EXECUTION COPY
================================================================================
MORGAN STANLEY ABS CAPITAL I INC.,
as Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer,
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Custodian,
and
JPMORGAN CHASE BANK, N.A.
as Trustee.
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
IXIS REAL ESTATE CAPITAL TRUST 2005-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-HE2
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS.........................................................10
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.......55
Section 2.01
Conveyance of Mortgage Loans...............................55
Section 2.02
Acceptance by the Custodian of the Mortgage Loans..........61
Section 2.03
Representations, Warranties and Covenants of the
Unaffiliated Seller and the Servicer.......................62
Section 2.04
The Depositor and the Mortgage Loans.......................67
Section 2.05
Delivery of Opinion of Counsel in Connection with
Substitutions and Non-Qualified Mortgages..................67
Section 2.06
Execution and Delivery of Certificates.....................67
Section 2.07
REMIC Matters..............................................67
Section 2.08
Representations and Warranties of the Depositor............68
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS....................69
Section 3.01
Servicer to Service Mortgage Loans.........................69
Section 3.02
Subservicing Agreements Between the Servicer and
Subservicers...............................................71
Section 3.03
Successor Subservicers.....................................72
Section 3.04
Liability of the Servicer..................................72
Section 3.05
No Contractual Relationship Between Subservicers and
the Trustee................................................73
Section 3.06
Assumption or Termination of Subservicing Agreements
by Trustee.................................................73
Section 3.07
Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts..........................73
Section 3.08
Subservicing Accounts......................................77
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts............................................77
Section 3.10
Collection Account.........................................78
Section 3.11
Withdrawals from the Collection Account....................79
Section 3.12
Investment of Funds in the Accounts........................81
Section 3.13
Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage............................82
Section 3.14
Enforcement of Due-On-Sale Clauses Assumption
Agreements.................................................83
Section 3.15
Realization Upon Defaulted Mortgage Loans..................84
Section 3.16
Release of Mortgage Files..................................86
Section 3.17
Title, Conservation and Disposition of REO Property........87
Section 3.18
Notification of Adjustments................................89
Section 3.19
Access to Certain Documentation and Information
Regarding the Mortgage Loans...............................89
Section 3.20
Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee........................89
Section 3.21
Servicing Compensation.....................................90
Section 3.22
Annual Statement as to Compliance..........................90
i
Section 3.23
Annual Independent Public Accountants' Servicing
Statement; Financial Statements............................91
Section 3.24
Trustee to Act as Servicer.................................91
Section 3.25
Compensating Interest......................................92
Section 3.26
Credit Reporting; Gramm-Leach-Bliley Act...................92
Section 3.27
Advance Facilities.........................................92
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE
SERVICER.........................94
Section 4.01
Advances...................................................94
Section 4.02
Priorities of Distribution.................................95
Section 4.03
Monthly Statements to Certificateholders..................102
Section 4.04
Certain Matters Relating to the Determination of
LIBOR.....................................................105
Section 4.05
Allocation of Applied Realized Loss Amounts...............105
ARTICLE V THE
CERTIFICATES...................................................106
Section 5.01
The Certificates..........................................106
Section 5.02
Certificate Register; Registration of Transfer and
Exchange of Certificates..................................106
Section 5.03
Mutilated, Destroyed, Lost or Stolen Certificates.........111
Section 5.04
Persons Deemed Owners.....................................111
Section 5.05
Access to List of Certificateholders' Names and
Addresses.................................................112
Section 5.06
Maintenance of Office or Agency...........................112
ARTICLE VI THE DEPOSITOR AND THE
SERVICER....................................112
Section 6.01
Respective Liabilities of the Depositor and the
Servicer..................................................112
Section 6.02
Merger or Consolidation of the Depositor or the
Servicer..................................................112
Section 6.03
Limitation on Liability of the Depositor, the Servicer
and Others................................................113
Section 6.04
Limitation on Resignation of the Servicer.................114
Section 6.05
Additional Indemnification by the Servicer; Third Party
Claims....................................................114
ARTICLE VII
DEFAULT..........................................................115
Section 7.01
Events of Default.........................................115
Section 7.02
Trustee to Act; Appointment of Successor..................117
Section 7.03
Notification to Certificateholders........................119
ARTICLE VIII CONCERNING THE
TRUSTEE..........................................119
Section 8.01
Duties of the Trustee.....................................119
Section 8.03
Trustee Not Liable for Certificates or Mortgage Loans.....121
Section 8.04
Trustee May Own Certificates..............................122
Section 8.05
Trustee's and Custodian's Fees and Expenses...............122
Section 8.06
Eligibility Requirements for the Trustee..................122
Section 8.07
Resignation and Removal of the Trustee....................123
Section 8.08
Successor Trustee.........................................124
Section 8.09
Merger or Consolidation of the Trustee....................124
Section 8.10
Appointment of Co-Trustee or Separate Trustee.............124
Section 8.11
Tax Matters...............................................126
Section 8.12
Periodic Filings..........................................128
Section 8.13
Tax Classification of the Excess Reserve Fund Account.....130
ii
Section 8.14
Interest Rate Cap Agreements..............................130
ARTICLE IX
TERMINATION.......................................................130
Section 9.01
Termination upon Liquidation or Purchase of the
Mortgage Loans............................................130
Section 9.02
Final Distribution on the Certificates....................131
Section 9.03
Additional Termination Requirements.......................132
ARTICLE X MISCELLANEOUS
PROVISIONS...........................................133
Section 10.01
Amendment.................................................133
Section 10.02
Recordation of Agreement; Counterparts....................135
Section 10.03
Governing Law.............................................135
Section 10.04
Intention of Parties......................................136
Section 10.05
Notices...................................................136
Section 10.06
Severability of Provisions................................137
Section 10.07
Assignment................................................137
Section 10.08
Limitation on Rights of Certificateholders................137
Section 10.09
Inspection and Audit Rights...............................138
Section 10.10
Certificates Nonassessable and Fully Paid.................138
Section 10.11
Waiver of Jury Trial......................................139
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule IA
Schedule of Countrywide 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 A-2, Class A-3, Class A-4, Class A-MZ,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificate
Exhibit B
Form of Class B-4 Certificate
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 May 1, 2005,
among
MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as
depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership,
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") and JPMORGAN CHASE BANK, N.A. as
trustee (the
"Trustee"),
WITNESSETH:
In consideration of the mutual agreements herein contained, the
parties hereto
agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that three segregated asset pools within
the
Trust Fund be treated for federal income tax purposes as comprising
three REMICs
(each a "REMIC" or, in the alternative, the Lower Tier REMIC, the
Middle Tier
REMIC and the Upper Tier REMIC, 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 Cap
Agreements and the Pre-Funding Reserve Account, represents
ownership of one or
more regular interests in the Upper Tier REMIC for purposes of the
REMIC
Provisions. 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 R Certificate represents ownership of the
sole class of
residual interest in each of the Lower Tier REMIC, the Middle Tier
REMIC and the
Upper Tier REMIC for purposes of the REMIC Provisions. The Class
UT-R, Class
MT-R and Class LT-R 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.
