================================================================================
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer, Backup Servicer and Securities Administrator,
SAXON MORTGAGE SERVICES, INC.
as Servicer,
MASTER FINANCIAL, INC.,
as Servicer,
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee and Custodian.
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
IXIS REAL ESTATE CAPITAL TRUST 2006-HE3
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-HE3
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS....................................................................................20
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES...................................69
Section 2.01 Conveyance of Mortgage Loans................................................................69
Section 2.02 Acceptance by the Custodian of the Mortgage Loans...........................................76
Section 2.03 Representations, Warranties and Covenants of the Unaffiliated Seller and the Servicers......77
Section 2.04 The Depositor and the Mortgage Loans........................................................82
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Non-Qualified
Mortgages...................................................................................82
Section 2.06 Execution and Delivery of Certificates......................................................82
Section 2.07 REMIC Matters...............................................................................83
Section 2.08 Representations and Warranties of the Depositor.............................................83
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................................................84
Section 3.01 Servicers to Service Mortgage Loans.........................................................84
Section 3.02 Subservicing Agreements Between the Servicers and Subservicers..............................87
Section 3.03 Successor Subservicers......................................................................89
Section 3.04 Liability of the Servicers..................................................................89
Section 3.05 No Contractual Relationship Between Subservicers and the Trustee............................90
Section 3.06 Assumption or Termination of Subservicing Agreements by Backup Servicer or Master Servicer..90
Section 3.07 Collection of Certain Mortgage Loan Payments; Establishment of Certain Accounts.............91
Section 3.08 Subservicing Accounts.......................................................................96
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow Accounts.........................96
Section 3.10 Collection Accounts.........................................................................97
Section 3.11 Withdrawals from the Collection Accounts....................................................98
Section 3.12 Investment of Funds in the Accounts........................................................100
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.............102
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption Agreements...................................103
Section 3.15 Realization Upon Defaulted Mortgage Loans..................................................104
Section 3.16 Release of Mortgage Files..................................................................106
Section 3.17 Title, Conservation and Disposition of REO Property........................................107
Section 3.18 Notification of Adjustments................................................................108
Section 3.19 Access to Certain Documentation and Information Regarding the Mortgage Loans...............109
Section 3.20 Documents, Records and Funds in Possession of each Servicer to be Held for the
Securities Administrator...................................................................109
Section 3.21 Servicing Compensation.....................................................................109
Section 3.22 Annual Statement as to Compliance..........................................................110
i
Section 3.23 Annual Independent Public Accountants' Servicing Statement; Financial Statements...........111
Section 3.24 Backup Servicer or Master Servicer to Act as Servicer......................................113
Section 3.25 Compensating Interest......................................................................114
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act...................................................114
Section 3.27 Advance Facilities.........................................................................114
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICERS...................................................116
Section 4.01 Advances...................................................................................116
Section 4.02 Priorities of Distribution.................................................................118
Section 4.03 Monthly Statements to Certificateholders...................................................126
Section 4.04 Certain Matters Relating to the Determination of LIBOR.....................................130
Section 4.05 [Reserved].................................................................................131
Section 4.06 [Reserved].................................................................................131
Section 4.07 Allocation of Applied Realized Loss Amounts................................................131
ARTICLE V THE CERTIFICATES..............................................................................131
Section 5.01 The Certificates...........................................................................131
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates................132
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................137
Section 5.04 Persons Deemed Owners......................................................................138
Section 5.05 Access to List of Certificateholders' Names and Addresses..................................138
Section 5.06 Maintenance of Office or Agency............................................................138
ARTICLE VI THE DEPOSITOR AND THE SERVICER................................................................139
Section 6.01 Respective Liabilities of the Depositor and the Servicers..................................139
Section 6.02 Merger or Consolidation of the Depositor or the Servicers..................................139
Section 6.03 Limitation on Liability of the Depositor, the Servicers and Others.........................139
Section 6.04 Limitation on Resignation of the Servicers.................................................141
Section 6.05 Additional Indemnification by the Servicers; Third Party Claims............................141
ARTICLE VII DEFAULT.......................................................................................143
Section 7.01 Events of Default..........................................................................143
Section 7.02 Backup Servicer and Master Servicer to Act; Appointment of Successor.......................145
Section 7.03 Notification to Certificateholders.........................................................147
ARTICLE VIII CONCERNING THE TRUSTEE........................................................................147
Section 8.01 Duties of the Trustee......................................................................147
Section 8.02 Certain Matters Affecting the Trustee and the Custodian....................................148
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans......................................150
Section 8.04 Trustee May Own Certificates...............................................................151
Section 8.05 Trustee's and Custodian's Fees and Expenses................................................151
Section 8.06 Eligibility Requirements for the Trustee...................................................151
Section 8.07 Resignation and Removal of the Trustee.....................................................152
Section 8.08 Successor Trustee..........................................................................152
Section 8.09 Merger or Consolidation of the Trustee.....................................................153
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................153
ii
Section 8.11 Tax Matters................................................................................155
Section 8.12 Periodic Filings...........................................................................157
Section 8.13 Tax Classification of the Supplemental Interest Trust, the Excess Reserve Fund Account
and the Swap Account.......................................................................163
Section 8.14 Interest Rate Swap Agreement...............................................................164
ARTICLE IX ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER...................................164
Section 9.01 Duties of the Master Servicer; Enforcement of the Servicers' Obligations...................164
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions Insurance............................165
Section 9.03 Representations and Warranties of the Master Servicer and the Backup Servicer..............165
Section 9.04 Master Servicer Events of Default..........................................................167
Section 9.05 Waiver of Default..........................................................................168
Section 9.06 Successor to the Master Servicer or Backup Servicer........................................168
Section 9.07 Compensation of the Master Servicer and Backup Servicer....................................170
Section 9.08 Merger or Consolidation....................................................................170
Section 9.09 Resignation of the Master Servicer or Backup Servicer......................................170
Section 9.10 Assignment or Delegation of Duties by the Master Servicer or Backup Servicer...............171
Section 9.11 Limitation on Liability of the Master Servicer and Backup Servicer.........................171
Section 9.12 Indemnification; Third Party Claims........................................................172
ARTICLE X CONCERNING THE SECURITIES ADMINISTRATOR.......................................................173
Section 10.01 Duties of Securities Administrator.........................................................173
Section 10.02 Certain Matters Affecting the Securities Administrator.....................................174
Section 10.03 Securities Administrator Not Liable for Certificates or Mortgage Loans.....................176
Section 10.04 Securities Administrator May Own Certificates..............................................176
Section 10.05 Securities Administrator's Fees and Expenses...............................................176
Section 10.06 Eligibility Requirements for Securities Administrator......................................177
Section 10.07 Resignation and Removal of Securities Administrator........................................178
Section 10.08 Successor Securities Administrator.........................................................179
Section 10.09 Merger or Consolidation of Securities Administrator........................................179
Section 10.10 Assignment or Delegation of Duties by the Securities Administrator.........................180
ARTICLE XI TERMINATION...................................................................................180
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage Loans.............................180
Section 11.02 Final Distribution on the Certificates.....................................................181
Section 11.03 Additional Termination Requirements........................................................183
ARTICLE XII MISCELLANEOUS PROVISIONS......................................................................183
Section 12.01 Amendment..................................................................................183
Section 12.02 Recordation of Agreement; Counterparts.....................................................186
Section 12.03 Governing Law..............................................................................186
Section 12.04 Intention of Parties.......................................................................186
Section 12.05 Notices....................................................................................187
Section 12.06 Severability of Provisions.................................................................188
Section 12.07 Assignment.................................................................................188
iii
Section 12.08 Limitation on Rights of Certificateholders.................................................188
Section 12.09 Inspection and Audit Rights................................................................189
Section 12.10 Certificates Nonassessable and Fully Paid..................................................189
Section 12.11 [Reserved].................................................................................190
Section 12.12 Third Party Beneficiary....................................................................190
Section 12.13 Waiver of Jury Trial.......................................................................190
Section 12.14 Regulation AB Compliance; Intent of the Parties; Reasonableness............................190
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule IA Schedule of Master Financial Serviced Loans
Schedule IB Schedule of Saxon Serviced Loans
Schedule II Representations and Warranties of Master Financial
Schedule IIA Further Representations and Warranties of Master Financial
Schedule III Representations and Warranties of Saxon
Schedule IIIA Further Representations and Warranties of Saxon
Schedule IV Representations and Warranties as to the Unaffiliated Seller
EXHIBITS
Exhibit A Form of Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 , Class B-3 and Class B-4 Certificate
Exhibit B Form of Class B-5 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-1 Servicer Certification to be provided to Depositor
Exhibit N-2 Master Servicer Certification to be provided to Depositor
Exhibit O Trustee Certification to be provided to Depositor
Exhibit P Form for Calculation of Realized Loss/Gain
Exhibit Q Servicing Criteria
Exhibit R Additional Form 10-D Disclosure
Exhibit S Additional Form 10-K Disclosure
Exhibit T Form 8-K Disclosure Information
Exhibit U Interest Rate Swap Agreement
Exhibit V Form of Advance Reimbursement Notice
Exhibit W Form of Master Servicer's Report
iv
THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2006,
among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a banking association
organized under the laws of the United States, as master servicer, backup
servicer and securities administrator (in each such capacity, respectively, the
"Master Servicer", "Backup Servicer" and the "Securities Administrator"), SAXON
MORTGAGE SERVICES, INC., a Texas corporation ("Saxon"), MASTER FINANCIAL, INC.,
a California corporation ("Master Financial" and together with Saxon, the
"Servicers"), IXIS REAL ESTATE CAPITAL INC. (f/k/a CDC Mortgage Capital Inc.), a
New York corporation, as unaffiliated seller (the "Unaffiliated Seller") and
DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee
and custodian (in each such capacity respectively, the "Trustee" and the
"Custodian").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trustee shall elect
that five segregated asset pools within the Trust Fund be treated for federal
income tax purposes as comprising five REMICs (each a "REMIC" or, in the
alternative, REMIC I, REMIC II, REMIC III, REMIC IV and REMIC V, respectively).
Each Class of Certificates, other than the Class P and Class R Certificates and
other than the right of each Class of LIBOR Certificates to receive Basis Risk
Carry Forward Amounts and the right of the Class X Certificates to receive
payments from the Interest Rate Swap Agreement and the Pre-Funding Reserve
Account, represents ownership of one or more regular interests in REMIC V for
purposes of the REMIC Provisions. Additionally, the Class X Certificates
represent the obligation to make certain payments of Basis Risk Carry Forward
Amounts to Holders of LIBOR Certificates, and the LIBOR Certificates represent
the obligation to make certain payments to the Class X Certificateholder to the
extent that the interest accrued on its corresponding REMIC V Regular Interest
is in excess of the interest accrued on such LIBOR Certificate. The Class P
Certificates represent beneficial ownership of the Prepayment Charges, which
portion of the Trust Fund shall be treated as a grantor trust. The Class I
Interests are uncertificated REMIC V Regular Interests and are designed to fund
net swap payments, in full or in part, on the Interest Rate Swap Agreement. The
Class R Certificate represents ownership of the sole class of residual interest
in each of REMIC I, REMIC II, REMIC III, REMIC IV and REMIC V for purposes of
the REMIC Provisions. The Class R-V, Class R-IV, Class R-III, Class R-II and
Class R-I Interests comprise the Class R Certificate. The Startup Day for each
REMIC described herein is the Closing Date. The latest possible maturity date
for each regular interest is the date referenced for such regular interest in
this preliminary statement.
REMIC V shall hold as assets the several classes of uncertificated
REMIC IV Regular Interests. Each such REMIC IV Regular Interest is hereby
designated as a regular interest in REMIC IV. The Class IV-A-1, Class IV-A-2,
Class IV-A-3, Class IV-A-4, Class IV-M-1, Class IV-M-2, Class IV-M-3, Class
IV-M-4, Class IV-M-5, Class IV-M-6, Class IV-B-1,
1
Class IV-B-2, Class IV-B-3, and Class IV-B-4 Interests are hereby designated the
REMIC IV Accretion Directed Classes.
REMIC IV shall hold as assets the several classes of uncertificated
REMIC III Regular Interests. Each such REMIC III Regular Interest is hereby
designated as a regular interest in REMIC III.
REMIC III shall hold as assets the several classes of uncertificated
REMIC II Regular Interests. Each such REMIC II Regular Interest is hereby
designated as a regular interest in REMIC II.
REMIC II shall hold as assets the several classes of uncertificated
REMIC I Regular Interests. Each such REMIC I Regular Interest is hereby
designated as a regular interest in REMIC I.
REMIC I shall hold as assets all of the assets included in the Trust
Fund other than the Prepayment Charges, the Supplemental Interest Trust, the
Excess Reserve Fund Account, the Swap Account, the Pre-Funding Account, the
Pre-Funding Reserve Account, the Capitalized Interest Account and the Interest
Rate Swap Agreement.
The REMIC I Regular Interests and the Class R-I Interest shall have
the following tier interest rate, initial tier principal amount and latest
possible maturity date as set forth in the table below.
REMIC I CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- --------------- ------------------ --------------------
Class I-C1 (1) $834,708,152.44 January 25, 2037
Class I-PO1 (2) $192,291,847.56 January 25, 2037
Class I-N (3) (4) December 25, 2006
Class R-I (5) (5)
(1) The interest rate with respect to any Distribution Date for this Class
I-C1 Interest is (i) for the first three Distribution Dates, a per annum
variable rate equal to the weighted average of the Adjusted Net Mortgage
Rates for then in effect on the beginning of the related Prepayment Period
on the Initial Mortgage Loans, and (ii) thereafter, a per annum variable
rate equal to the weighted average of the Adjusted Net Mortgage Rates then
in effect on the beginning of the related Prepayment Period on the
Mortgage Loans.
(2) The interest rate with respect to any Distribution Date for the Class
I-PO1 Interest is (i) for the first three Distribution Dates, 0.00% and
(ii) thereafter, a per annum variable rate equal to the weighted average
of the Adjusted Net Mortgage Rates then in effect on the beginning of the
related Prepayment Period on the Mortgage Loans.
2
(3) The interest rate with respect to any Distribution Date for the Class I-N
Interest is (i) for the first three Distribution Dates, all interest on
the Subsequent Mortgage Loans for such Distribution Date divided by
$192,291,847.56 and (ii) thereafter, 0.00%.
(4) The Class I-N Interest will have a notional principal balance equal to
$192,291,847.56.
(5) The Class R-I Interest is the sole class of residual interest in REMIC I.
The Class R-I does not have a principal amount or an interest rate.
During the Pre-Funding Period, all principal payments (scheduled and
prepaid) and Realized Losses with respect to the Initial Mortgage Loans shall be
allocated to the Class I-C1 Interest, until such Class is paid in full or
eliminated by such losses. All principal payments (scheduled and prepaid) and
Realized Losses generated with respect to the Subsequent Mortgage Loans and any
amounts transferred from the Pre-Funding Account to REMIC I shall be allocated
to the Class I-PO1 Interest.
On each Distribution Date thereafter, all principal payments
(scheduled and prepaid) and Realized Losses generated with respect to the
Mortgage Loans shall be allocated, pro rata, to the Class I-C1 and Class I-PO1
Interests, until such Classes are paid in full or eliminated by such losses..
The REMIC II Regular Interests and the Class R-II Interest shall
have the following tier interest rate, initial tier principal amount and latest
possible maturity date as set forth in the table below.
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- --------------- ------------------ --------------------
Class II-C1 (1) $ 16,191,800.90 January 25, 2037
Class II-C2 (1) $ 31,242,924.10 January 25, 2037
Class II-C3 (1) $ 29,960,459.50 January 25, 2037
Class II-C4 (1) $ 28,712,908.50 January 25, 2037
Class II-C5 (1) $ 35,203,366.30 January 25, 2037
Class II-C6 (1) $ 33,930,920.40 January 25, 2037
Class II-C7 (1) $ 32,715,908.50 January 25, 2037
Class II-C8 (1) $ 31,519,737.30 January 25, 2037
Class II-C9 (1) $ 30,409,366.00 January 25, 2037
Class II-C10 (1) $ 29,343,309.50 January 25, 2037
Class II-C11 (1) $ 28,318,645.40 January 25, 2037
Class II-C12 (1) $ 27,316,741.40 January 25, 2037
Class II-C13 (1) $ 26,285,159.20 January 25, 2037
3
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- --------------- ------------------ --------------------
Class II-C14 (1) $ 25,208,644.60 January 25, 2037
Class II-C15 (1) $ 24,210,059.40 January 25, 2037
Class II-C16 (1) $ 45,927,919.60 January 25, 2037
Class II-C17 (1) $ 43,564,385.30 January 25, 2037
Class II-C18 (1) $ 21,192,031.40 January 25, 2037
Class II-C19 (1) $ 21,384,920.10 January 25, 2037
Class II-C20 (1) $ 95,539,971.10 January 25, 2037
Class II-C21 (1) $ 155,295,540.80 January 25, 2037
Class II-C22 (1) $ 58,348,698.90 January 25, 2037
Class II-C23 (1) $ 23,946,486.30 January 25, 2037
Class II-C24 (1) $ 16,640,554.90 January 25, 2037
Class II-C25 (1) $ 5,617,318.20 January 25, 2037
Class II-C26 (1) $ 4,615,437.10 January 25, 2037
Class II-C27 (1) $ 4,395,834.70 January 25, 2037
Class II-C28 (1) $ 4,220,056.80 January 25, 2037
Class II-C29 (1) $ 4,214,734.60 January 25, 2037
Class II-C30 (1) $ 3,943,155.90 January 25, 2037
Class II-C31 (1) $ 3,740,572.10 January 25, 2037
Class II-C32 (1) $ 4,511,791.90 January 25, 2037
Class II-C33 (1) $ 28,226,611.30 January 25, 2037
Class II-C34 (1) $ 10,052,585.10 January 25, 2037
Class II-C35 (1) $ 4,174,541.80 January 25, 2037
Class II-C36 (1) $ 3,892,894.80 January 25, 2037
Class II-C37 (1) $ 1,834,737.80 January 25, 2037
Class II-C38 (1) $ 1,311,447.90 January 25, 2037
Class II-C39 (1) $ 1,263,446.90 January 25, 2037
Class II-C40 (1) $ 1,220,407.60 January 25, 2037
Class II-C41 (1) $ 1,178,794.40 January 25, 2037
Class II-C42 (1) $ 1,138,575.20 January 25, 2037
4
REMIC II CLASS TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- --------------- ------------------ --------------------
Class II-C43 (1) $ 1,099,708.90 January 25, 2037
Class II-C44 (1) $ 1,062,148.90 January 25, 2037
Class II-C45 (1) $ 1,025,853.70 January 25, 2037
Class II-C46 (1) $ 990,781.80 January 25, 2037
Class II-C47 (1) $ 956,892.70 January 25, 2037
Class II-C48 (1) $ 924,146.90 January 25, 2037
Class II-C49 (1) $ 892,506.60 January 25, 2037
Class II-C50 (1) $ 861,935.20 January 25, 2037
Class II-C51 (1) $ 832,396.90 January 25, 2037
Class II-C52 (1) $ 803,857.70 January 25, 2037
Class II-C53 (1) $ 776,284.20 January 25, 2037
Class II-J1 (1) $ 21,576,834.60 January 25, 2037
Class II-N (2) (3) December 25, 2006
Class R-II (4) (4)
(1) The interest rate with respect to any Distribution Date for these
interests is the weighted average of the interest rates of the Class I-C1
and Class I-PO1 Interests.
(2) The Class II-N Interest is entitled to all distributions of interest on
the Class I-N Interest.
(3) The Class II-N Interest will have a notional principal balance equal to
the notional principal balance of the Class I-N Interest.
(4) The Class R-II Interest is the sole class of residual interest in REMIC
II. The Class R-II Interest does not have a principal amount or an
interest rate.
On each Distribution Date, all principal payments (scheduled and
prepaid) and Realized Losses generated with respect to the Mortgage Loans and
any amounts transferred from the Pre-Funding Account to REMIC I shall be
allocated in the following order: (i) first, to the Class II-J1 Interest until
such Class is paid in full or eliminated by such losses, (ii) second, to the
Class II-C1, Class II-C2, Class II-C3 and Class II-C4, in reverse numerical
order, until such Classes are paid in full or eliminated by such losses and
(iii) third to the Class II-C5 through Class II-C53 Interests, sequentially,
until such Classes are paid in full or eliminated by such losses.
5
The REMIC III Regular Interests and the Class R-III Interest shall
have the following, Corresponding REMIC II Regular Interest, tier interest rate,
initial tier principal amount and latest possible maturity date as set forth in
the table below.
