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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor,
SAXON MORTGAGE SERVICES INC.
as Servicer,
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee, Swap Administrator and Custodian.
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2005
IXIS REAL ESTATE CAPITAL TRUST 2005-HE4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-HE4
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 20
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.. 68
Section 2.01 Conveyance of Mortgage Loans.......................... 68
Section 2.02 Acceptance by the Custodian of the Mortgage Loans..... 74
Section 2.03 Representations, Warranties and Covenants of the
Unaffiliated Seller and the Servicer.................. 75
Section 2.04 The Depositor and the Mortgage Loans.................. 79
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Non-Qualified Mortgages............. 80
Section 2.06 Execution and Delivery of Certificates................ 80
Section 2.07 REMIC Matters......................................... 80
Section 2.08 Representations and Warranties of the Depositor....... 80
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 82
Section 3.01 Servicer to Service Mortgage Loans.................... 82
Section 3.02 Subservicing Agreements Between the Servicer and
Subservicers.......................................... 84
Section 3.03 Successor Subservicers................................ 85
Section 3.04 Liability of the Servicer............................. 85
Section 3.05 No Contractual Relationship Between Subservicers and
the Trustee........................................... 85
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee............................................ 85
Section 3.07 Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts..................... 86
Section 3.08 Subservicing Accounts................................. 89
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts....................................... 90
Section 3.10 Collection Account.................................... 91
Section 3.11 Withdrawals from the Collection Account............... 92
Section 3.12 Investment of Funds in the Accounts................... 94
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage....................... 95
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption
Agreements............................................ 97
Section 3.15 Realization Upon Defaulted Mortgage Loans............. 98
Section 3.16 Release of Mortgage Files............................. 99
Section 3.17 Title, Conservation and Disposition of REO Property... 100
Section 3.18 Notification of Adjustments........................... 102
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans.......................... 102
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee................... 102
Section 3.21 Servicing Compensation................................ 103
Section 3.22 Annual Statement as to Compliance..................... 103
i
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements....................... 104
Section 3.24 Trustee to Act as Servicer............................ 104
Section 3.25 Compensating Interest................................. 105
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.............. 105
Section 3.27 Advance Facilities.................................... 105
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER.................... 107
Section 4.01 Advances.............................................. 107
Section 4.02 Priorities of Distribution............................ 108
Section 4.03 Monthly Statements to Certificateholders.............. 115
Section 4.04 Certain Matters Relating to the Determination of
LIBOR................................................. 118
Section 4.05 Allocation of Applied Realized Loss Amounts........... 119
ARTICLE V THE CERTIFICATES............................................... 119
Section 5.01 The Certificates...................................... 119
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.............................. 120
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..... 125
Section 5.04 Persons Deemed Owners................................. 125
Section 5.05 Access to List of Certificateholders' Names and
Addresses............................................. 125
Section 5.06 Maintenance of Office or Agency....................... 126
ARTICLE VI THE DEPOSITOR AND THE SERVICER................................ 126
Section 6.01 Respective Liabilities of the Depositor and the
Servicer.............................................. 126
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer.............................................. 126
Section 6.03 Limitation on Liability of the Depositor, the
Servicer and Others................................... 127
Section 6.04 Limitation on Resignation of the Servicer............. 128
Section 6.05 Additional Indemnification by the Servicer; Third
Party Claims.......................................... 129
ARTICLE VII DEFAULT...................................................... 129
Section 7.01 Events of Default..................................... 129
Section 7.02 Trustee to Act; Appointment of Successor.............. 132
Section 7.03 Notification to Certificateholders.................... 133
ARTICLE VIII CONCERNING THE TRUSTEE...................................... 133
Section 8.01 Duties of the Trustee................................. 133
Section 8.03 Trustee Not Liable for Certificates or
Mortgage Loans........................................ 136
Section 8.04 Trustee May Own Certificates.......................... 136
Section 8.05 Trustee's and Custodian's Fees and Expenses........... 136
Section 8.06 Eligibility Requirements for the Trustee.............. 136
Section 8.07 Resignation and Removal of the Trustee................ 137
Section 8.08 Successor Trustee..................................... 138
Section 8.09 Merger or Consolidation of the Trustee................ 138
Section 8.10 Appointment of Co-Trustee or Separate Trustee......... 138
Section 8.11 Tax Matters........................................... 140
Section 8.12 Periodic Filings...................................... 142
Section 8.13 Tax Classification of the Excess Reserve Fund
Account............................................... 144
ii
Section 8.14 Interest Rate Cap Agreements.......................... 144
ARTICLE IX TERMINATION................................................... 144
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans........................................ 144
Section 9.02 Final Distribution on the Certificates................ 145
Section 9.03 Additional Termination Requirements................... 147
ARTICLE X MISCELLANEOUS PROVISIONS....................................... 147
Section 10.01 Amendment............................................. 147
Section 10.02 Recordation of Agreement; Counterparts................ 150
Section 10.03 Governing Law......................................... 150
Section 10.04 Intention of Parties.................................. 150
Section 10.05 Notices............................................... 151
Section 10.06 Severability of Provisions............................ 152
Section 10.07 Assignment............................................ 152
Section 10.08 Limitation on Rights of Certificateholders............ 152
Section 10.09 Inspection and Audit Rights........................... 153
Section 10.10 Certificates Nonassessable and Fully Paid............. 153
Section 10.11 Waiver of Jury Trial.................................. 153
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule IA Schedule of Saxon Serviced Loans
Schedule II Representations and Warranties of the Servicer
Schedule IIA Further Representations and Warranties of the Servicer
Schedule III Representations and Warranties as to the Unaffiliated Seller
EXHIBITS
Exhibit A Form of Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2, Class B-3 and Class B-4 Certificate
Exhibit B [Reserved]
Exhibit C Form of Class P Certificate
Exhibit D Form of Class R Certificate
Exhibit E Form of Class X Certificate
Exhibit F Form of Initial Certification of Custodian
Exhibit G Form of Final Certification of Custodian
Exhibit H Form of Residual Transfer Affidavit
Exhibit I Form of Transferor Certificate
Exhibit J Form of Rule 144A Letter
Exhibit K Form of Request for Release
Exhibit L Form of Subsequent Transfer Agreement
Exhibit M Depositor Certification
Exhibit N Servicer Certification to be provided to Depositor
Exhibit O Trustee Certification to be provided to Depositor
iii
THIS POOLING AND SERVICING AGREEMENT, dated as of November 1, 2005,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), SAXON MORTGAGE SERVICES INC., a Texas corporation, as
servicer (the "Servicer"), IXIS REAL ESTATE CAPITAL INC. (f/k/a CDC Mortgage
Capital Inc.), a New York corporation, as unaffiliated seller (the "Unaffiliated
Seller"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association,
as custodian (the "Custodian"), swap administrator and trustee (in such
capacity, the "Trustee"),
WITNESSETH:
In consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that five segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising five REMICs
(each a "REMIC" or, in the alternative, REMIC I, REMIC II, REMIC III, REMIC IV
and REMIC V, respectively). Each Class of Certificates, other than the Class P
and Class R Certificates and other than the right of each Class of LIBOR
Certificates to receive Basis Risk Carry Forward Amounts and the right of the
Class X Certificates to receive payments from the Interest Rate Swap Agreement
and the Pre-Funding Reserve Account, represents ownership of one or more regular
interests in REMIC V for purposes of the REMIC Provisions. Additionally, the
Class X Certificates represent the obligation to make certain payments of Basis
Risk Carry Forward Amounts to Holders of LIBOR Certificates, and the LIBOR
Certificates represent the obligation to make certain payments to the Class X
Certificateholder to the extent that the interest accrued on its corresponding
REMIC V Regular Interest is in excess of the interest accrued on such LIBOR
Certificate. The Class P Certificates represent beneficial ownership of the
Prepayment Charges, which portion of the Trust Fund shall be treated as a
grantor trust. The Class I Interests are uncertificated REMIC V Regular
Interests and are designed to fund net swap payments, in full or in part, on the
Interest Rate Swap Agreement. The Class R Certificate represents ownership of
the sole class of residual interest in each of REMIC I, REMIC II, REMIC III,
REMIC IV and REMIC V for purposes of the REMIC Provisions. The Class R-V, Class
R-IV, Class R-III, Class R-II and Class R-I Interests comprise the Class R
Certificate. The Startup Day for each REMIC described herein is the Closing
Date. The latest possible maturity date for each regular interest is the date
referenced for such regular interest in this preliminary statement.
REMIC V shall hold as assets the several classes of uncertificated
REMIC IV Regular Interests. Each such REMIC IV Regular Interest is hereby
designated as a regular interest in REMIC IV. The Class IV-A-1, Class IV-A-2,
Class IV-A-3, Class IV-M-1, Class IV-M-2, Class IV-M-3, Class IV-M-4, Class
IV-M-5, Class IV-M-6, Class IV-B-1, Class IV-B-2, Class IV-B-3, and Class IV-B-4
Interests are hereby designated the REMIC IV Accretion Directed Classes.
REMIC IV shall hold as assets the several classes of uncertificated
REMIC III Regular Interests. Each such REMIC III Regular Interest is hereby
designated as a regular interest in REMIC III.
1
REMIC III shall hold as assets the several classes of uncertificated
REMIC II Regular Interests. Each such REMIC II Regular Interest is hereby
designated as a regular interest in REMIC II.
REMIC II shall hold as assets the several classes of uncertificated
REMIC I Regular Interests. Each such REMIC I Regular Interest is hereby
designated as a regular interest in REMIC I.
REMIC I shall hold as assets all of the assets included in the Trust
Fund other than the Prepayment Charges, the Supplemental Interest Trust, the
Excess Reserve Fund Account, the Swap Account, the Pre-Funding Account, the
Pre-Funding Reserve Account, the Capitalized Interest Account and the Interest
Rate Swap Agreement.
The REMIC I Regular Interests and the Class R-I Interest shall have
the following tier interest rate, initial tier principal amount and latest
possible maturity date as set forth in the table below.
REMIC I CLASS TIER INTEREST INITIAL TIER
DESIGNATION RATE PRINCIPAL AMOUNT LATEST POSSIBLE MATURITY DATE
------------- ------------- ---------------- -----------------------------
Class I-C1 (1) $700,404,243 February 25, 2036
Class I-PO1 (2) $147,488,871 February 25, 2036
Class I-N (3) (4) February 25, 2006
Class R-I (5) (5)
(1) The interest rate with respect to any Distribution Date for this Class I-C1
Interest is (i) for the first three Distribution Dates, a per annum
variable rate equal to the weighted average of the Adjusted Net Mortgage
Rates for then in effect on the beginning of the related Prepayment Period
on the Initial Mortgage Loans, and (ii) thereafter, a per annum variable
rate equal to the weighted average of the Adjusted Net Mortgage Rates then
in effect on the beginning of the related Prepayment Period on the Mortgage
Loans.
(2) The interest rate with respect to any Distribution Date for the Class I-PO1
Interest is (i) for the first three Distribution Dates, 0.00% and (ii)
thereafter, a per annum variable rate equal to the weighted average of the
Adjusted Net Mortgage Rates then in effect on the beginning of the related
Prepayment Period on the Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class I-N
Interest is (i) for the first three Distribution Dates, all interest on the
Subsequent Mortgage Loans for such Distribution Date divided by
$147,488,871, and (ii) thereafter, 0.00%.
(4) The Class I-N Interest will have a notional principal balance equal to
$147,488,871.
(5) The Class R-I Interest is the sole class of residual interest in REMIC I.
The Class R-I does not have a principal amount or an interest rate.
2
During the Pre-Funding Period, all principal payments (scheduled and
prepaid) and Realized Losses with respect to the Initial Mortgage Loans shall be
allocated to the Class I-C1 Interest, until such Class is paid in full or
eliminated by such losses. All principal payments (scheduled and prepaid) and
Realized Losses generated with respect to the Subsequent Mortgage Loans and any
amounts transferred from the Pre-Funding Account to REMIC I shall be allocated
to the Class I-PO1 Interest.
On each Distribution Date thereafter, all principal payments
(scheduled and prepaid) and Realized Losses generated with respect to the
Mortgage Loans shall be allocated, pro rata, to the Class I-C1 and Class I-PO1
Interests, until such Classes are paid in full or eliminated by such losses..
The REMIC II Regular Interests and the Class R-II Interest shall have
the following tier interest rate, initial tier principal amount and latest
possible maturity date as set forth in the table below.
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
-------------- ------------- ---------------- -----------------
Class II-C1 (1) $ 1,913,682.90 February 25, 2036
Class II-C2 (1) $20,768,388.20 February 25, 2036
Class II-C3 (1) $20,204,756.30 February 25, 2036
Class II-C4 (1) $30,594,866.80 February 25, 2036
Class II-C5 (1) $29,134,429.40 February 25, 2036
Class II-C6 (1) $28,073,267.10 February 25, 2036
Class II-C7 (1) $26,885,822.60 February 25, 2036
Class II-C8 (1) $25,900,719.10 February 25, 2036
Class II-C9 (1) $24,982,683.50 February 25, 2036
Class II-C10 (1) $24,102,930.30 February 25, 2036
Class II-C11 (1) $23,257,866.20 February 25, 2036
Class II-C12 (1) $22,427,305.90 February 25, 2036
Class II-C13 (1) $21,615,353.10 February 25, 2036
Class II-C14 (1) $20,731,300.30 February 25, 2036
Class II-C15 (1) $19,851,688.30 February 25, 2036
Class II-C16 (1) $19,272,989.90 February 25, 2036
Class II-C17 (1) $18,387,228.10 February 25, 2036
Class II-C18 (1) $19,625,656.40 February 25, 2036
Class II-C19 (1) $24,791,176.60 February 25, 2036
3
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
-------------- ------------- ---------------- -----------------
Class II-C20 (1) $ 45,170,793.90 February 25, 2036
Class II-C21 (1) $171,760,978.70 February 25, 2036
Class II-C22 (1) $ 28,940,206.20 February 25, 2036
Class II-C23 (1) $ 17,963,324.10 February 25, 2036
Class II-C24 (1) $ 15,158,931.40 February 25, 2036
Class II-C25 (1) $ 3,678,044.80 February 25, 2036
Class II-C26 (1) $ 2,848,760.70 February 25, 2036
Class II-C27 (1) $ 2,738,644.90 February 25, 2036
Class II-C28 (1) $ 2,632,883.60 February 25, 2036
Class II-C29 (1) $ 2,531,208.40 February 25, 2036
Class II-C30 (1) $ 2,594,963.20 February 25, 2036
Class II-C31 (1) $ 2,928,225.10 February 25, 2036
Class II-C32 (1) $ 10,947,357.90 February 25, 2036
Class II-C33 (1) $ 6,309,036.60 February 25, 2036
Class II-C34 (1) $ 3,517,998.70 February 25, 2036
Class II-C35 (1) $ 2,278,853.30 February 25, 2036
Class II-C36 (1) $ 1,585,784.90 February 25, 2036
Class II-C37 (1) $ 1,254,642.20 February 25, 2036
Class II-C38 (1) $ 1,131,385.50 February 25, 2036
Class II-C39 (1) $ 1,091,985.20 February 25, 2036
Class II-C40 (1) $ 1,053,939.10 February 25, 2036
Class II-C41 (1) $ 1,017,206.90 February 25, 2036
Class II-C42 (1) $ 981,742.00 February 25, 2036
Class II-C43 (1) $ 947,501.80 February 25, 2036
Class II-C44 (1) $ 914,445.20 February 25, 2036
Class II-C45 (1) $ 882,531.30 February 25, 2036
Class II-C46 (1) $ 851,721.10 February 25, 2036
Class II-C47 (1) $ 821,977.00 February 25, 2036
Class II-C48 (1) $ 793,262.40 February 25, 2036
4
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
-------------- ------------- ---------------- -----------------
Class II-C49 (1) $ 765,541.80 February 25, 2036
Class II-C50 (1) $ 738,781.30 February 25, 2036
Class II-C51 (1) $ 712,947.90 February 25, 2036
Class II-C52 (1) $ 712,399.60 February 25, 2036
Class II-C53 (1) $ 664,549.20 February 25, 2036
Class II-C54 (1) $ 18,103,927.60 February 25, 2036
Class II-J1 (1) $ 68,344,519.50 February 25, 2036
Class II-N (2) (3) February 25, 2006
Class R-II (4) (4)
(1) The interest rate with respect to any Distribution Date for these interests
is the weighted average of the interest rates of the Class I-C1 and Class
I-PO1 Interests.
(2) The Class II-N Interest is entitled to all distributions of interest on the
Class I-N Interest.
(3) The Class II-N Interest will have a notional principal balance equal to the
notional principal balance of the Class I-N Interest.
(4) The Class R-II Interest is the sole class of residual interest in REMIC II.
The Class R-II Interest does not have a principal amount or an interest
rate.
On each Distribution Date, all principal payments (scheduled and
prepaid) and Realized Losses generated with respect to the Mortgage Loans and
any amounts transferred from the Pre-Funding Account to REMIC I shall be
allocated in the following order: (i) first, to the Class II-J1 Interest until
such Class is paid in full or eliminated by such losses, (ii) second, to the
Class II-C1, Class II-C2 and Class II-C3, in reverse numerical order, until such
Classes are paid in full or eliminated by such losses and (iii) third to the
Class II-C4 through Class II-C54 Interests, sequentially, until such Classes are
paid in full or eliminated by such losses.
The REMIC III Regular Interests and the Class R-III Interest shall
have the following, Corresponding REMIC II Regular Interest, tier interest rate,
initial tier principal amount and latest possible maturity date as set forth in
the table below.
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C1a Class II-C1 (1) (2) February 25, 2036
Class III-C1b Class II-C1 (5) (3) February 25, 2036
5
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C1c Class II-C1 (6) (4) February 25, 2036
Class III-C2a Class II-C2 (1) (2) February 25, 2036
Class III-C2b Class II-C2 (5) (3) February 25, 2036
Class III-C2c Class II-C2 (6) (4) February 25, 2036
Class III-C3a Class II-C3 (1) (2) February 25, 2036
Class III-C3b Class II-C3 (5) (3) February 25, 2036
Class III-C3c Class II-C3 (6) (4) February 25, 2036
Class III-C4a Class II-C4 (7) (2) February 25, 2036
Class III-C4b Class II-C4 (8) (3) February 25, 2036
Class III-C4c Class II-C4 (9) (4) February 25, 2036
Class III-C5a Class II-C5 (7) (2) February 25, 2036
Class III-C5b Class II-C5 (8) (3) February 25, 2036
Class III-C5c Class II-C5 (9) (4) February 25, 2036
Class III-C6a Class II-C6 (10) (2) February 25, 2036
Class III-C6b Class II-C6 (11) (3) February 25, 2036
Class III-C6c Class II-C6 (12) (4) February 25, 2036
Class III-C7a Class II-C7 (10) (2) February 25, 2036
Class III-C7b Class II-C7 (11) (3) February 25, 2036
Class III-C7c Class II-C7 (12) (4) February 25, 2036
Class III-C8a Class II-C8 (10) (2) February 25, 2036
Class III-C8b Class II-C8 (11) (3) February 25, 2036
Class III-C8c Class II-C8 (12) (4) February 25, 2036
Class III-C9a Class II-C9 (10) (2) February 25, 2036
Class III-C9b Class II-C9 (11) (3) February 25, 2036
Class III-C9c Class II-C9 (12) (4) February 25, 2036
Class III-C10a Class II-C10 (10) (2) February 25, 2036
Class III-C10b Class II-C10 (11) (3) February 25, 2036
Class III-C10c Class II-C10 (12) (4) February 25, 2036
6
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C11a Class II-C11 (10) (2) February 25, 2036
Class III-C11b Class II-C11 (11) (3) February 25, 2036
Class III-C11c Class II-C11 (12) (4) February 25, 2036
Class III-C12a Class II-C12 (10) (2) February 25, 2036
Class III-C12b Class II-C12 (11) (3) February 25, 2036
Class III-C12c Class II-C12 (12) (4) February 25, 2036
Class III-C13a Class II-C13 (10) (2) February 25, 2036
Class III-C13b Class II-C13 (11) (3) February 25, 2036
Class III-C13c Class II-C13 (12) (4) February 25, 2036
Class III-C14a Class II-C14 (10) (2) February 25, 2036
Class III-C14b Class II-C14 (11) (3) February 25, 2036
Class III-C14c Class II-C14 (12) (4) February 25, 2036
Class III-C15a Class II-C15 (10) (2) February 25, 2036
Class III-C15b Class II-C15 (11) (3) February 25, 2036
Class III-C15c Class II-C15 (12) (4) February 25, 2036
Class III-C16a Class II-C16 (10) (2) February 25, 2036
Class III-C16b Class II-C16 (11) (3) February 25, 2036
Class III-C16c Class II-C16 (12) (4) February 25, 2036
Class III-C17a Class II-C17 (10) (2) February 25, 2036
Class III-C17b Class II-C17 (11) (3) February 25, 2036
Class III-C17c Class II-C17 (12) (4) February 25, 2036
Class III-C18a Class II-C18 (10) (2) February 25, 2036
Class III-C18b Class II-C18 (11) (3) February 25, 2036
Class III-C18c Class II-C18 (12) (4) February 25, 2036
Class III-C19a Class II-C19 (10) (2) February 25, 2036
Class III-C19b Class II-C19 (11) (3) February 25, 2036
Class III-C19c Class II-C19 (12) (4) February 25, 2036
Class III-C20a Class II-C20 (10) (2) February 25, 2036
7
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C20b Class II-C20 (11) (3) February 25, 2036
Class III-C20c Class II-C20 (12) (4) February 25, 2036
Class III-C21a Class II-C21 (10) (2) February 25, 2036
Class III-C21b Class II-C21 (11) (3) February 25, 2036
Class III-C21c Class II-C21 (12) (4) February 25, 2036
Class III-C22a Class II-C22 (10) (2) February 25, 2036
Class III-C22b Class II-C22 (11) (3) February 25, 2036
Class III-C22c Class II-C22 (12) (4) February 25, 2036
Class III-C23a Class II-C23 (10) (2) February 25, 2036
Class III-C23b Class II-C23 (11) (3) February 25, 2036
Class III-C23c Class II-C23 (12) (4) February 25, 2036
Class III-C24a Class II-C24 (10) (2) February 25, 2036
Class III-C24b Class II-C24 (11) (3) February 25, 2036
Class III-C24c Class II-C24 (12) (4) February 25, 2036
Class III-C25a Class II-C25 (10) (2) February 25, 2036
Class III-C25b Class II-C25 (11) (3) February 25, 2036
Class III-C25c Class II-C25 (12) (4) February 25, 2036
Class III-C26a Class II-C26 (10) (2) February 25, 2036
Class III-C26b Class II-C26 (11) (3) February 25, 2036
Class III-C26c Class II-C26 (12) (4) February 25, 2036
Class III-C27a Class II-C27 (10) (2) February 25, 2036
Class III-C27b Class II-C27 (11) (3) February 25, 2036
Class III-C27c Class II-C27 (12) (4) February 25, 2036
Class III-C28a Class II-C28 (10) (2) February 25, 2036
Class III-C28b Class II-C28 (11) (3) February 25, 2036
Class III-C28c Class II-C28 (12) (4) February 25, 2036
Class III-C29a Class II-C29 (10) (2) February 25, 2036
Class III-C29b Class II-C29 (11) (3) February 25, 2036
8
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C29c Class II-C29 (12) (4) February 25, 2036
Class III-C30a Class II-C30 (10) (2) February 25, 2036
Class III-C30b Class II-C30 (11) (3) February 25, 2036
Class III-C30c Class II-C30 (12) (4) February 25, 2036
Class III-C31a Class II-C31 (10) (2) February 25, 2036
Class III-C31b Class II-C31 (11) (3) February 25, 2036
Class III-C31c Class II-C31 (12) (4) February 25, 2036
Class III-C32a Class II-C32 (10) (2) February 25, 2036
Class III-C32b Class II-C32 (11) (3) February 25, 2036
Class III-C32c Class II-C32 (12) (4) February 25, 2036
Class III-C33a Class II-C33 (10) (2) February 25, 2036
Class III-C33b Class II-C33 (11) (3) February 25, 2036
Class III-C33c Class II-C33 (12) (4) February 25, 2036
Class III-C34a Class II-C34 (10) (2) February 25, 2036
Class III-C34b Class II-C34 (11) (3) February 25, 2036
Class III-C34c Class II-C34 (12) (4) February 25, 2036
Class III-C35a Class II-C35 (10) (2) February 25, 2036
Class III-C35b Class II-C35 (11) (3) February 25, 2036
Class III-C35c Class II-C35 (12) (4) February 25, 2036
Class III-C36a Class II-C36 (10) (2) February 25, 2036
Class III-C36b Class II-C36 (11) (3) February 25, 2036
Class III-C36c Class II-C36 (12) (4) February 25, 2036
Class III-C37a Class II-C37 (10) (2) February 25, 2036
Class III-C37b Class II-C37 (11) (3) February 25, 2036
Class III-C37c Class II-C37 (12) (4) February 25, 2036
Class III-C38a Class II-C38 (10) (2) February 25, 2036
Class III-C38b Class II-C38 (11) (3) February 25, 2036
Class III-C38c Class II-C38 (12) (4) February 25, 2036
9
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C39a Class II-C39 (10) (2) February 25, 2036
Class III-C39b Class II-C39 (11) (3) February 25, 2036
Class III-C39c Class II-C39 (12) (4) February 25, 2036
Class III-C40a Class II-C40 (10) (2) February 25, 2036
Class III-C40b Class II-C40 (11) (3) February 25, 2036
Class III-C40c Class II-C40 (12) (4) February 25, 2036
Class III-C41a Class II-C41 (10) (2) February 25, 2036
Class III-C41b Class II-C41 (11) (3) February 25, 2036
Class III-C41c Class II-C41 (12) (4) February 25, 2036
Class III-C42a Class II-C42 (10) (2) February 25, 2036
Class III-C42b Class II-C42 (11) (3) February 25, 2036
Class III-C42c Class II-C42 (12) (4) February 25, 2036
Class III-C43a Class II-C43 (10) (2) February 25, 2036
Class III-C43b Class II-C43 (11) (3) February 25, 2036
Class III-C43c Class II-C43 (12) (4) February 25, 2036
Class III-C44a Class II-C44 (10) (2) February 25, 2036
Class III-C44b Class II-C44 (11) (3) February 25, 2036
Class III-C44c Class II-C44 (12) (4) February 25, 2036
Class III-C45a Class II-C45 (10) (2) February 25, 2036
Class III-C45b Class II-C45 (11) (3) February 25, 2036
Class III-C45c Class II-C45 (12) (4) February 25, 2036
Class III-C46a Class II-C46 (10) (2) February 25, 2036
Class III-C46b Class II-C46 (11) (3) February 25, 2036
Class III-C46c Class II-C46 (12) (4) February 25, 2036
Class III-C47a Class II-C47 (10) (2) February 25, 2036
Class III-C47b Class II-C47 (11) (3) February 25, 2036
Class III-C47c Class II-C47 (12) (4) February 25, 2036
Class III-C48a Class II-C48 (10) (2) February 25, 2036
10
CORRESPONDING
REMIC II TIER INITIAL TIER
REMIC III CLASS REGULAR INTEREST PRINCIPAL LATEST POSSIBLE
DESIGNATION INTEREST RATE AMOUNT MATURITY DATE
--------------- ------------- -------- ------------ -----------------
Class III-C48b Class II-C48 (11) (3) February 25, 2036
Class III-C48c Class II-C48 (12) (4) February 25, 2036
Class III-C49a Class II-C49 (10) (2) February 25, 2036
Class III-C49b Class II-C49 (11) (3) February 25, 2036
Class III-C49c Class II-C49 (12) (4) February 25, 2036
Class III-C50a Class II-C50 (10) (2) February 25, 2036
Class III-C50b Class II-C50 (11) (3) February 25, 2036
Class III-C50c Class II-C50 (12) (4) February 25, 2036
Class III-C51a Class II-C51 (10) (2) February 25, 2036
Class III-C51b Class II-C51 (11) (3) February 25, 2036
Class III-C51c Class II-C51 (12) (4) February 25, 2036
Class III-C52a Class II-C52 (10) (2) February 25, 2036
Class III-C52b Class II-C52 (11) (3) February 25, 2036
Class III-C52c Class II-C52 (12) (4) February 25, 2036
Class III-C53a Class II-C53 (10) (2) February 25, 2036
Class III-C53b Class II-C53 (11) (3) February 25, 2036
Class III-C53c Class II-C53 (12) (4) February 25, 2036
Class III-C54a Class II-C54 (10) (2) February 25, 2036
Class III-C54b Class II-C54 (11) (3) February 25, 2036
Class III-C54c Class II-C54 (12) (4) February 25, 2036
Class III-J1 Class II-J1 (13) (14) February 25, 2036
Class III-N Class II-N (15) (16) February 25, 2006
Class R-III (17) (17)
(1) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Corresponding Distribution
Date through and including the Distribution Date in February 2006, 1.5
multiplied by (REMIC III Net WAC minus 4.655%) and (ii) for all other
Distribution Dates, REMIC III Net WAC.