The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Middle Tier Regular Interests. Each such Middle Tier
Regular
Interest is hereby designated as a regular interest in the Middle
Tier REMIC.
The Class MT-A-1, Class MT-A-2, Class MT-A-3, Class MT-A-4, Class
MT-A-MZ, Class
MT-M-1, Class MT-M-2, Class MT-M-3, Class MT-M-4, Class MT-M-5,
Class MT-M-6,
Class MT-B-1, Class MT-B-2, Class MT-B-3, and Class MT-B-4
Interests are hereby
designated the MT Accretion Directed Classes.
The Middle Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier Regular Interests. Each such Lower Tier
Regular
Interest is hereby designated as a regular interest in the Lower
Tier REMIC.
The Lower Tier REMIC shall hold as assets all of the assets
included
in the Trust Fund other than Prepayment Charges, the Excess Reserve
Fund
Account, the Pre-Funding Account, the Pre-Funding Reserve Account,
the
Capitalized Interest Account and the Interest Rate Cap Agreements.
1
The Lower Tier Regular Interests and the Class LT-R Interest shall
have the following tier interest rate, initial tier principal
amount and latest
possible maturity date as set forth in the table below.
<TABLE>
LOWER TIER CLASS
TIER INTEREST
INITIAL TIER PRINCIPAL
DESIGNATION
RATE
AMOUNT
LATEST POSSIBLE MATURITY DATE
----------------
-------------
----------------------
-----------------------------
Class LT-C
(1)
$705,450,196
September 25, 2035
Class LT-N
(2)
(3)
September 25, 2035
Class LT-PO
(4)
$158,370,942
September 25, 2035
Class LT-R
(5)
(5)
</TABLE>
(1)
The interest rate with respect to any Distribution Date for this
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
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 LT-N
Interest is (i) for the first three Distribution Dates, all
interest on the
Subsequent Mortgage Loans for such Distribution Date divided by
$158,370,942, and (ii) thereafter, 0.00%.
(3)
The Class LT-N Interest will have a notional principal balance
equal to
$158,370,942.
(4)
The interest rate with respect to any Distribution Date for the
Class LT-PO
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.
(5)
The Class LT-R Interest is the sole class of residual interest in
the Lower
Tier REMIC. The Class LT-R does not have a principal amount or an
interest
rate.
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 LT-C 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 the Lower Tier
REMIC shall
be allocated to the Class LT-PO 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 LT-C and
Class LT-PO
Interests, until such Classes are paid in full or eliminated by
such losses.
2
The Middle Tier REMIC Regular Interests and the Class MT-R Interest
shall have the following tier interest rate, initial principal
amount,
corresponding classes, and latest possible maturity date as set
forth in the
table below.
<TABLE>
TIER
MIDDLE TIER CLASS
INTEREST
INITIAL TIER PRINCIPAL
CORRESPONDING
LATEST POSSIBLE
DESIGNATION
RATE
AMOUNT
CLASS
MATURITY DATE
-----------------
--------
------------------------
-------------
------------------
Class MT-A-1
(1)
1/2 of the Corresponding
Class A-1
September 25, 2035
Class initial principal
balance
Class MT-A-2
(1)
1/2 of the Corresponding
Class A-2
September 25, 2035
Class initial principal
balance
Class MT-A-3
(1)
1/2 of the Corresponding
Class A-3
September 25, 2035
Class initial principal
balance
Class MT-A-4
(1)
1/2 of the Corresponding
Class A-4
September 25, 2035
Class initial principal
balance
Class MT-A-MZ
(1)
1/2 of the Corresponding
Class A-MZ
September 25, 2035
Class initial principal
balance
Class MT-M-1
(1)
1/2 of the Corresponding
Class M-1
September 25, 2035
Class initial principal
balance
Class MT-M-2
(1)
1/2 of the Corresponding
Class M-2
September 25, 2035
Class initial principal
balance
Class MT-M-3
(1)
1/2 of the Corresponding
Class M-3
September 25, 2035
Class initial principal
balance
Class MT-M-4
(1)
1/2 of the Corresponding
Class M-4
September 25, 2035
Class initial principal
balance
Class MT-M-5
(1)
1/2 of the Corresponding
Class M-5
September 25, 2035
Class initial principal
balance
Class MT-M-6
(1)
1/2 of the Corresponding
Class M-6
September 25, 2035
Class initial principal
balance
</TABLE>
3
<TABLE>
TIER
MIDDLE TIER CLASS
INTEREST
INITIAL TIER PRINCIPAL
CORRESPONDING
LATEST POSSIBLE
DESIGNATION
RATE
AMOUNT
CLASS
MATURITY DATE
-----------------
--------
------------------------
-------------
------------------
Class MT-B-1
(1)
1/2 of the Corresponding
Class B-1
September 25, 2035
Class initial principal
balance
Class MT-B-2
(1)
1/2 of the Corresponding
Class B-2
September 25, 2035
Class initial principal
balance
Class MT-B-3
(1)
1/2 of the Corresponding
Class B-3
September 25, 2035
Class initial principal
balance
Class MT-B-4
(1)
1/2 of the Corresponding
Class B-4
September 25, 2035
Class initial principal
balance
Class MT-Accrual
(1)
(2)
N/A
September 25, 2035
Class MT-N
(3)
(4)
Class X
September 25, 2035
Class MT-R
(5)
(5)
Class R
</TABLE>
(1)
The interest rate with respect to any Distribution Date for these
interests
is the weighted average of the Pass-Through Rates of the Class LT-C
and
Class LT-PO Interests.