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C1a Class II-C1 (1) (2) January 25, 2037
Class III-C1b Class II-C1 (5) (3) January 25, 2037
Class III-C1c Class II-C1 (6) (4) January 25, 2037
Class III-C2a Class II-C2 (1) (2) January 25, 2037
Class III-C2b Class II-C2 (5) (3) January 25, 2037
Class III-C2c Class II-C2 (6) (4) January 25, 2037
Class III-C3a Class II-C3 (1) (2) January 25, 2037
Class III-C3b Class II-C3 (5) (3) January 25, 2037
Class III-C3c Class II-C3 (6) (4) January 25, 2037
Class III-C4a Class II-C4 (1) (2) January 25, 2037
Class III-C4b Class II-C4 (5) (3) January 25, 2037
Class III-C4c Class II-C4 (6) (4) January 25, 2037
Class III-C5a Class II-C5 (7) (2) January 25, 2037
Class III-C5b Class II-C5 (8) (3) January 25, 2037
Class III-C5c Class II-C5 (9) (4) January 25, 2037
Class III-C6a Class II-C6 (10) (2) January 25, 2037
Class III-C6b Class II-C6 (11) (3) January 25, 2037
Class III-C6c Class II-C6 (12) (4) January 25, 2037
Class III-C7a Class II-C7 (10) (2) January 25, 2037
Class III-C7b Class II-C7 (11) (3) January 25, 2037
Class III-C7c Class II-C7 (12) (4) January 25, 2037
Class III-C8a Class II-C8 (10) (2) January 25, 2037
Class III-C8b Class II-C8 (11) (3) January 25, 2037
Class III-C8c Class II-C8 (12) (4) January 25, 2037
Class III-C9a Class II-C9 (10) (2) January 25, 2037
6
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C9b Class II-C9 (11) (3) January 25, 2037
Class III-C9c Class II-C9 (12) (4) January 25, 2037
Class III-C10a Class II-C10 (10) (2) January 25, 2037
Class III-C10b Class II-C10 (11) (3) January 25, 2037
Class III-C10c Class II-C10 (12) (4) January 25, 2037
Class III-C11a Class II-C11 (10) (2) January 25, 2037
Class III-C11b Class II-C11 (11) (3) January 25, 2037
Class III-C11c Class II-C11 (12) (4) January 25, 2037
Class III-C12a Class II-C12 (10) (2) January 25, 2037
Class III-C12b Class II-C12 (11) (3) January 25, 2037
Class III-C12c Class II-C12 (12) (4) January 25, 2037
Class III-C13a Class II-C13 (10) (2) January 25, 2037
Class III-C13b Class II-C13 (11) (3) January 25, 2037
Class III-C13c Class II-C13 (12) (4) January 25, 2037
Class III-C14a Class II-C14 (10) (2) January 25, 2037
Class III-C14b Class II-C14 (11) (3) January 25, 2037
Class III-C14c Class II-C14 (12) (4) January 25, 2037
Class III-C15a Class II-C15 (10) (2) January 25, 2037
Class III-C15b Class II-C15 (11) (3) January 25, 2037
Class III-C15c Class II-C15 (12) (4) January 25, 2037
Class III-C16a Class II-C16 (10) (2) January 25, 2037
Class III-C16b Class II-C16 (11) (3) January 25, 2037
Class III-C16c Class II-C16 (12) (4) January 25, 2037
Class III-C17a Class II-C17 (10) (2) January 25, 2037
Class III-C17b Class II-C17 (11) (3) January 25, 2037
Class III-C17c Class II-C17 (12) (4) January 25, 2037
Class III-C18a Class II-C18 (10) (2) January 25, 2037
Class III-C18b Class II-C18 (11) (3) January 25, 2037
7
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C18c Class II-C18 (12) (4) January 25, 2037
Class III-C19a Class II-C19 (10) (2) January 25, 2037
Class III-C19b Class II-C19 (11) (3) January 25, 2037
Class III-C19c Class II-C19 (12) (4) January 25, 2037
Class III-C20a Class II-C20 (10) (2) January 25, 2037
Class III-C20b Class II-C20 (11) (3) January 25, 2037
Class III-C20c Class II-C20 (12) (4) January 25, 2037
Class III-C21a Class II-C21 (10) (2) January 25, 2037
Class III-C21b Class II-C21 (11) (3) January 25, 2037
Class III-C21c Class II-C21 (12) (4) January 25, 2037
Class III-C22a Class II-C22 (10) (2) January 25, 2037
Class III-C22b Class II-C22 (11) (3) January 25, 2037
Class III-C22c Class II-C22 (12) (4) January 25, 2037
Class III-C23a Class II-C23 (10) (2) January 25, 2037
Class III-C23b Class II-C23 (11) (3) January 25, 2037
Class III-C23c Class II-C23 (12) (4) January 25, 2037
Class III-C24a Class II-C24 (10) (2) January 25, 2037
Class III-C24b Class II-C24 (11) (3) January 25, 2037
Class III-C24c Class II-C24 (12) (4) January 25, 2037
Class III-C25a Class II-C25 (10) (2) January 25, 2037
Class III-C25b Class II-C25 (11) (3) January 25, 2037
Class III-C25c Class II-C25 (12) (4) January 25, 2037
Class III-C26a Class II-C26 (10) (2) January 25, 2037
Class III-C26b Class II-C26 (11) (3) January 25, 2037
Class III-C26c Class II-C26 (12) (4) January 25, 2037
Class III-C27a Class II-C27 (10) (2) January 25, 2037
Class III-C27b Class II-C27 (11) (3) January 25, 2037
Class III-C27c Class II-C27 (12) (4) January 25, 2037
8
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C28a Class II-C28 (10) (2) January 25, 2037
Class III-C28b Class II-C28 (11) (3) January 25, 2037
Class III-C28c Class II-C28 (12) (4) January 25, 2037
Class III-C29a Class II-C29 (10) (2) January 25, 2037
Class III-C29b Class II-C29 (11) (3) January 25, 2037
Class III-C29c Class II-C29 (12) (4) January 25, 2037
Class III-C30a Class II-C30 (10) (2) January 25, 2037
Class III-C30b Class II-C30 (11) (3) January 25, 2037
Class III-C30c Class II-C30 (12) (4) January 25, 2037
Class III-C31a Class II-C31 (10) (2) January 25, 2037
Class III-C31b Class II-C31 (11) (3) January 25, 2037
Class III-C31c Class II-C31 (12) (4) January 25, 2037
Class III-C32a Class II-C32 (10) (2) January 25, 2037
Class III-C32b Class II-C32 (11) (3) January 25, 2037
Class III-C32c Class II-C32 (12) (4) January 25, 2037
Class III-C33a Class II-C33 (10) (2) January 25, 2037
Class III-C33b Class II-C33 (11) (3) January 25, 2037
Class III-C33c Class II-C33 (12) (4) January 25, 2037
Class III-C34a Class II-C34 (10) (2) January 25, 2037
Class III-C34b Class II-C34 (11) (3) January 25, 2037
Class III-C34c Class II-C34 (12) (4) January 25, 2037
Class III-C35a Class II-C35 (10) (2) January 25, 2037
Class III-C35b Class II-C35 (11) (3) January 25, 2037
Class III-C35c Class II-C35 (12) (4) January 25, 2037
Class III-C36a Class II-C36 (10) (2) January 25, 2037
Class III-C36b Class II-C36 (11) (3) January 25, 2037
Class III-C36c Class II-C36 (12) (4) January 25, 2037
Class III-C37a Class II-C37 (10) (2) January 25, 2037
9
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C37b Class II-C37 (11) (3) January 25, 2037
Class III-C37c Class II-C37 (12) (4) January 25, 2037
Class III-C38a Class II-C38 (10) (2) January 25, 2037
Class III-C38b Class II-C38 (11) (3) January 25, 2037
Class III-C38c Class II-C38 (12) (4) January 25, 2037
Class III-C39a Class II-C39 (10) (2) January 25, 2037
Class III-C39b Class II-C39 (11) (3) January 25, 2037
Class III-C39c Class II-C39 (12) (4) January 25, 2037
Class III-C40a Class II-C40 (10) (2) January 25, 2037
Class III-C40b Class II-C40 (11) (3) January 25, 2037
Class III-C40c Class II-C40 (12) (4) January 25, 2037
Class III-C41a Class II-C41 (10) (2) January 25, 2037
Class III-C41b Class II-C41 (11) (3) January 25, 2037
Class III-C41c Class II-C41 (12) (4) January 25, 2037
Class III-C42a Class II-C42 (10) (2) January 25, 2037
Class III-C42b Class II-C42 (11) (3) January 25, 2037
Class III-C42c Class II-C42 (12) (4) January 25, 2037
Class III-C43a Class II-C43 (10) (2) January 25, 2037
Class III-C43b Class II-C43 (11) (3) January 25, 2037
Class III-C43c Class II-C43 (12) (4) January 25, 2037
Class III-C44a Class II-C44 (10) (2) January 25, 2037
Class III-C44b Class II-C44 (11) (3) January 25, 2037
Class III-C44c Class II-C44 (12) (4) January 25, 2037
Class III-C45a Class II-C45 (10) (2) January 25, 2037
Class III-C45b Class II-C45 (11) (3) January 25, 2037
Class III-C45c Class II-C45 (12) (4) January 25, 2037
Class III-C46a Class II-C46 (10) (2) January 25, 2037
Class III-C46b Class II-C46 (11) (3) January 25, 2037
10
REMIC III CLASS CORRESPONDING REMIC II TIER INTEREST INITIAL TIER LATEST POSSIBLE
DESIGNATION REGULAR INTEREST RATE PRINCIPAL AMOUNT MATURITY DATE
------------------- ---------------------- --------------- ------------------- -------------------
Class III-C46c Class II-C46 (12) (4) January 25, 2037
Class III-C47a Class II-C47 (10) (2) January 25, 2037
Class III-C47b Class II-C47 (11) (3) January 25, 2037
Class III-C47c Class II-C47 (12) (4) January 25, 2037
Class III-C48a Class II-C48 (10) (2) January 25, 2037
Class III-C48b Class II-C48 (11) (3) January 25, 2037
Class III-C48c Class II-C48 (12) (4) January 25, 2037
Class III-C49a Class II-C49 (10) (2) January 25, 2037
Class III-C49b Class II-C49 (11) (3) January 25, 2037
Class III-C49c Class II-C49 (12) (4) January 25, 2037
Class III-C50a Class II-C50 (10) (2) January 25, 2037
Class III-C50b Class II-C50 (11) (3) January 25, 2037
Class III-C50c Class II-C50 (12) (4) January 25, 2037
Class III-C51a Class II-C51 (10) (2) January 25, 2037
Class III-C51b Class II-C51 (11) (3) January 25, 2037
Class III-C51c Class II-C51 (12) (4) January 25, 2037
Class III-C52a Class II-C52 (10) (2) January 25, 2037
Class III-C52b Class II-C52 (11) (3) January 25, 2037
Class III-C52c Class II-C52 (12) (4) January 25, 2037
Class III-C53a Class II-C53 (10) (2) January 25, 2037
Class III-C53b Class II-C53 (11) (3) January 25, 2037
Class III-C53c Class II-C53 (12) (4) January 25, 2037
Class III-J1 Class II-J1 (13) (14) January 25, 2037
Class III-N Class II-N (15) (16) December 25, 2006
Class R-III (17) (17)
(1) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the Corresponding
Distribution Date through and including the Distribution Date in January
2007, 1.5 multiplied by (REMIC III Net WAC minus 5.3135%) and (ii) for all
other Distribution Dates, REMIC III Net WAC.
11
(2) These REMIC III Regular Interests will have an initial principal balance
equal to the product of (i) the initial principal balance of the
Corresponding REMIC II Regular Interest and (ii) two divided by three.
(3) These REMIC III Regular Interests will have an initial principal balance
equal to the initial principal balance of the Corresponding REMIC II
Regular Interest divided by three.
(4) These REMIC III Regular Interests will have a notional principal balance
equal to the principal balance of the Corresponding REMIC II Regular
Interest.
(5) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the Corresponding
Distribution Date through and including the Distribution Date in January
2007, 3 multiplied by 1-month LIBOR, subject to a cap of 15.9405% and (ii)
for all other Distribution Dates, REMIC III Net WAC.
(6) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the Corresponding
Distribution Date through and including the Distribution Date in January
2007, 5.3135% minus 1-Month LIBOR, subject to a floor of zero and (ii) for
all other Distribution Dates, zero.
(7) The interest rate for this REMIC III Regular Interest will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in
February 2007 through and including the Corresponding Distribution Date,
1.5 multiplied by (REMIC III Net WAC minus 5.3135%) and (ii) for all other
Distribution Dates, REMIC III Net WAC.
(8) The interest rate for this REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in
February 2007 through and including the Corresponding Distribution Date, 3
multiplied by 1-month LIBOR, subject to a cap of 15.9405% and (ii) for all
other Distribution Dates, REMIC III Net WAC.
(9) The interest rate for this REMIC III Regular Interests will be as follows:
(i) for all Distribution Dates commencing on the Distribution Date in
February 2007 through and including the Corresponding Distribution Date,
5.3135% minus 1-Month LIBOR, subject to a floor of zero and (ii) for all
other Distribution Dates, zero.
(10) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the first
Distribution Date through and including the Corresponding Distribution
Date, 1.5 multiplied by (REMIC III Net WAC minus 5.3135%) and (ii) for all
other Distribution Dates, REMIC III Net WAC.
(11) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the first
Distribution Date through and including the Corresponding Distribution
Date, 3 multiplied by 1-month LIBOR, subject to a cap of 15.9405% and (ii)
for all other Distribution Dates, REMIC III Net WAC.
(12) The interest rate for these REMIC III Regular Interests will be as
follows: (i) for all Distribution Dates commencing on the first
Distribution Date through and including the
12
Corresponding Distribution Date, 5.3135% minus 1-Month LIBOR, subject to a
floor of zero and (ii) for all other Distribution Dates, zero.
(13) The interest rate for this REMIC III Regular Interest will be equal to the
REMIC III Net WAC.
(14) These REMIC III Regular Interests will have an initial principal balance
equal to the initial principal balance of the Corresponding REMIC II
Regular Interest.
(15) The Class III-N Interest is entitled to all distributions of interest on
the Class II-N Interest.
(16) The Class III-N Interest will have a notional principal balance equal to
the notional principal balance of the Class II-N Interest.
(17) The Class R-III Interest is the sole class of residual interest in REMIC
III. The Class R-III Interest does not have a principal amount or an
interest rate.
On each Distribution Date, all principal payments (scheduled and prepaid)
and Realized Losses generated with respect to the Mortgage Loans and any amounts
transferred from the Pre-Funding Account to REMIC I shall be allocated in the
following order: (i) first, to the Class III-J1 Interest until such Class is
paid in full or eliminated by such losses, (ii) second, to the Class III-C1a
through Class III-C4a and Class III-C1b through Class III-C4b Interests, first,
pro rata between the two subsets of interests, and second, in reverse numerical
order among the subsets of interests, until such Classes are paid in full or
eliminated by such losses and (iii) third, to the Class III-C5a through Class
III-C53a and Class III-C5b through Class III-C53b Interests, first, pro rata
between the two subsets of interests, and second, sequentially among the subsets
of interests, until such Classes are paid in full or eliminated by such losses.
The REMIC IV Regular Interests and the Class R-IV Interest shall
have the following tier interest rate, initial principal amount, Corresponding
REMIC V Interest, and latest possible maturity date as set forth in the table
below.
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
-------------------- ----------- -------------------------- ------------------------ ---------------------
Class IV-A-1 (1) 1/2 of the Corresponding Class A-1 January 25, 2037
Class initial principal
balance
Class IV-A-2 (1) 1/2 of the Corresponding Class A-2 January 25, 2037
Class initial principal
balance
13
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
-------------------- ----------- -------------------------- ------------------------ ---------------------
Class IV-A-3 (1) 1/2 of the Corresponding Class A-3 January 25, 2037
Class initial principal
balance
Class IV-A-4 (1) 1/2 of the Corresponding Class A-4 January 25, 2037
Class initial principal
balance
Class IV-M-1 (1) 1/2 of the Corresponding Class M-1 January 25, 2037
Class initial principal
balance
Class IV-M-2 (1) 1/2 of the Corresponding Class M-2 January 25, 2037
Class initial principal
balance
Class IV-M-3 (1) 1/2 of the Corresponding Class M-3 January 25, 2037
Class initial principal
balance
Class IV-M-4 (1) 1/2 of the Corresponding Class M-4 January 25, 2037
Class initial principal
balance
Class IV-M-5 (1) 1/2 of the Corresponding Class M-5 January 25, 2037
Class initial principal
balance
Class IV-M-6 (1) 1/2 of the Corresponding Class M-6 January 25, 2037
Class initial principal
balance
Class IV-B-1 (1) 1/2 of the Corresponding Class B-1 January 25, 2037
Class initial principal
balance
14
TIER CORRESPONDING REMIC V
REMIC IV CLASS INTEREST INITIAL TIER PRINCIPAL INTEREST/CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CLASS MATURITY DATE
-------------------- ----------- -------------------------- ------------------------ ---------------------
Class IV-B-2 (1) 1/2 of the Corresponding Class B-2 January 25, 2037
Class initial principal
balance
Class IV-B-3 (1) 1/2 of the Corresponding Class B-3 January 25, 2037
Class initial principal
balance
Class IV-B-4 (1) 1/2 of the Corresponding Class B-4 January 25, 2037
Class initial principal
balance
Class IV-B-5 (1) 1/2 of the Corresponding Class B-5 January 25, 2037
Class initial principal
balance
Class IV-Accrual (1) (2) N/A January 25, 2037
Class IV-N (3) (4) Class X-2 December 25, 2006
Class IV-I1 (5) (5) Class I-1 April 25, 2007
Class IV-I2 (6) (6) Class I-2 April 25, 2008
Class IV-I3 (7) (7) Class I-3 April 25, 2009
Class IV-I4 (8) (8) Class I-4 April 25, 2010
Class IV-I5 (9) (9) Class I-5 February 25, 2011
Class R-IV (10) (10) Class R
(1) The interest rate with respect to any Distribution Date for these REMIC IV
Regular Interests is the REMIC IV Net WAC.
(2) The Class IV-Accrual Interest will have an initial principal balance equal
to the product of (a) 50% and (b) the sum of (i) the Pool Stated Principal
Balance (ii) the Subordinated Amount and (ii) the Initial Pre-Funded
Amount.
(3) The Class IV-N Interest is entitled to all distributions of interest on
the Class III-N Interest.
(4) The Class IV-N Interest will have a notional principal balance equal to
the notional principal balance of the Class III-N Interest.
15
(5) The Class IV-I1 Interest will be an interest-only regular interest and
will be entitled to receive, on each Distribution Date, the amount
distributable on the Class III-C1c through Class III-C7c Interests on such
Distribution Date.
(6) The Class IV-I2 Interest will be an interest-only regular interest and
will be entitled to receive, on each Distribution Date, the sum of the
amounts distributable on the Class III-C8c through Class III-C19c
Interests on such Distribution Date.
(7) The Class IV-I3 Interest will be an interest-only regular interest and
will be entitled to receive, on each Distribution Date, the sum of the
amounts distributable on the Class III-C20c through Class III-C31c
Interests on such Distribution Date.
(8) The Class IV-I4 Interest will be an interest-only regular interest and
will be entitled to receive, on each Distribution Date, the sum of the
amounts distributable on the Class III-C32c through Class III-C43c
Interests on such Distribution Date.
(9) The Class IV-I5 Interest will be an interest-only regular interest and
will be entitled to receive, on each Distribution Date, the sum of the
amounts distributable on the Class III-C44c through Class III-C53c
Interests on such Distribution Date.
(10) The Class R-IV Interest is the sole class of residual interest in REMIC
IV. The Class R-IV Interest does not have a principal amount or an
interest rate.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the principal balances of the REMIC IV
Accretion Directed Classes and will be accrued and added to the principal
balance of the Class IV-Accrual Interest. To this end, each REMIC IV Accretion
Directed Class will be reduced by an amount equal to 50% of any increase in the
Subordinated Amount that is attributable to a reduction in the principal balance
of its Corresponding Class. On each Distribution Date, the increase in the
principal balance of the Class IV-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class IV-Accrual Interest. If, with
respect to any Distribution Date, 50% of the increase in the Subordinated Amount
exceeds accrued interest on the Class IV-Accrual Interest, the excess
(accumulated with all such excess for all prior Distribution Dates) will be
added to any increase in the Subordinated Amount for purposes of calculating
accrued interest on the Class IV-Accrual Interest payable as principal on the
REMIC IV Accretion Directed Classes on the next Distribution Date.
On each Distribution Date, all principal payments (scheduled and prepaid)
on the Mortgage Loans and any amounts transferred from the Pre-Funding Account
to REMIC I shall be allocated as follows: 50% to the Class IV-Accrual Interest
and 50% to the REMIC IV Accretion Directed Classes, until such interests are
paid in full. To this end, principal payments shall be allocated among such
REMIC IV Accretion Directed Classes in an amount equal to 50% of the principal
amounts allocated to their respective Corresponding Classes. Notwithstanding the
foregoing, principal payments allocated to the Class X Certificates that result
in the reduction in the Subordinated Amount shall be allocated to the Class
IV-Accrual Interest until paid in full. On each Distribution Date, Realized
Losses shall be applied so that after all distributions have been made on each
Distribution Date (i) the principal balance of each REMIC IV Accretion
16
Directed Class is equal to 50% of the principal balance of its Corresponding
Class, and (ii) the principal balance of the Class IV-Accrual Interest is equal
to 50% of the sum of (1) the Pool Stated Principal Balance, (2) the Subordinated
Amount and (3) the Pre-Funding Amount.
The REMIC V Regular Interests and the Class R-V Interest shall have
the following tier interest rate, initial tier principal amount, corresponding
classes, and latest possible maturity date as set forth in the table below.
REMIC V CLASS TIER INITIAL TIER LATEST POSSIBLE
DESIGNATION INTEREST RATE PRINCIPAL AMOUNT CORRESPONDING CLASS MATURITY DATE
---------------- --------------- ------------------ ----------------------- -------------------
Class A-1 (1) $406,130,000 Class A-1(8) January 25, 2007
Class A-2 (1) $128,340,000 Class A-2(8) January 25, 2007
Class A-3 (1) $170,095,000 Class A-3(8) January 25, 2007
Class A-4 (1) $109,845,000 Class A-4(8) January 25, 2007
Class M-1 (1) $42,620,000 Class M-1(8) January 25, 2007
Class M-2 (1) $30,810,000 Class M-2(8) January 25, 2007
Class M-3 (1) $18,999,000 Class M-3(8) January 25, 2007
Class M-4 (1) $16,432,000 Class M-4(8) January 25, 2007
Class M-5 (1) $16,945,000 Class M-5(8) January 25, 2007
Class M-6 (1) $14,891,000 Class M-6(8) January 25, 2007
Class B-1 (1) $14,378,000 Class B-1(8) January 25, 2007
Class B-2 (1) $12,837,000 Class B-2(8) January 25, 2007
Class B-3 (1) $7,189,000 Class B-3(8) January 25, 2007
Class B-4 (1) $8,216,000 Class B-4(8) January 25, 2007
Class B-5 (1) $10,270,000 Class B-5(8) January 25, 2007
Class X-1(7) (2) (2) Class X(9) January 25, 2007
Class X-2(7) (3) (4) Class X(9) December 25, 2006
Class V-I1 (5) (5) Class I-1 April 25, 2007
Class V-I2 (5) (5) Class I-2 April 25, 2008
Class V-I3 (5) (5) Class I-3 April 25, 2009
Class V-I4 (5) (5) Class I-4 April 25, 2010
Class V-I5 (5) (5) Class I-5 February 25, 2011
Class R-V (6) (6) Class R
17
(1) These Certificates will bear interest during each Interest Accrual Period
at a per annum variable rate equal to the least of (a) one-month LIBOR
plus the applicable Pass-Through Margin or (c) the REMIC Adjusted WAC Cap.
(2) The Class X-1 Interest has an initial principal balance of $19,002,900 but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X-1
Interest shall have a notional principal balance equal to the sum of (i)
the Pool Stated Principal Balance and (ii) any amount remaining in the
Pre-Funding Account as of the first day of the related Interest Accrual
Period. With respect to any Interest Accrual Period, the Class X-1
Interest shall bear interest at a rate equal to the excess, if any, of the
REMIC Adjusted WAC Cap over the product of (i) 2 and (ii) the weighted
average interest rates of the REMIC IV Accretion Direction Classes and the
Class IV-Accrual Interest, where each REMIC IV Accretion Directed Class is
subject to a cap equal to the interest rate on its Corresponding REMIC V
Interest and the Class IV-Accrual Interest is subject to a cap of zero.
With respect to any Distribution Date, interest that so accrues on the
notional principal balance of the Class X-1 Interest shall be deferred in
an amount equal to any increase in the Subordinated Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
(3) The Class X-2 Interest is entitled to all distributions of interest on the
Class IV-N Interest.
(4) The Class X-2 Interest will have a notional principal balance equal to the
notional principal balance of the Class IV-N Interest.
(5) These REMIC V Regular Interests will be interest-only regular interests
and will be entitled to receive on each Distribution Date all distribution
on its corresponding REMIC IV Regular Interest for such Distribution Date.
(6) The Class R-V Interest is the sole class of residual interest in REMIC V.
The Class R-V Interest does not have a principal amount or an interest
rate.
(7) The Class X Certificates will represent two REMIC V Regular Interests, the
Class X-1 and Class X-2 Interests.
(8) Each of these Certificates will represent not only the ownership of the
Corresponding Class of REMIC V Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and Swap Account in
respect of any Basis Risk Carry Forward Amounts. For federal income tax
purposes, the Trustee will treat a Certificateholder's right to receive of
Basis Risk Carry Forward Amounts as payments made pursuant to a notional
principal contract written by the Class X Certificateholders. Each of
these Certificates will also represent the obligation to make certain
payments on such notional principal contract to the extent that the
interest accrued on its Corresponding REMIC V Regular Interest is in
excess of the related Accrued Certificate Interest.
(9) The Class X Certificates also represent the right to receive payments from
the Interest Rate Swap Agreement, the Pre-Funding Reserve Account and
certain payments from
18
Holders of the LIBOR Certificates as described in footnote 8 and the
obligation to fund certain Basis Risk Carry Forward Amounts.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.................... All Classes of Certificates other than the Physical
Certificates.
Delay Certificates......................... None.
ERISA-Restricted Certificates.............. Class B-5 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 and
Subordinated Certificates.
Non-Delay Certificates..................... Class A-1, Class A-2, Class A-3, Class A-4, 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-5, Class P, Class X and Class R Certificates.
Rating Agencies............................ Xxxxx'x, 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.
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, Class B-4 and
Class B-5 Certificates.
19
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
10-K Filing Deadline: As defined in Section 8.12(c).