11
(2) These REMIC III Regular Interests will have an initial principal balance
equal to the product of (i) the initial principal balance of the
Corresponding REMIC II Regular Interest and (ii) two divided by three.
(3) These REMIC III Regular Interests will have an initial principal balance
equal to the initial principal balance of the Corresponding REMIC II
Regular Interest divided by three.
(4) These REMIC III Regular Interests will have a notional principal balance
equal to the principal balance of the Corresponding REMIC II Regular
Interest.
(5) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Corresponding Distribution
Date through and including the Distribution Date in February 2006, 3
multiplied by 1-month LIBOR, subject to a cap of 13.965% and (ii) for all
other Distribution Dates, REMIC III Net WAC.
(6) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Corresponding Distribution
Date through and including the Distribution Date in February 2006, 4.655%
minus 1-Month LIBOR, subject to a floor of zero and (ii) for all other
Distribution Dates, zero.
(7) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in March
2006 through and including the Corresponding Distribution Date, 1.5
multiplied by (REMIC III Net WAC minus 4.655%) and (ii) for all other
Distribution Dates, REMIC III Net WAC.
(8) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in March
2006 through and including the Corresponding Distribution Date, 3
multiplied by 1-month LIBOR, subject to a cap of 13.965% and (ii) for all
other Distribution Dates, REMIC III Net WAC.
(9) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in March
2006 through and including the Corresponding Distribution Date, 4.655%
minus 1-Month LIBOR, subject to a floor of zero and (ii) for all other
Distribution Dates, zero.
(10) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the first Distribution Date
through and including the Corresponding Distribution Date, 1.5 multiplied
by (REMIC III Net WAC minus 4.655%) and (ii) for all other Distribution
Dates, REMIC III Net WAC.
(11) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the first Distribution Date
through and including the Corresponding Distribution Date, 3 multiplied by
1-month LIBOR, subject to a cap of 13.965% and (ii) for all other
Distribution Dates, REMIC III Net WAC.
12
(12) The interest rate for these REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the first Distribution Date
through and including the Corresponding Distribution Date, 4.655% minus
1-Month LIBOR, subject to a floor of zero and (ii) for all other
Distribution Dates, zero.
(13) The interest rate for this REMIC III Regular Interest will be equal to the
REMIC III Net WAC.
(14) These REMIC III Regular Interests will have an initial principal balance
equal to the initial principal balance of the Corresponding REMIC II
Regular Interest.
(15) The Class III-N Interest is entitled to all distributions of interest on
the Class II-N Interest.
(16) The Class III-N Interest will have a notional principal balance equal to
the notional principal balance of the Class II-N Interest.
(17) The Class R-III Interest is the sole class of residual interest in REMIC
III. The Class R-III Interest does not have a principal amount or an
interest rate.
On each Distribution Date, all principal payments (scheduled and prepaid)
and Realized Losses generated with respect to the Mortgage Loans and any amounts
transferred from the Pre-Funding Account to REMIC I shall be allocated in the
following order: (i) first, to the Class III-J1 Interest until such Class is
paid in full or eliminated by such losses, (ii) second, to the Class III-C1a
through Class III-C3a and Class III-C1b through Class III-C3b Interests, first,
pro rata between the two subsets of interests, and second, in reverse numerical
order among the subsets of interests, until such Classes are paid in full or
eliminated by such losses and (iii) third, to the Class III-C4a through Class
III-C54a and Class III-C4b through Class III-C54b Interests, first, pro rata
between the two subsets of interests, and second, sequentially among the subsets
of interests, until such Classes are paid in full or eliminated by such losses.
The REMIC IV Regular Interests and the Class R-IV Interest shall have
the following tier interest rate, initial principal amount, Corresponding REMIC
V Interest, and latest possible maturity date as set forth in the table below.
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
---------------- -------- ------------------------ ---------------------- -----------------
Class IV-A-1 (1) 1/2 of the Corresponding Class A-1 February 25, 2036
Class initial principal
balance
Class IV-A-2 (1) 1/2 of the Corresponding Class A-2 February 25, 2036
Class initial principal
balance
13
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
---------------- -------- ------------------------ ---------------------- -----------------
Class IV-A-3 (1) 1/2 of the Corresponding Class A-3 February 25, 2036
Class initial principal
balance
Class IV-M-1 (1) 1/2 of the Corresponding Class M-1 February 25, 2036
Class initial principal
balance
Class IV-M-2 (1) 1/2 of the Corresponding Class M-2 February 25, 2036
Class initial principal
balance
Class IV-M-3 (1) 1/2 of the Corresponding Class M-3 February 25, 2036
Class initial principal
balance
Class IV-M-4 (1) 1/2 of the Corresponding Class M-4 February 25, 2036
Class initial principal
balance
Class IV-M-5 (1) 1/2 of the Corresponding Class M-5 February 25, 2036
Class initial principal
balance
Class IV-M-6 (1) 1/2 of the Corresponding Class M-6 February 25, 2036
Class initial principal
balance
Class IV-B-1 (1) 1/2 of the Corresponding Class B-1 February 25, 2036
Class initial principal
balance
Class IV-B-2 (1) 1/2 of the Corresponding Class B-2 February 25, 2036
Class initial principal
balance
Class IV-B-3 (1) 1/2 of the Corresponding Class B-3 February 25, 2036
Class initial principal
balance
14
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
---------------- -------- ------------------------ ---------------------- -----------------
Class IV-B-4 (1) 1/2 of the Corresponding Class B-4 February 25, 2036
Class initial principal
balance
Class IV-Accrual (1) (2) N/A February 25, 2036
Class IV-N (3) (4) Class X-2 February 25, 2006
Class IV-I1 (5) (5) Class I-1 December 26, 2005
Class IV-I2 (6) (6) Class I-2 December 26, 2006
Class IV-I3 (7) (7) Class I-3 December 26, 2007
Class IV-I4 (8) (8) Class I-4 December 26, 2008
Class IV-I5 (9) (9) Class I-5 December 28, 2009
Class IV-I6 (10) (10) Class I-6 May 25, 2010
Class R-IV (11) (11) Class R
(1) The interest rate with respect to any Distribution Date for these REMIC IV
Regular Interests is the REMIC IV Net WAC.
(2) The Class IV-Accrual Interest will have an initial principal balance equal
to the product of (a) 50% and (b) the sum of (i) the Pool Stated Principal
Balance (ii) the Subordinated Amount and (ii) the Initial Pre-Funded
Amount.
(3) The Class IV-N Interest is entitled to all distributions of interest on the
Class III-N Interest.
(4) The Class IV-N Interest will have a notional principal balance equal to the
notional principal balance of the Class III-N Interest.
(5) The Class IV-I1 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the amount distributable
on the Class III-C1c Interest on such Distribution Date.
(6) The Class IV-I2 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the sum of the amounts
distributable on the Class III-C2c through Class III-C13c Interests on such
Distribution Date.
15
(7) The Class IV-I3 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the sum of the amounts
distributable on the Class III-C14c through Class III-C25c Interests on
such Distribution Date.
(8) The Class IV-I4 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the sum of the amounts
distributable on the Class III-C26c through Class III-C37c Interests on
such Distribution Date.
(9) The Class IV-I5 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the sum of the amounts
distributable on the Class III-C38c through Class III-C49c Interests on
such Distribution Date.
(10) The Class IV-I6 Interest will be an interest-only regular interest and will
be entitled to receive, on each Distribution Date, the sum of the amounts
distributable on the Class III-C50c through Class III-C54c Interests on
such Distribution Date.
(11) The Class R-IV Interest is the sole class of residual interest in REMIC IV.
The Class R-IV Interest does not have a principal amount or an interest
rate.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the principal balances of the REMIC IV
Accretion Directed Classes and will be accrued and added to the principal
balance of the Class IV-Accrual Interest. To this end, each REMIC IV Accretion
Directed Class will be reduced by an amount equal to 50% of any increase in the
Subordinated Amount that is attributable to a reduction in the principal balance
of its Corresponding Class. On each Distribution Date, the increase in the
principal balance of the Class IV-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class IV-Accrual Interest. If, with
respect to any Distribution Date, 50% of the increase in the Subordinated Amount
exceeds accrued interest on the Class IV-Accrual Interest, the excess
(accumulated with all such excess for all prior Distribution Dates) will be
added to any increase in the Subordinated Amount for purposes of calculating
accrued interest on the Class IV-Accrual Interest payable as principal on the
REMIC IV Accretion Directed Classes on the next Distribution Date.
On each Distribution Date, all principal payments (scheduled and prepaid)
on the Mortgage Loans and any amounts transferred from the Pre-Funding Account
to REMIC I shall be allocated as follows: 50% to the Class IV-Accrual Interest
and 50% to the REMIC IV Accretion Directed Classes, until such interests are
paid in full. To this end, principal payments shall be allocated among such
REMIC IV Accretion Directed Classes in an amount equal to 50% of the principal
amounts allocated to their respective Corresponding Classes. Notwithstanding the
foregoing, principal payments allocated to the Class X Certificates that result
in the reduction in the Subordinated Amount shall be allocated to the Class
IV-Accrual Interest until paid in full. On each Distribution Date, Realized
Losses shall be applied so that after all distributions have been made on each
Distribution Date (i) the principal balance of each REMIC IV Accretion Directed
Class is equal to 50% of the principal balance of its Corresponding Class, and
(ii) the principal balance of the Class IV-Accrual Interest is equal to 50% of
the sum of (1) the Pool Stated Principal Balance, (2) the Subordinated Amount
and (3) the Pre-Funding Amount.
16
The REMIC V Regular Interests and the Class R-V Interest shall have
the following tier interest rate, initial tier principal amount, corresponding
classes, and latest possible maturity date as set forth in the table below.
INITIAL
TIER TIER LATEST
REMIC V CLASS INTEREST PRINCIPAL CORRESPONDING POSSIBLE MATURITY
DESIGNATION RATE AMOUNT CLASS DATE
------------- -------- ------------ ------------- -----------------
Class A-1 (1) $407,000,000 Class A-1(8) February 25, 2036
Class A-2 (1) $151,052,000 Class A-2(8) February 25, 2036
Class A-3 (1) $105,000,000 Class A-3(8) February 25, 2036
Class M-1 (1) $ 32,220,000 Class M-1(8) February 25, 2036
Class M-2 (1) $ 29,252,000 Class M-2(8) February 25, 2036
Class M-3 (1) $ 19,078,000 Class M-3(8) February 25, 2036
Class M-4 (1) $ 14,414,000 Class M-4(8) February 25, 2036
Class M-5 (1) $ 13,990,000 Class M-5(8) February 25, 2036
Class M-6 (1) $ 13,143,000 Class M-6(8) February 25, 2036
Class B-1 (1) $ 12,718,000 Class B-1(8) February 25, 2036
Class B-2 (1) $ 11,023,000 Class B-2(8) February 25, 2036
Class B-3 (1) $ 7,631,000 Class B-3(8) February 25, 2036
Class B-4 (1) $ 8,479,000 Class B-4(8) February 25, 2036
Class X-1(7) (2) (2) Class X(9) February 25, 2036
Class X-2(7) (3) (4) Class X(9) February 25, 2036
Class V-I1 (5) (5) Class I-1 December 25, 2005
Class V-I2 (5) (5) Class I-2 December 25, 2006
Class V-I3 (5) (5) Class I-3 December 25, 2007
Class V-I4 (5) (5) Class I-4 December 25, 2008
Class V-I5 (5) (5) Class I-5 December 25, 2009
Class V-I6 (5) (5) Class I-6 May 25, 2010
Class R-V (6) (6) Class R
(1) These Certificates will bear interest during each Interest Accrual Period
at a per annum variable rate equal to the least of (a) one-month LIBOR plus
the applicable Pass-Through Margin or (c) the REMIC Adjusted WAC Cap.
17
(2) The Class X-1 Interest has an initial principal balance of $22,893,114 but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X-1
Interest shall have a notional principal balance equal to the sum of (i)
the Pool Stated Principal Balance and (ii) any amount remaining in the
Pre-Funding Account as of the first day of the related Interest Accrual
Period. With respect to any Interest Accrual Period, the Class X-1 Interest
shall bear interest at a rate equal to the excess, if any, of the REMIC
Adjusted WAC Cap over the product of (i) 2 and (ii) the weighted average
interest rates of the REMIC IV Accretion Direction Classes and the Class
IV-Accrual Interest, where each REMIC IV Accretion Directed Class is
subject to a cap equal to the interest rate on its Corresponding REMIC V
Interest and the Class IV-Accrual Interest is subject to a cap of zero.
With respect to any Distribution Date, interest that so accrues on the
notional principal balance of the Class X-1 Interest shall be deferred in
an amount equal to any increase in the Subordinated Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
(3) The Class X-2 Interest is entitled to all distributions of interest on the
Class IV-N Interest.
(4) The Class X-2 Interest will have a notional principal balance equal to the
notional principal balance of the Class IV-N Interest.
(5) These REMIC V Regular Interests will be interest-only regular interests and
will be entitled to receive on each Distribution Date all distribution on
its corresponding REMIC IV Regular Interest for such Distribution Date.
(6) The Class R-V Interest is the sole class of residual interest in REMIC V.
The Class R-V Interest does not have a principal amount or an interest
rate.
(7) The Class X Certificates will represent two REMIC V Regular Interests, the
Class X-1 and Class X-2 Interests.
(8) Each of these Certificates will represent not only the ownership of the
Corresponding Class of REMIC V Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and Swap Account in
respect of any Basis Risk Carry Forward Amounts. For federal income tax
purposes, the Trustee will treat a Certificateholder's right to receive of
Basis Risk Carry Forward Amounts as payments made pursuant to a notional
principal contract written by the Class X Certificateholders. Each of these
Certificates will also represent the obligation to make certain payments on
such notional principal contract to the extent that the interest accrued on
its Corresponding REMIC V Regular Interest is in excess of the related
Accrued Certificate Interest.
(11) The Class X Certificates also represent the right to receive payments from
the Interest Rate Swap Agreement, the Pre-Funding Reserve Account and
certain payments from Holders of the LIBOR Certificates as described in
footnote 10 and the obligation to fund certain Basis Risk Carry Forward
Amounts.
Set forth below are designations of Classes of Certificates to the
categories used herein:
18
Book-Entry Certificates.......... All Classes of Certificates other than the
Physical Certificates.
Subordinated Certificates........ Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates.
Delay Certificates............... None.
ERISA-Restricted Certificates.... Class R Certificates, Class P Certificate
and Class X Certificate; any certificate
with a rating below the lowest applicable
permitted rating under the Underwriters'
Exemption.
LIBOR Certificates............... Class A-1, Class A-2, Class A-3 and
Subordinated Certificates.
Non-Delay Certificates........... Class A-1, Class A-2, Class A-3, Class X and
Subordinated Certificates.
Offered Certificates............. All Classes of Certificates other than the
Private Certificates.
Physical Certificates............ Class P, Class X and Class R Certificates.
Private Certificates............. Class P, Class X and Class R Certificates.
Rating Agencies.................. ▇▇▇▇▇'▇, Fitch and Standard & Poor's.
Regular Certificates............. All Classes of Certificates other than the
Class P and Class R Certificates.
Residual Certificates............ Class R Certificates.
19
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
60+ Day Delinquent Loan: Each Mortgage Loan with respect to which any
portion of a Scheduled Payment is, as of the last day of the prior Due Period,
two months or more past due (without giving effect to any grace period), each
Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for which
the Mortgagor has filed for bankruptcy.
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices set forth in Section 3.01.
Account: Any of the Capitalized Interest Account, the Collection
Account, the Distribution Account, any Escrow Account, the Excess Reserve Fund
Account, the Swap Account, the Pre-Funding Account or the Pre-Funding Reserve
Account. Each Account shall be an Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Accredited, and each other Assignment and Recognition
Agreement, by and among the Unaffiliated Seller, the Depositor and Accredited in
connection with any Subsequent Transfer of Accredited Mortgage Loans.
Accredited Mortgage Loan: A Mortgage Loan which was acquired from
Accredited by the Unaffiliated Seller pursuant to the Accredited Purchase
Agreement, and which has been acquired by the Trust Fund.
Accredited Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and Accredited.
Accrued Certificate Interest: With respect to any Distribution Date
for each Class of Certificates (other than the Class P, Class R and Class X
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 prior to such Distribution Date, as reduced by
such Class's share of Net Prepayment Interest Shortfalls and Relief Act
Shortfalls for such Distribution Date allocated to such Class pursuant to
Section 4.02.
Addition Notice: A written notice from the Unaffiliated Seller to the
Trustee, the Rating Agencies and the Unaffiliated Seller desires to make a
Subsequent Transfer.
20
Adjustable Rate Mortgage Loan: A Mortgage Loan bearing interest at an
adjustable rate.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and 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, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advances: Collectively, the P&I Advances and Servicing Advances.
Advance Facility: As defined in Section 3.27.
Advance Facility Trustee: As defined in Section 3.27.
Advance Reimbursement Amount: As defined in Section 3.27.
Advancing Person: As defined in Section 3.27.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allstate: Allstate Home Loans, Inc., a California corporation.
Allstate Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Allstate, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and Allstate in connection
with any Subsequent Transfer of Allstate Mortgage Loans.
Allstate Mortgage Loan: A Mortgage Loan which was acquired from
Allstate by the Unaffiliated Seller pursuant to the Allstate Purchase Agreement,
and which has been acquired by the Trust Fund.
Allstate Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of September 1, 2004, as amended to date, by and between the
Unaffiliated Seller and Allstate.
21
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Recognition Agreement: The Accredited Assignment
Agreement, the Allstate Assignment Agreement, the Chapel Mortgage Assignment
Agreement, the Encore Assignment Agreement, the First Bank Assignment Agreement,
the First Horizon Assignment Agreement, the First NLC Assignment Agreement, the
FlexPoint Assignment Agreement, the Fremont Assignment Agreement, the Homeowners
Assignment Agreement, the Impac Assignment Agreement, the Lenders Direct
Assignment Agreement, the Lime Financial Assignment Agreement, the Master
Financial Assignment Agreement, the NC Capital Assignment Agreement, the Novelle
Assignment Agreement, the Platinum Assignment Agreement, the ResMae Assignment
Agreement, the Rose Mortgage Assignment Agreement or the Town & Country
Assignment Agreement, as applicable.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans, to the extent received by the Trustee (x) the sum of (i) the
aggregate amount of Scheduled Payments on the Mortgage Loans due on the related
Due Date (net of the related Expense Fees) and received by the Servicer on or
prior to the related Determination Date, together with any P&I Advance in
respect thereof, (ii) certain unscheduled payments in respect of the Mortgage
Loans received by the Servicer during the related Prepayment Period and remitted
to the Trustee, including all partial or full prepayments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds (excluding Prepayment Charges),
(iii) Compensating Interest payments from the Servicer to the Trustee in respect
of Prepayment Interest Shortfalls for that Distribution Date, (iv) for any
Distribution Date on or prior to February 22, 2006, any funds required to be
paid from the Capitalized Interest Account to make up for any interest
shortfalls on the Initial Mortgage Loans, (v) immediately following the end of
the Pre-Funding Period, all amounts, if any, on deposit in the Pre-Funding
Account, (vi) the proceeds from repurchases of Mortgage Loans, and any
Substitution Adjustment Amounts received in connection with respect to the
substitutions of Mortgage Loans that occur during the month in which such
Distribution Date occurs at the Repurchase Price and (vii) all proceeds received
with respect to the termination of
22
the Trust Fund pursuant to Section 9.01(a) hereof, reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts, in each case, as to which the Servicer, the Depositor, the
Custodian or the Trustee are entitled to be paid or reimbursed pursuant to the
Agreement.
Average Net Proceeds: As defined in Exhibit M hereto.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the aggregate Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the WAC Cap, the excess of (i) the amount of interest such Class of
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of LIBOR and the applicable
Pass-Through Margin on such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Certificates
calculated at the WAC Cap, for such Distribution Date and (B) the Basis Risk
Carry Forward Amount for such Class of Certificates for all previous
Distribution Dates not previously paid, together with interest thereon at a rate
equal to the sum of LIBOR and the applicable Pass-Through Margin for such Class
of Certificates for such Distribution Date. For federal income tax purposes,
with respect to each Class of LIBOR Certificates, as of any Distribution Date,
the sum of (A) if on such Distribution Date, the interest rate for any
Corresponding REMIC V Regular Interest is based upon the REMIC Adjusted WAC Cap,
the excess of (i) the amount of interest such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such rate been
calculated as the sum of LIBOR and the applicable Pass-Through Margin on such
Class of Certificates for such Distribution Date, over (ii) the amount of
interest payable on such REMIC V Regular Interest calculated at the REMIC
Adjusted WAC Cap for such Distribution Date and (B) the Basis Risk Carry Forward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, a payment in an amount
equal to any Basis Risk Carry Forward Amount; provided, however, that with
respect to any Distribution Date, the payment cannot exceed the amounts
otherwise available for distribution on the Class X Certificates.
23
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions, in (a) the States of
California, New York, Utah, New Jersey and Florida, (b) the applicable states in
which the Servicer's servicing operations are located, (c) the State in which
the Trustee's operations are located or (d) the State in which the Custodian's
operations are located, are authorized or obligated by law or executive order to
be closed.
Capitalized Interest Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.07(e) in the name of the
Trustee for the benefit of the LIBOR Certificateholders and designated "Deutsche
Bank National Trust Company, in trust for registered holders of IXIS Real Estate
Capital Trust 2005-HE4, Mortgage Pass-Through Certificates, Series 2005-HE4".
Capitalized Interest Requirement: With respect to the Distribution
Dates occurring in December 2005, January 2006 and February 2006, the excess, if
any, of (x) the Accrued Certificate Interests for all classes of the LIBOR
Certificates for such Distribution Date over (y) all scheduled installments of
interest (net of the related Expense Fees) due on the Mortgage Loans in the
related Due Period. In no event will the Capitalized Interest Requirement be
less than zero.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates, other
than the Class X and Class R Certificates, at any date, the maximum dollar
amount of principal to which the Holder thereof is then entitled hereunder, such
amount being equal to the Denomination thereof minus all distributions of
principal previously made with respect thereto and in the case of any
Certificates, reduced by any Applied Realized Loss Amounts allocated to such
Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amounts for such Class or Classes for such Distribution Date);
provided, that the Certificate Balance of any Class of Certificates that had
previously been reduced to zero shall not be increased as a result of any
Subsequent Recoveries. The Class X and Class R Certificates have no Certificate
Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
24
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any Affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for the purposes of any provision hereof that requires the consent
of the Holders of Certificates of a particular Class as a condition to the
taking of any action hereunder. The Trustee is entitled to rely conclusively on
a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.
Certification: As defined in Section 8.12(b).
Chapel Mortgage: Chapel Mortgage Corporation, a New Jersey
corporation, and its successors in interest.
Chapel Mortgage Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Chapel Mortgage, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Chapel
Mortgage in connection with any Subsequent Transfer of Chapel Mortgage Loans.
Chapel Mortgage Loan: A Mortgage Loan which was acquired from Chapel
Mortgage by the Unaffiliated Seller pursuant to the Chapel Mortgage Purchase
Agreement, and which has been acquired by the Trust Fund.
Chapel Mortgage Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 4, 2002, as amended to date, by and
between the Unaffiliated Seller and Chapel Mortgage.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: The Class A-1, Class A-2 and Class A-3
Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (x) the aggregate Class
Certificate Balances of the Class A Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) 56.40% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,239,466.
Class A-1 Certificates: All Certificates bearing the class designation
of "Class A-1."
Class A-2 Certificates: All Certificates bearing the class designation
of "Class A-2."
25
Class A-3 Certificates: All Certificates bearing the class designation
of "Class A-3."
Class B Certificates: The Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates.
Class B-1 Certificates: All Certificates bearing the class designation
of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), and (H) the Class Certificate Balance of the
Class B-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 88.20% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $4,239,466.
Class B-2 Certificates: All Certificates bearing the class designation
of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal
26
Distribution Amount on such Distribution Date), (H) the Class Certificate
Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount on such Distribution
Date), and (I) the Class Certificate Balance of the Class B-2 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 90.80%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,239,466.
Class B-3 Certificates: All Certificates bearing the class designation
of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), and (J) the Class Certificate Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 92.60%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,239,466.
Class B-4 Certificates: All Certificates bearing the class designation
of "Class B-4".
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class
27
M-4 Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), (J) the Class Certificate Balance of the Class B-3 Certificates (after
taking into account the distribution of the Class B-3 Principal Distribution
Amount on such Distribution Date), and (K) the Class Certificate Balance of the
Class B-4 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 94.60% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $4,239,466.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class I Interests: As described in the Preliminary Statement.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates.
Class M-1 Certificates: All Certificates bearing the class designation
of "Class M-1".
Class M-1 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates and (ii) the
Subordinated Amount (in each case after taking into account the allocation of
the Principal Distribution Amount and any principal payments on those classes of
certificates from the Swap Account for such Distribution Date) by (y) the
Current Maximum Amount for that Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date) and (B) the Class Certificate Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 64.00% of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum Amount over $4,239,466.
Class M-2 Certificates: All Certificates bearing the class designation
of "Class M-2."
28
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (C) the Class
Certificate Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 70.90% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,239,466.
Class M-3 Certificates: All Certificates bearing the class designation
of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), and (D) the Class Certificate Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 75.40%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,239,466.
Class M-4 Certificates: All Certificates bearing the class designation
of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balances of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balances of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balances of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the Class
Certificate Balances of the Class M-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 78.80% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,239,466.
Class M-5 Certificates: All Certificates bearing the class designation
of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) aggregate
Class Certificate Balances of the
29
Class A Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such Distribution
Date over (i) the lesser of (A) 82.10% of the Current Maximum Amount and (B) the
excess, if any, of the Current Maximum Amount over $4,239,466.
Class M-6 Certificates: All Certificates bearing the class designation
of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (G) the Class Certificate Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 85.20%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,239,466.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of (i)
as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Regular Interests and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal
30
balance of the Class X Regular Interest which is distributable as a
Subordination Reduction Amount, less (iii) any amounts paid as a Basis Risk
Payment.
Class X Regular Interest: The REMIC V Regular Interests represented by
the Class X Certificates as specified and described in the Preliminary Statement
and the related footnote thereto.
Closing Date: November 23, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount by which the Prepayment Interest Shortfall, if any, for such
Distribution Date exceeds all Prepayment Interest Excesses for such Distribution
Date, with respect to voluntary Principal Prepayments in Full (excluding any
payments made upon liquidation of the Mortgage Loan) and (b) the Servicing Fee
payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
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: Trust Administration IX0504, facsimile no. (714)
247-6470 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class: As described in the Preliminary Statement.