(2)
The Class MT-Accrual Interest will have an initial principal
balance equal
to the product of (a) 1/2 and (b) the sum of (i) the Pool Stated
Principal
Balance, (ii) the Subordinated Amount and (iii) the Pre-Funding
Amount.
(3)
The Class MT-N Interest is entitled to all distributions of
interest on the
Class LT-N Interest.
(4)
The Class MT-N Interest will have a notional principal balance
equal to the
notional principal balance of the Class LT-N Interest.
(5)
The Class MT-R Interest is the sole class of residual interest in
the
Middle Tier REMIC. The Class MT-R 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 MT
Accretion Directed Classes and will be accrued and added to the
principal
balance of the Class MT-Accrual Interest. To this end, each MT
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 MT-Accrual Interest may not exceed
interest
accruals for such Distribution Date for the
4
Class MT-Accrual Interest. If, with respect to any Distribution
Date, 50% of the
increase in the Subordinated Amount exceeds accrued interest on the
Class
MT-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 MT-Accrual
Interest
payable as principal on the MT Accretion Directed Classes on the
next
Distribution Date.
All principal payments (scheduled and prepaid) on the Mortgage
Loans shall
be allocated 50% to the Class MT-Accrual Interest and 50% to the MT
Accretion
Directed Classes, until paid in full. To this end, principal
payments shall be
allocated among such MT 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 MT-Accrual Interest until paid in full.
Realized Losses
shall be applied so that after all distributions have been made on
each
Distribution Date (i) the principal balance of each MT Accretion
Directed Class
is equal to 50% of the principal balance of its Corresponding
Class, and (ii)
the principal balance of the Class MT-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.
The Upper Tier REMIC shall issue the following classes of
interests,
and each Upper Tier Interest, other than the Class UT-R Interest,
is hereby
designated as a regular interest in the Upper Tier REMIC.
<TABLE>
UPPER TIER
UPPER TIER
CLASS
INTEREST
INITIAL UPPER TIER
LATEST POSSIBLE MATURITY
DESIGNATION
RATE
PRINCIPAL AMOUNT
CORRESPONDING CLASS
DATE
----------------
----------
------------------
-------------------
------------------------
Class A-1
(1)
$255,000,000
Class A-1(21)
September 25, 2035
Class A-2
(2)
$175,000,000
Class A-2(21)
September 25, 2035
Class A-3
(3)
$ 70,000,000
Class A-3(21)
September 25, 2035
Class A-4
(4)
$109,858,000
Class A-4(21)
September 25, 2035
Class A-MZ
(5)
$ 95,020,000
Class A-MZ(21)
September 25, 2035
Class M-1
(6)
$ 28,938,000
Class M-1(21)
September 25, 2035
Class M-2
(7)
$ 15,980,000
Class M-2(21)
September 25, 2035
Class M-3
(8)
$ 12,958,000
Class M-3(21)
September 25, 2035
Class M-4
(9)
$ 22,891,000
Class M-4(21)
September 25, 2035
Class M-5
(10)
$ 12,957,000
Class M-5(21)
September 25, 2035
Class M-6
(11)
$ 11,230,000
Class M-6(21)
September 25, 2035
Class B-1
(12)
$ 13,389,000
Class B-1(21)
September 25, 2035
Class B-2
(13)
$
8,638,000
Class B-2(21)
September 25, 2035
</TABLE>
5
<TABLE>
UPPER TIER
UPPER TIER
CLASS
INTEREST
INITIAL UPPER TIER
LATEST POSSIBLE MATURITY
DESIGNATION
RATE
PRINCIPAL AMOUNT
CORRESPONDING CLASS
DATE
----------------
----------
------------------
-------------------
------------------------
Class B-3
(14)
$9,503,000
Class B-3(21)
September 25, 2035
Class B-4
(15)
$8,638,000
Class B-4(21)
September 25, 2035
Class X-1(20)
(16)
(16)
Class X(22)
September 25, 2035
Class X-2(20)
(17)
(18)
Class X(22)
September 25, 2035
Class UT-R
(19)
(19)
Class R
</TABLE>
(1)
The Class A-1 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 (x) on or prior to the Optional Termination Date,
0.0800% or (y)
after the Optional Termination Date, 0.1600% and (b) the Adjusted
WAC Cap.
(2)
The Class A-2 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 (x) on or prior to the Optional Termination Date,
0.1500% or (y)
after the Optional Termination Date, 0.3000% and (b) the Adjusted
WAC Cap.
(3)
The Class A-3 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.2200% or (y)
after the Optional Termination Date, 0.4400% and (b) the Adjusted
WAC Cap.
(4)
The Class A-4 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.3400% or (y)
after the Optional Termination Date, 0.6800% and (b) the Adjusted
WAC Cap.
(5)
The Class A-MZ Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.2600% or (y)
after the Optional Termination Date, 0.5200% and (b) the Adjusted
WAC Cap.
(6)
The Class M-1 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.4300% or (y)
after the Optional Termination Date, 0.6450% and (b) the Adjusted
WAC Cap.