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 each Servicer and any
Mortgage Loan, those mortgage servicing practices set forth in Section 3.01.
Account: Any of the Capitalized Interest Account, the Collection
Accounts, the Distribution Account, any Escrow Account, the Excess Reserve Fund
Account, the Swap Account, the Pre-Funding Account or the Pre-Funding Reserve
Account. Each Account shall be an Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, 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.
Additional Form 10-D Disclosure: As defined in Section 8.12(b).
20
Additional Form 10-K Disclosure: As defined in Section 8.12(c).
Addition Notice: A written notice from the Unaffiliated Seller to
the Trustee, the Rating Agencies and the Securities Administrator that the
Unaffiliated Seller desires to make a Subsequent Transfer.
Adjustable Rate Mortgage Loan: A Mortgage Loan bearing interest at
an adjustable rate.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advances: Collectively, the P&I Advances and Servicing Advances.
Advance Facility: As defined in Section 3.27.
Advance Facility Notice: As defined in Section 3.27.
Advance Facility Termination Notice: 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.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each 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.
21
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Securities Administrator by the
Depositor.
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 Chapel Mortgage Assignment Agreement, the Encore Assignment
Agreement, the First Bank Assignment Agreement, the First Horizon Assignment
Agreement, the First NLC Assignment Agreement, the FlexPoint Assignment
Agreement, the Funding America Assignment Agreement, the Lenders Direct
Assignment Agreement, the Lime Financial Assignment Agreement, the Mandalay
Assignment Agreement, the Master Financial Assignment Agreement, the Maxim
Assignment Agreement, the NC Capital Assignment Agreement, the Quick Loan
Assignment Agreement or the Rose 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 Securities Administrator (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
Servicers 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 Servicers during the related Prepayment Period
and remitted to the Master Servicer, including all partial or full prepayments,
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds (excluding
Prepayment Charges), (iii) Compensating Interest payments from the Servicers to
the Master Servicer in respect of Prepayment Interest Shortfalls for that
Distribution Date, (iv) for any Distribution Date on or prior to December 24,
2006, any funds required to be paid from the Capitalized Interest Account to
make up for any interest shortfalls on the Initial Mortgage Loans, (v)
immediately following the end of the Pre-Funding Period, all amounts, if any, on
deposit in the Pre-Funding Account, (vi) the proceeds from repurchases of
Mortgage Loans, and any Substitution Adjustment Amounts received in connection
with respect to the substitutions of Mortgage Loans that occur during the month
in which such Distribution Date occurs at the Repurchase Price and (vii) all
proceeds received with respect to the termination of the Trust Fund pursuant to
Section 11.01 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 Master Servicer, the Securities Administrator, the
Servicers, the Depositor, the Backup Servicer, the Custodian or the Trustee are
entitled to be paid or reimbursed pursuant to this Agreement and any costs
associated with a transfer of servicing to the extent not paid by the
predecessor servicer.
22
Backup Servicer: Xxxxx Fargo Bank, National Association, a banking
association organized under the laws of the United States, and its successors in
interest, and if a successor backup servicer is appointed hereunder, such
successor backup servicer.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Subordinated Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the WAC Cap, the excess of (i) the amount of interest such Class of
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of LIBOR and the applicable
Pass-Through Margin on such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Certificates
calculated at the WAC Cap for such Distribution Date and (B) the Basis Risk
Carry Forward Amount for such Class of Certificates for all previous
Distribution Dates not previously paid, together with interest thereon at a rate
equal to the sum of LIBOR and the applicable Pass-Through Margin for such Class
of Certificates for such Distribution Date. For federal income tax purposes,
with respect to each Class of LIBOR Certificates, as of any Distribution Date,
the sum of (A) if on such Distribution Date, the interest rate for any
Corresponding REMIC V Regular Interest is based upon the REMIC Adjusted WAC Cap,
the excess of (i) the amount of interest such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such rate been
calculated as the sum of LIBOR and the applicable Pass-Through Margin on such
Class of Certificates for such Distribution Date, over (ii) the amount of
interest payable on such REMIC V Regular Interest calculated at the REMIC
Adjusted WAC Cap for such Distribution Date and (B) the Basis Risk Carry Forward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, a payment in an
amount equal to any Basis Risk Carry Forward Amount; provided, however, that
with respect to any Distribution Date, the payment cannot exceed the amounts
otherwise available for distribution on the Class X Certificates.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
23
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
California, Minnesota, New York, Utah, New Jersey and Florida, (b) the
applicable states in which the Servicers' servicing operations are located, (c)
the State in which the Securities Administrator's or Master Servicer's
operations are located or (d) the State in which the Custodian's operations are
located, are authorized or obligated by law or executive order to be closed.
Capitalized Interest Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Section 3.07(e) in
the name of the Securities Administrator for the benefit of the LIBOR
Certificateholders and designated "Xxxxx Fargo Bank, National Association, in
trust for registered holders of IXIS Real Estate Capital Trust 2006-HE3,
Mortgage Pass-Through Certificates, Series 2006-HE3".
Capitalized Interest Requirement: With respect to the Distribution
Dates occurring in October 2006, November 2006 or December 2006, the excess, if
any, of (x) the Accrued Certificate Interests for all classes of the LIBOR
Certificates for such Distribution Date over (y) all scheduled installments of
interest (net of the related Expense Fees) due on the Mortgage Loans in the
related Due Period. In no event will the Capitalized Interest Requirement be
less than zero.
Certificate: Any one of the Certificates executed by the Securities
Administrator 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 4.07; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amounts for such Class or Classes for such Distribution Date);
provided, that the Certificate Balance of any Class of Certificates that had
previously been reduced to zero shall not be increased as a result of any
Subsequent Recoveries. The Class X and Class R Certificates have no Certificate
Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
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
24
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 Securities
Administrator 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.
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 September 29, 2006, 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 Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of November 1, 2005,
as amended to date, by and between the Unaffiliated Seller and Chapel Mortgage.
Charge-off Date: As defined in Section 3.07(o).
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 and Class
A-4 Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (x) the aggregate Class
Certificate Balances of the Class A Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) 58.60% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$5,135,000.
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."
25
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4."
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), and (H) the Class Certificate Balance of the
Class B-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 88.80% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $5,135,000.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal
26
Distribution Amount on such Distribution Date), (H) the Class Certificate
Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount on such Distribution
Date), and (I) the Class Certificate Balance of the Class B-2 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 91.30%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $5,135,000.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), and (J) the Class Certificate Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 92.70%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $5,135,000.
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4".
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M-3 Certificates (after
taking into account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class
27
M-4 Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), (J) the Class Certificate Balance of the Class B-3 Certificates (after
taking into account the distribution of the Class B-3 Principal Distribution
Amount on such Distribution Date), and (K) the Class Certificate Balance of the
Class B-4 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 94.30% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $5,135,000.
Class B-5 Certificates: All Certificates bearing the class
designation of "Class B-5".
Class B-5 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), (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), (K) the Class Certificate Balance of the
Class B-4 Certificates immediately prior to such Distribution Date and (L) the
Class Certificate Balance of the Class B-5 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) approximately 96.30% of the
Current Maximum Amount and (B) the excess, if any, of the Current Maximum Amount
over approximately $5,135,000.
28
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class I Interests: As described in the Preliminary Statement.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates and
(ii) the Subordinated Amount (in each case after taking into account the
allocation of the Principal Distribution Amount and any principal payments on
those classes of certificates from the Swap Account for such Distribution Date)
by (y) the Current Maximum Amount for that Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date) and (B) the Class Certificate Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 66.90% of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum Amount over $5,135,000.
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 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) 72.90% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$5,135,000.
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
29
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 $5,135,000.
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) 79.80% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$5,135,000.
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 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) 83.10% of
the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $5,135,000.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
30
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) 86.00%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $5,135,000.
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.
Class X Regular Interest: The REMIC V Regular Interests represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Accounts: As defined in Section 3.10(a).
Commission: The United States Securities and Exchange Commission.
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
31
Prepayments in Full (excluding any payments made upon liquidation of the
Mortgage Loan) and (b) the Servicing Fees payable to the Servicers 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: With respect to the Securities Administrator
(i) for the transfer, presentation or surrender of Certificates, the office at
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust Services - IXIS 2006-HE3, and (ii) for all other purposes 0000
Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Services IXIS 2006-HE3. The designated office in the State of California at
which at any particular time the Trustee's corporate trust business with respect
to this Agreement is administered, which office at the date of the execution of
this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000, Attn: Trust Administration IX0603, facsimile no. (000) 000-0000 and which
is the address to which notices to and correspondence with the Trustee should be
directed.
Corresponding Class: As described in the Preliminary Statement.
Corresponding Distribution Date:
Corresponding Distribution Date is
REMIC III Regular Interest the Distribution Date occurring in:
--------------------------------------------------------------------------------
Class III-C1a-c October 2006
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Class III-C2a-c November 2006
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Class III-C3a-c December 2006
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Class III-C4a-c January 2007
--------------------------------------------------------------------------------
Class III-C5a-c February 2007
--------------------------------------------------------------------------------
Class III-C6a-c March 2007
--------------------------------------------------------------------------------
Class III-C7a-c April 2007
--------------------------------------------------------------------------------
Class III-C8a-c May 2007
--------------------------------------------------------------------------------
Class III-C9a-c June 2007
--------------------------------------------------------------------------------
Class III-C10a-c July 2007
--------------------------------------------------------------------------------
32
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Class III-C11a-c August 2007
--------------------------------------------------------------------------------
Class III-C12a-c September 2007
--------------------------------------------------------------------------------
Class III-C13a-c October 2007
--------------------------------------------------------------------------------
Class III-C14a-c November 2007
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Class III-C15a-c December 2007
--------------------------------------------------------------------------------
Class III-C16a-c January 2008
--------------------------------------------------------------------------------
Class III-C17a-c February 2008
--------------------------------------------------------------------------------
Class III-C18a-c March 2008
--------------------------------------------------------------------------------
Class III-C19a-c April 2008
--------------------------------------------------------------------------------
Class III-C20a-c May 2008
--------------------------------------------------------------------------------
Class III-C21a-c June 2008
--------------------------------------------------------------------------------
Class III-C22a-c July 2008
--------------------------------------------------------------------------------
Class III-C23a-c August 2008
--------------------------------------------------------------------------------
Class III-C24a-c September 2008
--------------------------------------------------------------------------------
Class III-C25a-c October 2008
--------------------------------------------------------------------------------
Class III-C26a-c November 2008
--------------------------------------------------------------------------------
Class III-C27a-c December 2008
--------------------------------------------------------------------------------
Class III-C28a-c January 2009
--------------------------------------------------------------------------------
Class III-C29a-c February 2009
--------------------------------------------------------------------------------
Class III-C30a-c March 2009
--------------------------------------------------------------------------------
Class III-C31a-c April 2009
--------------------------------------------------------------------------------
Class III-C32a-c May 2009
--------------------------------------------------------------------------------
Class III-C33a-c June 2009
--------------------------------------------------------------------------------
Class III-C34a-c July 2009
--------------------------------------------------------------------------------
33
--------------------------------------------------------------------------------
Class III-C35a-c August 2009
--------------------------------------------------------------------------------
Class III-C36a-c September 2009
--------------------------------------------------------------------------------
Class III-C37a-c October 2009
--------------------------------------------------------------------------------
Class III-C38a-c November 2009
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Class III-C39a-c December 2009
--------------------------------------------------------------------------------
Class III-C40a-c January 2010
--------------------------------------------------------------------------------
Class III-C41a-c February 2010
--------------------------------------------------------------------------------
Class III-C42a-c March 2010
--------------------------------------------------------------------------------
Class III-C43a-c April 2010
--------------------------------------------------------------------------------
Class III-C44a-c May 2010
--------------------------------------------------------------------------------
Class III-C45a-c June 2010
--------------------------------------------------------------------------------
Class III-C46a-c July 2010
--------------------------------------------------------------------------------
Class III-C47a-c August 2010
--------------------------------------------------------------------------------
Class III-C48a-c September 2010
--------------------------------------------------------------------------------
Class III-C49a-c October 2010
--------------------------------------------------------------------------------
Class III-C50a-c November 2010
--------------------------------------------------------------------------------
Class III-C51a-c December 2010
--------------------------------------------------------------------------------
Class III-C52a-c January 2011
--------------------------------------------------------------------------------
Class III-C53a-c February 2011
--------------------------------------------------------------------------------
Corresponding REMIC V Interest: As described in the Preliminary
Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard and Poor's Glossary.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which the Distribution Date occurs less
any amounts received with respect to Realized Losses on the related Mortgage
Loans subsequent to the Final Recovery Determination being made with
34
respect to such Mortgage Loans and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of the aggregate amount of Realized Losses incurred since the
related Cut-off Date through the last day of the related Prepayment Period
divided by the Maximum Pool Principal Balance exceeds the applicable cumulative
loss percentage as follows with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN CUMULATIVE LOSS PERCENTAGE
------------------------------ ----------------------------------------------
October 2008 through September 1.250% for the first month, plus an additional
2009 1/12th of 1.600% for each month thereafter
(e.g., 2.050% in April 2009)
October 2009 through September 2.850% for the first month, plus an additional
2010 1/12th of 1.600% for each month thereafter
(e.g., 3.650% in April 2010)
October 2010 through September 4.450% for the first month, plus an additional
2011 1/12th of 1.250% for each month thereafter
(e.g., 5.075% in April 2011)
October 2011 through September 5.700% for the first month, plus an additional
2012 1/12th of 0.700% for each month thereafter
(e.g., 6.050% in April 2012)
October 2012 and thereafter 6.400%
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 held by the Trust at such time, and (ii) with respect to each date of
determination prior to the Distribution Date on or prior to December 26, 2006,
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.
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, September
1, 2006, 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.
35
Data Tape Information: The information provided by the Unaffiliated
Seller as of September 1, 2006 to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Mortgagor's name; (2) as
to each Mortgage Loan, the Scheduled Principal Balance as of the Cut-off Date;
(3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the type of Mortgaged Property; (7)
the first date on which the Scheduled Payment was due on the Mortgage Loan and,
if such date is not consistent with the Due Date currently in effect, such Due
Date; (8) the "paid through date" based on payments received from the related
Mortgagor; (9) the original principal amount of the Mortgage Loan; (10) with
respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage Rate; (11) the
type of Mortgage Loan (i.e., Fixed Rate Mortgage Loan, Adjustable Rate Mortgage
Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (13) a code indicating the documentation style
(i.e., full, asset verification, income verification and no documentation); (14)
the credit risk score (FICO score); (15) the loan credit grade classification
(as described in the Underwriting Guidelines); (16) with respect to each
Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17) the Mortgage Rate
at origination; (18) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date; (19) the value of
the Mortgaged Property; (20) a code indicating the type and term of Prepayment
Charges applicable to such Mortgage Loan, if any; and (21) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap. With respect to
the Mortgage Loans in the aggregate, the Data Tape Information shall set forth
the following information, as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
DCA Commission: As defined in Section 3.07(o).
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.
Defaulted Swap Termination Payment: Any termination payment required
to be made by the Trust to the Swap Provider pursuant to the Interest Rate Swap
Agreement as a result of: either (i) an event of default under the Interest Rate
Swap Agreement with respect to which the Swap Provider is the defaulting party
or (ii) a termination event under that agreement (other than illegality, a tax
event or a tax event upon merger of the Swap Provider) with respect to which the
Swap Provider is the sole affected party.
Deficiency Collection: As defined in Section 3.07(o).
Deficiency Collection Agent: As defined in Section 3.07(o).
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-
36
outstanding principal balance of the Mortgage Loan, which valuation results from
a proceeding initiated under the United States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by the
Unaffiliated Seller or the related Originator, as applicable, or replaced with a
Substitute Mortgage Loan in accordance with the terms hereof and the related
Mortgage Loan Purchase Agreement.
Delinquency Trigger Event: With respect to a Distribution Date after
the Stepdown Date, the event that is in effect if the quotient (expressed as a
percentage) of (x) the three-month rolling daily average of the aggregate Stated
Principal Balance of 60+ Day Delinquent Loans as of the last day of the related
Due Period, over (y) the Current Maximum Amount of the Mortgage Loans as of the
last day of the related Due Period exceeds (a) 38.65% of the prior period's
Senior Enhancement Percentage while any Class A Certificates remain outstanding,
or (b) 48.34% of the prior period's Class M-1 Enhancement Percentage if the
Class A Certificates are no longer outstanding.
Delinquent: A mortgage loan is "Delinquent" if any Scheduled Payment
due on a due date is not made by the close of business on the next scheduled due
date for that mortgage loan (including all Mortgage Loans in foreclosure,
Mortgage Loans in respect of REO Properties and Mortgage Loans for which the
related Mortgagor has declared bankruptcy). A mortgage loan is "30 days
Delinquent" if the Scheduled Payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month
in which that Scheduled Payment was due or, if there was no corresponding date
(e.g., as when a 30-day month follows a 31-day month in which the payment was
due on the 31st day of that month), then on the last day of that immediately
preceding month; and similarly for "60 days Delinquent" and "90 days
Delinquent," etc.
Delivery Date: With respect to the Initial Mortgage Loans, the
Closing Date; with respect to any Subsequent Mortgage Loans, the related
Subsequent Transfer Date therefor.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx 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.
37
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the 15th
of each month, or if the 15th is not a Business Day, the immediately preceding
Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.07(d) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "Xxxxx Fargo Bank, National Association, in trust for registered
holders of IXIS Real Estate Capital Trust 2006-HE3, Mortgage Pass-Through
Certificates, Series 2006-HE3". 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
October 2006.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company the
commercial paper, short-term debt obligations, demand deposits or other
short-term deposits of which are rated in one of the two highest rating
categories by each of the Rating Agencies at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to each Rating Agency, the
Certificateholders will have a claim with respect to the funds in such account
or a perfected first priority security interest against such collateral (which
shall be limited to Permitted Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its
fiduciary capacity, (iv) an account otherwise acceptable to each Rating Agency
or (v) an account maintained with a "qualified depository". 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,
38
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 Servicers and the
Securities Administrator) 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 Servicers
and the Securities Administrator).
Encore: Encore Credit Corp., a California corporation, and its
successors in interest.
Encore Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, 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 Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005, as amended to
date, by and between the Unaffiliated Seller and Encore.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator, on behalf of the
Supplemental Interest Trust, for the benefit of the Holders of the Regular
Certificates and designated "Xxxxx Fargo Bank, National Association, in trust
for registered holders of IXIS Real Estate Capital Trust 2006-HE3, Mortgage
Pass-Through Certificates, Series 2006-HE3". 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.
39
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and the Securities Administrator, Backup
Servicer and Master Servicer Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fees and the Securities Administrator, Backup Servicer and Master Servicer 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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx 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 applicable Servicer that all Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries
which such Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The applicable
Servicer shall maintain records, prepared by a Servicing Officer, of each Final
Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
FINAL SCHEDULED
DISTRIBUTION DATE
-------------------
Class A-1 Certificates................................ January 2037
Class A-2 Certificates................................ January 2037
Class A-3 Certificates................................ January 2037
Class A-4 Certificates................................ January 2037
Class M-1 Certificates................................ January 2037
40
FINAL SCHEDULED
DISTRIBUTION DATE
-------------------
Class M-2 Certificates................................ January 2037
Class M-3 Certificates................................ January 2037
Class M-4 Certificates................................ January 2037
Class M-5 Certificates................................ January 2037
Class M-6 Certificates................................ January 2037
Class B-1 Certificates................................ January 2037
Class B-2 Certificates................................ January 2037
Class B-3 Certificates................................ January 2037
Class B-4 Certificates................................ January 2037
Class B-5 Certificates................................ January 2037
Class X Certificates.................................. January 2037
Class P Certificates.................................. January 2037
Class R Certificates.................................. January 2037
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 September 29, 2006, 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 First Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of January 1, 2006, 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 Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and First Horizon, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and First Horizon
in connection with any Subsequent Transfer of First Horizon Mortgage Loans.
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.
41
First Horizon Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of December 1, 2005, as amended
to date, by and between the Unaffiliated Seller and First Horizon.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services., a Florida limited
liability company.
First NLC Capital Assignment Agreement: The Assignment and
Recognition Agreement, dated as of September 29, 2006, by and among the
Unaffiliated Seller, the Depositor and First NLC, and each other Assignment and
Recognition Agreement by and among the Unaffiliated Seller, the Depositor and
First NLC in connection with any Subsequent Transfer of First Bank Mortgage
Loans.
First NLC Mortgage Loan: A Mortgage Loan which was acquired from
First NLC by the Unaffiliated Seller pursuant to the First NLC Purchase
Agreement, and which has been acquired by the Trust Fund.
First NLC Purchase Agreement: The Second Mortgage Loan Purchase and
Warranties Agreement, dated as of December 1, 2005, as amended to date, by and
between the Unaffiliated Seller and First NLC.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.06 the address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance Group - IXIS Real Estate Capital Trust 2006-HE3, or such other
address as Fitch may hereafter furnish to the Depositor, the Securities
Administrator, the Trustee and the Servicers.
Fixed Rate Mortgage Loan: A Mortgage Loan bearing interest at a
fixed rate.
FlexPoint: FlexPoint Funding Corp., a California corporation.
FlexPoint Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and FlexPoint, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and FlexPoint in connection
with any Subsequent Transfer of FlexPoint Mortgage Loans.
FlexPoint Mortgage Loan: A Mortgage Loan which was acquired from
FlexPoint by the Unaffiliated Seller pursuant to the FlexPoint Purchase
Agreement, and which has been acquired by the Trust Fund.
FlexPoint Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005, as amended to
date, by and between the Unaffiliated Seller and XxxxXxxxx.
00
Xxxxx Xxxxxx: An amount equal to the product of (x) 0.50% and (y)
the Maximum Pool Principal Balance.
Form 8-K Disclosure Information: As defined in Section 8.12(g).
Funding America: Funding America Warehouse Trust, a Delaware
statutory trust and a wholly owned subsidiary of Funding America, LLC.
Funding America Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and Funding America, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Funding
America in connection with any Subsequent Transfer of Funding America Mortgage
Loans.
Funding America Mortgage Loan: A Mortgage Loan which was acquired
from Funding America by the Unaffiliated Seller pursuant to the Funding America
Purchase Agreement, and which has been acquired by the Trust Fund.
Funding America Purchase Agreement: The Flow Mortgage Loan Purchase
and Warranties Agreement, dated as of May 1, 2006, by and between the
Unaffiliated Seller and Funding America.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, (b) a "high cost
home," "threshold," "covered," (excluding New Jersey "Covered Home Loans" as
that term is defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002), "high risk home," "predatory" or
similar loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) or (c) a Mortgage
Loan categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
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: September 1, 2006.
Initial Mortgage Loans: The Mortgage Loans delivered by the
Depositor on the Startup Date.
Initial Pre-Funded Amount: $192,291,847.56.
43
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to any Distribution Date, the
period beginning with the preceding Distribution Date (or in the case of the
first Distribution Date, the period from and including the Closing Date to but
excluding such first Distribution Date) and ending on the day immediately
preceding the current Distribution Date (on an actual/360 day count basis).
Interest Rate Swap Agreement: The Interest Rate Swap Agreement dated
as of September 29, 2006, between the Supplemental Interest Trust and IXIS
Financial Products Inc.
Interest Remittance Amount: With respect to any Distribution Date,
the sum of (a) the sum, without duplication, of the following amounts received
by the Master Servicer from the Servicers 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 each Servicer
on or prior to the related Remittance Date;
(ii) Compensating Interest paid by each Servicer on such
Remittance Date;
(iii) the interest component of all Substitution Adjustment
Amounts and Repurchase Prices received by each Servicer during the related
Prepayment Period;
(iv) the interest component of all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds received by each 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 Securities Administrator, Backup Servicer and Master
Servicer Fee and the Servicing Fees for the related Prepayment Period 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
each Servicer, or the Trustee, Securities Administrator, Backup Servicer, Master
Servicer and Custodian 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).
