMac Bank, F.S.B., a federal savings bank ("IndyMac Bank"), in its capacity
as seller under the Pooling and Servicing Agreement referred to below (the
"Seller"), Countrywide Home Loans Servicing LP, in its capacity as backup
servicer under the Pooling and Servicing Agreement (the "Backup Servicer") and
Deutsche Bank National Trust Company, as trustee (the "Trustee").
WITNESSETH:
WHEREAS, the Depositor, IndyMac Bank (in its capacity as Seller and in
its capacity as Master Servicer),the Backup Servicer and the Trustee are
parties to the pooling and servicing agreement dated as of August 1, 2003 (the
"Pooling and Servicing Agreement") relating to the Home Equity Mortgage Loan
Asset-Backed Certificates, Series SPMD 2003-A; and
WHEREAS, as contemplated in the Pooling and Servicing Agreement, the
Seller desires to convey certain Subsequent Mortgage Loans to the Depositor,
and the Depositor desires to simultaneously convey the Subsequent Mortgage
Loans to the Trustee for the benefit of the Certificateholders;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1.01. Defined Terms.
Capitalized terms used herein that are not otherwise defined have the
meanings given to them in Pooling and Servicing Agreement.
"Agreement" means this Subsequent Transfer Agreement and all amendments
hereof and supplements hereto.
"Subsequent Mortgage Loans" means the Mortgage Loans identified on the
Mortgage Loan Schedule specified in Section 1.02.
"Subsequent Transfer Date" means, with respect to this Agreement,
[____________], 2003.
"Cut-off Date" means, with respect to each of the Subsequent Mortgage
Loans, the later of _________ 1, 2003 and its date of origination.
Section 1.02. Mortgage Loan Schedule.
Annexed hereto is a supplement to Schedule I to the Pooling and Servicing
Agreement listing the Subsequent Mortgage Loans to be conveyed by the Seller
to the Depositor and simultaneously by the Depositor to the Trustee pursuant
to the Pooling and Servicing Agreement and this Agreement on the Subsequent
Transfer Date and an updated Prepayment Charge Schedule.
Section 1.03. Conveyance of Subsequent Mortgage Loans by the Seller.
Subject to the conditions in Section 1.05 and Section 1.06, in
consideration of the Trustee's delivery to or upon the order of the Seller of
$________ (i.e., an amount not greater than the aggregate Cut-off Date
Principal Balance of the Subsequent Mortgage Loans), the Seller does hereby
sell, transfer, assign and otherwise convey to the Depositor, without recourse
(subject to the Seller's obligations hereunder) all of the Seller's interest
in the Subsequent Mortgage Loans, including all interest and principal
received or receivable by the Seller on or with respect to each Subsequent
Mortgage Loan after the related Cut-off Date and all interest and principal
payments on each Subsequent Mortgage Loan received before such related Cut-off
Date in respect of installments of interest and principal due thereafter, but
not including payments of principal and interest due and payable on each
Subsequent Mortgage Loan by such related Cut-off Date, and the Depositor
simultaneously does hereby sell, transfer, assign, set over and otherwise
convey to the Trustee for the benefit of the Certificateholders, without
recourse, all the interest of the Depositor in each Subsequent Mortgage Loan,
including all interest and principal received or receivable by the Depositor
on or with respect to each Subsequent Mortgage Loan after the related Cut-off
Date and all interest and principal payments on each Subsequent Mortgage Loan
received before such related Cut-off Date in respect of installments of
interest and principal due thereafter, but not including payments of principal
and interest due and payable on each Subsequent Mortgage Loan by such related
Cut-off Date.
Section 1.04. Allocation of the Amounts to be Released from the Pre-Funding
Account.
Of the $________ (i.e., an amount not greater than the aggregate Cut-off
Date Principal Balance of the Subsequent Mortgage Loans), released by the
Trustee pursuant to Section 1.03, the Trustee shall release $__________ (i.e.,
an amount not greater than the aggregate Cut-off Date Principal Balance of the
Subsequent Mortgage Loans transferred to Loan Group 1 pursuant to this
Agreement) from the Pre-Funding Account.
Section 1.05. Representations and Warranties of Seller.
The Seller does hereby reaffirm the representations and warranties in
Section 2.03 and on Schedules II and III of the Pooling and Servicing
Agreement for the benefit of the Depositor and the Trustee as purchasers
hereunder are true with respect to the Subsequent Mortgage Loans. Such
representations and warranties shall survive the sale, transfer, and
assignment of the Subsequent Mortgage Loans to the Depositor and the
simultaneous sale, transfer, and assignment of the Subsequent Mortgage Loans
to the Trustee.
Section 1.06. Representations and Warranties of Depositor.
The Depositor does hereby reaffirm the representations and warranties in
Section 2.04 of the Pooling and Servicing Agreement for the benefit of the
Trustee as purchaser hereunder are true with respect to the Subsequent
Mortgage Loans. Such representations and warranties shall survive the sale,
transfer and assignment of the Subsequent Mortgage Loans to the Trustee.
Section 1.07. Conditions Precedent.
The obligation of the Trustee to acquire the Subsequent Mortgage Loans
hereunder is subject to the satisfaction, by the Subsequent Transfer Date, of
the conditions precedent identified in Section 2.09(d).
The Trustee shall not be required to investigate or otherwise verify
satisfaction of the conditions listed above, but shall be entitled to
conclusively rely upon Opinions of Counsel and Officer's Certificates
confirming such fulfillment.
Section 1.08. Reaffirmation of Agreement.
All terms of the Pooling and Servicing Agreement are hereby reaffirmed
and incorporated by reference by the Seller as to the Subsequent Mortgage
Loans.
Section 1.09. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
under this Agreement shall be determined in accordance with such laws;
provided, however, the immunities, authority, and standard of care of the
Trustee shall be governed by the jurisdiction in which its Corporate Trust
Office is located.
IN WITNESS WHEREOF, the Seller, the Depositor, the Backup Servicer, and
the Trustee have caused this Agreement to be duly executed and delivered by
their respective duly authorized officers as of the day and the year first
above written.
INDYMAC BANK, F.S.B.
as Seller
By:
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Name:
Title:
INDYMAC ABS, INC.
as Depositor
By:
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Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP,
as Backup Servicer
By: COUNTRYWIDE GP, INC.
By:
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Name:
Title
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By:
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Name:
Title:
[Supplement to Mortgage Loan Schedule]