(7)
The Class M-2 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to
6
the Optional Termination Date, 0.4500% or (y) after the Optional
Termination Date, 0.6750% and (b) the Adjusted WAC Cap.
(8)
The Class M-3 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.4800% or (y)
after the Optional Termination Date, 0.7200% and (b) the Adjusted
WAC Cap.
(9)
The Class M-4 Certificates will bear interest during each Interest
Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.6200% or (y)
after the Optional Termination Date, 0.9300% and (b) the Adjusted
WAC Cap.
(10) The Class M-5 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.6500% or (y)
after the Optional Termination Date, 0.9750% and (b) the Adjusted
WAC Cap.
(11) The Class M-6 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
0.6900% or (y)
after the Optional Termination Date, 1.0350% and (b) the Adjusted
WAC Cap.
(12) The Class B-1 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
1.2000% or (y)
after the Optional Termination Date, 1.8000% and (b) the Adjusted
WAC Cap.
(13) The Class B-2 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
1.3000% or (y)
after the Optional Termination Date, 1.9500% and (b) the Adjusted
WAC Cap.
(14) The Class B-3 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date,
1.7500% or (y)
after the Optional Termination Date, 2.6250% and (b) the Adjusted
WAC Cap.
(15) The Class B-4 Certificates will bear interest during each
Interest Accrual
Period at a per annum variable rate equal to the lesser of (a)
one-month
LIBOR plus (x) on or prior to the Optional Termination Date, 3.500%
or (y)
after the Optional Termination Date, 5.2500% and (b) the Adjusted
WAC Cap.
(16) The Class X-1 Interest has an initial principal balance of
$13,821,138 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 Pool
Stated
Principal Balance as of the first day of the related Interest
Accrual
Period. With respect to any Interest Accrual Period, the Class X-1
Interest
shall
7
bear interest at a rate equal to the excess, if any, of the
Adjusted WAC
Cap over the product of (i) 2 and (ii) the weighted average
Pass-Through
Rate of the Middle Tier Regular Interests, where each MT Accretion
Directed
Class is subject to a cap and a floor equal to the Pass-Through
Rate on its
Corresponding Class and the Class MT-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.
(17) The Class X-2 Interest is entitled to all distributions of
interest on the
Class MT-N Interest.
(18) The Class X-2 Interest will have a notional principal balance
equal to the
notional principal balance of the Class MT-N Interest.
(19) The Class UT-R Interest is the sole class of residual interest
in the Upper
Tier REMIC. The Class UT-R Interest does not have a principal
amount or an
interest rate.
(20) The Class X Certificates will represent two regular interests
in the Upper
Tier REMIC, the Class X-1 and Class X-2 Interests.
(21) Each of these Certificates will represent not only the
ownership of the
Corresponding Class of Upper Tier Regular Interest but also the
right to
receive payments from the Excess Reserve Fund 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 payments
from the
Excess Reserve Fund Account as payments made pursuant to a notional
principal contract written by the Class X Certificateholders.
(22) The Class X Certificates also represent the right to receive
payments from
the Interest Rate Cap Agreements and the Pre-Funding Reserve
Account.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000
and integral
multiples of $1 in excess thereof. The minimum denomination for the
Class P
Certificates will be $1 with integral multiples thereof. The
minimum
denomination for the Class X Certificates will be a 1% Percentage
Interest in
such Class. The Class R Certificates will each represent a 100%
Percentage
Interest in such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
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.
8
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, Class
A-4, Class A-MZ and Subordinated
Certificates.
Non-Delay Certificates................
Class A-1, Class A-2, Class A-3, Class
A-4, Class A-MZ, 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 B-4, Class P, Class X and Class R
Certificates.
Rating Agencies.......................
Moody's, 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.
9
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 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 May 26, 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.
Adjustable Rate Mortgage Loan: A Mortgage Loan bearing interest at
an
adjustable rate.
10
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.
Adjusted WAC Cap: The weighted average of the Pass-Through Rates of
the Middle Tier Regular Interests (other than the Class MT-N).
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 May 26, 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.
11
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 BNC Assignment
Agreement, the
Chapel Mortgage Assignment Agreement, the Encore Assignment
Agreement, the First
Bank Assignment Agreement, the First Horizon Assignment Agreement,
the Fremont
Assignment Agreement, the Homeowners Assignment Agreement, the Home
Loan Corp.
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 People's Choice Assignment Agreement, the
Platinum
Assignment Agreement or the ResMae 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 August 25, 2005, 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
12
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 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
Class of
Certificates calculated at the 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 less any Interest Rate
Cap Payment
with respect to such Distribution Date; provided, however, that
with respect to
any Distribution Date, the payment cannot exceed the amounts
otherwise available
for distribution on the Class X Certificates.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
BNC: BNC Mortgage, Inc., a Delaware corporation, and its successors
in
interest.
BNC Assignment Agreement: The Assignment and Recognition Agreement,
dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor
and BNC, and each other Assignment and Recognition Agreement by and
among the
Unaffiliated Seller, the Depositor and BNC in connection with any
Subsequent
Transfer of BNC Mortgage Loans.
BNC Mortgage Loan: A Mortgage Loan which was acquired from BNC by
the
Unaffiliated Seller pursuant to the BNC Purchase Agreements, and
which has been
acquired by the Trust Fund.
13
BNC Purchase Agreements: The Second Amended and Restated Mortgage
Loan
Purchase and Warranties Agreement, dated as of March 30, 2004, as
amended to
date, by and between the Unaffiliated Seller and BNC.
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 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.
Cap Provider: IXIS Financial Products, Inc., a Delaware
corporation,
and any successor thereto.
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 "JPMorgan
Chase Bank, N.A., in trust for registered holders of IXIS Real
Estate Capital
Trust 2005-HE2, Mortgage Pass-Through Certificates, Series
2005-HE2".