44
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Investor-Based Exemption: Prohibited Transaction Class Exemption
84-14, Prohibited Transaction Class Exemption 90-1, Prohibited Transaction Class
Exemption 91-38, PTCE 95-60 or Prohibited Transaction Class Exemption 96-23, as
each may be amended from time to time, or any similar prohibited transaction
class exemption granted by the U.S. Department of Labor or, with respect to any
governmental plan (as defined in Section 3(32) of ERISA), granted pursuant to
any federal, state or local law materially similar to Title I of ERISA or
Section 4975 of the Code.
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 Corp., a California
corporation, and its successors in interest.
Lenders Direct Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, 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 Second Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of December 1, 2005,
as amended to date, by and between the Unaffiliated Seller and Lenders Direct.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator 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 Securities Administrator shall
request that 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
45
City, selected by the Securities Administrator, 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: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and Lime Financial, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lime Financial
in connection with any Subsequent Transfer of Lime Financial Mortgage Loans.
Lime Financial Mortgage Loan: A Mortgage Loan which was acquired
from Lime Financial by the Unaffiliated Seller pursuant to the Lime Financial
Purchase Agreement, and which has been acquired by the Trust Fund.
Lime Financial Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of December 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
applicable Servicer has certified to the Securities Administrator and the Master
Servicer that it has received all amounts it expects to receive in connection
with the liquidation of such Mortgage Loan including the final disposition of an
REO Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
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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.
Mandalay: Mandalay Mortgage, LLC, a Delaware limited liability
company, and its successors in interest.
Mandalay Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and Mandalay, and each other Assignment and Recognition Agreement
by and among the Unaffiliated Seller, the Depositor and Mandalay in connection
with any Subsequent Transfer of Mandalay Mortgage Loans.
Mandalay Mortgage Loan: A Mortgage Loan which was acquired from
Mandalay by the Unaffiliated Seller pursuant to the Mandalay Purchase Agreement,
and which has been acquired by the Trust Fund.
Mandalay Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2006, as amended to date, by and
between the Unaffiliated Seller and Mandalay.
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 September 29, 2006, 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 Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of November 1, 2005,
as amended to date, by and between the Unaffiliated Seller and Master Financial.
Master Servicer: Xxxxx Fargo Bank, National Association, a banking
association organized under the laws of the United States, and its successors in
interest and, if a successor master servicer is appointed hereunder, such
successor master servicer.
Master Servicer Events of Default: As defined in Section 9.04.
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Maxim: Maxim Mortgage Corp., a Texas corporation.
Maxim Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and Maxim, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Maxim in connection with
any Subsequent Transfer of Maxim Mortgage Loans.
Maxim Mortgage Loan: A Mortgage Loan which was acquired from Maxim
by the Unaffiliated Seller pursuant to the Maxim Purchase Agreement, and which
has been acquired by the Trust Fund.
Maxim Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of August 1, 2006, as amended to
date, by and between the Unaffiliated Seller and Maxim.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Maximum Pool Principal Balance: The aggregate Stated Principal
Balances of all Initial Mortgage Loans as of the Initial Cut-off Date plus the
Initial Pre-Funded Amount.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with the MERS Procedure Manual and
(b) the Originators have designated or will designate the Trustee as the
Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
and other parties as specified in and pursuant to Section 4.03(a).
Moody's: Xxxxx'x Investors Service, Inc, and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section
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10.06 the address for notices to Moody's shall be Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential
Mortgage Pass-Through Group, or such other address as Moody's may hereafter
furnish to the Depositor, the Trustee, and the Servicers.
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 Chapel Mortgage Purchase Agreement, the Encore Purchase Agreement, the First
Bank Purchase Agreement, the First Horizon Purchase Agreement, the First NLC
Purchase Agreement, the FlexPoint Purchase Agreement, the Funding America
Purchase Agreement, the Lenders Direct Purchase Agreement, the Lime Financial
Purchase Agreement, the Mandalay Purchase Agreement, the Master Financial
Purchase Agreement, the Maxim Purchase Agreement, the NC Capital Purchase
Agreement, the Quick Loan Purchase Agreement or the Rose 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) whether such Mortgage Loan has been 30
days Delinquent since the applicable Servicing Transfer Date; and (22) whether
such Mortgage Loan
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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 September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and NC Capital, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and NC Capital in
connection with any Subsequent Transfer of NC Capital Mortgage Loans.
NC Capital Mortgage Loan: A Mortgage Loan which was acquired from NC
Capital by the Unaffiliated Seller pursuant to the NC Capital Purchase
Agreement, and which has been acquired by the Trust Fund.
NC Capital Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of December 1, 2005, as amended
to date, by and between the Unaffiliated Seller and NC Capital.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) the Compensating Interest payments made
with respect to such Distribution Date and (ii) all Prepayment Interest Excesses
for such Distribution Date.
Net Swap Payment: For any Distribution Date, each payment required
to be made to the Swap Provider pursuant to the Interest Rate Swap Agreement.
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Net Swap Receipt: For any Distribution Date, the net payment that
the Swap Provider will owe the Supplemental Interest Trust pursuant to the
Interest Rate Swap Agreement.
NIM Issuer: Any entity established as the issuer of a series of NIM
Securities.
NIM Indenture: The Indenture, dated as of September 29, 2006,
between IXIS Real Estate Capital Inc. NIM Trust 2006-HE3N, as co-issuer, and
Xxxxx Fargo Bank, National Association, 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 applicable Servicer or the Master Servicer
or any successor Master 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 applicable Servicer, or the
Master Servicer or any successor Master 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
applicable Servicer or the Master Servicer or any successor Master Servicer that
it has made a Nonrecoverable Servicing Advance or that any proposed Servicing
Advances, if made, would constitute a Nonrecoverable Servicing Advance, shall be
evidenced by an Officers' Certificate delivered to the Securities Administrator
and the Master Servicer.
Notice of Final Distribution: The notice to be provided pursuant to
Section 11.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of each
Servicer or Subservicer responsibility for the servicing of the Mortgage Loans
required to be serviced by such Servicer or Subservicer and listed on a list
delivered to the Securities Administrator pursuant to this Agreement.
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Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or the Subservicer, reasonably acceptable to the
Trustee and the Securities Administrator; 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 related
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the related Servicer of the Mortgage Loans or in
an Affiliate of either and (iii) is not connected with the related 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 one or more of the Servicers 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;
provided, that if neither Servicer exercises its right to cause the Optional
Termination Date to occur, the Master Servicer may cause the Optional
Termination Date to occur on any Distribution Date when the aggregate Stated
Principal Balance of the Mortgage Loans is 10.00% or less of the Maximum Pool
Principal Balance; and
(ii) If the Class X Certificates are not 100% owned, either
directly or indirectly, by the Unaffiliated Seller or any Affiliate thereof,
then the Holders of a majority in Class Certificate Balance of the Class X
Certificates may cause the Optional Termination Date to occur on any
Distribution Date when the aggregate Stated Principal Balance of the Mortgage
Loans is 10.00% or less of the Maximum Pool Principal Balance, and, if such
Class X Certificateholders do not do so, then the Servicers 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 Chapel Mortgage Loan, Chapel, (iii) with
respect to any Encore Mortgage Loan, Encore, (iv) with respect to any First Bank
Mortgage Loan, First Bank, (v) with respect to any First Horizon Mortgage Loan,
First Horizon, (vi) with respect to any First NLC Mortgage Loan, First NLC,
(vii) with respect to any FlexPoint Mortgage Loan, FlexPoint, (viii) with
respect to any Funding America Mortgage Loan, Funding America, (ix) with respect
to any Lenders Direct Mortgage Loan, Lenders Direct, (x) with respect to any
Lime Financial Mortgage Loan, Lime Financial, (xi) with respect to Mandalay
Mortgage, LLC, Mandalay, (xii) with respect to any Master Financial Mortgage
Loan, Master Financial, (xiii) with respect to any Maxim Mortgage Loan, Maxim,
(xiv) with respect to any NC Capital Mortgage Loan, NC Capital, (xv) with
respect to any Quick Loan Mortgage Loan, Quick Loan and (xvi) with respect to
any Rose Mortgage Loan, Rose.
OTS: Office of Thrift Supervision, and any successor thereto.
52
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 Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities Administrator
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 applicable Servicer (including the Backup Servicer as successor
Servicer or any other successor Servicer) or the Master Servicer (including the
Trustee as successor Master Servicer and any other successor Master Servicer, as
applicable) in respect of any Remittance Date with respect to any Mortgage Loan
representing the aggregate of all payments of principal and/or interest on such
Mortgage Loan, net of the related Servicing Fee, that were due during the
related Due Period on the Mortgage Loan, and that were delinquent or unpaid on
the related Determination Date, plus certain amounts representing assumed
payments not covered by any current net income on the Mortgaged Properties
acquired by foreclosure or deed in lieu of foreclosure as determined pursuant to
Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, on or prior to the Optional Termination Date the following
percentages: Class A-1, 0.0500%; Class A-2, 0.1000%; Class A-3, 0.1500%; Class
A-4, 0.2300%; Class M-1, 0.3000%; Class M-2, 0.3100%; Class M-3, 0.3200%; Class
M-4, 0.3800%; Class M-5, 0.4100%; Class M-6, 0.4600%; Class B-1, 0.8200%; Class
B-2, 0.9500%; Class B-3, 1.9000%; Class B-4, 2.4000%; Class B-5, 2.4000%. On the
first Distribution Date after the Optional Termination Date, the Pass-Through
Margins shall increase to the following percentages: Class A-1, 0.1000%; Class
A-2, 0.2000%; Class A-3, 0.3000%; Class A-4, 0.4600%; Class M-1, 0.4500%; Class
M-2, 0.4650%; Class M-3, 0.4800%; Class M-4, 0.5700%; Class M-5, 0.6150%; Class
M-6, 0.6900%; Class B-1, 1.2300%; Class B-2, 1.4250%; Class B-3, 2.8500%; Class
B-4, 3.6000%; Class B-5, 3.6000%.
Pass-Through Rate: For any Distribution Date, the "Pass-Through
Rate" for each class of LIBOR Certificates will be a per annum rate equal to the
lesser of (1) One-Month LIBOR plus the related Pass-Through Margin for such
classes and that Distribution Date and (2) the WAC Cap.
PCAOB: The Public Company Accounting Oversight Board.
53
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicers, the Trustee, the Securities Administrator 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 Xxxxx Fargo Advantage Prime Money Market Fund or any other fund for
which Xxxxx Fargo Bank, National Association, the Trustee or an affiliate
thereof serves as an investment advisor, administrator, shareholder
servicing agent, and/or custodian or subcustodian, notwithstanding that
(i) Xxxxx Fargo Bank, National Association, or an affiliate thereof
charges and collects fees and expenses from such funds for services
rendered, (ii) Xxxxx
54
Fargo Bank, National Association, 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 Xxxxx Fargo Bank, National Association, 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
(vii) if previously confirmed in writing to the Securities
Administrator, 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).
55
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 Securities Administrator pursuant to Section 3.07(f) in the
name of Securities Administrator for the benefit of the Certificateholders, and
designated in trust for registered holders of IXIS Real Estate Capital Trust
2006-HE3, Mortgage Pass Through Certificates, Series 2006-HE3, 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 Securities Administrator 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) December
24, 2006.
Pre-Funding Reserve Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Section 3.07(j) in
the name of the Securities Administrator, for the benefit of the Class X
Certificateholders and designated "Xxxxx Fargo Bank, National Association, in
trust for holders of IXIS Real Estate Capital Trust 2006-HE3, Mortgage
Pass-Through Certificates, Series 2006-HE3, Class X".
Prepayment Charge: Any prepayment premium, penalty or charge
collected by a 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 a Servicer with respect to any Mortgage Loan as to
which a Principal Prepayment in Full occurs from the 1st day of the month
through the 15th day of the month in which such Distribution Date occurs and
that represents interest that accrues from the 1st day of such month to the date
of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the portion of the Prepayment
Period from and including the 16th day of the month preceding the month in which
such Distribution Date occurs (or from the day following the Cut-off Date, in
the case of the first Distribution Date) through the last day of such month the
subject of a Principal Prepayment in Full, that was applied by a 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
interest at the applicable Adjusted Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days
56
commencing on the date on which the prepayment is applied and ending on the last
day of the calendar month preceding such Distribution date.
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 Servicers
on or prior to the related Determination Date or advanced by the applicable
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 Servicers with
respect to such Distribution Date; and (v) the proceeds of any termination of
the Trust Fund pursuant to Section 11.01 (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 any Servicer is entitled to be
reimbursed pursuant to this Agreement.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated September
26, 2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
57
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.
Quick Loan: Quick Loan Funding Inc., a California corporation.
Quick Loan Assignment Agreement: The Assignment and Recognition
Agreement, dated as of September 29, 2006, by and among the Unaffiliated Seller,
the Depositor and Quick Loan, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Quick Loan in
connection with any Subsequent Transfer of Quick Loan Mortgage Loans.
Quick Loan Mortgage Loan: A Mortgage Loan which was acquired from
Quick Loan by the Unaffiliated Seller pursuant to the Quick Loan Purchase
Agreement, and which has been acquired by the Trust Fund.
Quick Loan Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of May 1, 2006, as amended to
date, by and between the Unaffiliated Seller and Quick Loan.
Rating Agency: Each of Standard & Poor's, Fitch and Xxxxx'x. 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 and the Securities Administrator. 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 10.06,
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, the Securities Administrator, and the Servicers.
Realized Loss: With respect to each Liquidated Mortgage Loan the
excess (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) of the unpaid principal balance of a Liquidated Mortgage Loan
together with accrued and unpaid interest thereon over the Liquidation Proceeds,
net of customary out-of-pocket expenses incurred by the applicable 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
58
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.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act and similar state laws.
Remainder Amount: As defined in Section 11.01.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC Adjusted WAC Cap: The weighted average of the interest rates
on the REMIC IV Accretion Directed Classes and the Class IV-Accrual Interest.
REMIC Provisions: Provisions of the federal income tax law relating
to REMICs, which appear at sections 860A through 860G of Subchapter M of Chapter
1 of the Code, and related provisions, and regulations promulgated thereunder,
as the foregoing may be in effect from time to time as well as provisions of
applicable state laws.
REMIC Trust: The segregated pool of assets consisting of the Trust
Fund, exclusive of Prepayment Charges, the Supplemental Interest Trust, the
Excess Reserve Fund Account, the Pre-Funding Account, the Swap Account, the
Pre-Funding Reserve Account, the Capitalized Interest Account and the Interest
Rate Swap Agreement.
REMIC I: As described in the Preliminary Statement.
REMIC I Regular Interest: As described in the Preliminary Statement.
REMIC II: As described in the Preliminary Statement.
REMIC II Regular Interest: As described in the Preliminary
Statement.
REMIC III: As described in the Preliminary Statement.
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REMIC III Net WAC: The weighted average of the interest rates on the
Class II C1 through Class II C53 Interests and the Class II J1 Interests.
REMIC III Regular Interest: As described in the Preliminary
Statement.
REMIC IV: As described in the Preliminary Statement.
REMIC IV Accretion Directed Class: As described in the Preliminary
Statement.
REMIC IV Net WAC: The weighted average of the interest rates on the
Class III-C1a through Class III-C52a, Class III-C1b through Class III-C52b
Interests and the Class III-J1 Interests.
REMIC IV Regular Interest: As described in the Preliminary
Statement.
REMIC V: As described in the Preliminary Statement.
REMIC V Regular Interest: As described in the Preliminary Statement.
Remittance Date: With respect to any Distribution Date, the 21st day
(or if such day is a Saturday, then the first business day immediately preceding
that day, or if such day is a Sunday or otherwise not a Business Day, then the
immediately following Business Day) of the month of the related Distribution
Date.
REO Disposition: The final sale by the applicable 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.
Reportable Event: As defined in Section 8.12(g).
Representative: Xxxxxx Xxxxxxx & 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 xxxxxxxxxxxx
X&X
60
Advances and Servicing Advances, (C) all unpaid Servicing Fees, (D) all expenses
reasonably incurred by the Servicers, the Trustee, the Custodian, the Securities
Administrator, the Master Servicer, the Backup Servicer or the Unaffiliated
Seller, as the case may be, in respect of a breach or defect, including, without
limitation, expenses arising out of any such party's enforcement of the
Originator's repurchase obligation, to the extent not included in (B), and (E)
all costs and expenses incurred by, or on behalf of, the Trust Fund in
connection with any violation by such Mortgage Loan of a predatory or
abusive-lending law or (y) if such Mortgage Loan is being repurchased by the
related Originator, all other amounts payable by such Originator in accordance
with the terms of the related Mortgage Loan Purchase Agreement.
Request for Release: The Request for Release submitted by a Servicer
to the Trustee and Custodian, substantially in the form of Exhibit K.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Master Servicer or the Securities Administrator, as applicable, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer or any other officer of the Trustee, the Master Servicer or the
Securities Administrator, as applicable, 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, in each case, shall have direct responsibility for
the administration of this Agreement.
Rose: Rose Mortgage, Inc., a New Jersey corporation, and its
successors in interest.
Rose Assignment Agreement: The Assignment and Recognition Agreement,
dated as of September 29, 2006, by and among the Unaffiliated Seller, the
Depositor and Rose, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Rose in connection with any
Subsequent Transfer of Rose Mortgage Loans.
Rose Mortgage Loan: A Mortgage Loan which was acquired from Rose by
the Unaffiliated Seller pursuant to the Rose Purchase Agreement, and which has
been acquired by the Trust Fund.
Rose Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of November 1, 2005, as amended to
date, by and between the Unaffiliated Seller and Rose.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless
61
otherwise specified herein, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the scheduled
payment due on such Mortgage Loan.
Scheduled Principal Balance: With respect to any Mortgage Loan: (a)
as of the Cut-off Date, the outstanding principal balance of such Mortgage Loan
as of such date, net of the principal portion of all unpaid Scheduled Payments,
if any, due on or before such date; (b) as of any Due Date subsequent to the
Cut-off Date up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of
(i) the principal portion of each Scheduled Payment due on or before such Due
Date but subsequent to the Cut-off Date, whether or not received, (ii) all
Principal Prepayments received before such Due Date but after the Cut-off Date,
(iii) the principal portion of all Liquidation Proceeds and Insurance Proceeds
received before such Due Date but after the Cut-off Date, net of any portion
thereof that represents principal due (without regard to any acceleration of
payments under the related Mortgage and Mortgage Note) on a Due Date occurring
on or before the date on which such proceeds were received and (iv) any
reduction in the principal balance of such Mortgage Loan incurred with respect
thereto as a result of a Deficient Valuation occurring before such Due Date, but
only to the extent such reduction in principal balance represents a reduction in
the 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.
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.
Securities Administrator: Xxxxx Fargo Bank, National Association, a
banking association organized under the laws of the United States, and its
successors and assigns, in its capacity as Securities Administrator hereunder.
Securities Administrator, Backup Servicer and Master Servicer Fee:
With respect to any Distribution Date, an amount equal to the product of (a)
one-twelfth of the Securities Administrator, Backup Servicer and Master Servicer
Fee Rate and (b) the sum of (i) the Stated Principal Balance of the Mortgage
Loans as of the prior Distribution Date (or as of the Cut-off Date in the case
of the first Distribution Date) and (ii) the Pre-Funding Amount.
Securities Administrator, Backup Servicer and Master Servicer Fee
Rate: With respect to each Mortgage Loan, 0.0050% per annum.
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.
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Senior Specified Enhancement Percentage: As of any date of
determination, 41.40%.
Servicer: Each of Master Financial and Saxon, each in its capacity
as a Servicer hereunder.
Servicer Remittance Report: As defined in Section 4.03(c).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable 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 applicable Servicer in
connection with executing and recording instruments of satisfaction, deeds of
reconveyance or Assignments of Mortgage in connection with any foreclosure in
respect of any Mortgage Loan to the extent not recovered from the Mortgagor or
otherwise payable under this Agreement. No Servicer shall be required to make
any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit Q
hereto.
Servicing Fee: With respect to each Servicer and each Mortgage Loan
and for any calendar month, an amount equal to one month's interest (or in the
event of any payment of interest which accompanies a Principal Prepayment in
Full made by the Mortgagor during such calendar month, interest for the number
of days covered by such payment of interest) at the Servicing Fee Rate on the
applicable Stated Principal Balance of such Mortgage Loan at the end of the
related Due Period. Such fee shall be payable monthly, and shall be pro rated
for any portion of a month during which the Mortgage Loan is serviced by such
Servicer under this Agreement. The Servicing Fee for each servicer 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 such 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 applicable 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 Function Participant: As defined in Section 3.23(a).
63
Servicing Officer: Any officer of either 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, the Securities Administrator, the Master Servicer and the Custodian
by such 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 Master Financial or Saxon commenced servicing such Mortgage Loan,
as set forth on the Mortgage Loan Schedule.
Servicing Trigger Event: With respect to each Determination Date, a
Servicing Trigger Event exists if total Cumulative Loss Percentage exceeds: (i)
8.50% on any Determination Date up to, and including, the fifth anniversary of
the Cut-off Date; or (ii) 10.82% on any Determination Date from the fifth to,
and including, the tenth anniversary of the Cut-off Date. Following the tenth
anniversary of the Cut-off Date, no Servicing Trigger Event shall exist.
Specified Subordinated Amount: With respect to any Distribution Date
prior to the Stepdown Date, an amount equal to 1.85% of the Maximum Pool
Principal Balance; and with respect to any Distribution Date on and after the
Stepdown Date, an amount equal to 3.70% 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 XxXxxx-Xxxx 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 10.06 the address for notices to Standard & Poor's shall be
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - IXIS Real Estate Capital Trust
2006-HE3, or such other address as Standard & Poor's may hereafter furnish to
the Depositor, the Trustee, the Securities Administrator and the Servicers.
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 Securities Administrator 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
64
Balance of any Mortgage Loan will give effect to any Scheduled Payments of
principal received by the related Servicer on or prior to the related
Determination Date or advanced by the related 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 October 2009 and (b) the Distribution Date on which the
aggregate Class Certificate Balance of the Class A Certificates have been
reduced to zero and (ii) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose only after taking into
account scheduled and unscheduled payments of principal on the Mortgage Loans on
the last day of the related Due Period but prior to any allocation of the
Principal Distribution Amount together with any principal payments from the Swap
Account to the LIBOR Certificates on the applicable Distribution Date) is
greater than or equal to the Senior Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by a Servicer, a Subservicer, or the Master Servicer or
the Securities Administrator, as applicable, that is not responsible for the
overall servicing (as "servicing" is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the Current Maximum Amount for that Distribution Date on
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date plus, except for federal
income tax purposes, the Class Certificate Balances of the Class P Certificates
(after giving effect to the payment of the Principal Remittance Amount on such
Certificates on such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount 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
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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: Any Person that services Mortgage Loans on behalf of a
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreement: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance
with the terms of this Agreement or the related Mortgage Loan Purchase
Agreement, as applicable, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit K, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than, the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity no greater than (and not more than one year less than that of)
the Deleted Mortgage Loan; and (v) comply with each representation and warranty
set forth in Sections 3.01(f), 3.01(h), 3.01(n), 3.01(o), 3.01(p) and 3.03 of
the Unaffiliated Seller's Agreement, each representation and warranty set forth
in the applicable Mortgage Loan Purchase Agreement and each of the requirements
set forth in Sections 2.01(c) hereof.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(d).
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Supplemental Interest Trust: IXIS Real Estate Capital Supplemental
Interest Trust 2006-HE3 established pursuant to Section 2.01(d).