Corresponding Distribution Date:
--------------------------------------------------------------------------------
Corresponding Distribution Date is the
REMIC III Regular Interest Distribution Date occurring in:
--------------------------------------------------------------------------------
Class III-C1a-c December 2005
--------------------------------------------------------------------------------
Class III-C2a-c January 2006
--------------------------------------------------------------------------------
Class III-C3a-c February 2006
--------------------------------------------------------------------------------
Class III-C4a-c March 2006
--------------------------------------------------------------------------------
31
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Class III-C5a-c April 2006
--------------------------------------------------------------------------------
Class III-C6a-c May 2006
--------------------------------------------------------------------------------
Class III-C7a-c June 2006
--------------------------------------------------------------------------------
Class III-C8a-c July 2006
--------------------------------------------------------------------------------
Class III-C9a-c August 2006
--------------------------------------------------------------------------------
Class III-C10a-c September 2006
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Class III-C11a-c October 2006
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Class III-C12a-c November 2006
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Class III-C13a-c December 2006
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Class III-C14a-c January 2007
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Class III-C15a-c February 2007
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Class III-C16a-c March 2007
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Class III-C17a-c April 2007
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Class III-C18a-c May 2007
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Class III-C19a-c June 2007
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Class III-C20a-c July 2007
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Class III-C21a-c August 2007
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Class III-C22a-c September 2007
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Class III-C23a-c October 2007
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Class III-C24a-c November 2007
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Class III-C25a-c December 2007
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Class III-C26a-c January 2008
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Class III-C27a-c February 2008
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Class III-C28a-c March 2008
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32
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Class III-C29a-c April 2008
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Class III-C30a-c May 2008
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Class III-C31a-c June 2008
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Class III-C32a-c July 2008
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Class III-C33a-c August 2008
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Class III-C34a-c September 2008
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Class III-C35a-c October 2008
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Class III-C36a-c November 2008
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Class III-C37a-c December 2008
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Class III-C38a-c January 2009
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Class III-C39a-c February 2009
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Class III-C40a-c March 2009
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Class III-C41a-c April 2009
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Class III-C42a-c May 2009
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Class III-C43a-c June 2009
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Class III-C44a-c July 2009
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Class III-C45a-c August 2009
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Class III-C46a-c September 2009
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Class III-C47a-cc October 2009
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Class III-C48a-c November 2009
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Class III-C49a-c December 2009
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Class III-C50a-c January 2010
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Class III-C51a-c February 2010
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Class III-C52a-c March 2010
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33
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Class III-C53a-c April 2010
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Class III-C54a-c May 2010
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Corresponding REMIC V Interest: As described in the Preliminary
Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard and Poor's Glossary.
Cumulative Loss Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which the Distribution Date occurs less
any amounts received with respect to Realized Losses on the related Mortgage
Loans subsequent to the Final Recovery Determination being made with respect to
such Mortgage Loans and the denominator of which is the Cut-off Date Pool
Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution Date,
a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of the aggregate amount of Realized Losses incurred since the
related Cut-off Date through the last day of the related Prepayment Period
divided by the Maximum Pool Principal Balance exceeds the applicable cumulative
loss percentage as follows with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN CUMULATIVE LOSS PERCENTAGE
------------------------------ --------------------------
December 2007 through 1.4500 for the first month, plus an additional
November 2008 1/12th of 1.800% for each month thereafter
(e.g., 2.350% in June 2008)
December 2008 through 3.250% for the first month, plus an additional
November 2009 1/12th of 1.750% for each month thereafter
(e.g., 4.125% in June 2009)
December 2009 through 5.000% for the first month, plus an additional
November 2010 1/12th of 1.500% for each month thereafter
(e.g., 5.750% in June 2010)
December 2010 through 6.500% for the first month, plus an additional
November 2011 1/12th of 1.000% for each month thereafter
(e.g., 7.000% in June 2011)
December 2011 and thereafter 7.500%
Current Maximum Amount: With respect to any date of determination, the
sum of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans
in the Trust at such time, and (ii) with respect to each date of determination
prior to the Distribution Date on or prior to February 25, 2006, the Pre-Funding
Amount immediately prior to such Distribution Date, net of investment earnings
on deposit therein.
34
Custodian: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest.
Custodial File: With respect to each Mortgage Loan, the file retained
by the Custodian consisting of items (i) - (viii) of Section 2.01(b).
Cut-off Date: With respect to the Initial Mortgage Loans, November 1,
2005, and with respect to each Subsequent Mortgage Loan, the related Subsequent
Cut-off Date.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date (after giving effect to
payments of principal due on that date, whether or not received).
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Data Tape Information: The information provided by the Unaffiliated
Seller as of November 1, 2005 to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Mortgagor's name; (2) as
to each Mortgage Loan, the Scheduled Principal Balance as of the Cut-off Date;
(3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the type of Mortgaged Property; (7)
the first date on which the Scheduled Payment was due on the Mortgage Loan and,
if such date is not consistent with the Due Date currently in effect, such Due
Date; (8) the "paid through date" based on payments received from the related
Mortgagor; (9) the original principal amount of the Mortgage Loan; (10) with
respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage Rate; (11) the
type of Mortgage Loan (i.e., Fixed Rate Mortgage Loan, Adjustable Rate Mortgage
Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (13) a code indicating the documentation style
(i.e., full, asset verification, income verification and no documentation); (14)
the credit risk score (FICO score); (15) the loan credit grade classification
(as described in the Underwriting Guidelines); (16) with respect to each
Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17) the Mortgage Rate
at origination; (18) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date; (19) the value of
the Mortgaged Property; (20) a code indicating the type and term of Prepayment
Charges applicable to such Mortgage Loan, if any; and (21) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap. With respect to
the Mortgage Loans in the aggregate, the Data Tape Information shall set forth
the following information, as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the United States
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
35
Defaulted Swap Termination Payment: Any termination payment required
to be made by the Trust to the Swap Provider pursuant to the Interest Rate Swap
Agreement as a result of: either (i) an event of default under the Interest Rate
Swap Agreement with respect to which the Swap Provider is the defaulting party
or (ii) a termination event under that agreement (other than illegality, a tax
event or a tax event upon merger of the Swap Provider) with respect to which the
Swap Provider is the sole affected party.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then- outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the United States Bankruptcy
Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by the
Unaffiliated Seller or the related Originator, as applicable, or replaced with a
Substitute Mortgage Loan in accordance with the terms hereof and the related
Mortgage Loan Purchase Agreement.
Delinquency Trigger Event: With respect to a Distribution Date after
the Stepdown Date, the event that is in effect if the quotient (expressed as a
percentage) of (x) the three-month rolling daily average of the aggregate Stated
Principal Balance of 60+ Day Delinquent Loans as of the last day of the related
Due Period, over (y) the Current Maximum Amount of the Mortgage Loans as of the
last day of the related Due Period exceeds (a) 36.70% of the prior period's
Senior Enhancement Percentage while any Class A Certificates remain outstanding,
or (b) 44.40% of the prior period's Class M-1 Enhancement Percentage if the
Class A Certificates are no longer outstanding.
Delinquent: A mortgage loan is "Delinquent" if any Scheduled Payment
due on a due date is not made by the close of business on the next scheduled due
date for that mortgage loan (including all Mortgage Loans in foreclosure,
Mortgage Loans in respect of REO Properties and Mortgage Loans for which the
related Mortgagor has declared bankruptcy). A mortgage loan is "30 days
Delinquent" if the Scheduled Payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month
in which that Scheduled Payment was due or, if there was no corresponding date
(e.g., as when a 30-day month follows a 31-day month in which the payment was
due on the 31st day of that month), then on the last day of that immediately
preceding month; and similarly for "60 days Delinquent" and "90 days
Delinquent," etc.
Delivery Date: With respect to the Initial Mortgage Loans, the Closing
Date; with respect to any Subsequent Mortgage Loans, the related Subsequent
Transfer Date therefor.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
36
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware corporation,
and its successors 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 Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the 15th of
each month, or if the 15th is not a Business Day, the immediately preceding
Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) 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 IXIS Real Estate Capital Trust
2005-HE4, Mortgage Pass-Through Certificates, Series 2005-HE4". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Date: The 25th day of each calendar month, or if such day
is not a Business Day, the next succeeding Business Day, commencing in December
2005.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
commercial paper, short-term debt obligations, demand deposits or other
short-term deposits of which are rated in one of the two highest rating
categories by each of the Rating Agencies at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to each Rating Agency, the
Certificateholders will have a claim with respect to the funds in such account
or a perfected first priority security interest against such collateral (which
shall be limited to Permitted Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its
fiduciary capacity, (iv) an
37
account otherwise acceptable to each Rating Agency or (v) an account maintained
with a "qualified depository" (as such term is defined in the related Servicing
Agreement). Eligible Accounts may bear interest.
Eligible Institution: A federal or state chartered depository
institution or trust company, which (x) with respect to any Eligible Account,
the amounts on deposit in which will be held for less than 30 days, the
commercial paper, short-term debt obligations, or other short-term deposits of
which are rated at least "F1" by Fitch, "P-1" by Moody's, and either "A-1+" or
"A-1", if the amounts on deposit represent less than 20% of the initial par
value of the securities, are not intended to be used as credit enhancement and
are to be held for less than 30 days, by Standard & Poor's (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) or (y) with respect to any Eligible Account,
the amounts on deposit in which will be held for no more than 365 days, the
long-term unsecured debt obligations of which are rated at least "A" by Fitch,
"A" by Standard & Poor's and "A2" by Moody's (or a comparable rating if another
Rating Agency is specified by the Depositor by written notice to the Servicer
and the Trustee).
Encore: Encore Credit Corporation, a California corporation, and its
successors in interest.
Encore Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 23, 2005, by and among the Unaffiliated Seller, the
Depositor and Encore, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Encore in connection with any
Subsequent Transfer of Encore Mortgage Loans.
Encore Mortgage Loan: A Mortgage Loan which was acquired from Encore
by the Unaffiliated Seller pursuant to the Encore Purchase Agreement, and which
has been acquired by the Trust Fund.
Encore Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of December 1, 2002, as amended to date, by and between the
Unaffiliated Seller and Encore.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the name
of the Trustee, on behalf of the Supplemental Interest Trust, for the benefit of
the Holders of the Regular
38
Certificates and designated "Deutsche Bank National Trust Company, in trust for
registered holders of IXIS Real Estate Capital Trust 2005-HE4, Mortgage
Pass-Through Certificates, Series 2005-HE4". Funds in the Excess Reserve Fund
Account shall be held in trust for the Holders of the Regular Certificates for
the uses and purposes set forth in this Agreement. Amounts on deposit in the
Excess Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the Subordinated Amount on such Distribution Date over
(b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal to
the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date, the
lesser of (x) the related Total Monthly Excess Spread for such Distribution Date
and (y) the Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
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.
Final Certification: A certification submitted by the Custodian in
substantially the form of Exhibit G hereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by an Originator as contemplated by the Assignment and Recognition Agreements),
a determination made by the Servicer that all Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
39
FINAL SCHEDULED
DISTRIBUTION DATE
-----------------
Class A-1 Certificates ..................................... February 25, 2036
Class A-2 Certificates ..................................... February 25, 2036
Class A-3 Certificates ..................................... February 25, 2036
Class M-1 Certificates ..................................... February 25, 2036
Class M-2 Certificates ..................................... February 25, 2036
Class M-3 Certificates ..................................... February 25, 2036
Class M-4 Certificates ..................................... February 25, 2036
Class M-5 Certificates ..................................... February 25, 2036
Class M-6 Certificates ..................................... February 25, 2036
Class B-1 Certificates ..................................... February 25, 2036
Class B-2 Certificates ..................................... February 25, 2036
Class B-3 Certificates ..................................... February 25, 2036
Class B-4 Certificates ..................................... February 25, 2036
Class X Certificates ....................................... February 25, 2036
Class P Certificates ....................................... February 25, 2036
Class R Certificates ....................................... February 25, 2036
First Bank: First Bank Mortgage, a Missouri corporation, and its
successors in interest.
First Bank Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and First Bank, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and First Bank in
connection with any Subsequent Transfer of First Bank Mortgage Loans.
First Bank Mortgage Loan: A Mortgage Loan which was acquired from
First Bank by the Unaffiliated Seller pursuant to the First Bank Purchase
Agreement, and which has been acquired by the Trust Fund.
First Bank Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of April 1, 2003, as amended to date, by and
between the Unaffiliated Seller and First Bank.
First Horizon: First Horizon Home Loan Corp., a Kansas corporation.
First Horizon Capital Assignment Agreement: The Assignment and
Recognition Agreement, dated as of November 23, 2005, by and among the
Unaffiliated Seller, the Depositor and First Horizon, and each other Assignment
and Recognition Agreement by and among the Unaffiliated Seller, the Depositor
and First Horizon in connection with any Subsequent Transfer of First Horizon
Mortgage Loans.
40
First Horizon Mortgage Loan: A Mortgage Loan which was acquired from
First Horizon by the Unaffiliated Seller pursuant to the First Horizon Purchase
Agreement, and which has been acquired by the Trust Fund.
First Horizon Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and First Horizon.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services., a Florida limited liability
company.
First NLC Capital Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and First NLC, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and First NLC in connection
with any Subsequent Transfer of First Bank Mortgage Loans.
First NLC Mortgage Loan: A Mortgage Loan which was acquired from First
NLC by the Unaffiliated Seller pursuant to the First NLC Purchase Agreement, and
which has been acquired by the Trust Fund.
First NLC Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, as amended to date, by and
between the Unaffiliated Seller and First NLC.
Fitch: Fitch, Inc., and its successors in interest. 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: Residential Mortgage
Surveillance Group - IXIS Real Estate Capital Trust 2005-HE4, or such other
address as Fitch may hereafter furnish to the Depositor, the Trustee and the
Servicer.
Fixed Rate Mortgage Loan: A Mortgage Loan bearing interest at a fixed
rate.
FlexPoint: FlexPoint Funding Corp., a California corporation.
FlexPoint Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and FlexPoint, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and FlexPoint in connection
with any Subsequent Transfer of FlexPoint Mortgage Loans.
FlexPoint Mortgage Loan: A Mortgage Loan which was acquired from
FlexPoint by the Unaffiliated Seller pursuant to the FlexPoint Purchase
Agreement, and which has been acquired by the Trust Fund.
41
FlexPoint Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, as amended to date, by and
between the Unaffiliated Seller and FlexPoint.
Floor Amount: An amount equal to the product of (x) 0.50% and (y) the
Maximum Pool Principal Balance.
Fremont: Fremont Investment & Loan, Inc., a California State chartered
industrial bank.
Fremont Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Fremont, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and Fremont in connection
with any Subsequent Transfer of Fremont Mortgage Loans.
Fremont Mortgage Loan: A Mortgage Loan which was acquired from Fremont
by the Unaffiliated Seller pursuant to the Fremont Purchase Agreement, and which
has been acquired by the Trust Fund.
Fremont Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of November 22, 2004, as amended to date, by and between the
Unaffiliated Seller and Fremont.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note to be added to
the applicable Index to determine the Mortgage Rate.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, (b) a "high cost
home," "threshold," "covered," (excluding New Jersey "Covered Home Loans" as
that term is defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002), "high risk home," "predatory" or
similar loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) or (c) a Mortgage
Loan categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
Homeowners: Homeowners Loan Corp., a Delaware corporation, and its
successors in interest.
Homeowners Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Homeowners, and each other Assignment and Recognition
Agreement by and among the
42
Unaffiliated Seller, the Depositor and Homeowners in connection with any
Subsequent Transfer of Homeowners Mortgage Loans.
Homeowners Mortgage Loan: A Mortgage Loan which was acquired from
Homeowners by the Unaffiliated Seller pursuant to the Homeowners Purchase
Agreement, and which has been acquired by the Trust Fund.
Homeowners Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 1, 2004, as amended to date, by and
between the Unaffiliated Seller and Homeowners.
Impac: Impac Funding Corporation, a California corporation, and its
successors in interest.
Impac Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 23, 2005, by and among the Unaffiliated Seller, the
Depositor and Impac, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Impac in connection with any
Subsequent Transfer of Impac Mortgage Loans.
Impac Mortgage Loan: A Mortgage Loan which was acquired from Impac by
the Unaffiliated Seller pursuant to the Impac Purchase Agreement, and which has
been acquired by the Trust Fund.
Impac Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of January 29, 2003, as amended to
date, by and between the Unaffiliated Seller and Impac.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Initial Cut-off Date: November 1, 2005.
Initial Mortgage Loans: The Mortgage Loans delivered by the Depositor
on the Startup Date.
Initial Pre-Funded Amount: $147,488,871.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to any Distribution Date, the
period beginning with the preceding Distribution Date (or in the case of the
first Distribution Date, the period from and including the Closing Date to but
excluding such first Distribution Date) and
43
ending on the day immediately preceding the current Distribution Date (on an
actual/360 day count basis).
Interest Rate Swap Agreement: The Interest Rate Swap Agreement dated
as of November 23, 2005, between the Supplemental Interest Trust and IXIS
Financial Products Inc.
Interest Remittance Amount: With respect to any Distribution Date, the
sum of (a) the sum, without duplication, of the following amounts received by
the Trustee from the Servicer on the related Remittance Date:
(i) all installments of interest due on the Mortgage Loans during the
related Prepayment Period and received or advanced by the Servicer on or prior
to the related Remittance Date;
(ii) Compensating Interest paid by the Servicer on such Remittance
Date;
(iii) the interest component of all Substitution Adjustment Amounts
and Repurchase Prices received by the Servicer during the related Prepayment
Period;
(iv) the interest component of all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds received by the Servicer during the related
Prepayment Period (in each case, net (but not to be reduced below zero) of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); and
(v) the interest component of the proceeds of any termination of the
Trust Fund;
reduced by the Servicing Fee for the related Prepayment Period and the
Trustee Fee for the related Distribution Date, together with amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to the Agreement; and
(b) the Capitalized Interest Requirement, if any, deposited into the
Distribution Account on such Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Investor-Based Exemption: Prohibited Transaction Class Exemption
84-14, Prohibited Transaction Class Exemption 90-1, Prohibited Transaction Class
Exemption 91-38, PTCE 95-60, Prohibited Transaction Class Exemption 96-23, as
each may be amended from time to time, or any similar prohibited transaction
class exemption granted by the U.S. Department of Labor or, with respect to any
governmental plan (as defined in Section 3(32) of ERISA), granted pursuant to
any federal, state or local law materially similar to Title I of ERISA or
Section 4975 of the Code.
44
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received subsequent to the Determination Date immediately
following such Due Period, whether as late payments of Scheduled Payments or as
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.
Lenders Direct: Lenders Direct Capital Corporation, a California
corporation, and its successors in interest.
Lenders Direct Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Lenders Direct, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lenders Direct
in connection with any Subsequent Transfer of Lenders Mortgage Loans.
Lenders Direct Mortgage Loan: A Mortgage Loan which was acquired from
Lenders Direct by the Unaffiliated Seller pursuant to the Lenders Direct
Purchase Agreement, and which has been acquired by the Trust Fund.
Lenders Direct Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of October 1, 2003, as amended
to date, by and between the Unaffiliated Seller and Lenders Direct.
LIBOR: With respect to 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 as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such 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 such date to prime banks in the London
interbank market. In such event, the Trustee shall be required to request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are 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 Trustee, after
consultation with the Depositor, at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual Period
(other than the initial Interest Accrual Period) for the LIBOR Certificates, the
second London Business Day preceding the commencement of such Interest Accrual
Period.
Lime Financial: Lime Financial Services, Ltd., an Oregon corporation,
and its successors in interest.
45
Lime Financial Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Lime Financial, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lime Financial
in connection with any Subsequent Transfer of Lime Financial Mortgage Loans.
Lime Financial Mortgage Loan: A Mortgage Loan which was acquired from
Lime Financial by the Unaffiliated Seller pursuant to the Lime Financial
Purchase Agreement, and which has been acquired by the Trust Fund.
Lime Financial Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and Lime Financial.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified to the Trustee that it has received all amounts it
expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
Liquidation Proceeds: Cash received in connection with the liquidation
of a Liquidated Mortgage Loan, whether through a trustee's sale, foreclosure
sale or otherwise, including any Subsequent Recoveries.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination, and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Master Financial: Master Financial, Inc., a California corporation,
and its successors in interest.
Master Financial Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Master Financial, and each other Assignment and Recognition
Agreement by and among the
46
Unaffiliated Seller, the Depositor and Master Financial in connection with any
Subsequent Transfer of Master Financial Mortgage Loans.
Master Financial Mortgage Loan: A Mortgage Loan which was acquired
from Master Financial by the Unaffiliated Seller pursuant to the Master
Financial Purchase Agreement, and which has been acquired by the Trust Fund.
Master Financial Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2003, as amended to date, by and
between the Unaffiliated Seller and Master Financial.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Maximum Pool Principal Balance: The aggregate Stated Principal
Balances of all Initial Mortgage Loans as of the Initial Cut-off Date plus the
Initial Pre-Funded Amount.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with the MERS Procedure Manual and
(b) the Originators have designated or will designate the Trustee as the
Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc, and its successors in
interest. 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 Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee, and the
Servicer.
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Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans. As applicable, "Mortgage Loan"
shall be deemed to refer to REO Property.
Mortgage Loan Purchase Agreement: The Accredited Purchase Agreement,
the Allstate Purchase Agreement, the Chapel Mortgage Purchase Agreement, the
Encore Purchase Agreement, the First Bank Purchase Agreement, the First Horizon
Purchase Agreement, the First NLC Purchase Agreement, the FlexPoint Purchase
Agreement, the Fremont Purchase Agreement, the Homeowners Purchase Agreement,
the Impac Purchase Agreement, the Lenders Direct Purchase Agreement, the Lime
Financial Purchase Agreement, the Master Financial Purchase Agreement, the NC
Capital Purchase Agreement, the Novelle Purchase Agreement, the Platinum
Purchase Agreement, the ResMae Purchase Agreement, the Rose Mortgage Purchase
Agreement or the Town & Country Purchase Agreement as applicable.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Schedule I, such schedule setting forth the following information with respect
to each Mortgage Loan: (1) the Originator's Mortgage Loan number; (2) the city,
state and zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, PUD or condominium; (4) the
current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) the Loan-to-Value Ratio; (12) the next Interest
Rate Adjustment Date; (13) with respect to each Adjustable Rate Mortgage Loan,
the lifetime mortgage interest rate cap; (14) whether the Mortgage Loan is
convertible or not; (15) a code indicating the mortgage guaranty insurance
company; (16) the Servicing Fee; (17) the identity of the related Originator of
such Mortgage Loan; (18) the Mortgagor's name; (19) the "paid-through" date
(based on payments received from the related Mortgagor) as of the Cut-off Date;
(20) the Servicing Transfer Date; (21) a Code indicating whether the Mortgage
Loan has been 30 days Delinquent since the applicable Servicing Transfer Date;
and (22) whether such Mortgage Loan provides for a Prepayment Charge as well as
the term and amount of such Prepayment Charge, if any.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
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Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time with respect to Adjustable Rate
Mortgage Loans.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
NC Capital: NC Capital Corporation, a California corporation.
NC Capital Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and NC Capital, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and NC Capital in
connection with any Subsequent Transfer of NC Capital Mortgage Loans.
NC Capital Mortgage Loan: A Mortgage Loan which was acquired from NC
Capital by the Unaffiliated Seller pursuant to the NC Capital Purchase
Agreement, and which has been acquired by the Trust Fund.
NC Capital Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 1, 2005, as amended to date, by and
between the Unaffiliated Seller and NC Capital.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) the Compensating Interest payments made
with respect to such Distribution Date and (ii) all Prepayment Interest Excesses
for such Distribution Date.
Net Swap Payment: For any Distribution Date, each payment required to
be made to the Swap Provider pursuant to the Interest Rate Swap Agreement.
Net Swap Receipt: For any Distribution Date, the net payment that the
Swap Provider will owe the Supplemental Interest Trust pursuant to the Interest
Rate Swap Agreement.
NIM Issuer: Any entity established as the issuer of a series of NIM
Securities.
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NIM Indenture: The Indenture, dated as of November 23, 2005, between
IXIS Real Estate Capital Inc. NIM 2005-HE4N, as issuer, IXIS Real Estate Capital
Inc. NIM Trust 2005-HE4N, as co-issuer, and Deutsche Bank National Trust
Company, as indenture trustee.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by Standard &
Poor's.
NIM Trustee: The trustee for any series of NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer, will not or, in the
case of a proposed Servicing Advance, would not, be ultimately recoverable from
related late payments, Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds or otherwise on such Mortgage Loan or REO Property. The determination
by the Servicer that it has made a Nonrecoverable Servicing Advance or that any
proposed Servicing Advances, if made, would constitute a Nonrecoverable
Servicing Advance, shall be evidenced by an Officers' Certificate delivered to
the Trustee.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Novelle: Novelle Financial Services, Inc., a California corporation,
and its successors in interest.
Novelle Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Novelle, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and Novelle in connection
with any Subsequent Transfer of Novelle Mortgage Loans.
Novelle Mortgage Loan: A Mortgage Loan which was acquired from Novelle
by the Unaffiliated Seller pursuant to the Novelle Purchase Agreement, and which
has been acquired by the Trust Fund.
Novelle Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of September 27, 2002, as amended to date, by and between
the Unaffiliated Seller and Novelle.
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Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be in-house
counsel for the Servicer or the Subservicer, reasonably acceptable to the
Trustee; provided that any Opinion of Counsel relating to (a) qualification of
the Mortgage Loans in a REMIC or (b) compliance with the REMIC Provisions, must
be (unless otherwise stated in such Opinion of Counsel) an opinion of counsel
who (i) is in fact independent of the Servicer of the Mortgage Loans, (ii) does
not have any material direct or indirect financial interest in the Servicer of
the Mortgage Loans or in an affiliate of either and (iii) is not connected with
the Servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Optional Termination Date: means:
(i) For so long as the Class X Certificates are 100% owned, either
directly or indirectly, by the Unaffiliated Seller or any Affiliate thereof,
then the Servicer may cause the Optional Termination Date to occur on any
Distribution Date when the aggregate Stated Principal Balance of the Mortgage
Loans is 10.00% or less of the Maximum Pool Principal Balance; and
(ii) If the Class X Certificates are not 100% owned, either directly
or indirectly, by the Unaffiliated Seller or any Affiliate thereof, then the
Holders of a majority in Class Certificate Balance of the Class X Certificates
may cause the Optional Termination Date to occur on any Distribution Date when
the aggregate Stated Principal Balance of the Mortgage Loans is 10.00% or less
of the Maximum Pool Principal Balance, and, if such Class X Certificateholders
do not do so, then the Servicer shall also have such right; provided, however,
that the Unaffiliated Seller or any of its affiliates, may only participate in
the exercise of the clean-up call by the majority owners of the Class X
Certificates if the Unaffiliated Seller or any of its affiliates, is not the
majority owner of the Class X Certificates, either directly or indirectly.