Capitalized Interest Requirement: With respect to the Distribution
Dates occurring in June 2005, July 2005 and August 2005, 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.
14
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor or any Affiliate of the Depositor shall be
deemed not to
be Outstanding and the Percentage Interest evidenced thereby 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 May 26, 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, Class A-3, Class
A-4
and Class A-MZ Certificates.
Class A Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class A Certificates, dated May 26,
2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller,
as "Party B"
thereunder, or any replacement thereof.
Class A Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's
"Preceding Business
Day Convention") with respect to the Class A Certificates, for the
first 28
Distribution Dates, the amount, if any, equal to
15
the product of (i) the excess, if any, of the lesser of (A)
one-month LIBOR rate
as of the related reset date under the Class A Certificates
Interest Rate Cap
Agreement and (B) the applicable cap ceiling rate set forth on
Schedule A to
such Interest Rate Cap Agreement for such Distribution Date over
the applicable
cap strike rate set forth on Schedule A to such Interest Rate Cap
Agreement for
such Distribution Date, calculated on an "actual/360" basis, (ii)
the applicable
Class A notional amount set forth on Schedule A to the Class A
Interest Rate Cap
Agreement for that Distribution Date and (iii) the multiplier set
forth on
Schedule A to such Interest Rate Cap Agreement.
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) 63.20% of the Current
Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount
over
$4,319,106.
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."
Class A-3 Certificates: All Certificates bearing the class
designation
of "Class A-3."
Class A-4 Certificates: All Certificates bearing the class
designation
of "Class A-4."
Class A-MZ Certificates: All Certificates bearing the class
designation of "Class A-MZ."
Class A Sequential Certificates: The Class A-1, Class A-2
Certificates, the Class A-3 Certificates and the Class A-4
Certificates.
Class B Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class B Certificates, dated May 26,
2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller,
as "Party B"
thereunder, or any replacement thereof.
Class B Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's
"Preceding Business
Day Convention"), with respect to the Class B Certificates, for the
first 28
Distribution Dates, the amount, if any, equal to the product of (i)
the excess,
if any, of the lesser of (A) one-month LIBOR rate as of the related
reset date
under the Class B Certificates Interest Rate Cap Agreement for such
Distribution
Date over the applicable cap strike rate set forth on Schedule A to
such
Interest Rate Cap Agreement for such Distribution Date, calculated
on an
"actual/360" basis; (ii) the applicable Class B notional amount set
forth on
Schedule A to the Class B Certificates Interest Rate Cap Agreement
for that
Distribution Date and (iii) the multiplier set forth on Schedule A
to such
Interest Rate Cap Agreement.
16
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) 90.60% of the Current Maximum Amount and (B) the
excess, if any,
of the Current Maximum Amount over $4,319,106.
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
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) 92.60% of the Current
Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount
over
$4,319,106.
17
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) 94.80%
of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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 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
18
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) 96.80%
of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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 M Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class M Certificates, dated May 26,
2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller,
as "Party B"
thereunder, or any replacement thereof.
Class M Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's
"Preceding Business
Day Convention") with respect to the Class M Certificates, for the
first 28
Distribution Dates, the amount, if any, equal to the product of (i)
the excess,
if any, of the lesser of (A) one-month LIBOR rate as of the related
reset date
under the Class M Certificates Interest Rate Cap Agreement and (B)
the
applicable cap ceiling rate set forth on Schedule A to such
Interest Rate Cap
Agreement for such Distribution Date over the applicable cap strike
rate set
forth on Schedule A to such Interest Rate Cap Agreement for such
Distribution
Date, calculated on an "actual/360" basis; (ii) the applicable
Class M notional
amount set forth on Schedule A to the Class M Certificates Interest
Rate Cap
Agreement for that Distribution Date and (iii) the multiplier set
forth on
Schedule A to such Interest Rate Cap Agreement;
Class M-1 Certificates: All Certificates bearing the class
designation
of "Class M-1".
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) 69.90% of the Current Maximum Amount and (B) the excess, if
any, of the
Current Maximum Amount over $4,319,106.
Class M-2 Certificates: All Certificates bearing the class
designation
of "Class M-2."
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
19
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) 73.60%
of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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) 76.60%
of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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) 81.90% of the Current
Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount
over
$4,319,106.
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 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
20
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) 84.90% of
the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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) 87.50%
of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum
Amount over $4,319,106.
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 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.
21
Class X Regular Interest: The Upper Tier Regular Interests
represented
by the Class X Certificates as specified and described in the
Preliminary
Statement and the related footnote thereto.
Closing Date: May 26, 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 New York 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 4 New York Plaza, 6th
Floor, New York,
New York 10004-2477, Attn: Institutional Trust Services/Global
Debt-IXIS Real
Estate Capital Trust 2005-HE2, facsimile no. (212) 623-5930 and
which is the
address to which notices to and correspondence with the Trustee
should be
directed.
Corresponding Class: The class of interests in any REMIC created
under
this Agreement that corresponds to the class of interests in
another such REMIC
or to a Class of Certificates in the manner set out below:
CORRESPONDING MIDDLE TIER
CORRESPONDING UPPER TIER
CORRESPONDING
CLASS DESIGNATION
INTEREST
CERTIFICATE
-------------------------
------------------------
-------------
Class MT-A-1
Class A-1
Class A-1
Class MT -A-2
Class A-2
Class A-2
Class MT -A-3
Class A-3
Class A-3
Class MT -A-4
Class A-4
Class A-4
Class MT-A-MZ
Class A-MZ
Class A-MZ
Class MT -M-1
Class M-1
Class M-1
Class MT -M-2
Class M-2
Class M-2
Class MT -M-3
Class M-3
Class M-3
Class MT -M-4
Class M-4
Class M-4
Class MT -M-5
Class M-5
Class M-5
Class MT -M-6
Class M-6
Class M-6
22
CORRESPONDING MIDDLE TIER
CORRESPONDING UPPER TIER
CORRESPONDING
CLASS DESIGNATION
INTEREST
CERTIFICATE
-------------------------
------------------------
-------------
Class MT -B-1
Class B-1
Class B-1
Class MT -B-2
Class B-2
Class B-2
Class MT -B-3
Class B-3
Class B-3
Class MT -B-4
Class B-4
Class B-4
Countrywide: Countrywide Home Loans Servicing LP, a Texas limited
partnership.