Swap Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 3.07(m) in the name of the
Securities Administrator, on behalf of the Supplemental Interest Trust, for the
benefit of the Certificateholders and the Swap Provider, and designated "Xxxxx
Fargo Bank, National Association, in trust for registered holders of IXIS Real
Estate Capital Trust 2006-HE3, Mortgage Pass-Through Certificates, Series
2006-HE3 and IXIS Financial Products, Inc.".
Swap Payment Rate: For any Distribution Date the Swap Payment Rate
is a fraction, the numerator of which is any Net Swap Payment or Swap
Termination Payment (other than a Defaulted Swap Termination Payment) owed to
the Swap Provider for such Distribution Date and the denominator of which is the
Stated Principal Balance of the mortgage loans at the beginning of the related
Due Period plus amounts in the Pre-Funding Account, multiplied by 12.
Swap Provider: IXIS Financial Products Inc., a Delaware corporation,
and any successor thereto.
Swap Termination Payment: A termination payment required to be made
by either the Supplemental Interest Trust or the Swap Provider pursuant to the
Interest Rate Swap Agreement as a result of termination of the Interest Rate
Swap Agreement.
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of REMIC I, REMIC II, REMIC III, REMIC IV and
REMIC V, respectively, in the manner provided under Treasury regulations section
1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 11.01.
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 Servicers on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable
to the LIBOR Certificates pursuant to Section 4.02(a)(i) and Net Swap Payments
to the Swap Provider on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
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Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: The occurrence of either a Delinquency Trigger Event
or a Cumulative Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(d).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) each
Account, other than the Swap Account and the Excess Reserve Fund Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) all rights of the
Depositor against the Unaffiliated Seller under the Unaffiliated Seller's
Agreement; (v) all rights of the Depositor against each Originator under the
related Assignment and Recognition Agreement and the related Mortgage Loan
Purchase Agreement; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Unaffiliated Seller's Agreement: The Unaffiliated Seller's
Agreement, dated as of the date hereof, among the Unaffiliated Seller and the
Depositor relating to the sale of the Mortgage Loans from the Unaffiliated
Seller to the Depositor.
Underwriters' Exemption: Prohibited Transaction Exemption 90-24, as
amended.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the excess of (i) the sum of the Accrued
Certificate Interest for such Distribution Date and any portion of such Accrued
Certificate Interest from prior Distribution Dates remaining unpaid over (ii)
the amount in respect of interest on such Class of Certificates actually
distributed on that Distribution Date and (b) 30 days' interest on the amount in
clause (a) above at the applicable Pass-Through Rate (to the extent permitted by
applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amount with respect to such Class over (ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates and (b) the amount by which the Class Certificate
Balance of such Class has been increased due to the distribution of any
Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
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organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans,
less the Swap Payment Rate, and (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 is required
hereunder to have acquired pursuant to Subsequent Transfer Agreements) and (iii)
Substitute Mortgage Loans. It is agreed and understood by the parties hereto
that it is not intended that any Mortgage Loan be included in the Trust Fund
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
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Loan so assigned (to the extent such documents or instruments are required to be
delivered by the related Originator under each Mortgage Loan Purchase
Agreement):
(i) the original Mortgage Note bearing all intervening
endorsements evidencing a complete chain of assignment from the originator
to the related Originator, endorsed "Pay to the order of _________,
without recourse" and signed in the name of the related Originator by an
authorized officer. To the extent that there is no room on the face of the
Mortgage Notes for endorsements, the endorsement may be contained on an
allonge, unless the Trustee and the Custodian are advised by the related
Originator that state law does not so allow. If the Mortgage Loan was
acquired by an Originator in a merger, the endorsement must be by
"[related Originator], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by the related Originator
while doing business under another name, the endorsement must be by
"[related Originator], formerly known as [previous name]";
(ii) the original of any guarantee executed in connection with
the Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon.
If in connection with any Mortgage Loan, the original Mortgage with
evidence of recording 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);
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(vi) the originals of all intervening assignments of mortgage,
evidencing a complete chain of assignment from the originator (or MERS
with respect to each MERS Designated Mortgage Loan) to the related
Originator, with evidence of recording thereon or if any such intervening
assignment has not been returned from the applicable recording office or
has been lost or if such public recording office retains the original
recorded assignments of mortgage;
(vii) the original or duplicate lender's title policy and all
riders thereto or, if such original is unavailable, either an original
title binder or an original or copy of the title commitment, and if copies
then certified to be true and complete by the title company; and
(viii) the security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage, if any.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the applicable 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. Within 90 days after the
Closing Date, the Trustee shall, for the benefit of the Holders of the
Certificates, based solely on the list of MERS Designated Mortgage Loans and
screen printouts from the MERS system provided to the Trustee by the
Unaffiliated Seller (such to be provided to the Trustee no later than 45 days
from the Closing Date), the Trustee shall confirm, on behalf of the Trust, that
the Trustee is shown as the Investor with respect to each MERS Designated
Mortgage Loan on such screen printouts. If the Trustee is not shown as the
Investor with respect to any MERS Designated Mortgage Loans on such screen
printouts, the Trustee shall promptly notify the Unaffiliated Seller of such
fact and the Unaffiliated Seller shall then either cure such defect or
repurchase such Mortgage Loan in accordance with Section 2.03.
From time to time, each 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
applicable 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 applicable
Servicer, or the applicable Servicer's designee shall direct the Custodian to
promptly forward such Assignment of Mortgage to such Servicer for recording. No
later than thirty (30) Business Days following the date of receipt by a Servicer
of all necessary
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recording information for a Mortgage, such 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 applicable Servicer that recordation is
necessary for the enforcement of rights under, or satisfaction or assignment of,
the related Mortgage, at which time, such Servicer shall record any such
Assignment of Mortgage in accordance with the terms hereof. If any Assignment of
Mortgage is required to be recorded pursuant to the terms hereof, the Mortgage
shall be assigned from the related Originator, to "Deutsche Bank National Trust
Company, as trustee under the Pooling and Servicing Agreement dated as of
September 1, 2006, IXIS Real Estate Capital Trust 2006-HE3." 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 applicable Servicer for any of the foregoing
costs of recording any such Assignment of Mortgage, such Servicer shall be
entitled to be reimbursed from the Trust Fund from amounts on deposit in its
Collection Account. In the event the related Originator fails to reimburse the
Unaffiliated Seller for the recording costs described above, upon receipt of
written direction from the Unaffiliated Seller, the Trustee shall assign its
rights under the applicable Mortgage Loan Purchase Agreement solely with respect
to payment of such expenses to the Unaffiliated Seller.
The Unaffiliated Seller shall use commercially reasonable efforts to
assist each Servicer in causing the related Originator to deliver (at the
expense of such Originator pursuant to the related Mortgage Loan Purchase
Agreement) to each 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 each Servicer in seeking
reimbursement from the related Originator pursuant to the related Mortgage Loan
Purchase Agreement for any fees or costs incurred by such Servicer in obtaining
such documents.
On or prior to the Closing Date, the Unaffiliated Seller shall
deliver to the Trustee, the Custodian, the Securities Administrator, the Master
Servicer, the Backup Servicer and the Servicers a copy of the Data Tape
Information in electronic, machine readable medium in a form mutually acceptable
to the Custodian, the Trustee, the Securities Administrator, the Master
Servicer, the Backup Servicer and the Servicers. 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, the Securities Administrator, the Master
Servicer, the Backup Servicer and the Servicers.
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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, the Trustee, the
Securities Administrator, the Master Servicer, the Backup Servicer or the
Custodian, then 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, the Trustee or the Securities Administrator, 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 Securities Administrator's receipt
of a Subsequent Transfer Agreement executed by all other parties thereto,
in consideration of the Securities Administrator's delivery on the related
Subsequent Transfer Dates to or upon the order of the Depositor of all or
a portion of the balance of funds in the Pre-Funding Account, the
Depositor shall on any Subsequent Transfer Date sell, transfer, assign,
set over and convey to the Trustee without recourse but subject to terms
and provisions of this Agreement, all of the right, title and interest of
the Depositor in and to the Subsequent Mortgage Loans, including the
outstanding principal of and interest due on such Subsequent Mortgage
Loans, and all other related assets included or to be included in the
Trust Fund with respect thereto.
The amount released from the Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%)
of the aggregate Stated Principal Balances as of the related Subsequent
Cut-off Date of the Subsequent Mortgage Loans so transferred.
(ii) The Subsequent Mortgage Loans and the other property and
rights related thereto described in paragraph (a) above shall be
transferred by the Depositor to the Trust Fund only upon the satisfaction
of each of the following conditions on or prior to the related Subsequent
Transfer Date:
(a) the Unaffiliated Seller shall have provided the Depositor, the
Trustee, the Securities Administrator 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
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information reasonably requested by any of the foregoing with
respect to the Subsequent Mortgage Loans;
(b) the applicable Servicer shall have deposited in the related
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 Securities
Administrator 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) each of the Rating Agencies shall have notified the
Unaffiliated Seller of its consent to the transfer of the
Subsequent Mortgage Loans to the Trust Fund which will be
evidenced to the Trustee in writing;.
(h) the parties to this Agreement shall have delivered to the
Securities Administrator an executed copy of a Subsequent
Transfer Agreement, substantially in the form of Exhibit L
hereto;
(i) the Unaffiliated Seller shall have delivered to the Securities
Administrator an Officer's Certificate confirming the
satisfaction of each condition precedent specified in this
paragraph (ii), and the Opinion of Counsel referenced in
clause (d);
(iii) The obligation of the Trust Fund to purchase the
Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to the
requirements that, following the
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purchase of such Subsequent Mortgage Loans, with respect to the entire
mortgage loan pool:
(A) no more than 4.00% may be second lien mortgage loans;
(B) no more than 40.00% may be first lien mortgage loans which are
secured by Mortgaged Properties which also secure second lien
mortgage loans;
(C) no less than 11.50% and no more than 16.50% 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
8.300%, or more than 8.700%;
(F) the weighted average original LTV must not exceed 81.00%, and
no more than 32.50% of the Mortgage Loans may have LTVs in
excess of 80.00%;
(G) at least 70.00% of the Mortgage Loans must have Prepayment
Charges;
(H) the weighted average Gross Margin for the Adjustable Rate
Mortgage Loans must be at least 6.000%;
(I) the weighted average credit score (FICO Score) must be at
least 620, 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 645;
(K) no more than 25.00% may have an interest-only period;
(L) no more than 5.00% of the Mortgage Loans will be 10 year/40
year dual amortization Mortgage Loans;
(M) the weighted average initial periodic rate cap for the
Adjustable Rate Mortgage Loans may not exceed 2.750%
(N) 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.
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(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 2006-HE3" and Deutsche Bank National Trust Company is hereby appointed as
Trustee in accordance with the provisions of this Agreement. The parties hereto
acknowledge and agree that it is the policy and intention of the Trust to
acquire only Mortgage Loans meeting the requirements set forth in this
Agreement. In addition Depositor does hereby establish, pursuant to the further
provisions of the Agreement and the laws of the State of New York, an express
trust (the "Supplemental Interest Trust") to be known, for convenience, as "IXIS
REAL ESTATE CAPITAL SUPPLEMENTAL INTEREST TRUST 2006-HE3", which, as a subtrust
of the Trust Fund, will hold the Interest Rate Swap Agreement, the Swap Account
and the Excess Reserve Fund Account.
(e) The Trust shall have the capacity, power and authority, and
the Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
The Securities Administrator is hereby authorized and directed to execute the
Interest Rate Swap Agreement on behalf of the Supplemental Interest Trust.
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 or
cause to be delivered via facsimile or original to the Depositor, the Trustee,
the Securities Administrator, the Backup Servicer, the Unaffiliated Seller and
the Servicers 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
Servicers, the Trustee, the Backup Servicer and the Securities Administrator a
Final Certification to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such
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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; (iv) each Mortgage
Note has been endorsed as provided in Section 2.01 of this Agreement; and (v)
upon receipt of the screen printouts specified in Section 2.01, with respect to
each MERS Designated Loan, the Trustee, on behalf of the Trust Fund, is listed
as the Investor of such MERS Designated Loan on the MERS System. The Custodian
shall not be responsible to verify the validity, sufficiency or genuineness of
any document in any Custodial File. Upon receipt of such Final Certification, if
the Depositor or the Unaffiliated Seller determines that any noncompliance
identified by the Custodian is a breach of a representation or warranty relating
to such Mortgage Loan, such party shall give written notice to the Trustee and
the Securities Administrator 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. Each 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
applicable Servicer from time to time.
Section 2.03 Representations, Warranties and Covenants of the
Unaffiliated Seller and the Servicers.
(a) Master Financial hereby makes the representations and
warranties set forth in (i) Schedule II hereto to the Depositor, the
Unaffiliated Seller, the Custodian, the Securities Administrator 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),
Master Financial 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) Saxon hereby makes the representations and warranties set
forth in (i) Schedule III hereto to the Depositor, the Unaffiliated Seller, the
Custodian, the Securities Administrator and the Trustee and (ii) Schedule IIIA
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), Saxon only makes
representations and warranties with respect to those Mortgage Loans on Schedule
IB hereto for which the Servicing Transfer Date has occurred prior to the
Closing Date or the related Subsequent Transfer Date, as applicable.
(c) IXIS Real Estate Capital Inc., in its capacity as the
Unaffiliated Seller, hereby makes the representations and warranties set forth
in Schedule IV hereto to the Depositor, the Trustee, the Securities
Administrator and the Custodian as of the Closing Date.
(d) It is understood and agreed by each Servicer and the
Unaffiliated Seller that the representations and warranties set forth in Section
2.03 shall survive the transfer of the
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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, the Unaffiliated Seller,
the Trustee, the Securities Administrator or either Servicer of a breach by the
Unaffiliated Seller of any of the foregoing representations or any of the
representations and warranties made pursuant to Sections 3.01(f), 3.01(h),
3.01(n), 3.01(o), 3.01(p) or 3.03 of the Unaffiliated Seller's Agreement or by
any Originator of the representations and warranties made pursuant to the
related Assignment and Recognition Agreement, the party discovering such breach
shall give prompt written notice to the others.
Within 90 days of the earlier of either discovery by or notice to
the Unaffiliated Seller of any breach of a representation or warranty set forth
in Section 3.01(f), 3.01(h), 3.01(n), 3.01(o), 3.01(p) or 3.03 of the
Unaffiliated Seller's Agreement that materially and adversely affects the value
of the Mortgage Loans or the interest of the Trustee or the Certificateholders
therein, the Unaffiliated Seller shall use its best efforts to cure such breach
in all material respects and, if such breach cannot be remedied, the
Unaffiliated Seller shall, (i) if such 90-day period expires prior to the second
anniversary of the related Delivery Date, remove such Mortgage Loan from the
Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in this Section 2.03; or (ii) repurchase
such Mortgage Loan at the Repurchase Price; provided, however, that any such
substitution pursuant 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
Accredited with respect to an Accredited 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, Accredited
fails to cure, substitute or repurchase such Mortgage Loan within the period
specified in either the Accredited Assignment Agreement or the Accredited
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 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 Funding America
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with respect to a Funding America 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, Funding
America fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Funding America Assignment Agreement or the
Funding America 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 Mandalay with respect to a Mandalay
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, Mandalay fails to cure, substitute or
repurchase such Mortgage Loan within the period specified in either the Mandalay
Assignment Agreement or the Mandalay 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 Maxim with
respect to a Maxim 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, Maxim fails to cure,
substitute or repurchase such Mortgage Loan within the period specified in
either the Maxim Assignment Agreement or the Maxim 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 Quick Loan with respect to a Quick
Loan 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, Quick Loan fails to cure, substitute
or repurchase such Mortgage Loan within the period specified in either the Quick
Loan Assignment Agreement or the Quick Loan Purchase Agreement, the Unaffiliated
Seller shall cure, substitute or repurchase such Mortgage Loan subject to the
conditions set forth in this
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Section 2.03. Notwithstanding the Unaffiliated Seller's lack of knowledge, in
the event it is discovered by the Unaffiliated Seller, the Depositor or the
Trust (including the Trustee and the Servicers acting on the Trust's behalf),
that the substance of a representation or warranty was inaccurate as of the
applicable date of such representation or warranty and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan, the
Unaffiliated Seller shall use its best efforts to cure such breach or substitute
or repurchase such Mortgage Loan in accordance with this Section 2.03(d).
With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Custodian, on behalf of the Trustee,
for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related Assignment of the Mortgage, and such other documents and agreements as
are required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution is permitted to be made in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the Due Period of
substitution shall not be part of the Trust Fund and will be retained by the
related Originator on the next succeeding Distribution Date. For the Due Period
of substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the
related Originator shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan.
For any month in which the Unaffiliated Seller substitutes one or
more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
applicable 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 related 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 applicable
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 Securities Administrator 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,
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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.
(e) 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.
(f) Based solely on information received with respect to any
Substitute Mortgage Loan from the Unaffiliated Seller or the related Originator,
as applicable, the related 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 related Servicer shall deliver the
amended Mortgage Loan Schedule to the Securities Administrator. 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 related Collection Account of the
amount required to be deposited therein in connection with such substitution as
described in this Section 2.03, the Securities Administrator shall forward the
Request for Release from the related 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.
(g) 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 related 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 applicable Servicer to the Custodian, and the
Custodian shall release the related Custodial File to such Person as directed by
such 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
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such Persons respecting such breach available to Certificateholders, the
Depositor, the Unaffiliated Seller, the Custodian, the Securities Administrator
or the Trustee on their behalf. In the event such required repurchase or
replacement does not occur, the Securities Administrator shall take such actions
as directed upon written direction from the Depositor and the provision of
reasonable indemnity satisfactory to the Securities Administrator in accordance
with Sections 6.03 and 10.02.
(h) 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 written
certification from the Unaffiliated Seller that it has deposited the related
Repurchase Price with the Securities Administrator or receipt by the Trustee of
a 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, the Trustee and the
Securities Administrator.
(i) 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 and the
Securities Administrator 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 Securities Administrator an
Opinion of Counsel, at the expense of the Unaffiliated Seller or the related
Originator, as applicable, addressed to the Trustee and the Securities
Administrator, 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, the Securities
Administrator has executed and
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delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "Startup Day" for
purposes of the REMIC Provisions shall be the Closing Date. Unless otherwise
stated, the "latest possible maturity date" is August 25, 2037, which is the
Distribution Date in the thirteenth month following the month in which the
latest maturity date of any Mortgage Loan occurs.
Section 2.08 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee, the Custodian, the Securities Administrator, the Master Servicer, the
Unaffiliated Seller and each 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;
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(ii) results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had, or, with respect to the Subsequent
Mortgage Loans, will have, good title to, and was, or will be, the sole owner of
each Mortgage Loan, free of any interest of any other Person, and the Depositor
has transferred, or shall transfer, all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
to the Custodian, on behalf of the Trustee, as and in the manner contemplated by
this Agreement is sufficient either (i) fully to transfer to the Trustee, for
the benefit of the Certificateholders, all right, title, and interest of the
Depositor thereto as note holder and mortgagee or (ii) to grant to the Trustee,
for the benefit of the Certificateholders and 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 Servicers to Service Mortgage Loans.
(a) For and on behalf of the Certificateholders, each Servicer
shall service and administer the Mortgage Loans for which it is acting as
Servicer 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:
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(i) any relationship that such Servicer, any Subservicer or
any Affiliate of such Servicer or any Subservicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) such 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, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, each 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, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when such 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. Each 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.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that such Servicer can service the
Mortgage Loans in accordance with the terms of this Agreement. Each 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 applicable Servicer, and furnish, or cause to be furnished, to such Servicer
and any Subservicer such documents as are necessary or appropriate to enable
such Servicer or any Subservicer to carry out their servicing and administrative
duties hereunder, and the Trustee hereby grants to each 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 each Servicer for the purposes described herein to the
extent necessary or desirable to enable the Servicers to perform its duties
hereunder. The Trustee shall not be liable for the actions of the Servicers or
any Subservicers under such powers of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards
of the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for
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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 a
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,
each Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and no Servicer shall (i) permit any
modification with respect to any Mortgage Loan (except in the case of a
defaulted Mortgage Loan) that would change the Mortgage Rate, reduce or increase
the principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such Mortgage Loan (except for a
reduction of interest payments resulting from the application of the
Servicemembers Civil Relief Act or any similar state statutes) or (ii) permit
any modification, waiver or amendment of any term of any Mortgage Loan that
would both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Department of the
Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup day" under
the REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
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 applicable Servicer shall be entitled at its sole discretion 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.
(f) [Reserved]
(g) Notwithstanding the foregoing, with respect to any Mortgage
Loan serviced by Master Financial, upon becoming 60 days Delinquent, Master
Financial will promptly notify Saxon, the Master Servicer, the Securities
Administrator and the Depositor, of the delinquent status of such Mortgage Loan.
In the event that the Scheduled Payment on such Mortgage Loan has not been
received by the 74th day following the related Due Date, Master Financial will
notify the related Mortgagor that servicing of such Mortgage Loan will be
transferred to Saxon and Saxon hereby agrees to accept any such servicing
transfer. Any such servicing transfer from Master Financial to Saxon shall occur
on the first day of the immediately succeeding calendar month and Saxon, as
successor Servicer, shall be subject to all the obligations and entitled to all
the benefits of a successor Servicer set forth in this Agreement.
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Section 3.02 Subservicing Agreements Between the Servicers and
Subservicers.
(a) Each Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). Each Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. Each Servicer shall give notice to the
Depositor, the Securities Administrator, the Master Servicer, the Backup
Servicer and the Trustee of any such Subservicer and Subservicing Agreement,
which notice shall contain all information (including without limitation a copy
of the Subservicing Agreement) reasonably necessary to enable the Securities
Administrator, pursuant to Section 8.12(g), to accurately and timely report the
event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports
under the Exchange Act are required to be filed under the Exchange Act). No
Subservicing Agreement shall be effective until 30 days after such written
notice is received by both the Depositor, the Securities Administrator, the
Master Servicer, the Backup Servicer and the Trustee. The Securities
Administrator, Master Servicer, the Back-up Servicer and the Trustee shall not
be required to review or consent to such Subservicing Agreements and shall have
no liability in connection therewith.
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 Xxxxxxx Mac or Xxxxxx 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.
Each Servicer will examine each Subservicing Agreement to which it is a party
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.
Each 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.
Any variation 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 applicable Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. Each Servicer shall
deliver to the Securities Administrator, the Trustee, the Master Servicer, the
Backup Servicer, the Unaffiliated Seller and the Depositor copies of all
Subservicing Agreements, and any amendments or modifications thereof, promptly
upon such Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, each 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
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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 applicable Servicer,
in its good faith business judgment, would require were it the owner of the
related Mortgage Loans. Each 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.
(c) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor, the
Securities Administrator, the Master Servicer, the Backup Servicer and the
Trustee to comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were a Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. Each Servicer
shall be responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(d) Subject to the conditions set forth in this Section 3.02(d),
each Servicer and any Subservicer engaged by such Servicer is permitted to
utilize one or more Subcontractors to perform certain of its obligations
hereunder. Each Servicer shall promptly upon request provide to the Depositor a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by each Servicer or any such
Subservicer, specifying, not later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(b) (i) the
identity of each such Subcontractor, if any, that is materially "participating
in the servicing function" (with respect to more than 5% of the pool assets)
within the meaning of Item 1122 of Regulation AB, and (ii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (i) of this paragraph. As a
condition to the utilization by a Servicer or any such Subservicer of any
Subcontractor determined to be materially "participating in the servicing
function" (with respect to more than 5% of the pool assets)within the meaning of
Item 1122 of Regulation AB, each Servicer shall cause any such Subcontractor
used by such Servicer (or by any such Subservicer) for the benefit of the
Depositor, the Securities Administrator, the Master Servicer, the Backup
Servicer and the Trustee to comply with the provisions of Section 3.23 of this
Agreement to the same extent as if such Subcontractor were a Servicer. Each
Servicer shall be responsible for obtaining from each such Subcontractor and
delivering to the applicable Persons any assessment of compliance report and
related accountant's attestation required to be delivered by such Subcontractor
under Section 3.23, in each case as and when required to be delivered.