Originator: The party that originated or acquired a Mortgage Loan and,
more specifically, (i) with respect to any Accredited Mortgage Loan, Accredited,
(ii) with respect to any Allstate Mortgage Loan, Allstate, (iii) with respect to
any Chapel Mortgage Loan, Chapel Mortgage, (iv) with respect to any Encore
Mortgage Loan, Encore, (v) with respect to any First Bank Mortgage Loan, First
Bank, (vi) with respect to any First Horizon Mortgage Loan, First Horizon, (vii)
with respect to any First NLC Mortgage Loan, First NLC, (viii) with respect to
any FlexPoint Mortgage Loan, FlexPoint, (ix) with respect to any Fremont
Mortgage Loan, Fremont, (x) with respect to any Homeowners Mortgage Loan,
Homeowners, (xi) with respect to any Impac Mortgage Loan or Novelle Mortgage
Loan, Impac or Novelle, as applicable, (xii) with respect to any Lenders Direct
Mortgage Loan, Lenders Direct, (xiii) with respect to any Lime Financial
Mortgage Loan, Lime Financial, (xiv) with respect to any Master Financial
Mortgage Loan, Master Financial, (xv) with respect to any NC Capital Mortgage
Loan, NC Capital, (xvi) with respect to any Platinum Mortgage Loan, Platinum,
(xvii) with respect to any
51
ResMae Mortgage Loan, ResMae, (xviii) with respect to any Rose Mortgage Loan,
Rose Mortgage, and (xix) with respect to any Town & Country Mortgage Loan, Town
& Country.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance made
by the Servicer in respect of any Remittance Date with respect to any Mortgage
Loan representing the aggregate of all payments of principal and/or interest on
such Mortgage Loan, net of the related Servicing Fee, that were due during the
related Due Period on the Mortgage Loan, and that were delinquent or unpaid on
the related Determination Date, plus certain amounts representing assumed
payments not covered by any current net income on the Mortgaged Properties
acquired by foreclosure or deed in lieu of foreclosure as determined pursuant to
Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, on or prior to the Optional Termination Date the following
percentages: Class A-1, 0.1100%; Class A-2, 0.2400%; Class A-3, 0.3400%; Class
M-1, 0.4200%; Class M-2, 0.4400%; Class M-3, 0.4500%; Class M-4, 0.5900%; Class
M-5, 0.6300%; Class M-6, 0.6800%; Class B-1, 1.1200%; Class B-2, 1.4000%; Class
B-3, 1.9500%; and Class B-4, 3.5000%. On the first Distribution Date after the
Optional Termination Date, the Pass-Through Margins shall increase to the
following percentages: Class A-1, 0.2200%; Class A-2, 0.4800%; Class A-3,
0.6800%; Class M-1, 0.6300%; Class M-2, 0.6600%; Class M-3, 0.6750%; Class M-4,
0.8850%; Class M-5, 0.9450%; Class M-6, 1.0200%; Class B-1, 1.6800%; Class B-2,
2.1000%; Class B-3, 2.9250%; and Class B-4, 5.2500%.
Pass-Through Rate: The "Pass-Through Rate" for each class of LIBOR
Certificates will be a per annum rate equal to the lesser of (1) One-Month LIBOR
plus the related Pass-Through Margin for those classes and that Distribution
Date and (2) the WAC Cap.
52
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof; provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Eligible Institution;
(iii) repurchase obligations with respect to any security described in
clause (i) above entered into with an Eligible Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of
America or any state thereof and that are rated by each Rating Agency that
rates such securities in its highest long-term unsecured rating categories
at the time of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition thereof)
that is rated by each Rating Agency that rates such securities in its
highest short-term unsecured debt rating available at the time of such
investment;
(vi) any demand, money market fund, common trust fund or time deposit
or obligation, or interest-bearing or other security or investment, (A)
rated in the highest rating category by each Rating Agency (if rated by
such Rating Agency) or (B) that would not adversely affect the then current
rating by either Rating Agency of any of the Certificates; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing "Aaa" or "AAA" rated securities;
53
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, international organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
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, (vi) an "electing large partnership" within the meaning of section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Plan: As defined in Section 5.02(b).
Platinum: Platinum Capital Group, a California corporation.
Platinum Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 23, 2005, by and among the Unaffiliated Seller,
the Depositor and Platinum, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and Platinum in connection
with any Subsequent Transfer of Platinum Mortgage Loans.
Platinum Mortgage Loan: A Mortgage Loan which was acquired from
Platinum by the Unaffiliated Seller pursuant to the Platinum Purchase Agreement,
and which has been acquired by the Trust Fund.
Platinum Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of December 14, 2004, as amended to date, by and between the
Unaffiliated Seller and Platinum.
54
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date which were Outstanding Mortgage Loans as of the last day of
the related Due Period.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(f) 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 IXIS Real Estate
Capital Trust 2005-HE4, Mortgage Pass-Through Certificates, Series 2005-HE4,"
the funds of which, during the Pre-Funding Period, shall be applied solely to
the purchase of Subsequent Mortgage Loans.
Pre-Funding Amount: With respect to any date, the amount on deposit in
the Pre-Funding Account.
Pre-Funding Earnings: The actual investment earnings realized on
amounts deposited in the Pre-Funding Account.
Pre-Funding Period: The period commencing on the Startup Date and
ending on the earliest 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, (ii) the date on which any Event of Default occurs and (iii) February
22, 2006.
Pre-Funding Reserve Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(j) in the name of the Trustee
for the benefit of the Class X Certificateholders and designated "Deutsche Bank
National Trust Company, in trust for holders of IXIS Real Estate Capital Trust
2005-HE4, Mortgage Pass-Through Certificates, Series 2005-HE4, Class X".
Prepayment Charge: Any prepayment premium, penalty or charge collected
by the Servicer with respect to a Mortgage Loan from a Mortgagor in connection
with any voluntary Principal Prepayment pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date, any
interest collected by the Servicer with respect to any Mortgage Loan as to which
a Principal Prepayment in Full occurs from the 1st day of the month through the
15th day of the month in which such Distribution Date occurs and that represents
interest that accrues from the 1st day of such month to the date of such
Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the portion of the Prepayment
Period from and including the 16th day of the month preceding the month in which
such Distribution Date occurs (or from the day following the Cut-off Date, in
the case of the first Distribution Date) through the last day of such month the
subject of a Principal Prepayment in Full, that was applied by the Servicer to
reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days
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commencing on the date on which such Principal Prepayment was applied and ending
on the last day of the related Prepayment Period.
Prepayment Period: With respect to any Distribution Date, the period
from and including the 16th day of the month preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, from
and including the Cut-off Date) to and including the 15th day of the month in
which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery of
principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period, of: (i) each Scheduled Payment of principal
on a Mortgage Loan during the related Due Period and received by the Servicer on
or prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date and all Principal Prepayments received during the
related Prepayment Period; (ii) the principal component of all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds during the related Due
Period (in each case, net of remaining (i.e., not deducted from the Interest
Remittance Amount) unreimbursed expenses incurred in connection with a
liquidation or foreclosure and unreimbursed Advances, if any); (iii) all partial
or full prepayments on the Mortgage Loans received during the related Prepayment
Period; (iv) the principal component of all Substitution Adjustment Amounts
allocable to principal and Repurchase Prices received by the Servicer with
respect to such Distribution Date; and (v) the proceeds of any termination of
the Trust Fund pursuant to Section 9.01(a) (to the extent such proceeds relate
to principal); reduced by remaining amounts (i.e., not deducted from the
Interest Remittance Amount) in reimbursement for Advances previously made with
respect to the Mortgage Loans and other amounts as to which the Servicer is
entitled to be reimbursed pursuant to this Agreement.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated November 18,
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
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Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
Rating Agency: Each of Standard & Poor's, Fitch and ▇▇▇▇▇'▇. If such
organization or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization, or other comparable
Person, as is designated by the Depositor, notice of which designation shall be
given to the Trustee. References herein to a given rating or rating category of
a Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 10.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as such
Rating Agency may hereafter furnish to the Depositor, the Trustee, and the
Servicer.
Realized Loss: With respect to each Liquidated Mortgage Loan the
excess (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) of the unpaid principal balance of a Liquidated Mortgage Loan
together with accrued and unpaid interest thereon over the Liquidation Proceeds,
net of customary out-of-pocket expenses incurred by the Servicer in connection
with the liquidation of such Liquidated Mortgage Loan and net of the amount of
any unreimbursed Servicing Advances with respect to such Liquidated Mortgage
Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
immediately preceding the month in which such applicable Distribution Date
occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act and similar state laws.
Remainder Amount: As defined in Section 9.01.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
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REMIC Adjusted WAC Cap: The weighted average of the interest rates on
the REMIC IV Accretion Directed Classes and the Class IV-Accrual Interest.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, 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.
REMIC Trust: The segregated pool of assets consisting of the Trust
Fund, exclusive of Prepayment Charges, the Supplemental Interest Trust, the
Excess Reserve Fund Account, the Pre-Funding Account, the Swap Account the
Pre-Funding Reserve Account, the Capitalized Interest Account and the Interest
Rate Swap Agreement.
REMIC I: As described in the Preliminary Statement.
REMIC I Regular Interest: As described in the Preliminary Statement.
REMIC II: As described in the Preliminary Statement.
REMIC II Regular Interest: As described in the Preliminary Statement.
REMIC III: As described in the Preliminary Statement.
REMIC III Net WAC: The weighted average of the interest rates on the
Class II-C1 through Class II-C54 Interests and the Class II-J1 Interests.
REMIC III Regular Interest: As described in the Preliminary Statement.
REMIC IV: As described in the Preliminary Statement.
REMIC IV Accretion Directed Class: As described in the Preliminary
Statement.
REMIC IV Net WAC: The weighted average of the interest rates on the
Class III-C1a through Class III-C54a, Class III-C1b through Class III-C54b
Interests and the Class III-J1 Interests.
REMIC IV Regular Interest: As described in the Preliminary Statement.
REMIC V: As described in the Preliminary Statement.
REMIC V Regular Interest: As described in the Preliminary Statement.
Remittance Date: With respect to any Distribution Date, 21st day (or
if such day is a Saturday, then it shall be the first business day immediately
preceding that day, or if such day is a Sunday or otherwise not a Business Day,
then it shall be the immediately following Business Day) of the month of the
related Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
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REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
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.
Representative: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, as representative
on behalf of itself, Bank of America Securities LLC, Countrywide Securities
Corporation and IXIS Securities LLC.
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum (without duplication) of (i) the unpaid principal balance of such
Mortgage Loan as of the date of repurchase and (ii) (x) if such Mortgage Loan is
being repurchased by the Unaffiliated Seller, the sum of (A) interest on such
unpaid principal balance of such Mortgage Loan at the Mortgage Rate from the
last date through which interest has been paid and distributed to the Trustee to
the last day of the month in which such repurchase occurs, (B) all ▇▇▇▇▇▇▇▇▇▇▇▇
▇&▇ Advances and Servicing Advances, (C) all unpaid Servicing Fees, (D) all
expenses reasonably incurred by the Servicer, the Trustee, the Custodian or the
Unaffiliated Seller, as the case may be, in respect of a breach or defect,
including, without limitation, expenses arising out of any such party's
enforcement of the Originator's repurchase obligation, to the extent not
included in (B), and (E) all costs and expenses incurred by, or on behalf of,
the Trust Fund in connection with any violation by such Mortgage Loan of a
predatory or abusive-lending law or (y) if such Mortgage Loan is being
repurchased by the related Originator, all other amounts payable by such
Originator in accordance with the terms of the related Mortgage Loan Purchase
Agreement.
Request for Release: The Request for Release submitted by the Servicer
to the Trustee and Custodian, substantially in the form of Exhibit K.
Residual Certificates: As specified in the Preliminary Statement.
ResMae: ResMae Mortgage Corporation, a California corporation.
ResMae Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 23, 2005, by and among the Unaffiliated Seller, the
Depositor and ResMae, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and ResMae in connection with any
Subsequent Transfer of ResMae Mortgage Loans.
ResMae Mortgage Loan: A Mortgage Loan which was acquired from ResMae
by the Unaffiliated Seller pursuant to the ResMae Purchase Agreement, and which
has been acquired by the Trust Fund.
ResMae Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of February 1, 2005, as amended to date, by and between the
Unaffiliated Seller and ResMae.
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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 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, such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Agreement.
Rose: Rose Mortgage Corporation, a New Jersey corporation.
Rose Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 23, 2005, by and among the Unaffiliated Seller, the
Depositor and Rose, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Rose in connection with any
Subsequent Transfer of Rose Mortgage Loans.
Rose Mortgage Loan: A Mortgage Loan which was acquired from Rose by
the Unaffiliated Seller pursuant to the Rose Purchase Agreement, and which has
been acquired by the Trust Fund.
Rose Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of June 1, 2005, as amended to date, by and between the
Unaffiliated Seller and Rose.
Rule 144A Letter: As defined in Section 5.02(b).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
scheduled payment due on such Mortgage Loan.
Scheduled Principal Balance: With respect to any Mortgage Loan: (a) as
of the Cut-off Date, the outstanding principal balance of such Mortgage Loan as
of such date, net of the principal portion of all unpaid Scheduled Payments, if
any, due on or before such date; (b) as of any Due Date subsequent to the
Cut-off Date up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of
(i) the principal portion of each Scheduled Payment due on or before such Due
Date but subsequent to the Cut-off Date, whether or not received, (ii) all
Principal Prepayments received before such Due Date but after the Cut-off Date,
(iii) the principal portion of all Liquidation Proceeds and Insurance Proceeds
received before such Due Date but after the Cut-off Date, net of any portion
thereof that represents principal due (without regard to any acceleration of
payments under the related Mortgage and Mortgage Note) on a Due Date occurring
on or before the date on which such proceeds were received and (iv) any
reduction in the principal balance of such Mortgage Loan incurred with respect
thereto as a result of a Deficient Valuation occurring before such Due Date, but
only to the extent such reduction in principal balance represents a reduction in
the
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portion of principal of such Mortgage Loan not yet due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) as of the
date of such Deficient Valuation; and (c) as of any Due Date subsequent to the
occurrence of a Liquidation Event with respect to such Mortgage Loan, zero.
SEC: As defined in Section 8.12(a).
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distribution of the Principal
Distribution Amount and any principal payments on those classes of certificates
from the Swap Account for such Distribution Date) by (y) the Current Maximum
Amount for that Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 43.60%.
Servicer: Saxon Mortgage Services, Inc., a Texas corporation, and its
successors and assigns, in its capacity as servicer hereunder.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and expenses
(including legal fees) incurred by the Servicer in the performance of its
servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Section
3.01, Section 3.09, Section 3.13 and Section 3.15. Servicing Advances also
include any reasonable "out-of-pocket" costs and expenses (including legal fees)
incurred by the Servicer in connection with executing and recording instruments
of satisfaction, deeds of reconveyance or Assignments of Mortgage in connection
with any foreclosure in respect of any Mortgage Loan to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement. The Servicer shall
not be required to make any Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan at the end of the related Due Period.
Such fee shall be payable monthly, and shall be pro rated for any portion of a
month
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during which the Mortgage Loan is serviced by the Servicer under this Agreement.
The Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds and proceeds received with respect to REO
Properties, to the extent permitted by Section 3.11) of such Scheduled Payment
collected by the Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Servicer consisting of originals or copies of all documents in the
Mortgage File which are not delivered to the Custodian in the Custodial File and
copies of each of the other Mortgage Loan documents required to be delivered by
the related Originator pursuant to the terms of the related Mortgage Loan
Purchase Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee and the Custodian by the Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan, the date
on which Saxon commenced servicing such Mortgage Loan, as set forth on the
Mortgage Loan Schedule.
Servicing Trigger Event: With respect to each Determination Date, a
Servicing Trigger Event exists if total Cumulative Loss Percentage exceeds: (i)
8.50% on any Determination Date up to, and including, the fifth anniversary of
the Cut-off Date; or (ii) 10.82% on any Determination Date from the fifth to,
and including, the tenth anniversary of the Cut-off Date. Following the tenth
anniversary of the Cut-off Date, no Servicing Trigger Event shall exist.
Specified Subordinated Amount: With respect to any Distribution Date
prior to the Stepdown Date, an amount equal to 2.70% of the Maximum Pool
Principal Balance; and with respect to any Distribution Date on and after the
Stepdown Date, an amount equal to 5.40% of the Current Maximum Amount for that
Distribution Date subject to a minimum amount equal to 0.50% of the Maximum Pool
Principal Balance; provided, however, that if, on any Distribution Date, a
Trigger Event exists, the Specified Subordinated Amount shall not be reduced to
the applicable percentage of the Current Maximum Amount, but instead will remain
the same as the prior period's Specified Subordinated Amount until the
Distribution Date on which a Trigger Event no longer exists. When the Class
Certificate Balance of each Class of LIBOR Certificates has been reduced to
zero, the Specified Subordinated Amount shall thereafter equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Surveillance Group - IXIS Real Estate Capital Trust
2005-HE4, or such other address as Standard & Poor's may hereafter furnish to
the Depositor, the Trustee, and the Servicer.
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Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary,
as may be in effect from time to time.
Startup Day: For each REMIC created hereunder, the Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any date
of determination, (i) the principal balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date, to
the extent actually received, minus (ii) all amounts previously remitted to the
Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal, including Advances in respect of Scheduled Payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any Scheduled Payments of principal
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer prior to the related Remittance Date and any
unscheduled principal payments and other unscheduled principal collections
received during the related Prepayment Period, and the Stated Principal Balance
of any Mortgage Loan that has prepaid in full or has become a Liquidated
Mortgage Loan during the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in December 2008 and (b) the Distribution Date on which
the aggregate Class Certificate Balance of the Class A Certificates have been
reduced to zero and (ii) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose only after taking into
account scheduled and unscheduled payments of principal on the Mortgage Loans on
the last day of the related Due Period but prior to any allocation of the
Principal Distribution Amount together with any principal payments from the Swap
Account to the LIBOR Certificates on the applicable Distribution Date) is
greater than or equal to the Senior Specified Enhancement Percentage.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the Current Maximum Amount for that Distribution Date on
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date plus, except for federal
income tax purposes, the Class Certificate Balances of the Class P Certificates
(after giving effect to the payment of the Principal Remittance Amount on such
Certificates on such Distribution Date).
Subordinated Certificates: As specified in the Preliminary Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution Date,
an amount equal to the lesser of (a) the Excess Subordinated Amount and (b) the
Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount
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related to such Mortgage Loan or Mortgaged Property is allocated to reduce the
Class Certificate Balance of any Class of Subordinated Certificates. Any
Subsequent Recovery that is received during a Prepayment Period will be treated
as Liquidation Proceeds and included as part of the Principal Remittance Amount
for the related Distribution Date.
Subsequent Cut-off Date: As to any Subsequent Mortgage Loans, the date
specified in the Addition Notice delivered in connection therewith, which date
shall be the close of business on the first day of the month in which such
Subsequent Mortgage Loans will be conveyed to the Trust Fund.
Subsequent Mortgage Loans: The Mortgage Loans hereafter transferred
and assigned to the Trust Fund pursuant to Section 2.01(c), each of which shall
have been purchased by the Unaffiliated Seller under a Mortgage Loan Purchase
Agreement.
Subsequent Transfer: The transfer and assignment by the Depositor to
the Trust of the Subsequent Mortgage Loans pursuant to the terms hereof.
Subsequent Transfer Agreement: A subsequent transfer agreement in
substantially the form of Exhibit L.
Subsequent Transfer Date: The Business Day on which a Subsequent
Transfer occurs.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreement: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance
with the terms of this Agreement or the related Mortgage Loan Purchase
Agreement, as applicable, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit K, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than, the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity no greater than (and not more than one year less than that of)
the Deleted Mortgage Loan; and (v) comply with each representation and warranty
set forth in Sections 3.01(f), 3.01(h), 3.01(n), 3.01(o), 3.01(p) and 3.03 of
the Unaffiliated Seller's Agreement, each representation and warranty set forth
in the applicable Mortgage Loan Purchase Agreement and each of the requirements
set forth in Sections 2.01(c) hereof.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
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Supplemental Interest Trust: IXIS Real Estate Capital Supplemental
Interest Trust 2005-HE4 established pursuant to Section 2.01(d).
Swap Account: The separate Eligible Account created and maintained by
the Trustee pursuant to Section 3.07(m) in the name of the Trustee, on behalf of
the Supplemental Interest Trust, for the benefit of the Certificateholders and
the Swap Provider, and designated "Deutsche Bank National Trust Company in trust
for registered holders of IXIS Real Estate Capital Trust 2005-HE4, Mortgage
Pass-Through Certificates, Series 2005-HE4 and IXIS Financial Products, Inc.".
Swap Payment Rate: For any Distribution Date the Swap Payment Rate is
a fraction, the numerator of which is any Net Swap Payment or Swap Termination
Payment owed to the Swap Provider for such Distribution Date and the denominator
of which is the Stated Principal Balance of the mortgage loans at the beginning
of the related Due Period plus amounts in the Pre-Funding Account, multiplied by
12.
Swap Provider: IXIS Financial Products Inc., a Delaware corporation,
and any successor thereto.
Swap Termination Payment: A termination payment required to be made by
either the Supplemental Interest Trust or the Swap Provider pursuant to the
Interest Rate Swap Agreement as a result of termination of the Interest Rate
Swap Agreement.
Tax Matters Person: The holder of the Class R Certificates designated
as "tax matters person" of REMIC I, REMIC II, REMIC III, REMIC IV and REMIC V,
respectively, in the manner provided under Treasury regulations section
1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicer on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable
to the LIBOR Certificates pursuant to Section 4.02(a)(i) and Net Swap Payments
to the Swap Provider on such Distribution Date
Town & Country: Town & Country Credit Corp., a Delaware corporation.
Town & Country Capital Assignment Agreement: Each Assignment and
Recognition Agreement by and among the Unaffiliated Seller, the Depositor and
Town &
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Country Credit Corporation in connection with any Subsequent Transfer of Town &
Country Capital Mortgage Loans.
Town & Country Mortgage Loan: A Mortgage Loan which was acquired from
Town & Country Capital Corporation by the Unaffiliated Seller pursuant to the
Town & Country Purchase Agreement, and which has been acquired by the Trust
Fund.
Town & Country Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of November 1, 2005, as amended to date, by and
between the Unaffiliated Seller and Town & Country Credit Corporation.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(b).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: The occurrence of either a Delinquency Trigger Event or
a Cumulative Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(d).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) each
Account, other than the Swap Account and the Excess Reserve Fund Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) all rights of the
Depositor against the Unaffiliated Seller under the Unaffiliated Seller's
Agreement; (v) all rights of the Depositor against each Originator under the
related Assignment and Recognition Agreement and the related Mortgage Loan
Purchase Agreement; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee: Deutsche Bank National Trust Company a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the sum
of (a) the product of one-twelfth of the Trustee Fee Rate times the sum of (i)
the aggregate Stated Principal Balances of the Mortgage Loans at the end of the
prior Due Period, and (ii) the amount on deposit in the Pre-Funding Account at
the end of such prior Due Period and (b) any reasonable compensation and
expenses of a separate trustee or co-trustee to be paid pursuant to Section
8.10(d).
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0036% per
annum.
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Unaffiliated Seller's Agreement: The Unaffiliated Seller's Agreement,
dated as of the date hereof, among the Unaffiliated Seller and the Depositor
relating to the sale of the Mortgage Loans from the Unaffiliated Seller to the
Depositor.
Underwriters' Exemption: Prohibited Transaction Exemption 90-24, as
amended.
Unpaid Interest Amount: 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 for such Distribution Date and any portion of such Accrued
Certificate Interest from prior Distribution Dates remaining unpaid over (ii)
the amount in respect of interest on such Class of Certificates actually
distributed on that Distribution Date and (b) 30 days' interest on the amount in
clause (a) above at the applicable Pass-Through Rate (to the extent permitted by
applicable law).
Unpaid Realized Loss Amount: With respect to any Class of Subordinated
Certificates and as to any Distribution Date, is the excess of (i) the Applied
Realized Loss Amount with respect to such Class over (ii) the sum of (a) all
distributions in reduction of such Applied Realized Loss Amounts on all previous
Distribution Dates and (b) the amount by which the Class Certificate Balance of
such Class has been increased due to the distribution of any Subsequent
Recoveries on all previous Distribution Dates. Any amounts distributed to a
Class of Subordinated Certificates in respect of any Unpaid Realized Loss Amount
will not be applied to reduce the Class Certificate Balance of such Class.
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 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 prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) 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 such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans,
less the Swap Payment Rate, and
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(ii) a fraction, the numerator of which is 30 and the denominator of which is
the actual number of days in the Interest Accrual Period related to such
Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund and the
Trustee, on behalf of the Trust, hereby accepts the Trust Fund, other than any
Subsequent Mortgage Loans, which will be so sold, transferred, assigned,
set-over and conveyed on the related Subsequent Transfer Date. The Mortgage
Loans permitted by the terms of this Agreement to be included in the Trust Fund
are limited to (i) the Initial Mortgage Loans (which the Depositor acquired
pursuant to the Unaffiliated Seller's Agreement), (ii) Subsequent Mortgage Loans
(which the Depositor is required hereunder to have acquired pursuant to
Subsequent Transfer Agreements) and (iii) Substitute Mortgage Loans (which, by
definition as set forth herein and referred to in the Unaffiliated Seller's
Agreement and Subsequent Transfer Agreements). It is agreed and understood by
the parties hereto that it is not intended that any Mortgage Loan be included in
the Trust that is a High Cost Loan.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Unaffiliated Seller has delivered or caused to be delivered to the
Custodian for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned (to the extent such
documents or instruments are required to be delivered by the related Originator
under each Mortgage Loan Purchase Agreement):
(i) the original Mortgage Note bearing all intervening endorsements
evidencing a complete chain of assignment from the originator to the
related Originator, endorsed "Pay to the order of _________, without
recourse" and signed in the name of the related Originator by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge,
unless the Trustee and the Custodian are advised by the related Originator
that state law does not so allow. If the Mortgage Loan was acquired by an
Originator in a merger, the endorsement must be by "[related Originator],
successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the related Originator while doing business under
another name, the endorsement must be by "[related Originator], formerly
known as [previous name]";
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the original Mortgage with evidence of
recording
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thereon cannot be delivered on or prior to the related Delivery Date
because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, then the related Originator, as required by the terms of
the related Mortgage Loan Purchase Agreement, will be required to deliver
to the Custodian, on behalf of the Trustee, a photocopy of such Mortgage
and (i) the original recorded Mortgage or a copy of such Mortgage certified
by such public recording office to be a true and complete copy of the
original recorded Mortgage promptly upon receipt thereof by the related
Originator (but in any event within 360 days from the related Delivery
Date); or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, in form and substance acceptable for recording (except
with respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of mortgage,
evidencing a complete chain of assignment from the originator (or MERS with
respect to each MERS Designated Mortgage Loan) to the related Originator,
with evidence of recording thereon or if any such intervening assignment
has not been returned from the applicable recording office or has been lost
or if such public recording office retains the original recorded
assignments of mortgage;
(vii) the original or duplicate lender's title policy and all riders
thereto or, if such original is unavailable, either an original title
binder or an original or copy of the title commitment, and if copies then
certified to be true and complete by the title company; and
(viii) the security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the applicable Originator to the extent permitted under the related Purchase
Agreement and otherwise at the expense of the Depositor to cause the Trustee to
be shown as Investor of the related Mortgage Loan on the records of MERS for the
purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
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From time to time, the Servicer shall forward to the Custodian
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Servicer, in accordance with the terms of this Agreement. All such mortgage
documents held by the Custodian as to each Mortgage Loan shall constitute the
"Custodial File".