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:
<TABLE>
DISTRIBUTION DATE OCCURRING IN
CUMULATIVE LOSS PERCENTAGE
------------------------------
--------------------------
June 2007 through May 2008
1.350% for the first month, plus an additional 1/12th of 1.650% for
each month thereafter (e.g., 2.175% in December 2007)
June 2008 through May 2009
3.000% for the first month, plus an additional 1/12th of 1.500% for
each month thereafter (e.g., 3.750% in December
2008)
June 2009 through May 2010
4.500% for the first month, plus an additional 1/12th of 1.500% for
each month thereafter (e.g., 5.250% in December 2009)
June 2010 through May 2011
6.000% for the first month, plus an additional 1/12th of 0.500% for
each month thereafter (e.g., 6.250% in December 2010)
June 2011 and thereafter
6.500%
</TABLE>
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
23
time, and (ii) with respect to each date of determination prior to
the
Distribution Date on or prior to August 25, 2005, the Pre-Funding
Amount
immediately prior to such Distribution Date, net of investment
earnings on
deposit therein.
Custodian: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest.
Custodian Fee: With respect to any Distribution Date, an amount
equal
to the sum of (a) the product of one-twelfth of the Custodian 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 Pre-Funding Amount.
Custodian Fee Rate: With respect to each Mortgage Loan, 0.0015% per
annum.
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, May 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 May 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
24
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.
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 41.00% of the prior
period's Senior
Enhancement Percentage.
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.
25
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.
Depositor: Morgan Stanley 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
Business
Day immediately preceding such Remittance Date.
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 "JPMorgan
Chase Bank,
N.A., in trust for registered holders of IXIS Real Estate Capital
Trust
2005-HE2, Mortgage Pass-Through Certificates, Series 2005-HE2".
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 June
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
26
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 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 May 26, 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.
27
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 for the benefit of the Holders of the Regular
Certificates and
designated "JPMorgan Chase Bank, N.A., in trust for registered
holders of IXIS
Real Estate Capital Trust 2005-HE2, Mortgage Pass-Through
Certificates, Series
2005-HE2". 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, the Trustee Fee Rate and the
Custodian Fee
Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee,
the Trustee Fee and the Custodian 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.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie Mae
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.
28
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in
each of the
following months:
FINAL SCHEDULED
DISTRIBUTION DATE
------------------
Class A-1 Certificates.....................................
September 25, 2035
Class A-2 Certificates.....................................
September 25, 2035
Class A-3 Certificates.....................................
September 25, 2035
Class A-4 Certificates.....................................
September 25, 2035
Class A-MZ Certificates....................................
September 25, 2035
Class M-1 Certificates.....................................
September 25, 2035
Class M-2 Certificates.....................................
September 25, 2035
Class M-3 Certificates.....................................
September 25, 2035
Class M-4 Certificates.....................................
September 25, 2035
Class M-5 Certificates.....................................
September 25, 2035
Class M-6 Certificates.....................................
September 25, 2035
Class B-1 Certificates.....................................
September 25, 2035
Class B-2 Certificates.....................................
September 25, 2035
Class B-3 Certificates.....................................
September 25, 2035
Class B-4 Certificates.....................................
September 25, 2035
Class X Certificates.......................................
September 25, 2035
Class P Certificates.......................................
September 25, 2035
Class R Certificates.......................................
September 25, 2035
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 May 26, 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: Each Assignment and
Recognition Agreement by and among the Unaffiliated Seller, the
Depositor and
First Horizon in connection with any Subsequent Transfer of First
Horizon
Capital Mortgage Loans.
29
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.
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., One
State Street Plaza, New York, New York 10004, Attention:
Residential Mortgage
Surveillance Group - IXIS Real Estate Capital Trust 2005-HE2, 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.
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 May 26, 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
30
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.
Home Loan Corp.: Home Loan Corp., a Texas corporation.
Home Loan Corp. Assignment Agreement: The Assignment and
Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated
Seller, the
Depositor and Home Loan Corp., and each other Assignment and
Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and
Home Loan
Corp. in connection with any Subsequent Transfer of Home Loan Corp.
Mortgage
Loans.
Home Loan Corp. Mortgage Loan: A Mortgage Loan which was acquired
from
Home Loan Corp. by the Unaffiliated Seller pursuant to the Home
Loan Corp.
Purchase Agreement, and which has been acquired by the Trust Fund.
Home Loan Corp. 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 Home Loan Corp.
Homeowners: Homeowners Loan Corp., a Delaware corporation, and its
successors in interest.
Homeowners Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated
Seller, the
Depositor and Homeowners, and each other Assignment and Recognition
Agreement by
and among the 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 May 26, 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.
31
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: May 1, 2005.
Initial Mortgage Loans: The Mortgage Loans delivered by the
Depositor
on the Startup Date.
Initial Pre-Funded Amount: $158,370,942.
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 immediately 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 ending on
the day
immediately preceding the current Distribution Date (on an
actual/360 day count
basis).
Interest Rate Cap Agreement: The Class A Certificates Interest Rate
Cap Agreement, the Class M Certificates Interest Rate Cap Agreement
and/or the
Class B Certificates Interest Rate Cap Agreement, as applicable.
Interest Rate Cap Payment: The Class A Certificates Interest Rate
Cap
Payment, the Class M Certificates Interest Rate Cap Payment and/or
the Class B
Certificates Interest Rate Cap Payment, as applicable.
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;
32
(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 and the Custodian 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.