(e) Notwithstanding the foregoing, if a Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, such Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the
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criteria in Item 1108(a)(2)(i) through (iii) of Regulation AB. If a Servicer
determines, pursuant to the preceding sentence, that such Subcontractor is a
"servicer" within the meaning of Item 1101 of Regulation AB and meets the
criteria in Item 1108(a)(2)(i) through (iii) of Regulation AB, then such
Subcontractor shall be deemed to be a Subservicer for purposes of this
Agreement, the engagement of such Subservicer shall not be effective unless and
until notice is given pursuant to Section 3.02(a) and such Servicer shall comply
with Section 3.02(c) with respect thereto.
Section 3.03 Successor Subservicers.
Each Servicer shall be entitled to terminate any Subservicing
Agreement to which it is a party and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement provided, however, that the
termination, resignation or removal of a Subservicer shall be not be effective
until 30 days after written notice is received by the Depositor and the
Securities Administrator that contains all information reasonably necessary to
enable the Securities Administrator, pursuant to Section 8.12(g), to accurately
and timely report the event under Item 6.02 of Form 8-K pursuant to the Exchange
Act (if such reports under the Exchange Act are required to be filed under the
Exchange Act). In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the
applicable Servicer without any act or deed on the part of such Subservicer or
such Servicer, and such 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, the Master Servicer,
Backup Servicer or the Securities Administrator without fee, in accordance with
the terms of this Agreement, in the event that the applicable Servicer shall,
for any reason, no longer be one of the Servicers (including termination due to
an Event of Default).
Section 3.04 Liability of the Servicers.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between a Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
such 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 such Servicer alone were servicing and administering
the Mortgage Loans. Each Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the applicable 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
applicable Servicer alone, and neither the Trustee nor the Securities
Administrator (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. Each Servicer
shall be solely liable for all fees owed by it to any Subservicer, irrespective
of whether such Servicer's compensation pursuant to this Agreement is sufficient
to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by Backup Servicer or Master Servicer.
In the event that Master Financial or Saxon at any time shall for
any reason no longer be a Servicer (including by reason of the occurrence of an
Event of Default), the Backup Servicer (in the event that Master Financial
ceases to be as Servicer) or the Master Servicer (in the event that Saxon ceases
to be as Servicer) or its designee shall thereupon assume all of the rights and
obligations of the applicable Servicer under each Subservicing Agreement that
such Servicer may have entered into, with copies thereof provided to the Backup
Servicer or the Master Servicer, as applicable, prior to the Backup Servicer or
the Master Servicer, as applicable, assuming such rights and obligations, unless
the Backup Servicer or the Master Servicer, as applicable, elects to terminate
any Subservicing Agreement in accordance with its terms as provided in Section
3.03.
Upon such assumption, the Backup Servicer or the Master Servicer, as
the case may be, its designee or the successor Servicer shall be deemed, subject
to Section 3.03, to have assumed all of the applicable Servicer's interest
therein and to have replaced such Servicer as a party to each Subservicing
Agreement to which the predecessor Servicer was a party to the same extent as if
each Subservicing Agreement had been assigned to the assuming party, except that
(i) the applicable Servicer shall not thereby be relieved of any liability or
obligations under any Subservicing Agreement that arose before it ceased to be a
Servicer and (ii) none of the Depositor, the Trustee, the Master Servicer, the
Backup Servicer, their designees or any successor Servicer shall be deemed to
have assumed any liability or obligation of such Servicer (including, but
without limitation, any and all Advances made by the predecessor Servicer) that
arose before such predecessor Servicer ceased to be a Servicer.
The applicable Servicer at its expense shall, upon request of the
Backup Servicer or the Master Servicer, as applicable, deliver to the assuming
party all documents and records relating to each Subservicing Agreement to which
it is a party and the Mortgage Loans then being serviced by it 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.
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Section 3.07 Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts.
(a) Subject to Section 3.07(o), each 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, a
Servicer may (i) waive any late payment charge or, if applicable, any penalty
interest, or (ii) extend the due dates for the Scheduled Payments due on a
Mortgage Note for a period of not greater than 180 days; provided that any
extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, such 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 such Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, a 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 such 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 such 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
such 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 related Collection Account together with and at the time that
the amount prepaid on the related Mortgage Loan is required to be deposited into
the related 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 applicable
Servicer, such 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 Securities Administrator shall establish and
maintain the Excess Reserve Fund Account, on behalf of the Class X
Certificateholders to receive any Basis Risk Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders Basis Risk Carry
Forward Amounts.
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(ii) On each Distribution Date, the Securities Administrator
shall deposit the amount of any Basis Risk Payment made for the benefit of the
Certificateholders 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 Securities
Administrator shall (1) withdraw from the Distribution Account and deposit in
the Excess Reserve Fund Account, as set forth in Section 4.02(a)(iii)(U), the
lesser of (a) the Class X Distributable Amount (without regard to the reduction
in the definition thereof with respect to the Basis Risk Payment) (to the extent
remaining after the distributions specified in Sections 4.02(a)(iii)(A)-(T), and
(b) the Basis Risk Payment and (2) withdraw from the Excess Reserve Fund Account
amounts necessary to pay to such Class or Classes of Certificates the Basis Risk
Carry Forward Amount. Such payments shall be allocated to those Classes on a pro
rata basis based upon the amount of Basis Risk Carry Forward Amount owed to each
such Class and shall be paid in the priority set forth in Section
4.02(a)(iii)(V).
(ii) The Securities Administrator shall account for each of
the Supplemental Interest Trust, the Excess Reserve Fund Account and the Swap
Account as an outside reserve fund within the meaning of Treasury regulations
section 1.860G-2(h) and not as an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Supplemental Interest Trust, the Excess
Reserve Fund Account and the Swap Account are the Class X Certificateholders.
For all federal tax purposes, amounts transferred by REMIC V to the Excess
Reserve Fund Account shall be treated as distributions by the Securities
Administrator to the Class X Certificateholders. For all federal tax purposes,
amounts transferred by REMIC V to the Swap Account shall be treated as
distributions by the Securities Administrator on the Class I Interests.
(iii) Any Basis Risk Carry Forward Amounts paid by the
Securities Administrator to the LIBOR Certificateholders shall be accounted for
by the Securities Administrator as amounts paid first to the Holders of the
Class X Certificates and then to the respective Class or Classes of LIBOR
Certificates.
(iv) Notwithstanding any provision contained in this
Agreement, the Securities Administrator shall not be required to make any
payments from the Excess Reserve Fund Account except as expressly set forth in
this Section 3.07(c) and Sections 4.02(a)(iii)(V)-(W).
(d) The Securities Administrator, on behalf of the Trustee, shall
establish and maintain the Distribution Account on behalf of the
Certificateholders. The Securities Administrator shall segregate and hold all
funds in the Distribution Account separate and apart from its own funds and
general assets. The Securities Administrator shall, promptly upon receipt,
deposit in the Distribution Account and retain therein the following:
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(i) the aggregate amount remitted by each Servicer to the
Master Servicer pursuant to Section 3.11(a)(i) which amounts the Master
Servicer will then remit to the Securities Administrator prior to the
related distribution date;
(ii) any amount deposited by each Servicer pursuant to Section
3.10 in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that any Servicer remit any amount not required to be
remitted, it may at any time direct the Securities Administrator in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Securities Administrator which describes the amounts deposited in
error in the Distribution Account. All funds deposited in the Distribution
Account shall be held by the Securities Administrator in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 4.02. In no event shall the Securities
Administrator incur liability for withdrawals from the Distribution Account at
the direction of the Servicers.
(e) The Securities Administrator, on behalf of the Trustee, shall
establish and maintain the Capitalized Interest Account, on behalf of the
Certificateholders. On the Closing Date, the Securities Administrator shall
deposit $100.00 into the Capitalized Interest Account received from the
Unaffiliated Seller. Withdrawals from the Capitalized Interest Account shall be
made in accordance with Sections 4.02(c) and (d). The Securities Administrator
shall account for the Capitalized Interest Account as an outside reserve fund
within the meaning of Treasury regulations section 1.860G-2(h) and not as an
asset of any REMIC created pursuant to this Agreement. The beneficial owner of
the Capitalized Interest Account shall be the Unaffiliated Seller.
(f) The Securities Administrator, on behalf of the Trustee, shall
establish and maintain the Pre-Funding Account on behalf of the
Certificateholders. On the Closing Date, the Securities Administrator shall
deposit the Initial Pre-Funded Amount into the Pre-Funding Account from the
proceeds of the sale of the LIBOR Certificates. Withdrawals from the Pre-Funding
Account shall be made in accordance with Sections 4.02(e) and (f).
(g) The Securities Administrator may invest the funds in the
Accounts, other than the Collection Account, the Excess Reserve Fund Account or
the Distribution Account, with prior written investment direction. With respect
to the Distribution Account and the Excess Reserve Fund Account such funds shall
be held uninvested. With respect to the Pre-Funding Account and the Capitalized
Interest Account such direction shall be provided by the Unaffiliated Seller,
and shall be in Permitted Investments and such directions shall be in accordance
with Section 3.12.
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(h) Each Servicer shall give prior written notice to the Trustee,
the Securities Administrator, the Master Servicer, each Rating Agency and the
Depositor of any proposed change of the location of the related Collection
Account.
(i) To help fight the funding of terrorism and money laundering
activities, the Trustee will obtain, verify, and record information that
identifies individuals or entities that establish a relationship or open an
account with the Trustee. The Trustee will ask for the name, address, tax
identification number and other information that will allow the Trustee to
identify the individual or entity who is establishing the relationship or
opening the account. The Trustee may also ask for formation documents such as
articles or incorporation, an offering memorandum, or other identifying
documents to be provided.
(j) The Securities Administrator shall establish and maintain the
Pre-Funding Reserve Account, on behalf of the Class X Certificateholders. On the
Closing Date, the Unaffiliated Seller shall remit to the Securities
Administrator and the Securities Administrator shall deposit $6,322,975.36 into
the Pre-Funding Reserve Account. The Securities Administrator shall account for
the Pre-Funding Reserve Account as an outside reserve fund within the meaning of
Treasury regulations section 1.860G-2(h) and not as an asset of any REMIC
created pursuant to this Agreement. For federal income tax purposes, the
beneficial owner of the funds in the Pre-Funding Reserve Account shall be the
Unaffiliated Seller. On the Closing Date, the Class X Certificateholders' rights
in the Pre-Funding Reserve Account will be conveyed to Xxxxx Fargo Bank,
National Association, as indenture trustee on behalf of the Noteholders of the
IXIS Real Estate Capital Inc. NIM 2006-HE3N Notes and shall be subject to the
terms of the NIM Indenture.
(k) On each Subsequent Transfer Date, the amount required to
remain on deposit in the Pre-Funding Reserve Account will be permitted to step
down to an amount equal to the product of (a) $6,322,975.36 multiplied by (b) a
fraction, the numerator of which is the amount remaining in the Pre-Funding
Account (after giving effect to any withdrawals on such Subsequent Transfer
Date) and the denominator of which is the Initial Pre-Funded Amount. Any excess
amount that is not required to remain in the Pre-Funding Reserve Account will be
withdrawn by the Securities Administrator from the Pre-Funding Reserve Account
and released to the Unaffiliated Seller.
(l) On any Subsequent Transfer Date on which at least 99% of the
Initial Pre-Funded Amount has been used to purchase Subsequent Mortgage Loans,
the Securities Administrator shall withdraw and release to the Unaffiliated
Seller any remaining amounts in the Pre-Funding Reserve Account. If less than
99% of the Initial Pre-Funded Amount has been used to purchase Subsequent
Mortgage Loans, then on the Distribution Date following the end of the
Pre-Funding Period, the Securities Administrator shall (a) withdraw an amount
equal to (i) the percentage of the Initial Pre-Funded Amount not used to
purchase Subsequent Mortgage Loans multiplied by (ii) $6,322,975.36 and remit
such amount to the Class X Certificateholders and (b) withdraw any remaining
amounts in the Pre-Funding Reserve Account and release such amounts to the
Unaffiliated Seller, and thereafter the Pre-Funding Reserve Account shall be
terminated.
(m) The Securities Administrator, on behalf of the Trustee, shall
establish and maintain the Swap Account, on behalf of the Supplemental Interest
Trust and the Swap Provider.
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Withdrawals from the Swap Account shall be made in accordance with Section
4.02(h) and all funds therein shall be held uninvested.
(n) The Securities Administrator shall pay the Trustee an annual
fee based on a separate fee schedule. The fee of the Trustee shall be payable
solely by the Securities Administrator from its own funds. The expenses of the
Trustee, if any, shall be paid from the Trust Fund and the fees and expenses of
the Custodian shall be paid in accordance with Section 8.05.
(o) Saxon shall pursue collection efforts on Mortgage Loans which
are Delinquent in accordance with the provisions of this Agreement until the
date on which the Mortgage Loan becomes 180 days Delinquent (the "Charge-off
Date"). If Saxon determines in its sole discretion that foreclosure is not a
viable resolution to the delinquency with respect to a Mortgage Loan which is
Delinquent, Saxon shall charge-off such Mortgage Loan on the applicable
Charge-off Date. Once a Mortgage Loan is 180 days Delinquent, unless foreclosure
proceedings are ongoing or the related Mortgagor has commenced bankruptcy
proceedings, Saxon shall have the right to appoint (and to subsequently
terminate) one or more agents (none of which may be an Affiliate of Saxon) (each
a "Deficiency Collection Agent") for the purpose of pursuing additional
collections relating to one or more Mortgage Loans which are Delinquent (any
such collection, a "Deficiency Collection"); provided, however, that Saxon shall
not make any such appointment unless the applicable Deficiency Collection Agent
enters into a written agreement with Saxon (with a copy to the Trustee) to (i)
promptly remit any Deficiency Collection (net of any commission to which such
Deficiency Collection Agent is entitled to with respect to such Deficiency
Collection, as set forth in such agreement (any such commission so specified, a
"DCA Commission")) to Saxon promptly upon receipt by such Deficiency Collection
Agent, (ii) indemnify Saxon, Trust Fund, the Trustee, the Unaffiliated Seller
and the Depositor and hold them harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, liability, fees and expenses that they may incur or sustain as a
result of any act or omission by the Deficiency Collection Agent, and (iii) make
the Trust Fund and the Trustee third-party beneficiaries of such agreement. The
Trustee shall reasonably cooperate with the Deficiency Collection Agent with
respect to its reasonable requests in connection obtaining any Deficiency
Collection. The Trustee shall have no obligation to approve of, or consent to,
the appointment or termination of any Deficiency Collection Agent and shall have
no obligation or responsibility to supervise or monitor any of its activities or
actions, or to verify compliance with any written agreement with such Deficiency
Collection Agent.
To the extent a Deficiency Collection Agent recovers any Deficiency
Collection, such Deficiency Collection (net of the applicable DCA Commission)
shall be remitted by Saxon to the Master Servicer on the next Remittance Date as
part of the Principal Remittance Amount and distributed by the Securities
Administrator on the next Distribution Date as part of the Available Funds in
accordance with Section 4.02.
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Section 3.08 Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "Subservicing
Account"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the related Servicer. The Subservicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account of the related
Servicer or remit such proceeds to the related Servicer for deposit in the
related Collection Account not later than two Business Days after the deposit of
such amounts in the Subservicing Account. For purposes of this Agreement, such
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) Each Servicer shall ensure that each of the first lien
Mortgage Loans serviced by such Servicer shall be covered by a paid-in-full,
life-of-the-loan tax service contract with a nationally recognized provider
acceptable to the applicable Servicer (each, a "Tax Service Contract"). Each Tax
Service Contract shall be assigned to the Trustee, or its designee, at the
applicable Servicer's expense in the event that a Servicer is terminated as
servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) hereof, each Servicer undertakes to perform such functions.
Each Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. Each Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than two Business Days after a
Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than one Business Day after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the applicable Servicer (or a
Subservicer to the extent provided in the related Subservicing Agreement) out of
related collections for any advances made pursuant to Section 3.01 (with respect
to taxes and assessments) and Section 3.13 (with respect
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to hazard insurance); (iii) refund to Mortgagors any sums as may be determined
to be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Escrow Account, and the applicable Servicer shall
be entitled to withdraw from the Escrow Account any interest earned and not
required to be paid to Mortgagors; (v) clear and terminate the Escrow Account at
the termination of the applicable Servicer's obligations and responsibilities in
respect of the Mortgage Loans under this Agreement, and the applicable Servicer
shall be entitled to withdraw from the Escrow Account any interest earned and
not required to be paid to the Mortgagors; (vi) to transfer such funds to a
replacement Escrow Account that meets the requirements hereof; or (vii) recover
amounts deposited in error. As part of its servicing duties, each Servicer or
Subservicer shall pay to the Mortgagors interest on funds in Escrow Accounts, to
the extent required by law and, to the extent that interest earned on funds in
the Escrow Accounts is insufficient, to pay such interest from its or their own
funds, without any reimbursement therefor. To the extent that a Mortgage does
not provide for Escrow Payments, the applicable Servicer shall determine whether
any such payments are made by the Mortgagor in a manner and at a time that
avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure
of a tax lien. The applicable Servicer assumes full responsibility for the
payment of all such bills within such time and shall effect payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make advances from its own
funds to effect such payments; provided, however, that such advances are deemed
to be Servicing Advances.
Section 3.10 Collection Accounts.
(a) On behalf of the Trustee, each Servicer shall establish and
maintain, or cause to be established and maintained, one or more separate
Eligible Accounts (each such account or accounts, a "Collection Account"), held
in trust for the benefit of the Trustee entitled "Deutsche Bank National Trust
Company on behalf of IXIS Real Estate Capital Trust 2006-HE3". On behalf of the
Trustee, each Servicer shall deposit or cause to be deposited in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the applicable Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the related Cut-off Date (other
than Principal Prepayments) received by it on or prior to the related Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
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(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent such Insurance Proceeds and Condemnation Proceeds are not to be
applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with the express requirements of
law or in accordance with Accepted Servicing Practices, and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer
pursuant to the second paragraph of Section 3.13(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with this Agreement; and
(vii) all Prepayment Charges collected by such Servicer.
The foregoing requirements for deposit in the related Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, NSF fees, reconveyance fees, assumption fees and other similar fees and
charges need not be deposited by the Servicers in the Collection Account and
shall, upon collection, belong to the applicable Servicer as additional
compensation for its servicing activities. In the event that a Servicer shall
deposit in the related Collection Account any amount not required to be
deposited therein, such Servicer may at any time withdraw such amount from its
Collection Account, any provision herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee, the Securities Administrator, the
Master Servicer and the Depositor of the location of its Collection Account
maintained by it when established and prior to any change thereof.
Section 3.11 Withdrawals from the Collection Accounts.
(a) Each Servicer shall, from time to time, make withdrawals from
the Collection Accounts for any of the following purposes or as described in
Section 4.01:
(i) On or prior to each Remittance Date, to remit to the
Master Servicer the Interest Remittance Amount and the Principal
Remittance Amount in respect of the related Distribution Date together
with all amounts representing Prepayment Charges from the Mortgage Loans
received during the related Prepayment Period;
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(ii) to reimburse such Servicer or the Master Servicer for
xxxxxxxxxxxx X&X Advances, but only to the extent of amounts received
which represent Late Collections (net of the related Servicing Fees) of
Scheduled Payments on Mortgage Loans that it Services with respect to
which such P&I Advances were made in accordance with the provisions of
Section 4.01;
(iii) to pay such Servicer, the Master Servicer or any
Subservicer (a) any unpaid Servicing Fees or (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan that it services,
but only to the extent of any Late Collections, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, or other amounts as may be
collected by such Servicer from the related Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to such Servicer as servicing compensation (in
addition to the Servicing Fee) on the Remittance Date any interest or
investment income earned on funds deposited in the related Collection
Account and any Prepayment Interest Excesses;
(v) to pay to the Unaffiliated Seller or the related
Originator, as applicable, with respect to each Mortgage Loan that it
services that has previously been purchased or replaced by the
Unaffiliated Seller or such Originator, as applicable, pursuant to this
Agreement, all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to reimburse such Servicer or the Master Servicer for (a)
any P&I Advance or Servicing Advance previously made which such Servicer
has determined to be a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance in accordance with the provisions of Section 4.01 and
(b) any unpaid Servicing Fees to the extent not recoverable from Late
Collections, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, or other amounts received with respect to the related Mortgage
Loan under Section 3.11(a)(iii); provided, that this clause (b) shall only
apply with respect to Servicing Fees for second lien Mortgage Loans;
(vii) to pay, or to reimburse such Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.15;
(viii) to reimburse such Servicer, the Master Servicer, the
Depositor, the Custodian, the Securities Administrator or the Trustee for
expenses and/or indemnities incurred by or reimbursable to such Servicer,
the Depositor, the Custodian, the Securities Administrator or the Trustee,
as the case may be, pursuant to Section 6.03;
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(ix) to reimburse such Servicer, the Unaffiliated Seller, the
Depositor, the Custodian, the Master Servicer, the Securities
Administrator or the Trustee, as the case may be, for expenses reasonably
incurred in respect of the breach or defect giving rise to the repurchase
obligation under Section 2.03 of this Agreement that were included in the
Repurchase Price of the Mortgage Loan, including any expenses arising out
of the enforcement of the repurchase obligation to the extent not
otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection
Accounts in error; and
(xi) to clear and terminate the Collection Accounts upon
termination of this Agreement.
(b) Each Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from its Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. Each Servicer shall provide written notification to the Master Servicer,
on or prior to the next succeeding Remittance Date, upon making any withdrawals
from the related Collection Account pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and
reconciling the applicable Collection Account in accordance with Accepted
Servicing Practices. Each Servicer shall act promptly to resolve any
discrepancies.
Section 3.12 Investment of Funds in the Accounts.
(a) Each Servicer may invest funds in its Collection Account and
the Master Servicer may direct the Securities Administrator to invest funds in
the Distribution Account, and the Unaffiliated Seller may direct the Securities
Administrator to invest the funds in the Pre-Funding Account, the Pre-Funding
Reserve Account and the Capitalized Interest Account (each of such Accounts, for
purposes of this Section 3.12, an "Investment Account"), in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand no later than the second Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. All such investment directions shall be in
writing and if the Securities Administrator does not receive such written
instructions the Securities Administrator shall invest such amounts in the Xxxxx
Fargo Advantage Prime Money Market Fund. All such Permitted Investments shall be
held to maturity, unless payable on demand. Any investment of funds in an
Investment Account (other than a Collection Account) shall be made in the name
of the Securities Administrator. The Securities Administrator shall be entitled
to sole possession (except with respect to investment direction of funds held in
the related Account and any income and gain realized thereon) over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Securities Administrator or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Securities Administrator. Any investment of funds in a
Collection Account shall be made in the name of
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the related Servicer. Each Servicer shall be entitled to sole possession (except
with respect to investment direction of funds held in the related Account and
any income and gain realized thereon) over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the related Servicer or its agent, together with any
document of transfer necessary to transfer title to such investment to the such
Servicer. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Securities
Administrator may:
(i) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(ii) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) (i) All income and gain realized from the investment of funds
deposited in the related Collection Account with respect to the Servicers shall
be for the benefit of the applicable Servicer and shall be subject to its
withdrawal in the manner set forth in Section 3.11. Each Servicer shall deposit
in the Collection Accounts the amount of any loss of principal incurred in
respect of any such Permitted Investment directed by the applicable Servicer
made with funds in such accounts immediately upon realization of such loss. (ii)
All income and gain realized from the investment of funds deposited in the
Pre-Funding Account, the Pre-Funding Reserve Account and the Capitalized
Interest Account held by or on behalf of the Unaffiliated Seller shall be
retained in such Investment Account, subject to withdrawal as provided in
Section 4.02. Whether in regard to the Pre-Funding Account or the Capitalized
Interest Account, the Unaffiliated Seller shall deposit in the Pre-Funding
Account or the Capitalized Interest Account, as applicable, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Securities Administrator shall take such action as may
be appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. The Securities Administrator shall
not be liable for the amount of any loss incurred in respect of any investment
or lack of investment of funds held in any Investment Account or the
Distribution Account if made in accordance with this Section 3.12.