On or prior to the related Delivery Date, the Unaffiliated Seller
shall deliver, or cause the related Originator to deliver, to the Custodian
Assignments of Mortgage, in blank, for each Mortgage Loan. If an Assignment of
Mortgage is required to be recorded pursuant to the terms hereof, the Servicer,
or the Servicer's designee shall direct the Custodian to promptly forward such
Assignment of Mortgage to the Servicer for recording. No later than thirty (30)
Business Days following the date of receipt by the Servicer of all necessary
recording information for a Mortgage, the Servicer shall promptly submit or
cause to be submitted for recording, at the expense of the Unaffiliated Seller
(the Unaffiliated Seller to seek reimbursement from the related Originator under
the applicable Mortgage Loan Purchase Agreement) in the appropriate public
office for real property records, each Assignment of Mortgage referred to in
Section 2.01(b)(v). Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignment of Mortgage shall not be required to be completed and submitted for
recording with respect to any MERS Designated Mortgage Loan or any Mortgage Loan
(other than any Mortgage Loan where the Mortgaged Property is located in any
state where recordation is required by any Rating Agency to obtain the initial
ratings on the Certificates, which states as of the date hereof, are Florida and
Maryland) upon a determination by the Servicer that recordation is necessary for
the enforcement of rights under, or satisfaction or assignment of, the related
Mortgage, at which time, the Servicer shall record any such Assignment of
Mortgage in accordance with the terms hereof. If any Assignment of Mortgage is
required to be recorded pursuant to the terms hereof, the Mortgage shall be
assigned from the related Originator, to "Deutsche Bank National Trust Company
as trustee under the Pooling and Servicing Agreement dated as of November 1,
2005, IXIS Real Estate Capital Trust 2005-HE4." In the event that any such
assignment is lost or returned unrecorded because of a defect therein, the
Unaffiliated Seller shall cause the related Originator to promptly prepare a
substitute assignment to cure such defect and thereafter cause each such
assignment to be duly recorded. In the event the Unaffiliated Seller does not
pay or otherwise reimburse the Servicer for any of the foregoing costs of
recording any such Assignment of Mortgage, the Servicer shall be entitled to be
reimbursed from the Trust Fund from amounts on deposit in the Collection
Account. In the event the related Originator fails to reimburse the Unaffiliated
Seller for the recording costs described above, upon receipt of written
direction from the Unaffiliated Seller, the Trustee shall assign its rights
under the applicable Mortgage Loan Purchase Agreement solely with respect to
payment of such expenses to the Unaffiliated Seller.
The Unaffiliated Seller shall use commercially reasonable efforts to
assist the Servicer in causing the related Originator to deliver (at the expense
of such Originator pursuant to the related Mortgage Loan Purchase Agreement) to
the Servicer copies of all trailing documents required to be included in the
Custodial File at the same time the originals or certified copies thereof are
delivered to the Custodian, such documents, including, but not limited to, the
mortgagee policy of title insurance and any mortgage loan documents upon return
from the recording office. The Unaffiliated Seller shall use commercially
reasonable efforts to assist the Servicer in seeking reimbursement from the
related Originator pursuant to the related Mortgage
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Loan Purchase Agreement for any fees or costs incurred by the Servicer in
obtaining such documents.
On or prior to the Closing Date, the Unaffiliated Seller shall deliver
to the Trustee, the Custodian and the Servicer a copy of the Data Tape
Information in electronic, machine readable medium in a form mutually acceptable
to the Custodian, the Trustee and the Servicer. Within ten days of the Closing
Date, the Unaffiliated Seller shall deliver a copy of the complete Mortgage Loan
Schedule to the Custodian, the Trustee and the Servicer.
In the event that such original or copy of any document submitted for
recordation to the appropriate public recording office is not so delivered to
the Custodian within 90 days following the related Delivery Date, as evidenced
by the Custodian's Final Certification, and in the event that the Originator
does not cure such failure within 30 days of discovery or receipt of written
notification of such failure from the Depositor or the Trustee, the Trustee
shall notify the related Originator to repurchase the Mortgage Loan pursuant to
the related Mortgage Loan Purchase Agreement, upon the request of the Depositor
or the Trustee, at the Repurchase Price and in the manner specified in Section
2.03. The foregoing repurchase provision shall not apply in the event that the
related Originator cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the related Originator shall instead be required to
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Originator confirming that such document has been accepted for recording.
(c) Purchase and Sale of Subsequent Mortgage Loans.
(i) Subject to the satisfaction of the conditions set forth in
paragraph (ii) below, and upon the Trustee's receipt of a Subsequent
Transfer Agreement executed by all other parties thereto, in consideration
of the Trustee's delivery on the related Subsequent Transfer Dates to or
upon the order of the Depositor of all or a portion of the balance of funds
in the Pre-Funding Account, the Depositor shall on any Subsequent Transfer
Date sell, transfer, assign, set over and convey to the Trustee without
recourse but subject to terms and provisions of this Agreement, all of the
right, title and interest of the Depositor in and to the Subsequent
Mortgage Loans, including the outstanding principal of and interest due on
such Subsequent Mortgage Loans, and all other related assets included or to
be included in the Trust Fund with respect thereto.
The amount released from the Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans, shall be one-hundred percent (100%)
of the aggregate Stated Principal Balances as of the related Subsequent
Cut-off Date of the Subsequent Mortgage Loans so transferred.
(ii) The Subsequent Mortgage Loans and the other property and rights
related thereto described in paragraph (a) above shall be transferred by
the Depositor to the Trust Fund only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
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(a) the Unaffiliated Seller shall have provided the Depositor,
the Trustee and the Rating Agencies with a timely Addition Notice,
which shall include a Mortgage Loan Schedule, listing the Subsequent
Mortgage Loans and shall have provided any other information
reasonably requested by any of the foregoing with respect to the
Subsequent Mortgage Loans;
(b) the Servicer shall have deposited in the Collection Account
all collections of (x) principal in respect of the Subsequent Mortgage
Loans received and due after the related Subsequent Cut-off Date and
(y) interest due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date;
(c) as of each Subsequent Transfer Date, the Unaffiliated Seller
was not insolvent nor will be made insolvent by such transfer nor is
the Unaffiliated Seller aware of any pending insolvency;
(d) such addition will not result in a "prohibited transaction"
(as defined in the REMIC Provisions) for any REMIC created hereunder,
and will not cause any REMIC created hereunder to cease to qualify as
a REMIC, as evidenced by an Opinion of Counsel with respect to such
matters (which may be a blanket opinion dated the Closing Date);
(e) the Pre-Funding Period shall not have terminated;
(f) the Unaffiliated Seller shall have delivered to the Trustee
an executed Assignment and Recognition Agreement with respect to each
related Originator of Subsequent Mortgage Loans to be added to the
Trust Fund on such Subsequent Transfer Date (which Assignment and
Recognition Agreement shall include a representation and warranty from
the related Originator that none of the Subsequent Mortgage Loans is a
High Cost Loan, none of the Subsequent Mortgage Loans is covered by
the Home Ownership and Equity Protection Act of 1994 and none of the
Subsequent Mortgage Loans is in violation of any comparable state
law);
(g) the Unaffiliated Seller shall have delivered to the Trustee
an Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (ii), and the Opinion of Counsel
referenced in clause (d);
(h) the Unaffiliated Seller and the Depositor shall have
delivered to the Trustee an executed copy of a Subsequent Transfer
Agreement, substantially in the form of Exhibit L hereto; and
(i) each of the Rating Agencies shall have provided a notice in
either written or electronic format acknowledging their respective
consents to the transfer of the Subsequent Mortgage Loans to the Trust
Fund.
(iii) The obligation of the Trust Fund to purchase the Subsequent
Mortgage Loans on a Subsequent Transfer Date is subject to the requirements
that, following the
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purchase of such Subsequent Mortgage Loans, with respect to the entire
mortgage loan pool:
(A) no more than 3.25% may be second lien mortgage loans;
(B) no more than 41.00% may be first lien mortgage loans which are
secured by Mortgaged Properties which also secure second lien
mortgage loans;
(C) no less than 12.00% and no more than 14.00% may be Fixed Rate
Mortgage Loans;
(D) the weighted average original term to maturity may not exceed 360
months;
(E) the weighted average gross Mortgage Rate must not be less than
7.50%, or more than 7.70%;
(F) the weighted average LTV must not exceed 80.00%, and no more than
32.50% of the Mortgage Loans may have LTVs in excess of 80.00%;
(G) at least 70.00% of the Mortgage Loans must have Prepayment
Charges;
(H) the weighted average Gross Margin for the Adjustable Rate
Mortgage Loans must be at least 6.200%;
(I) the weighted average credit score (FICO Score) must be at least
623, and none of the Mortgage Loans may have credit scores below
500;
(J) the weighted average credit score for the second-lien mortgage
loans must be at least 649;
(K) no more than 31.50% may have an interest-only period; and
(L) no mortgage loan is classified as a "high cost" loan under the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no
mortgage loan is in violation of, or classified as a "high cost,"
"threshold," "predatory" or similar loan under, any other
applicable state, federal or local law.
Any of the requirements set forth in clauses (ii) and (iii) above may
be waived or modified in any respect with the consent of the Rating
Agencies.
(iv) In connection with the transfer and assignment of the Subsequent
Mortgage Loans, the Unaffiliated Seller shall satisfy the document delivery
requirements set forth in Section 2.01(b).
(d) The Depositor does hereby establish, pursuant to the further
provisions of the Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "IXIS REAL ESTATE CAPITAL
TRUST 2005-HE4" and Deutsche
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Bank National Trust Company is hereby appointed as Trustee in accordance with
the provisions of this Agreement. The parties hereto acknowledge and agree that
it is the policy and intention of the Trust to acquire only Mortgage Loans
meeting the requirements set forth in this Agreement. In addition, the Depositor
does hereby establish, pursuant to the further provisions of the Agreement and
the laws of the State of New York, an express trust (the "Supplemental Interest
Trust") to be known, for convenience, as "IXIS REAL ESTATE CAPITAL SUPPLEMENTAL
INTEREST TRUST 2005-HE4", which, as a subtrust of the Trust Fund, will hold the
Swap Agreement, the Swap Account and the Excess Reserve Fund Account.
(e) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
Section 2.02 Acceptance by the Custodian of the Mortgage Loans.
The Custodian shall acknowledge, on each Delivery Date, receipt of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit F, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, on behalf of the
Trustee, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Custodian acknowledges that it will maintain possession
of the related Mortgage Notes in the State of California, unless otherwise
permitted under this Agreement or by the Rating Agencies.
In connection with each Delivery, the Custodian shall deliver via
facsimile (with original to follow the next Business Day) to the Depositor, the
Trustee, the Unaffiliated Seller and the Servicer an Initial Certification on or
prior to the related Delivery Date, certifying receipt of the related Mortgage
Notes and Assignments of Mortgage for each related Mortgage Loan. The Custodian
shall not be responsible for verifying the validity, sufficiency or genuineness
of any document in any Custodial File.
Within 120 days after the related Delivery Date, the Custodian shall
ascertain that all documents required to be reviewed by it are in its
possession, and shall deliver to the Depositor, the Unaffiliated Seller, the
Servicer and the Trustee a Final Certification to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such certification
as an exception and not covered by such certification): (i) all documents
required to be reviewed by it are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to such Mortgage
Loan; (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (1), (2) and (18) of the Mortgage Loan Schedule
and items (1), (9) and (17) of the Data Tape Information respecting such
Mortgage Loan is correct; and (iv) each Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement. The Custodian shall not be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File. Upon receipt of such Final Certification, if the
Depositor or the Unaffiliated Seller determines that any noncompliance
identified by the
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Custodian is a breach of a representation or warranty relating to such Mortgage
Loan, such party shall give written notice to the Trustee thereof.
The Custodian shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Custodian, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Section 2.03 Representations, Warranties and Covenants of the
Unaffiliated Seller and the Servicer.
(a) The Servicer hereby makes the representations and warranties set
forth in (i) Schedule II hereto to the Depositor, the Unaffiliated Seller, the
Custodian and the Trustee and (ii) Schedule IIA hereto to the Unaffiliated
Seller, in each case, as of the Closing Date, and with respect to Subsequent
Mortgage Loans, as of the related Subsequent Transfer Date; provided, however,
that in the case of clause (ii), the Servicer only makes representations and
warranties with respect to those Mortgage Loans on Schedule IA hereto for which
the Servicing Transfer Date has occurred prior to the Closing Date or the
related Subsequent Transfer Date, as applicable.
(b) IXIS Real Estate Capital Inc., in its capacity as the Unaffiliated
Seller, hereby makes the representations and warranties set forth in Schedule
III hereto to the Depositor, the Trustee and the Custodian, as of the Closing
Date.
(c) It is understood and agreed by the Servicer and the Unaffiliated
Seller that the representations and warranties set forth in Section 2.03 shall
survive the transfer of the Mortgage Loans to the Trust Fund, and shall inure to
the benefit of the Trust Fund notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination or
failure to examine any Mortgage File. Upon discovery by any of the Depositor and
the Unaffiliated Seller, the Trustee or the Servicer of a breach by the
Unaffiliated Seller of any of the foregoing representations or any of the
representations and warranties made pursuant to Sections 3.01(f), 3.01(h),
3.01(n), 3.01(o), 3.01(p) or 3.03 of the Unaffiliated Seller's Agreement or by
any Originator of the representations and warranties made pursuant to the
related Assignment and Recognition Agreement, the party discovering such breach
shall give prompt written notice to the others.
Within 90 days of the earlier of either discovery by or notice to the
Unaffiliated Seller of any breach of a representation or warranty set forth in
Section 3.01(f), 3.01(h), 3.01(n), 3.01(o), 3.01(p) or 3.03 of the Unaffiliated
Seller's Agreement that materially and adversely affects the value of the
Mortgage Loans or the interest of the Trustee or the Certificateholders therein,
the Unaffiliated Seller shall use its best efforts to cure such breach in all
material respects and, if such breach cannot be remedied, the Unaffiliated
Seller shall, (i) if such 90-day period expires prior to the second anniversary
of the related Delivery Date, remove such Mortgage Loan from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the manner and subject to
the conditions set forth in this Section 2.03; or (ii) repurchase such Mortgage
Loan at the Repurchase Price; provided, however, that any such substitution
pursuant
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to (i) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.05, if any, and a Request for Release
substantially in the form of Exhibit K, and the Mortgage File for any such
Substitute Mortgage Loan. The Trustee shall forward such Request for Release to
the Custodian and the Custodian shall release the related Mortgage File.
In the event there is a breach of a representation or warranty by
Allstate Home Loans with respect to a Allstate Home Loan that materially and
adversely affects the value of such Mortgage Loan or the interest of the Trustee
and the Certificateholders therein, and, upon discovery or receipt of notice,
Allstate fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Allstate Assignment Agreement or the Allstate
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Chapel Mortgage
with respect to a Chapel Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Chapel
Mortgage fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Chapel Mortgage Assignment Agreement or the
Chapel Mortgage Purchase Agreement, the Unaffiliated Seller shall cure,
substitute or repurchase such Mortgage Loan subject to the conditions set forth
in this Section 2.03. In the event there is a breach of a representation or
warranty by Encore with respect to an Encore Mortgage Loan that materially and
adversely affects the value of such Mortgage Loan or the interest of the Trustee
and the Certificateholders therein, and, upon discovery or receipt of notice,
Encore fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Encore Assignment Agreement or the Encore
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by First Bank with
respect to a First Bank Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, First Bank
fails to cure, substitute or repurchase such Mortgage Loan within the period
specified in either the First Bank Assignment Agreement or the First Bank
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Homeowners with
respect to a Homeowners Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Homeowners
fails to cure, substitute or repurchase such Mortgage Loan within the period
specified in either the Homeowners Assignment Agreement or the Homeowners
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Lenders Direct
with respect to a Lenders Direct Mortgage Loan that materially and adversely
affects the value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Lenders
Direct fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Lenders Direct Assignment Agreement or the
Lenders Direct Purchase Agreement, the Unaffiliated Seller shall cure,
substitute or repurchase such Mortgage Loan subject to the conditions set forth
in this Section 2.03. In the event there is a breach of a representation or
warranty by Lime Financial with respect to a Lime Financial Mortgage Loan
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that materially and adversely affects the value of such Mortgage Loan or the
interest of the Trustee and the Certificateholders therein, and, upon discovery
or receipt of notice, Lime Financial fails to cure, substitute or repurchase
such Mortgage Loan within the period specified in either the Lime Financial
Assignment Agreement or the Lime Financial Purchase Agreement, the Unaffiliated
Seller shall cure, substitute or repurchase such Mortgage Loan subject to the
conditions set forth in this Section 2.03. In the event there is a breach of a
representation or warranty by Master Financial with respect to a Master
Financial Mortgage Loan that materially and adversely affects the value of such
Mortgage Loan or the interest of the Trustee and the Certificateholders therein,
and, upon discovery or receipt of notice, Master Financial fails to cure,
substitute or repurchase such Mortgage Loan within the period specified in
either the Master Financial Assignment Agreement or the Master Financial
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Platinum with
respect to a Platinum Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Platinum
fails to cure, substitute or repurchase such Mortgage Loan within the period
specified in either the Platinum Assignment Agreement or the Platinum Purchase
Agreement, the Unaffiliated Seller shall cure, substitute or repurchase such
Mortgage Loan subject to the conditions set forth in this Section 2.03. In the
event there is a breach of a representation or warranty by ResMae with respect
to a ResMae Mortgage Loan that materially and adversely affects the value of
such Mortgage Loan or the interest of the Trustee and the Certificateholders
therein, and, upon discovery or receipt of notice, ResMae fails to cure,
substitute or repurchase such Mortgage Loan within the period specified in
either the ResMae Assignment Agreement or the ResMae Purchase Agreement, the
Unaffiliated Seller shall cure, substitute or repurchase such Mortgage Loan
subject to the conditions set forth in this Section 2.03. Notwithstanding the
Unaffiliated Seller's lack of knowledge, in the event it is discovered by the
Unaffiliated Seller, the Depositor or the Trust (including the Trustee and the
Servicer acting on the Trust's behalf), that the substance of a representation
or warranty was inaccurate as of the applicable date of such representation or
warranty and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, the Unaffiliated Seller shall use its best efforts to
cure such breach or substitute or repurchase such Mortgage Loan in accordance
with this Section 2.03(d).
With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Custodian, on behalf of the Trustee,
for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related Assignment of the Mortgage, and such other documents and agreements as
are required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution is permitted to be made in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the Due Period of
substitution shall not be part of the Trust Fund and will be retained by the
related Originator on the next succeeding Distribution Date. For the Due Period
of substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the
related Originator shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan.
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For any month in which the Unaffiliated Seller substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Substitute Mortgage Loans as of the date of substitution is less than
the aggregate unpaid principal balance of all such Deleted Mortgage Loans. The
Unaffiliated Seller shall deposit the amount of such shortage plus an amount
equal to the aggregate of any unreimbursed Advances and accrued and unpaid
Servicing Fees with respect to such Deleted Mortgage Loans (the "Substitution
Adjustment Amount") into the Collection Account on or before the Remittance 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.
Upon receipt of written notice (x) from the Custodian that any
document does not comply with the requirements set forth in clauses (i) through
(iv) of the Custodian's review of the Custodial Files pursuant to Section 2.02
or (y) of a breach of a representation and warranty, the Trustee shall in turn
promptly notify the applicable Originator (with a copy to the Servicer, the
Custodian and the Unaffiliated Seller) in writing of such non-compliance or
breach and request that the related Originator cure such non-compliance or
breach within the time period set forth in the applicable Mortgage Loan Purchase
Agreement (but in any event, within 60 days from the date the related Originator
is notified of such non-compliance or breach) and if the related Originator does
not cure such non-compliance or breach in all material respects during such
period, the Trustee shall notify such Originator to repurchase such Mortgage
Loan from the Trust Fund at the Repurchase Price. In the event the Trustee
receives written notice (x) of a breach by any Originator of a representation
and warranty that is subject to an automatic sixty-day repurchase obligation
pursuant to Section 9.03 of the related Mortgage Loan Purchase Agreement, which
representations and warranties relate to Prepayment Fees, Predatory Lending
Regulations, Single Premium Credit Insurance, the Georgia Fair Lending Act, the
Fair Credit Reporting Act, New York State Banking Law or (y) that a Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall notify such Originator to repurchase
the Mortgage Loan at the Repurchase Price within sixty (60) days of such
Originator's receipt of such notice.
(d) Upon receipt of the Final Certification with respect to each
Mortgage Loan, the Trustee will notify the related Originator within 5 Business
Days of such delivery of any missing documents from the Custodial File and if
the related Originator does not deliver such missing documents within 60 days
from the date the related Originator is notified of such noncompliance or
breach, the Trustee shall notify such Originator to repurchase such Mortgage
Loan from the Trust Fund at the Repurchase Price.
(e) Based solely on information received with respect to any
Substitute Mortgage Loan from the Unaffiliated Seller or the related Originator,
as applicable, the Servicer shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Unaffiliated Seller shall be deemed to have made with respect to such Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Sections 3.01(f), 3.01(h), 3.01(n), 3.01(o), 3.01(p)
and 3.03 of the Unaffiliated Seller's
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Agreement with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Collection Account of the amount required to be deposited therein
in connection with such substitution as described in this Section 2.03, the
Trustee shall forward the Request for Release from the Servicer to the Custodian
and the Custodian shall release the Mortgage File relating to such Deleted
Mortgage Loan to the Unaffiliated Seller or the related Originator, as
applicable, and the Trustee shall execute and deliver at the Unaffiliated
Seller's or related Originator's direction, as applicable, such instruments of
transfer or assignment prepared by such party, in each case without recourse, as
shall be necessary to vest title in the Unaffiliated Seller or the related
Originator, or its designee, as applicable, the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
(f) In the event that the Unaffiliated Seller or the related
Originator, as applicable, shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the Collection Account pursuant
to Section 3.10 on or before the Remittance Date for the Distribution Date in
the month following the month during which the Unaffiliated Seller or the
related Originator, as applicable, became obligated hereunder to repurchase or
replace such Mortgage Loan and upon such deposit of the Repurchase 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 K hereto, the Trustee shall forward
the Request for Release from the Servicer to the Custodian, and the Custodian
shall release the related Custodial File to such Person as directed by the
Servicer, and the Trustee shall execute and deliver at such Person's direction
such instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. It
is understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor, the
Unaffiliated Seller, the Custodian or the Trustee on their behalf. In the event
such required repurchase or replacement does not occur, the Trustee shall take
such actions as directed upon written direction from the Depositor and the
provision of reasonable indemnity satisfactory to the Trustee in accordance with
Sections 6.03 and 8.02.
(g) If the Unaffiliated Seller is required to repurchase or replace a
Mortgage Loan pursuant to the terms hereof, upon receipt by the Trustee of
written direction from the Unaffiliated Seller and either the related Repurchase
Price or Substitute Mortgage Loan, as applicable, the Trustee shall assign to
the Unaffiliated Seller its rights under the related Mortgage Loan Purchase
Agreement solely with respect to such Mortgage Loan by an assignment in form and
substance mutually satisfactory to the Unaffiliated Seller and the Trustee.
(h) The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Custodian.
Section 2.04 The Depositor and the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the related Delivery Date, and following the transfer of the
Mortgage Loans to it by the Unaffiliated Seller,
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the Depositor had good title to the Mortgage Loans and the Mortgage Notes were
subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee all
of its rights with respect to the Initial Mortgage Loans and shall, on each
subsequent Transfer Date, convey all of its right, title and interest with
respect to the related subsequent Mortgage Loans.
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Non-Qualified Mortgages.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
related Delivery Date unless the Unaffiliated Seller delivers, or causes the
related Originator to deliver, as applicable, to the Trustee an Opinion of
Counsel, at the expense of the Unaffiliated Seller or the related Originator, as
applicable, 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 Day, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
created hereunder to fail to qualify as one or more REMICs at any time that any
Certificates are outstanding.
Section 2.06 Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "Startup Day" for
purposes of the REMIC Provisions shall be the Closing Date. Unless otherwise
stated, the "latest possible maturity date" is February 25, 2036, which is the
Distribution Date in the month following the month in which the latest maturity
date of any Mortgage Loan occurs.
Section 2.08 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee, the Custodian, the Unaffiliated Seller and the Servicer that as of the
date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
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(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required for
the execution, delivery and performance of or compliance by the Depositor with
this Agreement or the consummation by the Depositor of any of the transactions
contemplated hereby, except as have been made on or prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or by-laws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the Depositor
to the Trustee, the Depositor had, or, with respect to the Subsequent Mortgage
Loans, will have, good title to, and was, or will be, the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred, or shall transfer, all right, title and interest in each Mortgage
Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage to the
Custodian, on behalf of the Trustee, as and in the manner contemplated by this
Agreement is sufficient either (i) fully to transfer to the Trustee, for the
benefit of the Certificateholders, all right, title, and interest of the
Depositor thereto as note holder and mortgagee or (ii) to grant to
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the Trustee, for the benefit of the Certificateholders, the security interest
referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.08 shall survive delivery of the
respective Custodial Files to the Custodian and shall inure to the benefit of
the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans.
(a) For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and the respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of prudent mortgage lenders and loan servicers
administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the Servicer
or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive compensation
for its services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the
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Mortgagors any reports required to be provided to them thereby. The Servicer
covenants that its computer and other systems used in servicing the Mortgage
Loans operate in a manner such that the Servicer can service the Mortgage Loans
in accordance with the terms of this Agreement. The Servicer shall also comply
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under any standard hazard insurance policy. Subject to Section
3.15, the Trustee shall execute, at the written request of the Servicer, and
furnish, or cause to be furnished, to the Servicer and any Subservicer such
documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (except for a reduction of interest payments resulting from the
application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Department of the Treasury regulations promulgated thereunder) and (B) cause any
REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup day" under the REMIC Provisions, or (iii) except as provided in Section
3.07(a), waive any Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration of any disputes arising in connection with such Mortgage
Loan, the Servicer shall be entitled to waive any such provisions on behalf of
the Trust and to send written notice of such waiver to the
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related Mortgagor, although the Mortgagor may still require arbitration of such
disputes at its option.
Section 3.02 Subservicing Agreements Between the Servicer and
Subservicers.
(a) Subject to the consent of the Depositor, which consent shall not
be unreasonably withheld, the Servicer may enter into subservicing agreements
with Subservicers (each, a "Subservicer"), for the servicing and administration
of the Mortgage Loans.
Unless otherwise approved by the Depositor, each Subservicer shall be
(i) authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, (ii) an institution approved as
a mortgage loan originator by the Federal Housing Administration or an
institution that has deposit accounts insured by the FDIC and (iii) a ▇▇▇▇▇▇▇
Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. Each Subservicing Agreement must
impose on the Subservicer requirements conforming to the provisions set forth in
Section 3.08 and provide for servicing of the Mortgage Loans consistent with the
terms of this Agreement. The Servicer will examine each Subservicing Agreement
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
The Servicer and the Subservicers may enter into and make amendments to the
Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee, the Unaffiliated Seller and the Depositor copies of all Subservicing
Agreements, and any amendments or modifications thereof, promptly upon the
Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
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Section 3.03 Successor Subservicers.
The Servicer shall be entitled to terminate any Subservicing Agreement
and the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Subservicer or the Servicer, and the
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Subservicing Agreement with a successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship Between Subservicers and the
Trustee.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.
In the event the Servicer at any time shall for any reason no longer
be the Servicer (including by reason of the occurrence of a Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Servicer under each Subservicing Agreement that the Servicer
may have entered into, with copies thereof provided to the Trustee
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prior to the Trustee assuming such rights and obligations, unless the Trustee
elects to terminate any Subservicing Agreement in accordance with its terms as
provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
Accepted Servicing Practices, the Servicer may (i) waive any late payment charge
or, if applicable, any penalty interest, or (ii) extend the due dates for the
Scheduled Payments due on a Mortgage Note for a period of not greater than 180
days; provided that any extension pursuant to clause (ii) above shall not affect
the amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Servicer shall make timely advances on such
Mortgage Loan during such extension pursuant to Section 4.01 and in accordance
with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to
which the Servicer shall not be required to make any such advances that are
Nonrecoverable P&I Advances. Notwithstanding the foregoing, the Servicer may not
waive, in whole or in part, a Prepayment Charge, except under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan, and doing so is standard and customary in servicing
mortgage loans similar to the Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
related to a default or a reasonably foreseeable default), and in no event will
the Servicer 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 or (ii) such Prepayment Charge is not permitted to be collected by
applicable law. If a Prepayment Charge is waived other than as permitted by the
prior sentence, then the Servicer is required to pay the
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amount of such waived Prepayment Charge, for the benefit of the Holders of the
Class P Certificates, by depositing such amount into the Collection Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Collection Account. Notwithstanding
any provision in this Agreement to the contrary, in the event the Prepayment
Charge payable under the terms of the Mortgage Note is less than the amount of
the Prepayment Charge set forth in the Mortgage Loan Schedule or other
information provided to the Servicer, the Servicer shall not have any liability
or obligation with respect to such difference, and in addition shall not have
any liability or obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Mortgage Loan Schedule.