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 May 26, 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.
33
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.
Lime Financial Assignment Agreement: Each 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
34
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 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.
Lower Tier Regular Interest: As described in the Preliminary
Statement.
Lower Tier REMIC: As described in the Preliminary Statement
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 May 26, 2005, by and among the Unaffiliated
Seller, the
Depositor and Master Financial, and each other Assignment and
Recognition
Agreement by and among the 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.
35
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.
Middle Tier Regular Interest: As described in the Preliminary
Statement.
Middle Tier REMIC: As described in the Preliminary Statement.
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: Moody's Investors Service, Inc, and its successors in
interest. If Moody's 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 Moody's Investors Service, Inc., 99 Church Street, New
York, New York
10007, Attention: Residential Mortgage Pass-Through Group, or such
other address
as Moody's may hereafter furnish to the Depositor, the Trustee, and
the
Servicer.
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 BNC Purchase Agreement, the
Chapel Mortgage
Purchase
36
Agreement, the Encore Purchase Agreement, the First Bank Purchase
Agreement, the First Horizon Purchase Agreement, the Fremont
Purchase Agreement,
the Homeowners Purchase Agreement, the Home Loan Corp. 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
People's Choice
Purchase Agreement, the Platinum Purchase Agreement or the ResMae
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.
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 May 26, 2005, by and among the Unaffiliated
Seller, the
Depositor and
37
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.
NIM Issuer: Any entity established as the issuer of a series of NIM
Securities.
NIM Indenture: The Indenture, dated as of May 26, 2005, between
IXIS
Real Estate Capital Inc. NIM 2005-HE2N, as issuer, IXIS Real Estate
Capital Inc.
NIM Trust 2005-HE2N, as co-issuer, and JPMorgan Chase Bank, N.A.,
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
38
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 May 26, 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.
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
39
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 BNC Mortgage Loan, BNC, (iv) with respect to any Chapel
Mortgage Loan,
Chapel Mortgage, (v) with respect to any Encore Mortgage Loan,
Encore, (vi) with
respect to any First Bank Mortgage Loan, First Bank, (vii) with
respect to any
First Horizon Mortgage Loan, First Horizon, (viii) with respect to
any Fremont
Mortgage Loan, Fremont, (ix) with respect to any Homeowners
Mortgage Loan,
Homeowners, (x) with respect to any Home Loan Corp. Mortgage Loan,
Home Loan
Corp., (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 People's Choice
Mortgage Loan,
People's Choice, (xvii) with respect to any Platinum Mortgage Loan,
Platinum,
and (xviii) with respect to any ResMae Mortgage Loan, ResMae.
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
40
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, 0.0800%; Class A-2, 0.1500%; Class A-3,
0.2200%; Class
A-4, 0.3400%; Class A-MZ, 0.2600%; Class M-1, 0.4300%; Class M-2,
0.4500%; Class
M-3, 0.4800%; Class M-4, 0.6200%; Class M-5, 0.6500%; Class M-6,
0.6900%; Class
B-1, 1.2000%; Class B-2, 1.3000%; Class B-3, 1.7500%; and Class
B-4, 3.500%. On
the first Distribution Date after the Optional Termination Date,
the
Pass-Through Margins shall increase to the following percentages:
Class A-1,
0.1600%; Class A-2, 0.3000%; Class A-3, 0.4400%; Class A-4,
0.6800%; Class A-MZ,
0.5200%; Class M-1, 0.6450%; Class M-2, 0.6750%; Class M-3,
0.7200%; Class M-4,
0.9300%; Class M-5, 0.9750%; Class M-6, 1.0350%; Class B-1,
1.8000%; Class B-2,
1.9500%; Class B-3, 2.6250%; and Class B-4, 5.2500%.
Pass-Through Rate: For each Class of Certificates and each Lower
Tier
and Middle Tier Regular Interest, the per annum rate set forth or
calculated in
the manner described in the Preliminary Statement.
People's Choice: People's Choice Home Loan, Inc., a Wyoming
corporation, and its successors in interest.
People's Choice Assignment Agreement: The Assignment and
Recognition
Agreement, dated as of May 26, 2005 as amended to date, by and
among the
Unaffiliated Seller, the Depositor and People's Choice, and each
other
Assignment and Recognition Agreement by and among the Unaffiliated
Seller, the
Depositor and People's Choice in connection with any Subsequent
Transfer of
People's Choice Mortgage Loans.
People's Choice Mortgage Loan: A Mortgage Loan which was acquired
from
People's Choice by the Unaffiliated Seller pursuant to the People's
Choice
Purchase Agreement, and which has been acquired by the Trust Fund.
People's Choice Purchase Agreement: The Amended and Restated
Mortgage
Loan Purchase and Warranties Agreement, dated as of October 24,
2002, as amended
to date, by and between the Unaffiliated Seller and People's
Choice.
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.
41
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. Such
investments
in this subsection (vi) may include money market mutual funds or
common
trust funds, including, without limitation, the J.P. Morgan Prime
Money
Market Fund or any other fund for which JPMorgan Chase Bank, the
Trustee or
an affiliate thereof serves as an investment advisor,
administrator,
shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (i) JPMorgan Chase Bank or an affiliate
thereof
charges and collects fees and expenses from such funds for services
rendered, (ii) JPMorgan Chase Bank or an affiliate thereof charges
and
collects fees and expenses for services rendered pursuant to this
Agreement, and (iii) services performed for such funds and pursuant
to this
Agreement may converge at any time. The Trustee specifically
authorizes
JPMorgan Chase Bank or an affiliate thereof to charge and collect
from the
Trust Fund such fees as are collected from all investors in such
funds for
services rendered to such funds (but not to exceed investment
earnings
thereon); and
42
(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;
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 May 26, 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.
43
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.