(d) The Securities Administrator, Backup Servicer and Master
Servicer or any of their Affiliates shall be permitted to receive additional
compensation that could be deemed to be in the Securities Administrator's,
Backup Servicer's or Master Servicer's economic self-interest for (i) serving as
investment adviser, administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in
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certain Permitted Investments. Such compensation shall not be considered an
amount that is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) Each Servicer shall cause to be maintained for each Mortgaged
Property securing any Mortgage Loan serviced by such Servicer fire insurance
with extended coverage on the related Mortgaged Property in an amount which is
at least equal to the least of (i) the outstanding principal balance of such
Mortgage Loan, (ii) the amount necessary to fully compensate for any damage or
loss to the improvements that are a part of such property on a replacement cost
basis and (iii) the maximum insurable value of the improvements which are a part
of such Mortgaged Property, in each case in an amount not less than such amount
as is necessary to avoid the application of any coinsurance clause contained in
the related hazard insurance policy. Each Servicer shall also cause to be
maintained fire insurance with extended coverage on each REO Property serviced
by such Servicer in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by such Servicer under any
such policies (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by a Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Securities Administrator, be added
to the unpaid principal balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the applicable Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).
In the event that a Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better from
Best's (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the applicable Servicer shall, in the event
that there shall not have been
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maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the Mortgage Loans, each
Servicer agrees to prepare and present, on behalf of itself, the Trustee claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Mae or
Xxxxxxx Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall provide the Master Servicer
with copies of any such insurance policies and fidelity bond upon the Master
Servicer's request. Each Servicer shall be deemed to have complied with this
provision if an Affiliate of such Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to such Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be canceled by
such Servicer without thirty days' prior written notice to the Master Servicer.
Each Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption
Agreements.
Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
applicable Servicer shall not be required to take such action if, in its sole
business judgment, such Servicer believes it is not in the best interests of the
Trust Fund and shall not exercise any such rights if prohibited by law from
doing so. If such Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause or if any of the other conditions set forth
in the proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of such Servicer, and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
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the applicable Servicer shall apply such underwriting standards and follow such
practices and procedures as shall be normal and usual in its general mortgage
servicing activities and as it applies to other mortgage loans owned solely by
it. Neither Servicer shall take or enter into any assumption and modification
agreement, however, unless (to the extent practicable in the circumstances) it
shall have received confirmation, in writing, of the continued effectiveness of
any applicable hazard insurance policy, or a new policy meeting the requirements
of this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including, but not limited
to, the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee, the Securities Administrator, the Master
Servicer and the Custodian that any such substitution, modification or
assumption agreement has been completed and forward to the Custodian the
executed original of such substitution or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization Upon Defaulted Mortgage Loans.
Each Servicer shall use its best efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert (which
may include an acquisition of REO Property) the ownership of properties securing
such of the Mortgage Loans as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage from an uninsured cause, the applicable Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan, after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by
such Servicer through Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
Each Servicer shall be responsible for all other costs and expenses incurred by
it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the related property, as contemplated in Section
3.11.
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The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the applicable
Servicer or any Subservicer for any related unreimbursed Servicing Advances,
pursuant to Section 3.11 or 3.17; second, to reimburse the applicable Servicer
for any related xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which such amounts are to be distributed if
not in connection with a liquidation or REO Disposition and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
applicable Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The
portions of the recovery so allocated to interest at the Mortgage Rate (net of
the Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied
as follows: first, to reimburse the applicable Servicer or any Subservicer for
any related unreimbursed Servicing Advances in accordance with Section 3.11 or
3.17, and second, to the Securities Administrator in accordance with the
provisions of Section 4.02, subject to the last paragraph of Section 3.17 with
respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Master Servicer otherwise requests, such Servicer
shall cause an environmental inspection or review of such Mortgaged Property to
be conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Master Servicer with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices, how to
proceed with respect to the Mortgaged Property. In the event (a) the
environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the applicable
Servicer determines, consistent with Accepted Servicing Practices, to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, such Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the Collection
Accounts pursuant to Section 3.11. In the event the applicable Servicer
determines not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, such Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged Property from the
related Collection Account pursuant to Section 3.11.
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Section 3.16 Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by any Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the applicable Servicer will, within five
(5) Business Days of the payment in full, notify the Trustee, the Securities
Administrator and the Custodian by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the related
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Custodial File.
Upon receipt of such certification and Request for Release, the Custodian shall
promptly release the related Custodial File to the applicable Servicer within
five (5) Business Days. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the related
Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Custodian shall, upon
request of any Servicer and delivery to the Custodian, of a Request for Release,
release the related Custodial File to such Servicer, and the Trustee shall, at
the direction of such Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and such Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the applicable Servicer to return each and every document
previously requested from the Custodial File to the Custodian when the need
therefor by such Servicer no longer exists, unless the Mortgage Loan has been
charged-off or liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in a Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and such Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was charged-off or liquidated
and that all amounts received or to be received in connection with such
liquidation that are required to be deposited into the related Collection
Account have been so deposited, or that such Mortgage Loan has become an REO
Property, a copy of the Request for Release of documents shall be released by
the Custodian to the applicable Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the applicable Servicer any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the applicable Servicer a power of
attorney sufficient to authorize such Servicer to execute such documents on its
behalf. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by
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the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Upon receipt of a Request for Release under this Section 3.16, the
Custodian shall deliver the related Custodial File to the applicable Servicer by
regular mail, unless such Servicer requests that the Custodian deliver such
Custodial File to such Servicer by overnight courier (in which case such
delivery shall be at such Servicer's expense). To the extent that the applicable
Servicer requires an overnight courier for such delivery and incurs the related
expense due to such Servicer not having previously received copies of the
documents required to be delivered to such Servicer hereunder, the Unaffiliated
Seller shall use commercially reasonable efforts to assist such Servicer in
causing the related Originator pursuant to the related Mortgage Loan Purchase
Agreement to reimburse such Servicer for such expense.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for
the account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the applicable Servicer shall cause the deed or certificate of sale to
be issued in the name of the Trustee, on behalf of the Certificateholders. Upon
written request by the applicable Servicer, the Trustee shall provide such
Servicer with a power of attorney prepared by such Servicer with respect to such
REO Property.
(b) Each Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. Each Servicer, either itself or through an agent selected by such
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. Each Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
such Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders. The applicable Servicer shall notify the Trustee, the Master
Servicer, the Backup Servicer and the Securities Administrator from time to time
as to the status of each REO Property.
(c) [Reserved].
(d) [Reserved].
(e) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(f) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding P&I Advances, Servicing Advances and unpaid
Servicing Fees provided in Section 3.11, or cause to be deposited, on a daily
basis in the related Collection Account all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property. The
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Master Servicer shall retain all initial proceeds from REO Properties until all
liquidation proceeds with respect to such REO Properties have been received.
(g) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related xxxxxxxxxxxx X&X Advances and Servicing Advances
as well as any unpaid Servicing Fees from proceeds received in connection with
the REO Disposition, as further provided in Section 3.11.
(h) Any net proceeds from a REO Disposition which are in excess of
the applicable Stated Principal Balance plus all unpaid REO Imputed Interest
thereon through the date of the REO Disposition shall be retained by the
applicable Servicer as additional servicing compensation.
(i) Each Servicer shall use its reasonable best efforts to sell,
or cause the Subservicer to sell, any REO Property as soon as possible, but in
no event later than the conclusion of the third calendar year beginning after
the year of its acquisition by REMIC I unless (i) the applicable Servicer
applies for an extension of such period from the Internal Revenue Service
pursuant to the REMIC Provisions and Code Section 856(e)(3), in which event such
REO Property shall be sold within the applicable extension period, or (ii) the
applicable Servicer obtains for the Trustee and the Securities Administrator an
Opinion of Counsel, addressed to the Depositor, the Trustee, the Securities
Administrator and such Servicer, to the effect that the holding by REMIC I of
such REO Property subsequent to such period will not result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the Code or
cause any REMIC created hereunder to fail to qualify as a REMIC under the REMIC
Provisions or comparable provisions of relevant state laws at any time. Each
Servicer shall manage, conserve, protect and operate each REO Property that it
services for the Trustee solely for the purpose of its prompt disposition and
sale in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) or result in the
receipt by any REMIC created hereunder of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under Section 860G(a)(1) of
the Code. Pursuant to its efforts to sell such REO Property, the applicable
Servicer shall either itself or through an agent selected by such Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the Trustee on
behalf of the Certificateholders, rent the same, or any part thereof, as such
Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
provided, however, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.
Section 3.18 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan that it services,
each Servicer shall adjust the Mortgage Rate on the related Adjustment Date and
shall adjust the Scheduled Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. Each Servicer shall execute and deliver
any and all necessary notices required under
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applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Rate and Scheduled Payment adjustments. Each Servicer shall
promptly, upon written request therefor, deliver to the Master Servicer such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments. Upon the discovery
by a Servicer or the receipt of notice from the Master Servicer that such
Servicer has failed to adjust a Mortgage Rate or Scheduled Payment in accordance
with the terms of the related Mortgage Note, such Servicer shall deposit in its
Collection Account from its own funds the amount of any interest loss caused as
such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
Each Servicer shall provide, or cause the applicable Subservicer to
provide, to the Depositor, the Custodian, the Unaffiliated Seller, the
Securities Administrator, the Master Servicer, the Backup Servicer, the Trustee,
the OTS or the FDIC and the examiners and supervisory agents thereof access to
the documentation regarding the Mortgage Loans in its possession. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the applicable
Servicer or any Subservicer. Nothing in this Section shall derogate from the
obligation of any such party to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of any such
party to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of each
Servicer to be Held for the Securities Administrator.
Each Servicer shall account fully to the Trustee, the Master
Servicer, the Securities Administrator for any funds received by such Servicer
or which otherwise are collected by such Servicer as Liquidation Proceeds,
Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, a
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including, but not
limited to, any funds on deposit in its Collection Account, shall be held by
such Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. Each Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in any Account, or any
funds that otherwise are or may become due or payable to the Securities
Administrator for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of setoff against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the applicable Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to such Servicer under this Agreement.
Section 3.21 Servicing Compensation.
(a) As compensation for its activities hereunder, each Servicer
shall, with respect to each Mortgage Loan, be entitled to retain from deposits
to its Collection Account and
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from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan that it services (less any portion of such amounts retained by any
Subservicer). In addition, each Servicer shall be entitled to recover unpaid
Servicing Fees out of related late collections and as otherwise permitted under
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the applicable
Servicer's responsibilities and obligations under this Agreement; provided,
however, that a Servicer may pay from the Servicing Fee any amounts due to a
Subservicer pursuant to a Subservicing Agreement entered into under Section
3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw
from the related Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein. In addition, each Servicer
shall be entitled to retain Prepayment Interest Excesses (to the extent not
required to offset Prepayment Interest Shortfalls), but only to the extent such
amounts are received by such Servicer.
(c) Each Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including payment
of premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance.
Each Servicer shall deliver, and shall cause each Subservicer
engaged by such Servicer to deliver or cause to be delivered, and the Master
Servicer shall deliver, to the Depositor, the Securities Administrator and the
Trustee on or before March 15th of each calendar year, commencing in 2007, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of such Master Servicer, Servicer or Subservicer, as
applicable, during the preceding calendar year and of its performance under this
Agreement or the applicable Subservicing Agreement, as the case may be, has been
made under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer, such Servicer or such
Subservicer, as applicable, has fulfilled all of its obligations under this
Agreement or the applicable Subservicing Agreement, as the case may be, in all
material respects, throughout such year, or, if there has been a default in the
fulfillment of any such obligation in any material respect, specifying each such
default known to such officers and the nature and status thereof. Promptly after
receipt of each such Officer's Certificate, the Depositor shall review such
Officer's Certificate and, if applicable, consult with the Master Servicer, the
applicable Servicer or the applicable Subservicer as to the nature of any
defaults by the Master Servicer, such Servicer or such Subservicer in the
fulfillment of any of the Master Servicer's, such Servicer's or such
Subservicer's obligations. The obligations of the Master Servicer, each Servicer
and each Subservicer under this Section apply to each Master Servicer, Servicer
and
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Subservicer that acted as Master Servicer or serviced a Mortgage Loan, as
applicable, during the applicable period, whether or not the Master Servicer,
any Servicer or any Subservicer is acting as Master Servicer, a Servicer or a
Subservicer, as applicable, at the time such Officer's Certificate is required
to be delivered. None of the Master Servicer, any Servicer or any Subservicer
shall be required to cause the delivery of any Officer's Certificate required by
this Section until March 24th in any given year so long as it has received
written confirmation from the Depositor that a Form 10-K is not required to be
filed in respect of the Trust for the preceding calendar year.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
(a) Not later than March 15th of each calendar year commencing in
2007, each Servicer, the Master Servicer and the Securities Administrator shall
deliver, and each Servicer shall cause each Subservicer engaged by such Servicer
and each Servicer, the Master Servicer and the Securities Administrator shall
cause each Subcontractor utilized by such Servicer (or by any such Subservicer)
or the Master Servicer or the Securities Administrator, as applicable, and
determined by the Servicer, the Master Servicer or the Securities Administrator,
as applicable, pursuant to Section 3.02(e) to be materially "participating in a
servicing function" within the meaning of Item 1122 of Regulation AB (in each
case, a "Servicing Function Participant"), to deliver, each at its own expense,
to the Depositor and the Securities Administrator, a report on an assessment of
compliance with the Servicing Criteria applicable to it that contains (A) a
statement by such party of its responsibility for assessing compliance with the
Servicing Criteria applicable to it, (B) a statement that such party used the
Servicing Criteria to assess compliance with the applicable Servicing Criteria,
(C) such party's assessment of compliance with the applicable Servicing Criteria
as of and for the period ending the end of the fiscal year covered by the Form
10-K required to be filed pursuant to Section 8.12, including, if there has been
any material instance of noncompliance with the applicable Servicing Criteria, a
discussion of each such failure and the nature and status thereof, and (D) a
statement that a registered public accounting firm has issued an attestation
report on such Person's assessment of compliance with the applicable Servicing
Criteria as of and for such period. Each such assessment of compliance report
shall be signed by an authorized officer of the applicable company, and shall
address each of the applicable Servicing Criteria set forth on Exhibit Q hereto,
or as set forth in the notification furnished to the Depositor and the Trustee
pursuant to Section 3.23(c). The parties to this Agreement acknowledge that
where a particular Servicing Criteria has multiple components, each party's
assessment of compliance (and related attestation of compliance) will relate
only to those components that are applicable to such party. Each Servicer, the
Securities Administrator and the Master Servicer hereby acknowledge and agree
that their respective assessments of compliance will cover the items identified
on Exhibit Q hereto as being covered by such party. Promptly after receipt of
each such report on assessment of compliance, (i) the Depositor shall review
each such report and, if applicable, consult with the applicable Servicer, the
Securities Administrator or the Master Servicer as to the nature of any material
instance of noncompliance with the Servicing Criteria applicable to it (and each
Subservicer or Servicing Function Participant engaged or utilized by such
Servicer, such Subservicer, the Master Servicer or the Securities Administrator,
as applicable), as the case may be. None of the Servicer, the Securities
Administrator or the Master Servicer or any Subservicer
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or Servicing Function Participant shall be required to cause the delivery of any
such assessments if a Form 10-K is not required to be filed in respect of the
Trust for the preceding calendar year.
(b) Not later than March 15th of each calendar year commencing in
2007, each Servicer, the Securities Administrator and the Master Servicer shall
cause, and each Servicer shall cause each Subservicer engaged by such Servicer
and each Servicer, the Securities Administrator and the Master Servicer shall
cause each Servicing Function Participant utilized by such Servicer, the
Securities Administrator or the Master Servicer, as applicable (or by any
Subservicer engaged by a Servicer), to cause, each at its own expense, a
registered public accounting firm (which may also render other services to such
party) and that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Securities Administrator and the
Depositor to the effect that (i) it has obtained a representation regarding
certain matters from the management of such Person, which includes an assertion
that such Person has complied with the Servicing Criteria applicable to it
pursuant to Section 3.23(a) and (ii) on the basis of an examination conducted by
such firm in accordance with standards for attestation engagements issued or
adopted by the PCAOB, that attests to and reports on such Person's assessment of
compliance with the Servicing Criteria applicable to it. In the event that an
overall opinion cannot be expressed, such registered public accounting firm
shall state in such report why it was unable to express such an opinion. Each
such related accountant's attestation report shall be made in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act. Such report must be available for general use and not contain
restricted use language. Promptly after receipt of each such accountants'
attestation report, the Depositor shall review the report and, if applicable,
consult with the applicable Servicer, the Securities Administrator or the Master
Servicer as to the nature of any material instance of noncompliance with the
Servicing Criteria applicable to it (and each Subservicer or Servicing Function
Participant engaged or utilized by a Servicer, the Securities Administrator or
the Master Servicer, as applicable, or by any Subservicer engaged by a
Servicer), as the case may be, in the fulfillment of any of such Servicer's, the
Securities Administrator's, the Master Servicer's or the applicable
Subservicer's or Servicing Function Participant's obligations hereunder or under
any applicable sub-servicing agreement. None of the Servicer, the Securities
Administrator or the Master Servicer or any Subservicer or Servicing Function
Participant shall be required to cause the delivery of any such attestation
required by this paragraph if a Form 10-K is not required to be filed in respect
of the Trust for the preceding calendar year.
(c) No later than February 1 of each fiscal year, commencing in
2007, each Servicer shall notify the Securities Administrator and the Depositor
as to the name of each Subservicer engaged by it and each Servicing Function
Participant utilized by it and by each Subservicer engaged by it, and each of
the Master Servicer and the Securities Administrator shall notify the Depositor
as to the name of each Servicing Function Participant utilized by it, and each
such notice will specify what specific Servicing Criteria will be addressed in
the report on assessment of compliance prepared by such Servicing Function
Participant in each case, to the extent of any change from the prior year's
notice, if any. When a Servicer, the Master Servicer or the Securities
Administrator submits its assessment pursuant to Section 3.23(a), such Servicer,
the Master Servicer or the Securities Administrator, as applicable, will also at
such time include the assessment (and related attestation pursuant to Section
3.23(b)) of each Servicing Function Participant utilized by it and by each
Subservicer engaged by it.
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Section 3.24 Backup Servicer or Master Servicer to Act as Servicer.
(a) In the event that Master Financial shall for any reason no
longer be a Servicer hereunder (including by reason of an Event of Default),
except as provided under Section 7.02, the Backup Servicer or its successor
shall, within 60 days, assume all of the rights and obligations of Master
Financial hereunder arising thereafter (except that the Backup Servicer shall
not be (i) liable for losses of Master Financial pursuant to Section 3.10 or any
acts or omissions of the predecessor Servicer hereunder, (ii) obligated to make
Advances if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including,
but not limited to, repurchases or substitutions pursuant to Section 2.03, (iv)
responsible for expenses incurred by, or advances made by, the predecessor
Servicer or (v) deemed to have made any representations and warranties of such
Servicer hereunder). Notwithstanding the foregoing, if Master Financial shall
for any reason no longer be a Servicer hereunder (including by reason of Event
of Default), the Unaffiliated Seller shall have the right, but not the
obligation, to offer to Saxon the right of first refusal to assume all of the
rights and obligations of Master Financial hereunder arising thereafter on
mutually agreeable terms to the parties hereto. In the event that the
Unaffiliated Seller opts not to request Saxon to assume the rights and
obligations of Master Financial or Saxon opts not to assume the rights and
obligations of Master Financial, in either event within seven (7) Business Days
of Master Financial's termination, except in the case of an Event of Default
pursuant to Section 7.01(a) of 7.01(g) unless Saxon has made any such P&I
Advance, Saxon or the Backup Servicer, as applicable, or its successor, shall
within sixty (60) days thereafter assume all such rights and obligations. Any
such assumption by the Backup Servicer or its successor or by Saxon shall be
subject to Section 7.02.
(b) In the event that Saxon shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), except as
provided under Section 7.02, the Master Servicer or its successor shall, within
90 days, assume all of the rights and obligations of Saxon hereunder arising
thereafter (except that the Master Servicer shall not be (i) liable for losses
of Saxon pursuant to Section 3.10 or any acts or omissions of the predecessor
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including, but not limited to,
repurchases or substitutions pursuant to Section 2.03, (iv) responsible for
expenses incurred by, or advances made by, the predecessor Servicer or (v)
deemed to have made any representations and warranties of such Servicer
hereunder).
Every subservicing agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
If a Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Backup Servicer (with respect
to Master Financial) or the Master Servicer (with respect to Saxon) (or any
other successor Servicer) may, at its option, succeed to any rights and
obligations of such Servicer under any subservicing agreement in accordance with
the terms thereof; provided that the Backup Servicer or the Master Servicer, as
applicable, (or any other successor Servicer) shall not incur any liability or
have any obligations in its capacity as successor Servicer under a subservicing
agreement arising prior to the date of such succession
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unless it expressly elects to succeed to the rights and obligations of such
Servicer thereunder; and such Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.
The applicable Servicer shall, upon request of the Backup Servicer
or the Master Servicer, as applicable, but at the expense of such Servicer,
deliver to the assuming party all documents and records relating to each
subservicing agreement (if any) and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held by it and otherwise
use its best efforts to effect the orderly and efficient transfer of the
subservicing agreement to the assuming party.
Section 3.25 Compensating Interest.
Each Servicer shall remit to the Master Servicer on each Remittance
Date an amount from its own funds equal to the Compensating Interest payable by
the applicable Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.
(a) With respect to each Mortgage Loan that it services, each
Servicer agrees to fully furnish, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans that it services and the related
borrowers and shall provide all required notices thereunder.
Section 3.27 Advance Facilities.
Each Servicer is hereby authorized to enter into a financing or
other facility (an "Advance Facility") under which (l) such Servicer sells,
assigns or pledges to another Person (an "Advancing Person") such Servicer's
rights under this Agreement to be reimbursed for any Advances and/or (2) an
Advancing Person agrees to fund some or all P&I Advances or Servicing Advances
required to be made by such Servicer pursuant to this Agreement. Such Servicer
may enter into an Advance Facility without the consent of any Person. Upon
entering into any such Advance Facility, the applicable Servicer shall promptly
notify the Securities Administrator with a notice substantively in the form
attached hereto as Exhibit V and the Securities Administrator shall execute an
acknowledgement of such Advance Facility Notice promptly upon the receipt of
such notice from the related Servicer. Notwithstanding the existence of any
Advance Facility under which an Advancing Person agrees to fund P&I Advances
and/or Servicing Advances on such Servicer's behalf, such Servicer shall remain
obligated pursuant to this Agreement to make P&I Advances and Servicing Advances
pursuant to and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility.
An Advancing Person shall not be required to meet the criteria for
qualification of a subservicer set forth in this Agreement. An Advancing Person
shall be permitted to finance, or
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otherwise sell, assign, pledge or otherwise transfer, any rights to
reimbursement for Advances funded, financed or acquired under the Advance
Facility.