(b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders to receive any Basis
Risk Payment and to secure their limited recourse obligation to pay to the LIBOR
Certificateholders Basis Risk Carry Forward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment made for the benefit of the Certificateholders
for such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(U), the lesser of (a) the Class X
Distributable Amount (without regard to the reduction in the definition thereof
with respect to the Basis Risk Payment) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(T), and (b) the Basis Risk
Payment and (2) withdraw from the Excess Reserve Fund Account amounts necessary
to pay to such Class or Classes of Certificates the Basis Risk Carry Forward
Amount. Such payments shall be allocated to those Classes on a pro rata basis
based upon the amount of Basis Risk Carry Forward Amount owed to each such Class
and shall be paid in the priority set forth in Section 4.02(a)(iii)(V).
(ii) The Trustee shall account for each of the Supplemental
Interest Trust, the Excess Reserve Fund Account and the Swap Account as an
outside reserve fund within the meaning of Treasury regulations section
1.860G-2(h) and not as an asset of any REMIC created pursuant to this Agreement.
The beneficial owners of the Supplemental Interest Trust, Excess Reserve Fund
Account and Swap Account are the Class X Certificateholders. For all federal tax
purposes, amounts transferred by REMIC V to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholders. For all federal tax purposes, amounts transferred by REMIC V
to the Swap Account shall be treated as distributions by the Trustee on the
Class I Interests.
(iii) Any Basis Risk Carry Forward Amounts paid by the Trustee to
the LIBOR Certificateholders shall be accounted for by the Trustee as amounts
paid first to the Holders of the Class X Certificates and then to the respective
Class or Classes of LIBOR Certificates.
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(iv) 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 set forth in this Section 3.07(c) and Sections
4.02(a)(iii)(V)-(W).
(d) 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 Servicer to the Trustee
pursuant to Section 3.11(a)(i);
(ii) any amount deposited by the Servicer pursuant to Section 3.10 in
connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required to
be remitted, it may at any time direct the Trustee in writing to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Servicer.
(e) The Trustee shall establish and maintain the Capitalized Interest
Account, on behalf of the Certificateholders. On the Closing Date, the Trustee
shall deposit $100.00 into the Capitalized Interest Account from the proceeds of
the sale of the LIBOR Certificates. Withdrawals from the Capitalized Interest
Account shall be made in accordance with Sections 4.02(c) and (d). The Trustee
shall account for the Capitalized Interest Account as an outside reserve fund
within the meaning of Treasury regulations section 1.860G-2(h) and not as an
asset of any REMIC created pursuant to this Agreement. The beneficial owner of
the Capitalized Interest Account shall be the Unaffiliated Seller.
(f) The Trustee shall establish and maintain the Pre-Funding Account
on behalf of the Certificateholders. On the Closing Date, the Trustee shall
deposit the Initial Pre-Funded Amount into the Pre-Funding Account from the
proceeds of the sale of the LIBOR Certificates. Withdrawals from the Pre-Funding
Account shall be made in accordance with Sections 4.02(e) and (f).
(g) The Servicer or the Trustee (if directed in writing by the
Servicer) may invest the funds in the Accounts with respect to the Collection
Account and the Distribution Account or by the Unaffiliated Seller, with respect
to the Pre-Funding Account and the Capitalized Interest Account in each case, in
Permitted Investments, which directions shall be in accordance with Section
3.12. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested.
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(h) The Servicer shall give prior written notice to the Trustee, each
Rating Agency and the Depositor of any proposed change of the location of the
Collection Account.
(i) In order to comply with its duties under the U.S.A. Patriot Act,
the Trustee shall obtain and verify certain information and documentation from
the parties hereto, including but not limited to, each party's name, address and
other identifying information.
(j) The Trustee shall establish and maintain the Pre-Funding Reserve
Account, on behalf of the Class X Certificateholders. On the Closing Date, the
Unaffiliated Seller shall remit to the Trustee and the Trustee shall deposit
$4,113,858 into the Pre-Funding Reserve Account. The Trustee shall account for
the Pre-Funding Reserve Account as an outside reserve fund within the meaning of
Treasury regulations section 1.860G-2(h) and not as an asset of any REMIC
created pursuant to this Agreement. For federal income tax purposes, the
beneficial owner of the funds in the Pre-Funding Reserve Account shall be the
Unaffiliated Seller. On the Closing Date, the Class X Certificateholders' rights
in the Pre-Funding Reserve Account will be conveyed to Deutsche Bank National
Trust Company, as indenture trustee on behalf of the Noteholders of the IXIS
Real Estate Capital Inc. NIM 2005-HE4N Notes and shall be subject to the terms
of the NIM Indenture.
(k) On each Subsequent Transfer Date, the amount required to remain on
deposit in the Pre-Funding Reserve Account will be permitted to step down to an
amount equal to the product of (a) $4,113,858 multiplied by (b) a fraction, the
numerator of which is the amount remaining in the Pre-Funding Account (after
giving effect to any withdrawals on such Subsequent Transfer Date) and the
denominator of which is the Initial Pre-Funded Amount. Any excess amount that is
not required to remain in the Pre-Funding Reserve Account will be withdrawn by
the Trustee from the Pre-Funding Reserve Account and released to the
Unaffiliated Seller.
(l) On any Subsequent Transfer Date on which at least 99% of the
Initial Pre-Funded Amount has been used to purchase Subsequent Mortgage Loans,
the Trustee shall withdraw and release to the Unaffiliated Seller any remaining
amounts in the Pre-Funding Reserve Account. If less than 99% of the Initial
Pre-Funded Amount has been used to purchase Subsequent Mortgage Loans, then on
the Distribution Date following the end of the Pre-Funding Period, the Trustee
shall (a) withdraw an amount equal to (i) the percentage of the Initial
Pre-Funded Amount not used to purchase Subsequent Mortgage Loans multiplied by
(ii) $4,113,858 and remit such amount to the Class X Certificateholders and (b)
withdraw any remaining amounts in the Pre-Funding Reserve Account and release
such amounts to the Unaffiliated Seller, and thereafter the Pre-Funding Reserve
Account shall be terminated.
(m) The Trustee shall establish and maintain the Swap Account, on
behalf of the Supplemental Interest Trust and the Swap Provider. Withdrawals
from the Swap Account shall be made in accordance with Section 4.02(h) and all
funds therein shall be held uninvested.
Section 3.08 Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more
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accounts (collectively, the "Subservicing Account"). The Subservicing Account
shall be an Eligible Account and shall otherwise be acceptable to the Servicer.
The Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Servicer for
deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) The Servicer shall ensure that each of the first lien Mortgage
Loans shall be covered by a paid-in-full, life-of-the-loan tax service contract
with a nationally recognized provider acceptable to the Servicer (each, a "Tax
Service Contract"). Each Tax Service Contract shall be assigned to the Trustee,
or its designee, at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account, and the Servicer shall be entitled to withdraw from the
Escrow Account any interest earned and not required to be paid to Mortgagors;
(v) clear and terminate the Escrow Account at the termination of the Servicer's
obligations and responsibilities in respect of the Mortgage Loans
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under this Agreement, and the Servicer shall be entitled to withdraw from the
Escrow Account any interest earned and not required to be paid to the
Mortgagors; (vi) to transfer such funds to a replacement Escrow Account that
meets the requirements hereof; or (vii) recover amounts deposited in error. As
part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account.
(a) On behalf of the Trustee, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee entitled "Deutsche Bank National Trust Company on
behalf of IXIS Real Estate Capital Trust 2005-HE4". On behalf of the Trustee,
the Servicer shall deposit or cause to be deposited in the clearing account
(which account must be an Eligible Account) in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than one Business
Day after the Servicer's receipt thereof, and shall thereafter deposit in the
Collection Account, in no event more than two Business Days after the deposit of
such funds into the clearing account, as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it subsequent to the related Cut-off Date (other than in respect of principal or
interest on the related Mortgage Loans due on or before the related Cut-off
Date, and except for $80,647.26 in interest, which is being retained by the
Unaffiliated Seller), or payments (other than Principal Prepayments) received by
it on or prior to the related Cut-off Date but allocable to a Due Period
subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing
Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices, and Liquidation Proceeds;
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(iv) any amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with respect
to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.01:
(i) On or prior to each Remittance Date, to remit to the Trustee the
Interest Remittance Amount and the Principal Remittance Amount in respect
of the related Distribution Date together with all amounts representing
Prepayment Charges from the Mortgage Loans received during the related
Prepayment Period;
(ii) to reimburse the Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, but only
to the extent of amounts received which represent Late Collections (net of
the related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (a) any unpaid Servicing
Fees or (b) any unreimbursed Servicing Advances with respect to each
Mortgage Loan, but only to the extent of any Late Collections, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, or other amounts as
may be collected by the Servicer from the related Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
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(iv) to pay to the Servicer as servicing compensation (in addition to
the Servicing Fee) on the Remittance Date any interest or investment income
earned on funds deposited in the Collection Account and any Prepayment
Interest Excesses;
(v) to pay to the Unaffiliated Seller or the related Originator, as
applicable, with respect to each Mortgage Loan that has previously been
purchased or replaced by the Unaffiliated Seller or such Originator, as
applicable, pursuant to this Agreement, all amounts received thereon
subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for (a) any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (b) any unpaid Servicing
Fees to the extent not recoverable from Late Collections, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, or other amounts
received with respect to the related Mortgage Loan under Section
3.11(a)(iii); provided, that this clause (b) shall only apply with respect
to Servicing Fees to second lien Mortgage Loans;
(vii) to pay, or to reimburse the Servicer for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
3.15;
(viii) to reimburse the Servicer, the Depositor, the Custodian or the
Trustee for expenses and/or indemnities incurred by or reimbursable to the
Servicer, the Depositor, the Custodian or the Trustee, as the case may be,
pursuant to Section 6.03;
(ix) to reimburse the Servicer, the Unaffiliated Seller, the
Depositor, the Custodian or the Trustee, as the case may be, for expenses
reasonably incurred in respect of the breach or defect giving rise to the
repurchase obligation under Section 2.03 of this Agreement that were
included in the Repurchase Price of the Mortgage Loan, including any
expenses arising out of the enforcement of the repurchase obligation to the
extent not otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination of
this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Remittance Date, upon making any withdrawals from
the Collection Account pursuant to subclause (a)(vi) above.
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Section 3.12 Investment of Funds in the Accounts.
(a) The Servicer may invest funds in the Collection Account and may
direct the Trustee to invest funds in the Distribution Account, and the
Unaffiliated Seller may direct the Trustee to invest the funds in the
Pre-Funding Account, the Pre-Funding Reserve Account and the Capitalized
Interest Account (each of such Accounts, for purposes of this Section 3.12, an
"Investment Account"), in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement. All such investment
directions shall be in writing and if the Trustee does not receive such written
instructions no investment shall be made. All such Permitted Investments shall
be held to maturity, unless payable on demand. Any investment of funds in an
Investment Account (other than the Collection Account) shall be made in the name
of the Trustee. The Trustee shall be entitled to sole possession (except with
respect to investment direction of funds held in the related Account and any
income and gain realized thereon) over each such investment, and any certificate
or other instrument evidencing any such investment shall be delivered directly
to the Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee. Any investment of funds in the
Collection Account shall be made in the name of the Servicer. The Servicer shall
be entitled to sole possession (except with respect to investment direction of
funds held in the related Account and any income and gain realized thereon) over
each such investment, and any certificate or other instrument evidencing any
such investment shall be delivered directly to the Servicer or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Servicer. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee may:
(i) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount
equal to the lesser of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder that such Permitted
Investment would not constitute a Permitted Investment in respect
of funds thereafter on deposit in the Investment Account.
(b) (i) All income and gain realized from the investment of funds
deposited in the Collection Account and the Distribution Account held by or on
behalf of the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in the manner set forth in Section 3.11 in the case of
income in the Collection Account, and on each Distribution Date, the Trustee
shall withdraw from the Distribution Account, and remit to the Servicer all
amounts in respect of such income and gain in the Distribution Account. Whether
in regard to the Collection Account or the Distribution Account, the Servicer
shall deposit in the Collection Account or the Distribution Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment directed by the Servicer made with funds in such accounts
immediately upon realization of such loss.
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(ii) All income and gain realized from the investment of funds
deposited in the Pre-Funding Account, the Pre-Funding Reserve Account and the
Capitalized Interest Account held by or on behalf of the Unaffiliated Seller
shall be retained in such Investment Account, subject to withdrawal as provided
in Section 4.02. Whether in regard to the Pre-Funding Account or the Capitalized
Interest Account, the Unaffiliated Seller shall deposit in the Pre-Funding
Account or the Capitalized Interest Account, as applicable, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings. 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 any Investment Account or the Distribution Account if made in accordance with
this Section 3.12.
(d) 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.
Such compensation shall not be considered an amount that is reimbursable or
payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in an
amount which is at least equal to the least of (i) the outstanding principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost
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incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better from
Best's (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Servicer's obligations under this Agreement, which policy
or policies shall be in such form and amount that would meet the requirements of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the
Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac. The Servicer shall provide the Trustee with copies of any such insurance
policies and fidelity bond. The Servicer shall be deemed to have complied with
this provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee. The Servicer shall
also cause each Subservicer to maintain a policy of insurance covering errors
and omissions and a fidelity bond which would meet such requirements.
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Section 3.14 Enforcement of Due-On-Sale Clauses Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note; provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer, and such substitution is in
the best interest of the Certificateholders as determined by the Servicer. In
connection with any assumption, modification or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including, but not limited to, the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
and the Custodian that any such substitution, modification or assumption
agreement has been completed and forward to the Custodian the executed original
of such substitution or assumption agreement, which document shall be added to
the related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
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Section 3.15 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its best efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert (which
may include an acquisition of REO Property) the ownership of properties securing
such of the Mortgage Loans as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. The Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Trustee, taking into
account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage from an uninsured cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its sole discretion (i) that such restoration will
increase the net proceeds of liquidation of the related Mortgage Loan to the
Trustee, after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable by the Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicer or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to reimburse the Servicer for any related
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11; third, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a liquidation or REO Disposition and fourth, as a recovery of
principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a
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qualified inspector. Upon completion of the inspection, the Servicer shall
promptly provide the Trustee with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices, how to proceed
with respect to the Mortgaged Property. In the event (a) the environmental
inspection report indicates that the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes and (b) the Servicer determines,
consistent with Accepted Servicing Practices, to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11. In the event the Servicer determines not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed from general collections for all Servicing Advances made with
respect to the related Mortgaged Property from the Collection Account pursuant
to Section 3.11.
Section 3.16 Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will, within five (5) Business
Days of the payment in full, notify the Trustee and the Custodian by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Custodial File. Upon receipt of such certification and Request for
Release, the Custodian shall promptly release the related Custodial File to the
Servicer within five (5) Business Days. No expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Custodian shall, upon
request of the Servicer and delivery to the Custodian, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Custodian when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been charged-off or
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered to the Custodian a certificate of
a Servicing Officer certifying as to the name and address of the Person to which
such Mortgage
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File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was charged-off or liquidated and that all amounts received or to
be received in connection with such liquidation that are required to be
deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release of
documents shall be released by the Custodian to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer any court pleadings, requests for trustee's
sale or other documents reasonably necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity, or shall
exercise and deliver to the Servicer a power of attorney sufficient to authorize
the Servicer to execute such documents on its behalf. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Upon receipt of a Request for Release under this Section 3.16, the
Custodian shall deliver the related Custodial File to the Servicer by regular
mail, unless the Servicer requests that the Custodian deliver such Custodial
File to the Servicer by overnight courier (in which case such delivery shall be
at the Servicer's expense). To the extent that the Servicer requires an
overnight courier for such delivery and incurs the related expense due to the
Servicer not having previously received copies of the documents required to be
delivered to the Servicer hereunder, the Unaffiliated Seller shall use
commercially reasonable efforts to assist the Servicer in causing the related
Originator pursuant to the related Mortgage Loan Purchase Agreement to reimburse
the Servicer for such expense.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the
account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the Servicer shall cause the deed or certificate of sale to be issued
in the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the Servicer, the Trustee shall provide the Servicer with a power of
attorney in the standard form used by the Trustee with respect to such REO
Property.
(b) The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise
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provided below) on such terms and conditions as the Servicer deems to be in the
best interest of the Trustee. The Servicer shall notify the Trustee from time to
time as to the status of each REO Property.
(c) [Reserved].
(d) [Reserved].
(e) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(f) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding P&I Advances, Servicing Advances and unpaid
Servicing Fees provided in Section 3.11, or cause to be deposited, on a daily
basis in the Collection Account all revenues received with respect to the
related REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property.
(g) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances and Servicing Advances
as well as any unpaid Servicing Fees from proceeds received in connection with
the REO Disposition, as further provided in Section 3.11.
(h) Any net proceeds from a REO Disposition which are in excess of the
applicable Stated Principal Balance plus all unpaid REO Imputed Interest thereon
through the date of the REO Disposition shall be retained by the Servicer as
additional servicing compensation.
(i) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by REMIC I unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by REMIC I of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause any
REMIC created hereunder to fail to qualify as a REMIC under the REMIC Provisions
or comparable provisions of relevant state laws at any time. The Servicer shall
manage, conserve, protect and operate each REO Property for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by any REMIC created
hereunder of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code or any "net income from foreclosure property"
which is subject to taxation under Section 860G(a)(1) of the Code. Pursuant to
its efforts to sell such REO Property, the Servicer shall either itself or
through an agent selected by the Servicer protect and conserve such REO Property
in the same manner and to such extent as is customary
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in the locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Trustee on behalf of the Certificateholders for
the period prior to the sale of such REO Property; provided, however, that any
rent received or accrued with respect to such REO Property qualifies as "rents
from real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Rate on the related Adjustment Date and shall adjust the
Scheduled Payment on the related mortgage payment adjustment date, if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer or the receipt of notice from
the Trustee that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall provide, or cause the Subservicer to provide, to
the Depositor, the Custodian, the Unaffiliated Seller, the Trustee, the OTS or
the FDIC and the examiners and supervisory agents thereof access to the
documentation regarding the Mortgage Loans in its possession. Such access shall
be afforded without charge, but only upon reasonable and prior written request
and during normal business hours at the offices of the Servicer or any
Subservicer. Nothing in this Section shall derogate from the obligation of any
such party to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of any such party to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee.
The Servicer shall account fully to the Trustee for any funds received
by the Servicer or which otherwise are collected by the Servicer as Liquidation
Proceeds, Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage
Loan. All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including, but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this
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Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in any Account, or any funds
that otherwise are or may become due or payable to the Trustee for the benefit
of the Certificateholders, to any claim, lien, security interest, judgment,
levy, writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that the
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Servicer under this Agreement.
Section 3.21 Servicing Compensation.
(a) As compensation for its activities hereunder, the Servicer shall,
with respect to each Mortgage Loan, be entitled to retain from deposits to the
Collection Account and from Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and REO Proceeds related to such Mortgage Loan, the Servicing
Fee with respect to each Mortgage Loan (less any portion of such amounts
retained by any Subservicer). In addition, the Servicer shall be entitled to
recover unpaid Servicing Fees out of related late collections and as otherwise
permitted under Section 3.11. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement; provided,
however, that the Servicer may pay from the Servicing Fee any amounts due to a
Subservicer pursuant to a Subservicing Agreement entered into under Section
3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account and the Distribution Account, as additional
servicing compensation, interest or other income earned on deposits therein. In
addition, the Servicer shall be entitled to retain Prepayment Interest Excesses
(to the extent not required to offset Prepayment Interest Shortfalls), but only
to the extent such amounts are received by the Servicer.
(c) The Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance.
The Servicer will deliver or cause to be delivered to the Depositor,
the Rating Agencies, the Unaffiliated Seller, the Swap Provider and the Trustee
on or before March 15th of each year in which a 10-K is required to be filed, or
on or before March 24th of each year in which no 10-K is required to be filed,
of each calendar year, commencing in 2006, an Officer's Certificate stating, as
to each signatory thereof, that (i) a review of the activities of the Servicer
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during the preceding calendar year and of performance under this Agreement has
been made, and (ii) based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to the Servicer and the nature and status thereof.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
Not later than March 15th of each year in which a 10-K is required to
be filed, or not later than March 24th of each year in which no 10-K is required
to be filed, of each calendar year commencing in 2006, the Servicer, at its
expense, shall cause a nationally recognized firm of independent certified
public accountants to furnish to the Depositor, the Unaffiliated Seller, the
Rating Agencies, the Swap Provider and the Trustee a report stating that (i) it
has obtained a letter of representation regarding certain matters from the
management of the Servicer which includes an assertion that the Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America, with respect to the
servicing of residential mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. In rendering its report such firm may rely, as to matters relating
to the direct servicing of residential mortgage loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.
Section 3.24 Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), except as
provided under Section 7.02, the Trustee or its successor shall thereupon assume
all of the rights and obligations of the Servicer hereunder arising thereafter
(except that the Trustee shall not be (i) liable for losses of the Servicer
pursuant to Section 3.10 or any acts or omissions of the predecessor Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including, but not limited to, repurchases or
substitutions pursuant to Section 2.03, (iv) responsible for expenses of the
predecessor Servicer pursuant to Section 2.03 or (v) deemed to have made any
representations and warranties of the Servicer hereunder). Any such assumption
shall be subject to Section 7.02.
Every subservicing agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in
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accordance with the terms thereof; provided that the Trustee (or any other
successor Servicer) shall not incur any liability or have any obligations in its
capacity as successor Servicer under a subservicing agreement arising prior to
the date of such succession unless it expressly elects to succeed to the rights
and obligations of the Servicer thereunder; and the Servicer shall not thereby
be relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement (if any) and the Mortgage Loans then being
serviced thereunder and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.25 Compensating Interest.
The Servicer shall remit to the Trustee on each Remittance Date an
amount from its own funds equal to the Compensating Interest payable by the
Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(a) With respect to each Mortgage Loan, the Servicer agrees to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the national credit repositories), on a monthly
basis.
(b) The Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
Section 3.27 Advance Facilities.
The Servicer is hereby authorized to enter into a financing or other
facility (an "Advance Facility") under which (l) the Servicer sells, assigns or
pledges to another Person (an "Advancing Person") the Servicer's rights under
this Agreement to be reimbursed for any Advances and/or (2) an Advancing Person
agrees to fund some or all P&I Advances or Servicing Advances required to be
made by the Servicer pursuant to this Agreement. Except as provided in the
preceding sentence, no consent of any party is required before the Servicer may
enter into an Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund P&I Advances and/or
Servicing Advances on the Servicer's behalf, the Servicer shall remain obligated
pursuant to this Agreement to make P&I Advances and Servicing Advances pursuant
to and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility.
Reimbursement amounts ("Advance Reimbursement Amounts") shall consist
solely of amounts in respect of P&I Advances and/or Servicing Advances made with
respect to the Mortgage Loans for which the Servicer would be permitted to
reimburse itself in accordance
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with this Agreement, assuming the Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge
of the rights to be reimbursed for P&I Advances and/or Servicing Advances,
and/or whose obligations hereunder are limited to the funding of P&I Advances
and/or Servicing Advances shall not be required to meet the criteria for
qualification of a subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that
Advance Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan information with
respect to each Advance Reimbursement Amount distributed to such Advancing
Person or to a trustee or custodian (an "Advance Facility Trustee") on each
Distribution Date, to enable the Advancing Person or Advance Facility Trustee to
make the FIFO allocation of each Advance Reimbursement Amount with respect to
each Mortgage Loan. The Servicer shall remain entitled to be reimbursed pursuant
to the Advance Facility by the Advancing Person or Advance Facility Trustee for
all P&I Advances and Servicing Advances funded by the Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
Any amendment to this Section 3.27 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.27, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Depositor, the Unaffiliated Seller and the Servicer without the
consent of any Certificateholder, notwithstanding anything to the contrary in
this Agreement. Prior to entering into an Advance Facility, the Servicer shall
notify the lender under such facility in writing that: (a) the Advances financed
by and/or pledged to the lender are obligations owed to the Servicer on a
non-recourse basis payable only from the cash flows and proceeds received under
this Agreement for reimbursement of such Advances only to the extent provided
herein, and the Trustee is not otherwise obligated or liable to repay any
Advances financed by the lender; (b) the Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; (c) the Trustee shall not have any responsibility to
track or monitor the administration of the financing arrangement between the
Servicer and the lender; (d) if the Servicer is replaced by a successor
servicer, the lender shall continue to be entitled to receive reimbursements as
provided in clause (a) above but shall have no further right to make advances
with respect to the transaction subject to this Agreement; and (e) (i) the
pledge, if any, of Servicer's rights to the lender under the facility conveys no
rights (such as a right to fees after the removal of the Servicer or the right
to become a substitute
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servicer) under this Agreement, or against the Trust Fund, any investor in or
guarantor of securities issued hereunder, or any person other than the Servicer,
(ii) the Servicer is only pledging assets and rights that it owns and any
purported pledge of any assets or rights that are not property of the Servicer
shall be of force and effect and will not be deemed to create any additional
rights or assets of either the lender or the Servicer and (iii) the lender shall
take such steps as are reasonably necessary to confirm to a successor servicer
that it has no rights in any collateral due or payable on or after the date of
servicing transfer other than the Servicer's rights to reimbursement of Advances
(to be repaid pursuant to the terms of this Agreement) for Advances made prior
to such servicing transfer.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.
(a) The amount of P&I Advances to be made by the Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) with
respect to the Mortgage Loans, the aggregate amount of Scheduled Payments (with
each interest portion thereof net of the related Servicing Fee), due on the Due
Date immediately preceding such Remittance Date in respect of such Mortgage
Loans, which Scheduled Payments were not received as of the related
Determination Date, plus (ii) with respect to each REO Property, which REO
Property was acquired during or prior to the related Prepayment Period and as to
which such REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the Scheduled
Payments (with each interest portion thereof net of the related Servicing Fee)
that would have been due on the related Due Date in respect of the related
Mortgage Loans, over the net income from such REO Property transferred to the
Collection Account for distribution on such Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds, (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held For Future Distribution have been, as
permitted by this Section 4.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. Any Amounts Held For Future Distribution and
so used shall be appropriately reflected in the Servicer's records and replaced
by the Servicer by deposit in the Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery
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Determination in connection therewith or the removal thereof from coverage under
this Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
P&I Advance or Servicing Advance would, if made, constitute a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance. The determination by the Servicer
that it has made a Nonrecoverable P&I Advance or a Nonrecoverable Servicing
Advance or that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance,
respectively, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 hereof for P&I Advances and
Servicing Advances from recoveries from the related Mortgagor or from all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution.