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 "JPMorgan
Chase Bank,
N.A., in trust for registered holders of IXIS Real Estate Capital
Trust
2005-HE2, Mortgage Pass-Through Certificates, Series 2005-HE2," 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, which amount the Trustee shall evidence to
the
Custodian upon request.
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) August
24, 2005.
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
"JPMorgan Chase
Bank, N.A., in trust for holders of IXIS Real Estate Capital Trust
2005-HE2,
Mortgage Pass-Through Certificates, Series 2005-HE2, 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
44
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 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.
45
Prospectus Supplement: The Prospectus Supplement, dated May 23,
2005,
relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
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 Moody's. 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: The excess 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.
46
Remainder Amount: As defined in Section 9.01.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to
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 Excess Reserve Fund
Account, the
Pre-Funding Account, the Pre-Funding Reserve Account, the
Capitalized Interest
Account and the Interest Rate Cap Agreements.
Remittance Date: With respect to any Distribution Date, the 18th
day
(or if such 18th day is not a Business Day, the first Business Day
immediately
preceding such day) of the month of the related Distribution Date.
REO Disposition: The final sale by the Servicer of any REO
Property.
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: Morgan Stanley & 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
unreimbursed
P&I 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.
47
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 May 26, 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.
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.
Rule 144A Letter: As defined in Section 5.02(b).
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
48
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 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 for such Distribution Date) by (y) the Current
Maximum
Amount for that Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 36.80%.
Sequential Trigger Event: With respect to any Distribution Date the
event that exists if either (a) before the Distribution Date in
June 2008, the
quotient of (x) the aggregate amount of Realized Losses incurred
since the
Cut-off Date through the last day of the related Prepayment Period
and (y) the
Maximum Pool Principal Balance, exceeds 2.50%; or if (b) either
prior to or
after the Distribution Date in June 2008, a Trigger Event is in
effect.
Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, 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
49
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 on 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 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 Countrywide commenced servicing such Mortgage Loan, as set
forth on the
Mortgage Loan Schedule.
Specified Subordinated Amount: With respect to any Distribution
Date
prior to the Stepdown Date, an amount equal to 1.60% of the Maximum
Pool
Principal Balance; and with respect to any Distribution Date on and
after the
Stepdown Date, an amount equal to 3.20% 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 McGraw-Hill 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, 55 Water Street, New York, New
50
York 10041, Attention: Residential Mortgage Surveillance Group -
IXIS Real
Estate Capital Trust 2005-HE2, or such other address as Standard
& Poor's may
hereafter furnish to the Depositor, the Trustee, and the Servicer.
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 June 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 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 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.
51
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 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.
52
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
Tax Matters Person: The Holder of the Class R Certificates
designated
as "tax matters person" of the Lower Tier REMIC, the Middle Tier
REMIC and the
Upper Tier REMIC, 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) on such
Distribution
Date.
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, 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; (vi) the Interest Rate Cap Agreements, for
the benefit
of the Holders of the LIBOR Certificates; and (vii) all proceeds of
the
conversion, voluntary or involuntary, of any of the foregoing.
53
Trustee: JPMorgan Chase Bank, N.A. 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, 0.020% per
annum.
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.
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 Recovery
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.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
U.S. Person: Shall mean (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for
tax purposes)
created or organized in the United States or under the laws of the
United States
or of any State thereof, including, for this purpose, the District
of Columbia;
(iii) a partnership (or entity treated as a partnership for tax
purposes)
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate
whose income
is includible in gross income for United States income tax purposes
regardless
of its source; or (v) a trust, if a court within the United States
is able to
exercise primary supervision over the administration of the trust
and one or
more U.S. Persons have authority to control all substantial
decisions of the
trust. Notwithstanding the last clause of the preceding sentence,
to the extent
provided in Treasury
54
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
and (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
55
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 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
56
(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.
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 "JPMorgan Chase Bank, N.A.
as trustee
under the Pooling and Servicing Agreement dated as of May 1, 2005,
IXIS Real
Estate Capital Trust 2005-HE2." 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
57
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 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
58
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:
(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
59
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 purchase of such Subsequent Mortgage Loans,
with
respect to the entire mortgage loan pool:
(A)
no more than 4.00% may be second lien mortgage loans;
(B)
no more than 36.00% may be first lien mortgage loans which are
secured by Mortgaged Properties which also secure second lien
mortgage loans;
(C)
no less than 9.00% and no more than 12.00% 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
7.43%, or more than 7.53%;
(F)
the weighted average LTV must not exceed 81.00%, and no more than
37.00% of the Mortgage Loans may have LTVs in excess of 80.00%;
(G)
at least 84.00% of the Mortgage Loans must have Prepayment
Charges;
(H)
the weighted average Gross Margin for the Adjustable Rate
Mortgage Loans must be at least 6.25%;
(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 652;
(K)
the weighted average Stated Documentation and No Ratio
Documentation percentage must not exceed 55.00%.
(L)
no more than 32.50% may have an interest-only period; and
60
(M)
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-HE2" and JPMorgan Chase Bank, N.A. 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.
(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, 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, 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
61
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, the Unaffiliated Seller determines that any
noncompliance identified
by the 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.
62
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 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 Home
Loan Corp.
with respect to a Home Loan Corp. 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, Home Loan
Corp. fails to cure, substitute or repurchase such Mortgage Loan
within the
period specified in either the Home Loan Corp. Assignment
63
Agreement or the Home Loan Corp. 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 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.
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
64
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.
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.
65
(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 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 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.
66
(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, 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. The
"latest possible
maturity date" is September 25, 2035, which is the Distribution
Date in the
month following the month in which the latest maturity date of any
Mortgage Loan
occurs.
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Section 2.08 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee, the Custodian 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;
(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;
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(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
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
69
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
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
70
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 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 Freddie
Mac or Fannie 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.
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(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.
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.
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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
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
73
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 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 any Interest Rate Cap Payments 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
and any Interest Rate Cap Payment made for the benefit of the LIBOR
Certificates
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