(a) On each Distribution Date, the Trustee shall allocate from amounts
then on deposit in the Distribution Account in the following order of priority
and to the extent of the Available Funds remaining:
(i) to the holders of each class of LIBOR Certificates and the Swap
Account in the following order of priority:
(a) to the Swap Account, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment owed to the Swap Provider other than
a Defaulted Swap Termination Payment owed to the Swap Provider, if
any;
(b) from the Interest Remittance Amount, in the following order
of priority:
(1) to the holders of the Class A Certificates, pro rata,
the Accrued Certificate Interest and any Unpaid Interest
Amount for each class of Class A Certificates;
(2) payable from any remaining Interest Remittance Amounts,
to the Class M-1 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(3) payable from any remaining Interest Remittance Amounts,
to the Class M-2 Certificates, the Accrued Certificate
Interest for such class on such Distribution Date;
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(4) payable from any remaining Interest Remittance Amounts,
to the Class M-3 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(5) payable from any remaining Interest Remittance Amounts,
to the Class M-4 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(6) payable from any remaining Interest Remittance Amounts,
to the Class M-5 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(7) payable from any remaining Interest Remittance Amounts,
to the Class M-6 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(8) payable from any remaining Interest Remittance Amounts,
to the Class B-1 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(9) payable from any remaining Interest Remittance Amounts,
to the Class B-2 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(10) payable from any remaining Interest Remittance Amounts,
to the Class B-3 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date; and
(11) payable from any remaining Interest Remittance Amounts,
to the Class B-4 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(ii) (x) on each Distribution Date (A) before the Stepdown Date or (B)
with respect to which a Trigger Event is in effect, to the Holders of the
Class or Classes of LIBOR Certificates then entitled to distributions of
principal as set forth below from the amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, in an amount equal to the Principal Distribution Amount in the
following order of priority:
(A) to the Holders of the Class A Certificates, first, to the Class
A-1 Certificates until the Certificate Balance of the Class A-1
Certificates has been reduced to zero, second, to the Class A-2
Certificates until the Certificate Balance of the Class A-2
Certificates has been reduced to zero, and third, to the Class
A-3 Certificates until the Certificate Balance of the Class A-3
Certificates has been reduced to zero; provided, however, that on
and after the Distribution Date on which the aggregate Class
Certificate Balances of the Subordinated Certificates and the
principal balance of the Class X Certificates have been reduced
to zero, any principal distributions
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allocated to the Class A Certificates shall be allocated pro rata
among the Class A-1, Class A-2 and Class A-3 Certificates, based
on their respective Class Certificate Balances, and distributed
concurrently to the Class A-1, Class A-2 and Class A-3
Certificates;
(B) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(y) on each Distribution Date (1) on and after the Stepdown Date
and (2) as long as a Trigger Event is not in effect, to the Holders of the
related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, in an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(A) to the Class A Certificates, the lesser of the Principal
Distribution Amount and the Class A Principal Distribution
Amount, allocated among the Class A Certificates, first, to the
Class A-1 Certificates until the Certificate Balance of the Class
A-1 Certificates has been reduced to zero, second, to the Class
A-2 Certificates until the Certificate Balance of the Class A-2
Certificates has been reduced to zero, and third, to the Class
A-3 Certificates until the Certificate Balance of the Class A-3
Certificates has been reduced to zero;
(B) to the Class M-1 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(C) to the Class M-2 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-2 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(D) to the Class M-3 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(E) to the Class M-4 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-4 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(F) to the Class M-5 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-5 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
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(G) to the Class M-6 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-6 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(H) to the Class B-1 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-1 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(I) to the Class B-2 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-2 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(J) to the Class B-3 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-3 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero; and
(K) to the Class B-4 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-4 Principal
Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(iii) any amount remaining in the Distribution Account after the
distributions in clauses (i) and (ii) above, plus as specifically indicated
below, from amounts on deposit in the Excess Reserve Fund Account, shall be
distributed in the following order of priority:
(A) to the Holders of the Class M-1 Certificates, any Unpaid Interest
Amount for such Class;
(B) to the Holders of the Class M-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(C) to the Holders of the Class M-2 Certificates, any Unpaid Interest
Amount for such Class;
(D) to the Holders of the Class M-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(E) to the Holders of the Class M-3 Certificates, any Unpaid Interest
Amount for such Class;
(F) to the Holders of the Class M-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(G) to the Holders of the Class M-4 Certificates, any Unpaid Interest
Amount for such Class;
(H) to the Holders of the Class M-4 Certificates, any Unpaid Realized
Loss Amount for such Class;
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(I) to the Holders of the Class M-5 Certificates, any Unpaid Interest
Amount for such Class;
(J) to the Holders of the Class M-5 Certificates, any Unpaid Realized
Loss Amount for such Class;
(K) to the Holders of the Class M-6 Certificates, any Unpaid Interest
Amount for such Class;
(L) to the Holders of the Class M-6 Certificates, any Unpaid Realized
Loss Amount for such Class;
(M) to the Holders of the Class B-1 Certificates, any Unpaid Interest
Amount for such Class;
(N) to the Holders of the Class B-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(O) to the Holders of the Class B-2 Certificates, any Unpaid Interest
Amount for such Class;
(P) to the Holders of the Class B-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(Q) to the Holders of the Class B-3 Certificates, any Unpaid Interest
Amount for such Class;
(R) to the Holders of the Class B-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(S) to the Holders of the Class B-4 Certificates, any Unpaid Interest
Amount for such Class;
(T) to the Holders of the Class B-4 Certificates, any Unpaid Realized
Loss Amount for such Class;
(U) to the Excess Reserve Fund Account, the amount of any Basis Risk
Payment for such Distribution Date;
(V) from amounts on deposit in the Excess Reserve Fund Account, an
amount equal to any unpaid Basis Risk Carry Forward Amount, prior
to application of any amounts on deposit in the Swap Account,
with respect to any LIBOR Certificates allocated to the LIBOR
Certificates in the same order and priority in which Accrued
Certificate Interest is allocated among those Classes of
Certificates, with the allocation to the Class A Certificates
being further allocated: (a) first, between the Class A-1, Class
A-2 and Class A-3 Certificates pro rata, based upon their
respective Class Certificate Balances and (b) second, any
remaining amounts to the Class
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A-1, Class A-2 and Class A-3 Certificates, pro rata, based on any
Basis Risk Carry Forward Amounts remaining unpaid, in order to
reimburse such unpaid amounts;
(W) to the Swap Account, the amount of any Defaulted Swap Termination
Payment owed to the Swap Provider;
(X) to the Holders of the Class P Certificates (as a payment from
REMIC V to the Class X Certificates), the outstanding principal
balance thereof, if any, and to the Holders of the Class X
Certificates, the remainder of the Class X Distributable Amount
not distributed pursuant to Sections 4.02(a)(iii)(A)-(W) (to the
extent stated in clause (i) of the definition of Class X
Distributable Amount, as interest, and to the extent stated in
clause (ii) of the definition of Class X Distributable Amount, as
principal); and
(Y) to the Holders of the Class R Certificates, any remaining amount.
(b) On each Distribution Date prior to any distributions on any other
Class of Certificates, all amounts representing Prepayment Charges from the
Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the Holders of the Class P Certificates.
(c) On the December 2005, January 2006 and February 2006 Distribution
Dates, the Trustee shall transfer from the Capitalized Interest Account to the
Distribution Account the Capitalized Interest Requirement, if any, for such
Distribution Date.
(d) On the final Subsequent Transfer Date any amounts remaining in the
Capitalized Interest Account and all Pre-Funding Earnings in the Pre-Funding
Account, after taking into account the transfers, if any, to be made to the
Distribution Account on the immediately succeeding Distribution Date described
in clause (c) above, shall be paid by the Trustee to the Unaffiliated Seller.
(e) On each Subsequent Transfer Date, the Unaffiliated Seller shall
instruct in writing the Trustee to withdraw from the Pre-Funding Account an
amount equal to 100% of the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Date of the Subsequent Mortgage Loans sold to the
Trust Fund on such Subsequent Transfer Date and pay such amount to or upon the
order of the Unaffiliated Seller upon satisfaction of the conditions set forth
in Section 2.01(c) with respect to such transfer. The Trustee may conclusively
rely on such written instructions from the Unaffiliated Seller.
(f) If the Pre-Funding Amount available in the Pre-Funding Account
(exclusive of Pre-Funding Earnings) has been reduced to $100,000 or less by the
close of business on December 1, 2005 then, on the December 26, 2005
Distribution Date, after giving effect to any reductions in such Pre-Funding
Amount on such date, the Trustee shall withdraw from the Pre-Funding Account on
such date and deposit in the Distribution Account the amount on deposit in such
Pre-Funding Account other than any Pre-Funding Earnings; if the Pre-Funding
Amount available in such Pre-Funding Account has not been reduced to zero by the
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close of business on February 22, 2006, the Trustee shall withdraw from such
Pre-Funding Account the amount on deposit therein, other than the Pre-Funding
Earnings, and deposit such amount into the Distribution Account on such day for
distribution on the February 25, 2006 Distribution Date into the Distribution
Account. Any amount deposited into the Distribution Account pursuant to the
preceding sentence from the Pre-Funding Account shall be distributed to the
Class A Certificates until those Certificates are reduced to zero; provided that
amounts allocated to the Class A Certificates shall be allocated as follows:
first, to the Class A-1 Certificates until the Certificate Balance of the Class
A-1 Certificates has been reduced to zero, second, to the Class A-2 Certificates
until the Certificate Balance of the Class A-2 Certificates has been reduced to
zero, and third, to the Class A-3 Certificates until the Certificate Balance of
the Class A-3 Certificates has been reduced to zero, as a separate payment of
principal, on the related Distribution Date.
(g) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee as a reduction in the following order:
(1) first, to the amount of interest payable to the Class X
Certificates; and
(2) second, pro rata, as a reduction of the Accrued Certificate
Interest for the Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2, Class B-3 and Class B-4 Certificates, based on the
amount of interest to which such Classes would otherwise be
entitled.
(h) On any Distribution Date any funds on deposit in the Swap Account
shall be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the
Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a
Defaulted Swap Termination Payment, if any, owed to the Swap Provider for
that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest
and, if applicable, any Unpaid Interest Amounts to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4, in
that order to pay principal as described and, in the same manner of
priority to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal but only to the extent
necessary to maintain the Subordinated Amount at the Specified Subordinated
Amount, after giving effect to payments and distributions from Available
Funds;
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(vi) to the Class A certificates, to pay any Basis Risk Carry Forward
Amounts, pro rata, based on their Class Certificate Balances for such
Distribution Date, up to the Swap Payment Allocation for each class of
Class A certificates and to the extent unpaid from Available Funds
(including funds on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4
certificates, to pay any Basis Risk Carry Forward Amounts, up to the Swap
Payment Allocation for each class of Class M and Class B certificates and
to the extent unpaid from Available Funds (including funds on deposit in
the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis Risk
Carry Forward Amount, pro rata, based on their respective remaining unpaid
Basis Risk Carry Forward Amount after the allocation of payments as set
forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4
certificates, to pay any Unpaid Realized Loss Amounts, to the extent unpaid
from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed
to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X certificates, any remaining
amounts.
(i) Following the applicable Final Scheduled Distribution Date, no
Class of Certificates other than the Class R Certificates shall be entitled to
receive any remaining amounts. Any amounts remaining in any of the Accounts
shall be applied to the Class R Certificates.
Section 4.03 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall make
available to each Certificateholder, the Servicer, the Depositor, the
Unaffiliated Seller, the Swap Provider and each Rating Agency a statement, based
solely on the information provided by the Servicer, setting forth with respect
to the related distribution:
(i) the amount thereof allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments and Liquidation Proceeds
included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account on such Distribution Date;
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(iii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the shortfall
and the allocation thereof as between principal and interest, including any
Basis Risk Carry Forward 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 such Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Expense Fees paid to or retained by the
Servicer or the Trustee (stated separately and in the aggregate) with
respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicer as outstanding as of the close of business on such Distribution
Date;
(ix) the number and aggregate Scheduled Principal Balances of Mortgage
Loans (1) as to which the Scheduled Payment is delinquent 31 to 60 days, 61
to 90 days and 91 or more days, (2) that have become REO Property, (3) that
are in foreclosure and (4) that are in bankruptcy, in each case as of the
close of business on the last Business Day of the immediately preceding
month;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xii) 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);
(xiii) the amount on deposit in the Excess Reserve Fund Account (after
giving effect to distributions on such Distribution Date);
(xiv) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
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(xv) the aggregate amount of Subsequent Recoveries incurred during the
preceding calendar month and aggregate Subsequent Recoveries through such
Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders with
respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvii) the Subordinated Amount and Specified Subordinated Amount;
(xviii) the Interest Remittance Amount, the Principal Remittance
Amount and the Prepayment Charges remitted by the Servicer with respect to
that Distribution Date;
(xix) the Pre-Funded Amount as of the end of the prior Due Period;
(xx) the amount of any principal prepayment on the Certificates
resulting from the application of unused moneys in the Pre-Funding Account;
and
(xxi) the Net Swap Payment or Net Swap Receipt, as applicable, or any
Defaulted Swap Termination Payment, if any, for such Distribution Date.
(b) The Trustee's responsibility for providing the above statement is
limited to the availability, timeliness and accuracy of the information derived
from the Servicer pursuant to Section 4.03(d) below. The Trustee will provide
the above statement via the Trustee's internet website on each Distribution
Date. The Trustee's website will initially be located at
▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ and assistance in using the website can be obtained
by calling the Trustee's investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. A paper copy
of the statement will also be made available upon request.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be made available to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Not later than the 18th day of each month (or if such day is a
Saturday, the prior Business Day or if such day is a Sunday or otherwise not a
Business Day, prior to the next Business Day), the Servicer shall furnish to the
Trustee and the Swap Provider and, subject to the terms of the confidentiality
agreement between the Servicer and the Unaffiliated Seller, to the Unaffiliated
Seller a monthly remittance advice statement containing such information as
shall be reasonably requested by the Trustee to provide the reports required by
Section 4.03(a) as to the accompanying remittance and the period ending on the
close of business on the last day of the related Prepayment Period (the
"Servicer Remittance Report").
The Servicer shall furnish to the Trustee and, subject to the terms of
the confidentiality agreement between the Servicer and the Unaffiliated Seller,
to the Unaffiliated
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Seller an individual loan accounting report, as of the 18th day of each month
(or if such day is a Saturday, the prior Business Day or if such day is a Sunday
or otherwise not a Business Day, prior to the next Business Day), to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the related
Determination Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest and assumption fees;
(iii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the individual and aggregate Scheduled Principal Balances of the
Mortgage Loans;
(vi) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Section 3.05 and 3.11; and
(vii) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (a) as to which the Scheduled Payment is delinquent (1) 31
to 60 days, (2) 61 to 90 days and (3) 91 days or more; (b) as to which
foreclosure has commenced; (c) as to which REO Property has been acquired
and (d) that are in bankruptcy.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the
definition 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 LIBOR Determination Date. The Trustee,
after consultation with the Depositor, 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 Trustee should terminate a
Reference Bank, the Trustee, after consultation with the Depositor, shall
promptly appoint or cause to be appointed another Reference Bank. The Trustee
shall have no liability or responsibility to any Person for (i) the selection of
any Reference Bank for purposes of determining LIBOR or (ii) any inability to
retain at least four Reference Banks which is caused by circumstances beyond its
reasonable control.
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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 4.04 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.
Section 4.05 [Reserved]
Section 4.06 [Reserved]
Section 4.07 Allocation of Applied Realized Loss Amounts.
Any Applied Realized Loss Amounts shall be allocated by the Trustee to
the most junior Class of Subordinated Certificates then outstanding in reduction
of the Class Certificate Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount and aggregate
denominations per Class set forth in the Preliminary Statement).
The Depositor hereby directs the Trustee to register the Class X
Certificates and the Class P Certificates initially to Deutsche Bank National
Trust Company, as indenture trustee on behalf of the Noteholders of the IXIS
Real Estate Capital Inc. NIM 2005-HE4N Notes, and to deliver such Class X
Certificates and Class P Certificates on the Closing Date to Deutsche Bank
National Trust Company, as NIM Trustee, or as otherwise directed by the
Depositor.
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 (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, or (y) upon the request,
in writing, of the applicable Certificateholder, by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the
Certificate Register.
The Certificates shall be executed and authenticated by manual or
facsimile signature on behalf of the Trustee by an authorized officer.
Certificates bearing the manual or
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facsimile signatures of individuals who were, at the time such signatures were
affixed, authorized to sign on behalf of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the execution, authentication 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 authenticated by the Trustee by manual signature, and
such authentication 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 authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to (i) the transfer of Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
and Class P Certificates to the NIM Issuer, if any, or the NIM Trustee, if any,
or (iii) a transfer of the
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Class X or Class P Certificates from the NIM Issuer, if any, or the NIM Trustee,
if any, to the Depositor, Unaffiliated Seller or an Affiliate of the Depositor
or the Unaffiliated Seller, in the event that a transfer of a Private
Certificate which is a Physical Certificate is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer shall certify to the Trustee in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit I (the "Transferor
Certificate") and either (i) there shall be delivered to the Trustee a letter in
substantially the form of Exhibit J (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee at the expense of the transferor an Opinion of
Counsel that such transfer may be made without registration under the Securities
Act. In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. The Depositor shall, and
the Unaffiliated Seller may, provide to any Holder of a Private Certificate and
any prospective transferee designated by any such Holder, information regarding
the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor and the
Unaffiliated Seller in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor and the Unaffiliated Seller shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Servicer and the Unaffiliated Seller
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.
Except with respect to (i) the transfer of Class X, Class P or Class R
Certificates to the Depositor or an Affiliate of the Depositor, (ii) a transfer
of the Class X and Class P Certificates to the NIM Issuer, if any, or the NIM
Trustee, if any, or (iii) a transfer of the Class X or Class P Certificates from
the NIM Issuer, if any, or the NIM Trustee, if any, to the Depositor,
Unaffiliated Seller or an Affiliate of the Depositor or the Unaffiliated Seller,
no transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received a representation letter from the transferee in substantially
the form of Exhibit J, to the effect that either (A) such transferee is not an
employee benefit plan or arrangement subject to Title I of ERISA, Section 4975
of the Code or any Federal, state or local law materially similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and is not acting on
behalf of any Plan or using the assets of any Plan to effect such transfer or
(B) with respect to the transfer of an ERISA-Restricted Certificate that is not
a Class P, Class X or Class R Certificate, such transferee is an insurance
company that is purchasing the Certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and the conditions for
exemptive relief under Sections I
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and III of ▇▇▇▇ ▇▇-▇▇ are satisfied with respect to the purchase and holding of
such Certificate. For purposes of the preceding sentence, with respect to (i)
the transfer of an ERISA-Restricted Certificate that is not a Physical
Certificate and (ii) the transfer of the Class X or Class P Certificates from
the NIM Issuer, if any, or the NIM Trustee, if any, to an Affiliate of the
Depositor or Unaffiliated Seller, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Trustee by the transferee's (including
an initial acquiror's) acceptance of the ERISA-Restricted Certificate. In the
event that such representation is violated, such attempted transfer or
acquisition shall be void and of no effect.
Each purchaser or transferee of an Offered Certificate that is a Plan,
or that is acting on behalf of a Plan or using the assets of a Plan to acquire
such Offered Certificate, shall be deemed to represent that (i) it qualifies as
an accredited investor as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act and, for so long as
the Interest Rate Swap Agreement is in effect, (ii) its acquisition and holding
of an interest in the Supplemental Interest Trust will be eligible for the
exemptive relief available under an Investor-Based Exemption.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Residual Certificate unless, in addition to
the certificates required to be delivered to the Trustee under subparagraph
(b) above, the Trustee shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed transferee in
the form attached hereto as Exhibit H;
(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
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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 (i) is a Non-Permitted
Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of Section 5.02(b)
and this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee shall
become a Holder of a Residual Certificate in violation of the provisions of
Section 5.02(b) and this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive to
the date of registration of Transfer of such Residual Certificate. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Residual Certificate that is in fact not permitted by Section
5.02(b) and this Section 5.02(c) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the
Transfer was registered after receipt of the related Transfer Affidavit,
Transferor Certificate and the Rule 144A Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-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; and
(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 a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Unaffiliated Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause the transfer to be disregarded under Treasury
regulations section 1.860E-1(c), cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is a
Non-Permitted Transferee and (b) to provide for a means to compel the Transfer
of a Residual Certificate which is held by a Person that is a Non-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.
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(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor or (y) after the occurrence of an Event
of Default, Certificate Owners representing at least a majority of the
Certificate Balance of the Book-Entry Certificates together advise the Trustee
and the Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully-registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. Neither the Servicer, the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor 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.
(f) Each Private Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
and accompanied
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by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments) or W-9 in
form satisfactory to the Trustee, duly executed by the Certificateholder or his
attorney duly authorized in writing. Each Certificate presented or surrendered
for registration of transfer or exchange shall be canceled and subsequently
disposed of by the Trustee in accordance with its customary practice. No service
charge shall be made for any registration of transfer or change of Private
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Depositor, the Servicer and
the Trustee such security or indemnity as may be required by them to hold each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Trustee and the Depositor and any agent of the
Servicer, the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicer, the Trustee and the Depositor nor any
agent of the Servicer, the Depositor or the Trustee shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request in writing such
information from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
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Section 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in the United States where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its office for such purposes located at DB Services
Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Transfer Unit. The Trustee shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
Section 5.07 [Reserved]
Section 5.08 [Reserved]
Section 5.09 [Reserved]
Section 5.10 [Reserved]
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or limited partnership, 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 or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or
FHLMC.
The Servicer is and shall continue to be an institution which is a
▇▇▇▇▇▇ Mae and FHLMC approved seller/servicer in good standing and shall
maintain a net worth of at least $30,000,000.
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Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others.
None of the Depositor, the Servicer, the Custodian, the Trustee nor
any of their respective directors, officers, employees or agents shall be under
any liability to the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer, the Custodian, the Trustee or any such Person against
any breach of representations or warranties made by it herein or protect the
Depositor, the Servicer, the Custodian, the Trustee or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence (or with respect to the Depositor, gross negligence) in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor and any director, officer, employee or agent of
the Depositor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer, the Custodian, the Trustee and any
director, officer, employee or agent of the Depositor, the Servicer, the
Custodian or the Trustee shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action and, in the case of the Trustee, other matters
relating to this Agreement or the Certificates (including, as to the Trustee,
the undertaking of actions as directed by the Unaffiliated Seller pursuant to
Section 2.03), other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence (or with respect to the Depositor,
gross negligence) in the performance of their respective duties hereunder or by
reason of reckless disregard of their respective obligations and duties
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action (or direct the Trustee to undertake any such actions pursuant to
Section 2.03 hereof for the benefit of the Certificateholders) that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor shall be entitled to be reimbursed therefor out of
the Collection Account.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee, the Custodian or the
Depositor for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement; provided, however, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in compliance with the terms of this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that the Servicer may undertake any
such action which it may deem necessary or
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desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Servicer shall be entitled to be reimbursed therefor out of
the Collection Account. In the event the Servicer agrees, at the request of the
Depositor, to act on behalf of the Depositor in any litigation relating to the
origination of a Mortgage Loan, the Depositor shall pay all expenses associated
with the defense and management of such claim (without reimbursement from the
Trust Fund).
Section 6.04 Limitation on Resignation of the Servicer.
The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor and the Trustee (and written notice to the Custodian) or
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Depositor and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor and the Trustee. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder. Notwithstanding anything to the contrary herein, the Servicer may
pledge or assign as collateral all its rights, title and interest under this
Agreement to a lender (the "Lender"); provided that the Lender may only
terminate the Servicer under this Agreement if there has been an Event of
Default under this Agreement, in which event the Lender may replace the Servicer
in the same manner and subject to the same conditions applicable in the event
the Servicer is appointing a successor Servicer upon a servicer termination
pursuant to Section 7.02.
Notwithstanding the provisions of Section 6.04 herein to the contrary,
in the event that the Servicer determines that it will no longer engage in the
business of servicing mortgage loans, the Servicer may assign its rights under
this Agreement, provided that, (i) the Rating Agencies' ratings of the
Certificates in effect immediately prior to such action will not be qualified,
reduced or withdrawn as a result thereof (as evidenced by a letter to such
effect from the Rating Agencies) and (ii) the Servicer shall be liable for all
costs and expenses associated with the transfer of servicing, provided further,
that the Servicer shall indemnify and hold each of the Trust Fund, the Trustee,
the Custodian, the Depositor, any sub-servicer, the successor Servicer and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that such party may sustain in any way related to such
assignment except with respect to a successor Servicer's failure to comply with
the terms of this Agreement. No assignment by such Servicer shall become
effective until a successor Servicer acceptable to the Depositor shall have
assumed in writing such Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. Any such assignment shall not relieve the
Servicer of responsibility for any of the obligations specified herein except to
the extent that such responsibilities have been expressly assumed by the
successor Servicer.
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Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.
The Servicer shall indemnify the Depositor (and its Affiliate, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc.), the Unaffiliated Seller, the Custodian and the
Trustee and any director, officer, employee, or agent of the Depositor (or its
Affiliate, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.), the Unaffiliated Seller, the
Custodian and the Trustee and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to any breach by the Servicer, of any
of its representations and warranties referred to in Section 2.03(a)(i) or the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Servicer shall indemnify the
Unaffiliated Seller and any director, officer, employee, or agent of the
Unaffiliated Seller and the Trust Fund and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that it may sustain in any way related to any breach by the Servicer, of any of
its representations and warranties referred to in Section 2.03(a)(ii). The
Servicer immediately shall notify the Depositor, the Unaffiliated Seller, the
Custodian and the Trustee if a claim is made by a third party with respect to
any such breach or failure by the Servicer under this Agreement, assume (with
the prior written consent of the Depositor, the Unaffiliated Seller, the
Custodian and the Trustee, as applicable) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Unaffiliated Seller, the Custodian or the
Trustee in respect of such claim; provided, that if it is determined that the
Servicer is not obligated to indemnify such parties in accordance with this
Section 6.05, each such party (or the Trust Fund, if applicable) shall promptly
reimburse the Servicer in connection with each of the foregoing payments made to
such party by the Servicer. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Trustee or to the Trustee by
Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or
(b) failure on the part of the Servicer to duly observe or perform in
any material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period of
forty-five days (except that (x) such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement and (y) such number of days shall be ten
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in the case of a failure to observe or perform any of the obligations set forth
in Sections 3.22, 3.23 or 8.12) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or by the Trustee, or to the Trustee
by Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates and (ii) actual knowledge of such failure by a Servicing Officer of
the Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) Fitch reduces its servicer rating of the Servicer to "RPS2-" or
lower, Moody's reduces its servicer rating of the Servicer to "SQ3" or lower, or
Standard & Poor's reduces its servicer rating of the Servicer to "Average" or
lower; or
(g) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(h) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the earlier of (i) the date upon which written notice of
such breach is given to the Servicer by the Trustee or the Depositor, or to the
Servicer, the Depositor and the Trustee by any Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such breach by a Servicing Officer of the Servicer; or
(i) any reduction, withdrawal or qualification of the Servicer's
servicer rating by any Rating Agency which results in the Servicer being deemed
unacceptable by any Rating Agency to act as a primary servicer for this
transaction or a primary servicer or a special servicer for any other
mortgage-backed or asset-backed transaction rated or to be rated by any such
Rating Agency; or
(j) the occurrence of a Servicing Trigger Event.
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If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of Holders holding a majority of the Voting Rights, the
Trustee shall, by notice in writing to the Servicer (with a copy to each Rating
Agency), terminate all of the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder; provided, however, that the Trustee
shall not be required to give written notice to the Servicer of the occurrence
of an Event of Default described in clauses (b) through (i) of this Section 7.01
unless and until a Responsible Officer of the Trustee has actual knowledge of
the occurrence of such an Event of Default. In the event that a Responsible
Officer of the Trustee has actual knowledge of the occurrence of an event of
default described in clause (a) of this Section 7.01, the Trustee shall give
written notice to the Servicer of the occurrence of such an event within one
Business Day of the first day on which such Responsible Officer obtains actual
knowledge of such occurrence; provided, however, that the failure of the Trustee
to provide such notice within one Business Day will not affect the rights of the
Depositor or the Certificateholders to provide notice as required pursuant to
clause (a) of this Section 7.01. On and after the receipt by the Servicer of
such written notice, all authority and power of the Servicer hereunder, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee. If an Event of Default described in clause (g) shall occur, and
shall not have been cured at least two (2) Business Days, prior to the related
Distribution Date, the Trustee shall, prior to the related Distribution Date,
immediately terminate the rights and obligations of the Servicer hereunder and
succeed to the rights and obligations of the Servicer hereunder pursuant to
Section 7.02, including the obligation to immediately make any P&I Advances,
which the Servicer failed to make subject to Section 4.01 pursuant to the terms
hereof prior to such Distribution Date. Any costs related to the transfer of
servicing from the Servicer to the Trustee as successor Servicer and from the
Trustee to another successor Servicer shall be reimbursable by the Trust Fund.
The Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Section 3.11, and any other amounts payable to
such Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder in accordance with Section 3.11 and in the time
period specified in Section 3.11. The Servicer shall continue to be entitled to
the benefits of Section 6.03, notwithstanding any termination hereunder, with
respect to events occurring prior to such termination.
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Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 3.24 or Section 7.01, subject to the third paragraph of this
Section 7.02, the Trustee shall, subject to and to the extent provided in
Section 3.05, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances and Servicing Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans that the Servicer would have been entitled
to charge to the Collection Account or Distribution Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Collection Account and Distribution Account.
Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act, or at the direction of Holders holding a majority of the
Voting Rights, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution the appointment of
which does not adversely affect the then current rating of the Certificates by
each Rating Agency, as the successor to the Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Any successor to the Servicer shall be an institution which
is a ▇▇▇▇▇▇ Mae and FHLMC approved seller/servicer in good standing, which has a
net worth of at least $30,000,000, which is willing to service the Mortgage
Loans and which executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, containing an assumption by
such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; provided
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced, as a result of such assignment and delegation. Pending appointment
of a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.05, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of the
Servicing Fee Rate and amounts paid to the Servicer from investments. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor Servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it. If
no successor Servicer meeting such qualifications shall have been approved by
the Depositor within 30 days after the giving of such notice or resignation, the
Servicer or the
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Trustee may petition any court of competent jurisdiction for the appointment of
a successor Servicer meeting the qualifications set forth in Section 7.02.
Notwithstanding any provision in this Agreement to the contrary, prior
to the 20th day following the notice of termination of the Servicer and with the
consent of the Depositor (such consent not to be unreasonably withheld, delayed
or conditioned), the terminated Servicer may appoint a successor Servicer that
satisfies the eligibility criteria of a successor Servicer set forth in this
Section 7.02; provided such successor Servicer agrees to fully effect the
servicing transfer within 90 days following the termination of the Servicer and
to make all P&I Advances and Servicing Advances that would otherwise be made by
the Trustee under this Section 7.02 as of the date of such appointment and prior
thereto, the terminated Servicer makes all P&I Advances and Servicing Advances;
otherwise the Trustee shall appoint a successor Servicer as otherwise set forth
in this Section 7.02. Any proceeds received in connection with the appointment
of such successor Servicer shall be the property of the terminated Servicer or
its designee.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Swap Provider, the Unaffiliated Seller and to each
Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders, the Swap Provider, the
Unaffiliated Seller and each Rating Agency notice of each such Event of Default
hereunder known to the Trustee, unless such Event of Default shall have been
cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
The Trustee, before the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to
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determine whether they are in the form required by this Agreement. The Trustee
shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts;
(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 the 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; and
(d) none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the Custodian.
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
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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 to do so by the Holders of Certificates
evidencing not less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require indemnity satisfactory to the Trustee against such cost,
expense or liability as a condition to taking any such action;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security);
(h) except as otherwise provided in Section 7.01 the Trustee shall not
be deemed to have knowledge of an Event of Default until a Responsible Officer
of the Trustee shall have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act; and
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder.
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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 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
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee 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.
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 and Custodian's Fees and Expenses.
(a) 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 Servicer against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any failure by the Servicer to perform its obligations under this
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee and the Custodian, as applicable, under
this Agreement.
(b) The Custodian shall be entitled to the same protections,
immunities and indemnities set forth herein to the same extent as the Trustee.
Section 8.06 Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause any of the Rating Agencies to reduce their
respective then current
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ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor, the
Unaffiliated Seller or the Servicer other than the Trustee in its role as
successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicer, the Custodian, the Unaffiliated Seller and each Rating Agency not less
than 60 days before the date specified in such notice, when, subject to Section
8.08, such resignation is to take effect, and acceptance by a successor trustee
in accordance with Section 8.08 meeting the qualifications set forth in Section
8.06. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice or resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee reasonably acceptable to the Depositor by written instrument,
in triplicate, one copy of which shall be delivered to the Trustee, one copy to
the Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed 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 and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder; provided that such corporation shall be eligible under
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 Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the
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terms of eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon the
Trustee, except for the obligation of the Trustee under this Agreement to
advance funds on behalf of the Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trustee, and not the Servicer, shall be liable for the payment
of reasonable compensation and expenses to any such separate trustee or
co-trustee from the Trustee Fee payable to the Trustee on each Distribution
Date.
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 and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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Section 8.11 Tax Matters.
As set forth in the Preliminary Statement, the assets within the Trust
Fund for which any REMIC election is to be made shall constitute, and the
conduct of matters relating to such assets shall be consistent with the
treatment of such assets as, a REMIC. To this end, the Trustee covenants and
agrees to 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 any REMIC described in the
Preliminary Statement containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, furnish to the Internal
Revenue Service on Form 8811 or as otherwise may be required by the Code, the
name, title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code;
(c) make an election that each of REMIC I, REMIC II, REMIC III, REMIC
IV and REMIC V 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 described 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 a Non-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) not knowingly or intentionally take any action or omit to take any
action that would cause the termination of the REMIC status of any REMIC created
hereunder;
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(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC created hereunder
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);
(i) cause federal, state or local income tax or information returns to
be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for REMIC I, REMIC II, REMIC III,
REMIC IV and REMIC V, within the meaning of Treasury regulations section
1.860F-4(d), and the Trustee is hereby designated as agent of such
Certificateholder for such purpose (or if the Trustee is not so permitted, such
Holder shall be the Tax Matters Person in accordance with the REMIC Provisions).
In such capacity, the Trustee shall, as and when necessary and appropriate,
represent each REMIC created hereunder 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 each
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of any
REMIC created hereunder, and otherwise act on behalf of the REMIC in relation to
any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Charges as the beneficial ownership of interests in a grantor
trust, and not as an obligation of any REMIC created hereunder, for federal
income tax purposes.
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 Basis Risk Carry Forward 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
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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 any REMIC
created hereunder as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of such REMIC as defined in Section 860G(c) of
the Code, on any contribution to the REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, including any minimum
tax imposed on the REMIC 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 arises out of or results from
negligence of the Trustee in the performance of any of its obligations under
this Agreement, (ii) the Servicer if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement, (iii) the
Unaffiliated Seller shall pay if such tax arises out of or results from the
Unaffiliated Seller's obligation to repurchase a Mortgage Loan pursuant to
Section 2.03, or (iv) in all other cases, or if the Trustee, the Servicer or the
Unaffiliated 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 4.02(a).
Section 8.12 Periodic Filings.
(a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Trustee shall prepare on behalf of the Trust any Forms 8-K and 10-K customary
for similar securities as required by the Exchange Act and the Rules and
Regulations of the Securities and Exchange Commission (the "SEC") thereunder,
and the Trustee shall file (via the SEC's Electronic Data Gathering and
Retrieval System) such Forms with the SEC on behalf of the Depositor. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such Form 8-K but only to the extent no accompanying certification
is required to be filed on behalf of the Depositor. Such power of attorney shall
continue until either the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. The Depositor shall execute the Form 10-K. 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.
(b) Each Form 8-K shall be filed by the Trustee with the SEC within 15
days after each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the SEC), the Trustee shall file a Form
10-K, in substance as required by applicable law or the SEC's staff
interpretations. Such Form 10-K shall include as exhibits the Servicer's annual
statement of compliance described under Section 3.22 (upon which the Trustee may
rely) and the accountant's report described under Section 3.23, in each case to
the extent they have been timely delivered to the Trustee. If they are not so
timely delivered, the Trustee shall file an amended Form 10-K including such
documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Form 10-K shall also include a certification in the form attached
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hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the SEC (the "Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization. The
Trustee shall prepare and deliver each Form 10-K to the Depositor for execution
no later than March 20th (or if such day is not a Business Day, the immediately
preceding Business Day) of each year. The Depositor shall return the executed
Form 10-K to the Trustee for filing no later than March 25th (or if such day is
not a Business Day, the immediately preceding Business Day) of each year.
(c) Notwithstanding that the Certification is to be signed by an
officer of the Depositor, a Responsible Officer of the Trustee shall sign a
certification, in the form attached hereto as Exhibit O, with such changes as
may be necessary or appropriate as a result of changes promulgated by the SEC,
for the benefit of the Depositor and its officers, directors and Affiliates in
respect of items 1 through 3 thereof of the Certification (provided, however,
that the Trustee shall not undertake an analysis of the accountant's report
attached as an exhibit to the Form 10-K), and a Servicing Officer of the
Servicer who is responsible for the servicing and administration of the Mortgage
Loans shall sign a certification in the form attached hereto as Exhibit N, with
such changes as may be necessary or appropriate as a result of changes
promulgated by the SEC, for the benefit of the Depositor, the Trustee and their
respective officers, directors and Affiliates in respect of items 4 and 5 of the
Certification. Each such certification shall be delivered to the Depositor and
the Trustee (as applicable), no later than March 15th of each year (or if such
day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Certification to be filed to the Trustee no later
than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Servicer has actual
knowledge of information material to the Certification, that party shall
promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors, employees, agents and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith and (ii) the Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Servicer's obligations under this Section 8.12(c) or any material misstatement
or omission, negligence, bad faith or willful misconduct of the Servicer in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified party then (i) the Trustee
agrees in connection with a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) the Servicer
agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, as the case may be, on the one hand
and the Servicer on the other in connection with a breach of the Servicer's
obligations
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under this Section 8.12(c) or any material misstatement or omission, negligence,
bad faith or willful misconduct of the Servicer in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall, in accordance with applicable
law, file a Form 15D Suspension Notification with respect to the Trust Fund in a
timely manner.
Section 8.13 Tax Classification of the Supplemental Interest Trust,
the Excess Reserve Fund Account and the Swap Account.
For federal income tax purposes, the Trustee shall treat each of the
Supplemental Interest Trust, the Excess Reserve Fund Account and the Swap
Account as an outside reserve fund, within the meaning of Treasury Regulation
Section 1.860G-2(h), that is beneficially owned by the holder of the Class X
Certificate. The Trustee shall treat the rights that each Class of LIBOR
Certificates has to receive payments of Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account and the Swap Account as rights to receive
payments under a notional principal contract written by the Class X
Certificateholder in favor of each Class. Accordingly, each Class of
Certificates (excluding the Class X, Class P and Class R Certificates) will be
comprised of two components - a REMIC V Regular Interest and an interest in a
notional principal contract. The Trustee shall allocate the issue price for a
Class of Certificates between such two components for purposes of determining
the issue price of the REMIC V Regular Interest component based on information
received from the Depositor.
Section 8.14 Interest Rate Swap Agreement.
The Trustee is hereby authorized and directed to execute and deliver
the Interest Rate Swap Agreement not in its individual capacity but solely on
behalf of the Supplemental Interest Trust of the Trust and to acknowledge the
provisions thereof. The Swap Administrator is directed to administer the
Interest Rate Swap Agreement in accordance with the terms thereof and hereof. In
the event that the Swap Provider fails to make a payment as required pursuant to
the Interest Rate Swap Agreement, the Trustee shall make a demand for such
payment from the guarantor of the Interest Rate Swap Agreement.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer, the Custodian and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase,
on or after the applicable Optional Termination Date, by the Servicer or the
Class X Certificateholders (subject to the restrictions set forth in the
definition of "Optional Termination Date") of all Mortgage Loans (and REO
Properties) at the
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price equal to the sum of (i) 100% of the unpaid principal balance of each
Mortgage Loan (other than in respect of REO Property) plus accrued and unpaid
interest thereon at the applicable Mortgage Rate, (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 party
exercising the optimal termination at the expense of the party exercising the
optimal termination plus, accrued and unpaid interest on each Mortgage Loan at
the applicable Mortgage Rate and (y) the unpaid principal balance of each
Mortgage Loan related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Mortgage Rate, (iii) all costs and expenses
incurred by, or on behalf of, the Trust Fund, of which the Trustee has actual
knowledge, in connection with any violation by such Mortgage Loan of any
predatory or abusive-lending law and (iv) any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, owed to the Swap Provider (the
"Termination Price") and (b) the later of (i) the maturity or other liquidation
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.
Notwithstanding the foregoing, if Standard & Poor's has rated a class
of debt securities ("NIM Securities") that are backed by the Class X
Certificates and Class P Certificates and that are outstanding on any date on
which the Servicer intends to exercise its option to purchase the Mortgage
Loans, the Servicer will be permitted to exercise such option only if one of the
following additional conditions is met: (i) after distribution of the
Termination Price to the Certificateholders (other than the Holders of the Class
X Certificates, Class P Certificates and Class R Certificates) to redeem the
related Certificates, the remainder of the Termination Price (the "Remainder
Amount") is distributed to the Holders of the Class X Certificates and Class P
Certificates and is sufficient to pay the outstanding principal amount of and
accrued and unpaid interest on the NIM Securities to the extent the NIM
Securities are then outstanding; or (ii) (A) at the same time that the Servicer
remits the Termination Price to the Trustee, it also remits to the Trustee an
additional amount which, in combination with the Remainder Amount, is sufficient
to pay the outstanding principal amount of and accrued and unpaid interest on
the NIM Securities, to the extent the NIM Securities are then outstanding, and
(B) the Trustee remits the Remainder Amount to the Holders of the Class X
Certificates and Class P Certificates and remits that additional amount directly
to the NIM Trustee (plus any outstanding fees and expenses due and owing to the
NIM Trustee) under the indenture creating the NIM Securities.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that there are
no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Servicer shall direct the
Trustee promptly to send a Notice of Final Distribution to each
Certificateholder. If the Servicer or the Class X Certificateholder elects to
terminate the Trust Fund pursuant to Section 9.01, at least 20 days prior to the
date the Notice of Final Distribution is to be mailed to the affected
Certificateholders such electing party shall notify the Depositor and the
Trustee of the final Distribution Date the Servicer or the Class
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X Certificateholder intends to terminate the Trust Fund and of the applicable
repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, 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 of Final Distribution shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency and the Swap Provider at the time
such Notice of Final Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the Servicer
shall cause all funds in the Collection Account to be remitted to the Trustee
for deposit in the Distribution Account on the Business Day prior to 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 forward the Request for Release to the Custodian and the Custodian
shall promptly release to the Servicer the Custodial 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 (after
reimbursement of all amounts due to the Servicer, the Depositor, the Swap
Provider and the Trustee hereunder), in each case on the final Distribution Date
and in the order set forth in Section 4.02, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, up
to an amount equal to (i) as to each Class of Regular Certificates (except the
Class X Certificates), the Certificate Balance thereof plus for each such Class
and the Class X Certificates accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.02 and (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other than
the amounts retained to meet claims) after application pursuant to clause (i)
above.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have
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been surrendered for cancellation, the Class R Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which remain
subject hereto.
Section 9.03 Additional Termination Requirements.
In the event the purchase option described in Section 9.01 is
exercised, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been supplied with an Opinion of
Counsel, at the expense of the Servicer or the Class X Certificateholder, as
applicable, 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 hereunder to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to the
purchaser thereof, and, no later than the next Distribution Date after such sale
(and in no event more than 90 days after such sale), shall, in the order set
forth in Section 4.02 and subject to the payment of all amounts payable under
Section 4.02, distribute to the Certificateholders the proceeds of such sale in
complete liquidation of each of the REMICs created hereunder.
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the REMICs created hereunder stating that pursuant to
Treasury regulations section 1.860F-1, the first day of the 90-day liquidation
period for each such REMIC was the date on which the Trustee sold the assets of
the Trust Fund pursuant to Section 9.01.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time (x) by the Depositor,
the Servicer, the Custodian and the Trustee, (y) with the consent of the
Unaffiliated Seller unless the Trustee receives an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund)
stating that the amendment will not adversely affect the Unaffiliated Seller,
but (z) without the consent of any of the Certificateholders (i) to cure any
ambiguity or mistake, (ii) to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor or the Servicer,
(iv) to add any other provisions with respect to matters or questions arising
hereunder or (v) to modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement; provided, that any action pursuant to
clauses (iv) or (v) above shall not, as evidenced by an Opinion of Counsel
(which Opinion of Counsel shall not be an expense of the Trustee or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder (it being understood that any Opinion of Counsel with respect
to income tax matters will be limited to an opinion that such amendment will not
cause the imposition of any federal income tax on any REMIC created hereunder or
the Certificateholders or cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificates are outstanding); and provided,
further, that any such action pursuant to clause (iv)
147
or (v) above 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; it being understood and agreed that any such letter in and
of itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.
In addition, this Agreement may also be amended from time to time (x)
by the Trustee, the Depositor, the Custodian and the Servicer, and (y) with the
consent of the Unaffiliated Seller unless the Trustee receives an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee or the
Trust Fund) stating that the amendment will not adversely affect the
Unaffiliated Seller, but (z) without the consent of the Certificateholders, to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or helpful to (i) maintain the qualification of REMIC I, REMIC II,
REMIC III, REMIC IV and REMIC V under the Code, (ii) avoid or minimize the risk
of the imposition of any tax on REMIC I, REMIC II, REMIC III, REMIC IV and REMIC
V pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; provided, that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time (x) by the
Depositor, the Servicer, the Custodian and the Trustee, (y) with the consent of
the Unaffiliated Seller unless the Trustee receives an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund)
stating that the amendment will not adversely affect the Unaffiliated Seller,
and (z), except as set forth in Section 3.27, with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66-2/3%
of each Class of Certificates (based on the aggregate outstanding principal
balance of such class at such time) affected thereby, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating not less than 66-2/3%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause the
imposition of any federal income tax on any REMIC or
148
the Certificateholders or cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificates are outstanding.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the
Depositor, the Unaffiliated Seller or any of their respective Affiliates shall
be deemed not to be outstanding (and shall not be considered when determining
the percentage of Certificateholders consenting or when calculating the total
number of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 10.01 have been
obtained.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment, modification or change to this Agreement
without the prior written consent of the Swap Provider, if such amendment,
modification or change could reasonably be expected to have a material adverse
effect on the rights or obligations of the Swap Provider under this Agreement or
under the Interest Rate Swap Agreement. Unless notified by the Swap Provider
that the Swap Provider could reasonably be materially and adversely affected by
such amendment, modification or change, for purposes of determining whether an
amendment, modification or change could reasonably be expected to have a
material adverse effect on the Swap Provider, the Trustee shall be entitled to
rely on an Opinion of Counsel (which Opinion of Counsel shall not be an expense
of the Trustee) after giving notice of such amendment, modification or change to
the Swap Provider. The Trustee shall furnish to the Swap Provider a copy of each
proposed amendment, modification or change to this Agreement at least ten
Business Days prior to the execution thereof and a copy of each executed
amendment, modification or change to this Agreement promptly upon execution
thereof, along with copies of the letter from each Rating Agency stating that
the amendment, modification or change would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to the Swap Provider,
each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the Custodian
to enter into an amendment without receiving an Opinion of Counsel (which
Opinion shall not be an expense of the Trustee, the Custodian or the Trust
Fund), satisfactory to the Trustee and the Custodian that (i) such amendment is
permitted and is not prohibited by this Agreement and that all requirements for
amending this Agreement have been complied with; and (ii) either (A) the
amendment does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 10.01.
149
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 Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at its expense, but only upon receipt of an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance (i)
of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be, or if for any other reason this Agreement is held or deemed to create a
security interest in either such assets, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant 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 Depositor, for the benefit of the Certificateholders and the Swap
Provider, shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Trust Fund, such security interest would be deemed to
be a perfected security interest of first priority under applicable law and will
be maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
150
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) 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; and
2. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents, notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (a) in the case of the Depositor or the Representative, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇, with a copy to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (b)
in the case of the Servicer, Saxon Mortgage Services, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇, President, with a copy
to Saxon Capital, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, or such other address as may be hereafter furnished
to the parties hereto in writing, (c) in the case of the Trustee and Custodian
to Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration - IX0504, (d) in the case
of the Unaffiliated Seller, IXIS Real Estate Capital, Inc., ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or such other address as
the Unaffiliated Seller may hereafter furnish to the parties hereto, (e) in the
case of each of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency, (f) in the case of
any Originator, the address specified therefor in the applicable Mortgage Loan
Purchase Agreement and (g) in the case of the Swap Provider, the address
specified therefor in the Interest Rate Swap Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
151
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.04, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee and Depositor; provided,
however, that, subject to Section 3.27, the Servicer may pledge or sell its
interest in any reimbursements for P&I Advances or Servicing Advances hereunder.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates, shall also have made written request to
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference
152
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor, the Unaffiliated Seller or the Trustee
during the Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the party
conducting the inspection and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any customary out-of-pocket expense of the Servicer incident to the
exercise by the Depositor, the Unaffiliated Seller or the Trustee of any right
under this Section 10.09 shall be borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 [Reserved]
Section 10.12 Third Party Beneficiary
The parties agree that the Swap Provider is intended and shall have
all rights of a third-party beneficiary of this Agreement.
Section 10.13 Waiver of Jury Trial.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO
THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
153
IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated
Seller, the Servicer and the Custodian have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By:
------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and Custodian and not
in its individual capacity
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
SAXON MORTGAGE SERVICES INC., as
Servicer
By:
------------------------------------
Name:
Title:
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
[Signature Page to Pooling and Servicing Agreement]
154
SCHEDULE I
Mortgage Loan Schedule
[On File with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]
I-A-1
SCHEDULE IA
Schedule of Saxon Serviced Loans
[On File with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]
IA-1
SCHEDULE II
IXIS REAL ESTATE CAPITAL TRUST 2005-HE4
Mortgage Pass-Through Certificates,
Series 2005-HE4
Representations and Warranties of the Servicer
(1) The Servicer is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the state of Texas
and is licensed and qualified to transact any and all business contemplated
by this Pooling and Servicing Agreement to be conducted by the Servicer in
any state in which a Mortgaged Property securing a Mortgage Loan 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 and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(2) The Servicer 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 this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this 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 the Servicer,
enforceable against the Servicer in accordance with its terms, except to
the extent 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 the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing Agreement
by the Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Servicer and
will not (A) result in a breach of any term or provision of the
organizational documents of the Servicer or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which the Servicer
is a party or by which it may be bound, or any statute, order or regulation
applicable to the Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Servicer; and the
Servicer is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to the Servicer's
II-1
knowledge, would in the future materially and adversely affect, (x) the
ability of the Servicer to perform its obligations under this Pooling and
Servicing Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac;
(5) No action, suit, proceeding or investigation is pending or, to the
best of the Servicer's knowledge, threatened against the Servicer, before
any court, administrative agency or other tribunal asserting the invalidity
of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in business,
operations, financial conditions, properties or assets of the Servicer, or
in any material impairment of the right or ability of the Servicer to carry
on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations of
the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(7) The Servicer represents that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this Pooling
and Servicing Agreement; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided monthly
reports to the three credit repositories, the Servicer has fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulation, accurate and compete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
II-2
SCHEDULE IIA
Further Representations and Warranties of the Servicer
(1) Mortgage Loan Schedule. With respect to each Mortgage Loan, as of
the applicable Cut-off Date, each of (1) the last Due Date on which a
payment was actually applied to the outstanding principal balance of each
Mortgage Loan; (2) the Stated Principal Balance of each Mortgage Loan,
after deduction of payments of principal due and collected on or before the
applicable Cut-off Date; and (3) the Servicing Transfer Date for each
Mortgage Loan, in each case, as listed on the Mortgage Loan Schedule, is
true and correct;
(2) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled
Payment is 30 days or more Delinquent as of the Cut-off Date nor has any
Payment been 30 days or more Delinquent at any time from and after the
Servicing Transfer Date through the Cut-off Date;
(3) Original Terms Unmodified. With respect to each Mortgage Loan, the
terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified by or on behalf of the Servicer from and after the
Servicing Transfer Date;
(4) No Satisfaction of Mortgage. With respect to each Mortgage Loan,
since the related Servicing Transfer Date and except for prepayments in
full, the Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. From and after the Servicing Transfer Date,
the Servicer has not waived the performance by the Mortgagor of any action,
if the Mortgagor's failure to perform such action would cause the Mortgage
Loan to be in default, nor has the Servicer waived any default resulting
from any action or inaction by the Mortgagor;
(5) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note;
(6) Escrow Payments/Interest Rate Adjustments. With respect to each
Mortgage Loan, since the Servicing Transfer Date, the servicing and
collection practices used by the Servicer with respect to such Mortgage
Loan have been in all material respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
material respects legal and proper. With respect to escrow deposits and
Escrow Payments, if any, all such deposits and payments received by the
Servicer are in the possession of, or under the control of, the Servicer
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments
have been collected in full
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compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage (to the extent not otherwise prohibited by law).
From and after the Servicing Transfer Date, all Mortgage Rate adjustments
(if any) have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note;
(7) Other Insurance Policies. 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 customary in the area where the
Mortgaged Property is located; and
(8) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has notified
the Servicer, and the Servicer has no knowledge, of any relief requested
and allowed to the Mortgagor under the Servicemembers Civil Relief Act or
any similar state or local law.
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SCHEDULE III
(a) Due Organization and Authority. The Unaffiliated Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of New York and has all licenses necessary to carry on its business
as now being conducted and is licensed, qualified and in good standing in
each state wherein it owns or leases any material properties or where a
Mortgaged Property is located, if the laws of such state require licensing
or qualification in order to conduct business of the type conducted by the
Unaffiliated Seller, and in any event the Unaffiliated Seller is in
compliance with the laws of any such state to the extent necessary; the
Unaffiliated Seller has the full corporate power, authority and legal right
to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement by the
Unaffiliated Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement and all
agreements contemplated hereby have been duly executed and delivered and
constitute the valid, legal, binding and enforceable obligations of the
Unaffiliated Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Unaffiliated Seller to make this Agreement and all agreements
contemplated hereby valid and binding upon the Unaffiliated Seller in
accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Agreement, will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Unaffiliated Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Unaffiliated Seller
is now a party or by which it is bound, or constitute a default or result
in an acceleration under any of the foregoing, except such unfulfillment,
non-compliance or default or acceleration does not in the aggregate have a
material adverse effect on the operation, business, condition (business or
otherwise) of the Unaffiliated Seller or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Unaffiliated
Seller or its property is subject, except such violation does not in the
aggregate have a material adverse effect on the operation, business,
condition (business or otherwise) of the Unaffiliated Seller or result in
the creation or imposition of any lien, charge or encumbrance that would
have an adverse effect upon any of its properties pursuant to the terms of
any mortgage, contract, deed of trust or other instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending nor, to the Unaffiliated Seller's knowledge,
threatened against the Unaffiliated Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in
the aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Unaffiliated
Seller, or in any material impairment of the right or ability of the
Unaffiliated Seller to carry on its business substantially as now
conducted, or which would draw into question the validity of this Agreement
or of any action taken or to be taken in connection with the obligations of
the Unaffiliated Seller contemplated herein, or
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which would be likely to impair materially the ability of the Unaffiliated
Seller to perform under the terms of this Agreement; and
(d) No Consent Required. No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental agency
or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Unaffiliated Seller of or compliance by the
Unaffiliated Seller with this Agreement or the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date.
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