If any Servicer enters into an Advance Facility, such Servicer shall
deliver to the Trustee, the Securities Administrator and the Master Servicer a
notice (an "Advance Facility Notice") stating (a) the identity of the Advancing
Person and (b) the identity of the Person (the "Servicer's Assignee"), which may
be the Advancing Person, that will have the right to be reimbursed by the
Securities Administrator or the Master Servicer directly, or to make withdrawals
from such Servicer's Collection Account pursuant to Section 3.11 to reimburse
itself, for previously xxxxxxxxxxxx X&X Advances and/or Servicing Advances
("Advance Reimbursement Amounts"). Advance Reimbursement Amounts shall consist
solely of amounts in respect of P&I Advances and/or Servicing Advances for which
the Servicer would be permitted to reimburse itself in accordance with Section
3.11, assuming the Servicer had made the related P&I Advance(s) and/or Servicing
Advance(s). An Advance Facility may be terminated by the joint written direction
of such Servicer and the related Advancing Person. Upon any such termination,
the applicable servicer shall deliver to the Trustee, the Securities
Administrator and the Master Servicer a notice (an "Advance Facility Termination
Notice") stating (a) the identity of the terminated Advancing Person and (b) the
identity of the Servicer's Assignee that will have the right to be reimbursed by
the Securities Administrator or the Master Servicer directly, or to make
withdrawals from such Servicer's Collection Account pursuant to Section 3.11 to
reimburse itself, for Advance Reimbursement Amounts.
Notwithstanding the existence of an Advance Facility, the applicable
Servicer, on behalf of the Advancing Person, shall be entitled to receive
reimbursements of P&I Advances and/or Servicing Advances in accordance with
Section 3.11, which entitlement may be terminated by the Advancing Person
pursuant to a written notice to such Servicer, the Trustee, the Securities
Administrator and the Master Servicer. Upon receipt of such written notice, such
Servicer shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Collection Account all Advance Reimbursement Amounts.
None of the Trustee, the Securities Administrator, the Master Servicer, the
Backup Servicer or any Certificateholder shall have any right to, or otherwise
be entitled to, receive any Advance Reimbursement Amounts to which such Servicer
or Servicer's Assignee, as applicable, shall be entitled pursuant to Section
3.11. Without limiting the foregoing, none of the Trustee, the Securities
Administrator, the Master Servicer, the Backup Servicer, any successor Servicer
or other Person shall have any right of set-off against Advance Reimbursement
Amounts hereunder.
Each Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
As between a predecessor Servicer and its Advancing Person, on the
one hand, and a successor Servicer and/or its Advancing Person, if any, on the
other hand, Advance Reimbursement Amounts on a loan-by-loan basis with respect
to each Mortgage Loan as to which a P&I Advance and/or Servicing Advance shall
have been made and be outstanding shall
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be allocated on a "first-in, first out" basis. In the event the Servicer's
Assignee shall have received some or all of an Advance Reimbursement Amount
related to P&I Advances and/or Servicing Advances that were made by a Person
other than such predecessor Servicer or its related Advancing Person in error,
then such Servicer's Assignee shall be required to remit any portion of such
Advance Reimbursement Amount to each Person entitled to such portion of such
Advance Reimbursement Amount. The applicable Servicer shall remain entitled to
be reimbursed pursuant to the Advance Facility by the Advancing Person for all
P&I Advances and Servicing Advances funded by such Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
Any amendment to this Section 3.27 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.27, including amendments to
add provisions relating to successor Servicers, may be entered into by the
Trustee, the Securities Administrator, the Master Servicer, the Backup Servicer,
the Depositor, the Unaffiliated Seller and the Servicer without the consent of
any Certificateholder notwithstanding anything to the contrary in this
Agreement. Notwithstanding anything to the contrary contained in this Agreement,
this Agreement shall not be amended, waived or modified in any respect without
the prior written consent of an Advancing Person if such amendment, waiver or
modification would adversely affect the rights of the Advancing Person hereunder
in any material respect, it being understood that the Advancing Person is an
intended third party beneficiary under this Agreement. The Securities
Administrator shall be entitled to rely on an Opinion of Counsel (which Opinion
of Counsel shall not be an expense of the Securities Administrator, the Master
Servicer, the Backup Servicer, the Trustee or the Trust) as to whether the
amendment will adversely affect the Advancing Person. None of the Trustee, the
Securities Administrator, or the Master Servicer is obligated or liable to repay
from its own funds any Advances financed, funded or otherwise acquired by the
Advancing Person, and none of the Master Servicer, the Backup Servicer, the
Trustee or the Securities Administrator shall have any responsibility to track
or monitor the administration of the financing arrangement between the
applicable Servicer and the Advancing Person. If the applicable Servicer is
replaced by a successor Servicer, the Advancing Person shall continue to be
entitled to receive reimbursements as provided herein but shall have no further
right to make further advances under this Agreement. The pledge, if any, of
applicable Servicer's rights to the Applicable Person under the Advance Facility
conveys no other rights (such as a right to fees after the removal of such
Servicer or the right to become a substitute Servicer) under this Agreement, or
against the Trust Fund or any Certificateholder or any other party to this
Agreement other than such Servicer.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.
(a) The amount of P&I Advances to be made by each Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) with
respect to the Mortgage Loans, the aggregate amount of Scheduled Payments (with
each interest portion
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thereof net of the related Servicing Fee), due on the Due Date immediately
preceding such Remittance Date in respect of such Mortgage Loans, which
Scheduled Payments were not received as of the related Determination Date, plus
(ii) with respect to each REO Property, which REO Property was acquired during
or prior to the related Prepayment Period and as to which such REO Property an
REO Disposition did not occur during the related Prepayment Period, an amount
equal to the excess, if any, of the Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee) that would have been due on
the related Due Date in respect of the related Mortgage Loans, over the net
income from such REO Property transferred to the Collection Accounts for
distribution on such Remittance Date.
(b) On the Remittance Date, each Servicer shall remit in
immediately available funds to the Master Servicer an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties serviced by such Servicer for the related Remittance
Date either (i) from its own funds, (ii) from the related Collection Account, to
the extent of funds held therein for future distribution (in which case, it will
cause to be made an appropriate entry in the records of the related Collection
Account that Amounts Held for Future Distribution have been, as permitted by
this Section 4.01, used by such Servicer in discharge of any such P&I Advance)
or (iii) in the form of any combination of (i) and (ii) aggregating the total
amount of P&I Advances to be made by such Servicer with respect to the Mortgage
Loans and REO Properties. Any Amounts Held For future Distribution and so used
shall be appropriately reflected in such Servicer's records and replaced by such
Servicer by deposit in the related Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by any
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The applicable
Servicer may determine at any time that an Advance made constitutes a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance, as applicable.
The determination by the applicable Servicer that it has made a Nonrecoverable
P&I Advance or a Nonrecoverable Servicing Advance or that any proposed P&I
Advance or Servicing Advance, if made, would constitute a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance, respectively, shall be evidenced
by an Officers' Certificate of such Servicer delivered to the Securities
Administrator, Backup Servicer and Master Servicer.
(e) Each Servicer shall be entitled to reimbursement for P&I
Advances and Servicing Advances as and to the extent set forth in Section 3.11.
(f) On each Remittance Date, the Master Servicer shall deposit all
funds remitted to it by the Servicers pursuant to Sections 3.11(a)(i) and 3.25
and this Section 4.01 in a segregated Eligible Account for the benefit of the
Certificateholders and, prior to each
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Distribution Date, will remit such amounts to the Securities Administrator for
deposit in the Distribution Account. The Master Servicer may retain or withdraw
from the Distribution Account, (i) the Securities Administrator, Backup Servicer
and Master Servicer Fee, (ii) amounts necessary to reimburse it for any
previously unreimbursed Advances and any Advances the Master Servicer deems to
be nonrecoverable from the related Mortgage Loan proceeds, (iii) an amount to
indemnify itself for amounts due in accordance with this Agreement, and (iv) any
other amounts that it is entitled to receive hereunder for reimbursement,
indemnification or otherwise. The amounts remitted by the Servicers to the
Master Servicer on each Servicer Remittance Date shall be credited to the Master
Servicing Account within 2 Business Days once the amounts are identified as a
remittance in connection with the trust and reconciled to the reports provided
by the Servicers.
Section 4.02 Priorities of Distribution.
(a) On each Distribution Date, the Securities Administrator shall,
solely in accordance with the information provided by the Master Servicer,
allocate from amounts then on deposit in the Distribution Account in the
following order of priority and to the extent of the Available Funds remaining:
(i) to the Holders of each class of LIBOR Certificates and
the Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment owed to the Swap Provider
other than a Defaulted Swap Termination Payment owed to the
Swap Provider, if any;
(B) from the Interest Remittance Amount, in the following order of
priority:
(1) to the holders of the Class A Certificates, pro rata,
based on their respective Class Certificate Balances,
the Accrued Certificate Interest and any Unpaid Interest
Amount for each class of Class A Certificates;
(2) payable from any remaining Interest Remittance Amounts,
to the Class M-1 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(3) payable from any remaining Interest Remittance Amounts,
to the Class M-2 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(4) payable from any remaining Interest Remittance Amounts,
to the Class M-3 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
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(5) payable from any remaining Interest Remittance Amounts,
to the Class M-4 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(6) payable from any remaining Interest Remittance Amounts,
to the Class M-5 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(7) payable from any remaining Interest Remittance Amounts,
to the Class M-6 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(8) payable from any remaining Interest Remittance Amounts,
to the Class B-1 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(9) payable from any remaining Interest Remittance Amounts,
to the Class B-2 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(10) payable from any remaining Interest Remittance Amounts,
to the Class B-3 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date;
(11) payable from any remaining Interest Remittance Amounts,
to the Class B-4 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date; and
(12) payable from any remaining Interest Remittance Amounts,
to the Class B-5 Certificates, the Accrued Certificate
Interest for such Class on such Distribution Date.
(ii) (x) on each Distribution Date (A) before the Stepdown
Date or (B) with respect to which a Trigger Event is in effect, to the
Holders of the Class or Classes of LIBOR Certificates then entitled to
distributions of principal as set forth below from the amounts remaining
on deposit in the Distribution Account after making distributions pursuant
to clause (i) above, in an amount equal to the Principal Distribution
Amount in the following order of priority:
(A) to the Holders of the Class A Certificates, first, to the
Class A-1 Certificates until the Certificate Balance of the
Class A-1 Certificates has been reduced to zero, second, to
the Class A-2 Certificates until the Certificate Balance of
the Class A-2 Certificates has been reduced to zero, third, to
the Class A-3 Certificates until the Certificate Balance of
the Class A-3 Certificates has been reduced to zero and
fourth, to the Class A-4 Certificates until the Certificate
Principal Balance of the Class A-4 Certificates has been
reduced to zero; provided, however, that on and after
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the Distribution Date on which the aggregate Class Certificate
Balances of the Subordinated Certificates and the principal
balance of the Class X Certificates have been reduced to zero,
any principal distributions allocated to the Class A
Certificates shall be allocated pro rata among the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, based on
their respective Class Certificate Balances, and distributed
concurrently to the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates;
(B) sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class B-4 Certificates and Class B-5 Certificates, in that
order, until the respective Class Certificate Balances are
reduced to zero;
(y) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the Holders
of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, in an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(A) to the Class A Certificates, the lesser of the Principal
Distribution Amount and the Class A Principal Distribution
Amount, allocated among the Class A Certificates, first, to
the Class A-1 Certificates until the Certificate Balance of
the Class A-1 Certificates has been reduced to zero, second,
to the Class A-2 Certificates until the Certificate Balance of
the Class A-2 Certificates has been reduced to zero, third, to
the Class A-3 Certificates until the Certificate Balance of
the Class A-3 Certificates has been reduced to zero and
fourth, to the Class A-4 Certificates until the Certificate
Balance of the Class A-4 Certificates has been reduced to
zero; provided, however, that on and after the Distribution
Date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the principal balance of the
Class X Certificates have been reduced to zero, any principal
distributions allocated to the Class A Certificates shall be
allocated pro rata among the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates, based on their respective Class
Certificate Balances, and distributed concurrently to the
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates;
(B) to the Class M-1 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(C) to the Class M-2 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-2 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
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(D) to the Class M-3 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(E) to the Class M-4 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-4 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(F) to the Class M-5 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-5 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(G) to the Class M-6 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class M-6 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(H) to the Class B-1 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-1 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(I) to the Class B-2 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-2 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(J) to the Class B-3 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-3 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(K) to the Class B-4 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-4 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(L) to the Class B-5 Certificates, the lesser of the remaining
Principal Distribution Amount and the Class B-5 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining in the Distribution Account after
the distributions in clauses (i) and (ii) above (such amount, the "Net
Monthly Excess Cash Flow"), plus as specifically indicated below, from
amounts on deposit in the Excess Reserve Fund Account, shall be
distributed in the following order of priority:
(A) to the Holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(B) to the Holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
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(C) to the Holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the Holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(E) to the Holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the Holders of the Class M-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(G) to the Holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the Holders of the Class M-4 Certificates, any Unpaid
Realized Loss Amount for such Class;
(I) to the Holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the Holders of the Class M-5 Certificates, any Unpaid
Realized Loss Amount for such Class;
(K) to the Holders of the Class M-6 Certificates, any Unpaid
Interest Amount for such Class;
(L) to the Holders of the Class M-6 Certificates, any Unpaid
Realized Loss Amount for such Class;
(M) to the Holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(N) to the Holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(O) to the Holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(P) to the Holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(Q) to the Holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(R) to the Holders of the Class B-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
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(S) to the Holders of the Class B-4 Certificates, any Unpaid
Interest Amount for such Class;
(T) to the Holders of the Class B-4 Certificates, any Unpaid
Realized Loss Amount for such Class;
(U) to the Holders of the Class B-5 Certificates, any Unpaid
Interest Amount for such Class;
(V) to the Holders of the Class B-5 Certificates, any Unpaid
Realized Loss Amount for such Class;
(W) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment for such Distribution Date;
(X) from amounts on deposit in the Excess Reserve Fund Account, an
amount equal to any unpaid Basis Risk Carry Forward Amount,
prior to application of any amounts on deposit in the Swap
Account, with respect to any LIBOR Certificates allocated to
the LIBOR Certificates in the same order and priority in which
Accrued Certificate Interest is allocated among those Classes
of Certificates, with the allocation to the Class A
Certificates being further allocated: (a) first, between the
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates pro
rata, based upon their respective Class Certificate Balances
and (b) second, any remaining amounts to the Class A-1, Class
A-2, Class A-3 and Class A-4 Certificates, pro rata, based on
any Basis Risk Carry Forward Amounts remaining unpaid, in
order to reimburse such unpaid amounts;
(Y) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(Z) to the Holders of the Class P Certificates (as a payment from
REMIC V to the Class X Certificates), the outstanding
principal balance thereof, if any, and to the Holders of the
Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(W) (to the extent stated in clause (i) of the
definition of Class X Distributable Amount, as interest, and
to the extent stated in clause (ii) of the definition of Class
X Distributable Amount, as principal); and
(AA) to the Holders of the Class R Certificates, any remaining
amount.
(b) On each Distribution Date prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Securities Administrator to the Holders of the Class P
Certificates.
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(c) On the October 2006 and November 2006 Distribution Dates and
on December 24, 2006, the Securities Administrator shall transfer from the
Capitalized Interest Account to the Distribution Account the Capitalized
Interest Requirement, if any, for such Distribution Date.
(d) On either the Distribution Date following the final Subsequent
Transfer Date or December 24, 2006, whichever date is earlier, any amounts
remaining in the Capitalized Interest Account and all Pre-Funding Earnings in
the Pre-Funding Account, after taking into account the transfers in respect of
the Distribution Date described in clause (c) above, shall be paid by the
Securities Administrator to the Unaffiliated Seller.
(e) On each Subsequent Transfer Date, the Unaffiliated Seller
shall instruct in writing the Securities Administrator to withdraw from the
Pre-Funding Account an amount equal to 100% of the aggregate Stated Principal
Balances as of the related Subsequent Cut-off Date of the Subsequent Mortgage
Loans sold to the Trust Fund on such Subsequent Transfer Date and pay such
amount to or upon the order of the Unaffiliated Seller upon satisfaction of the
conditions set forth in Section 2.01(c) with respect to such transfer. The
Securities Administrator may conclusively rely on such written instructions from
the Unaffiliated Seller.
(f) If the Pre-Funding Amount available in the Pre-Funding Account
(exclusive of Pre-Funding Earnings) has been reduced to $100,000 or less by the
close of business on November, 2006 then, on the November 25, 2006 Distribution
Date, after giving effect to any reductions in such Pre-Funding Amount on such
date, the Securities Administrator shall withdraw from the Pre-Funding Account
on such date and deposit in the Distribution Account the amount on deposit in
such Pre-Funding Account other than any Pre-Funding Earnings; if the Pre-Funding
Amount available in such Pre-Funding Account has not been reduced to zero by the
close of business on December 24, 2006, the Securities Administrator shall
withdraw from such Pre-Funding Account the amount on deposit therein, other than
the Pre-Funding Earnings, and deposit such amount into the Distribution Account
on such day for distribution on the December 26, 2006 Distribution Date into the
Distribution Account. Any amount deposited into the Distribution Account
pursuant to the preceding sentence from the Pre-Funding Account shall be
distributed to the Class A Certificates until those Certificates are reduced to
zero; provided that amounts allocated to the Class A Certificates shall be
allocated as follows: first, to the Class A-1 Certificates until the Certificate
Balance of the Class A-1 Certificates has been reduced to zero, second, to the
Class A-2 Certificates until the Certificate Balance of the Class A-2
Certificates has been reduced to zero, and third, to the Class A-3 Certificates
until the Certificate Balance of the Class A-3 Certificates has been reduced to
zero, as a separate payment of principal, on the related Distribution Date.
(g) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) first, to the amount of interest payable to the Class X
Certificates; and
(2) second, pro rata, as a reduction of the Accrued Certificate
Interest for the Class A-1, Class A-2, Class X-0, Xxxxx X-0, Class M-1,
Class M-2, Class M-3, Class M-
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4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates, based on the amount of interest to which such
Classes would otherwise be entitled.
(h) On any Distribution Date any funds on deposit in the Swap
Account shall be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed
to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, if any, owed to the Swap
Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest and, if applicable, any Unpaid Interest Amounts to the extent
unpaid from Available Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5, in that order to pay to pay Accrued Certificate
Interest and, if applicable, any Unpaid Interest Amounts the extent unpaid
from Available Funds;
(v) to the LIBOR Certificates, to pay principal but only to
the extent necessary to maintain the Subordinated Amount at the Specified
Subordinated Amount, after giving effect to payments and distributions
from Available Funds;
(vi) to the Class A certificates, to pay any Basis Risk Carry
Forward Amounts, pro rata, based on their Class Certificate Balances for
such Distribution Date, up to the Swap Payment Allocation for each class
of Class A certificates and to the extent unpaid from Available Funds
(including funds on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 certificates, to pay any Basis Risk Carry Forward
Amounts, up to the Swap Payment Allocation for each class of Class M and
Class B certificates and to the extent unpaid from Available Funds
(including funds on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis
Risk Carry Forward Amount, pro rata, based on their respective remaining
unpaid Basis Risk Carry Forward Amount after the allocation of payments as
set forth in clauses (f) and (g) above;
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(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 certificates, to pay any Unpaid Realized Loss Amounts,
to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination
Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X certificates, any remaining
amounts.
(i) Following the applicable Final Scheduled Distribution Date, no
Class of Certificates other than the Class R Certificates shall be entitled to
receive any remaining amounts. Any amounts remaining in any of the Accounts
shall be applied (i) to the Securities Administrator, the Master Servicer, the
Backup Servicer and the Servicers pro rata to the extent of any remaining unpaid
amounts then owed to them, and then (ii) to the Class R Certificates, any
remaining amount.
Section 4.03 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Securities
Administrator shall make available to each Certificateholder, each Servicer, the
Depositor, the Unaffiliated Seller, the Trustee, the Master Servicer, the Backup
Servicer, the Swap Provider and each Rating Agency a statement (the "Monthly
Statement"), based solely on the information provided by the Master Servicer two
Business Days prior to the Distribution Date, setting forth with respect to the
related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid
Interest Amounts included in such distribution and any remaining Unpaid
Interest Amounts after giving effect to such distribution, any Basis Risk
Carry Forward Amount for such Distribution Date and the amount of all
Basis Risk Carry Forward Amount covered by withdrawals from the Excess
Reserve Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account;
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(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of principal on such
Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of the Expense Fees (stated separately and in
the aggregate) paid to or retained by (i) each Servicer with respect to
such Distribution Date and (ii) the Master Servicer, the Securities
Administrator and the Backup Servicer;
(vii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on
such Distribution Date and the aggregate amount of Advances reported by
each Servicer and the Master Servicer as outstanding as of the close of
business on such Distribution Date;
(ix) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month as reported in the OTS methodology;
(x) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any
REO Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Loans);
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
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(xiv) for each Class of Certificates, the amount of Applied
Realized Loss Amounts incurred during the preceding calendar month and
aggregate Applied Realized Loss Amounts through such Distribution Date;
(xv) the aggregate amount of Subsequent Recoveries incurred
during the preceding calendar month and aggregate Subsequent Recoveries
through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvii) the Subordinated Amount and Specified Subordinated
Amount;
(xviii) the Interest Remittance Amount, the Principal
Remittance Amount and the Prepayment Charges remitted by each Servicer
with respect to that Distribution Date;
(xix) the Pre-Funded Amount as of the end of the prior Due
Period;
(xx) the amount of any principal prepayment on the
Certificates resulting from the application of unused moneys in the
Pre-Funding Account;
(xxi) the Net Swap Payment or Net Swap Receipt, as applicable,
or any Defaulted Swap Termination Payment, if any, for such Distribution
Date; and
In addition, each Form 10-D prepared and filed by the Securities Administrator
pursuant to Section 8.12 shall include the following information with respect to
the related distribution:
(i) material breaches of Mortgage Loan representations and warranties of
which the Securities Administrator has received written instruction to
include in the Form 10-D; and
(ii) material breaches of any covenants under this Agreement of which
the Securities Administrator has received written instruction to include
in the Form 10-D.
(b) The Securities Administrator's responsibility for providing
the above statement is limited to the availability, timeliness and accuracy of
the information derived from the Master Servicer. The Master Servicer's
responsibility for providing the above information is limited to the
availability, timeliness and accuracy of the information provided to the Master
Servicer by the Servicers in the Servicer Remittance Reports upon which the
Master Servicer's information provided to the Securities Administrator shall be
based. The Securities Administrator will provide the above statement via the
Securities Administrator's internet
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website. The Securities Administrator's website will initially be located at
xxx.XXXXxxx.xxx and assistance in using the website can be obtained by calling
the Securities Administrator's investor relations desk at 0-000-000-0000. A
paper copy of the statement will also be made available upon written request.
Upon timely and adequate prior notice to the Depositor and each
Certificateholder, the Securities Administrator may change the manner in which
statements are distributed in order to make such distributions more convenient
and or more accessible to the Depositor and each Certificateholder.
The Securities Administrator shall make available to each Analytics
Company via its website each statement to Certificateholders prepared pursuant
to Section 4.03(a). The Securities Administrator, the Master Servicer and each
Servicer shall cooperate in good faith with the Depositor to reconcile any
discrepancies in such statements, and the Securities Administrator shall provide
any corrections to such statements to each Analytics Company as soon as
reasonably practicable after the such discrepancies have been identified and
resolved.
The Securities Administrator will also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the monthly statement to
Certificateholders and may affix thereto any disclaimer it deems appropriate in
its reasonable discretion (without suggesting liability on the part of any other
party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be made available to
each Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall have been previously provided by
the Securities Administrator.
Not later than the 18th day of each month (or if such day is a
Saturday, the prior Business Day and if such day is a Sunday or otherwise not a
Business Day, prior to, the following Business Day), each Servicer shall furnish
to Depositor with respect to clause (i) below and the Master Servicer and the
Swap Provider with respect to clause (ii) below, a monthly remittance advice
statement (the "Servicer Remittance Report") (in a format mutually agreed upon
by such Servicer, the Master Servicer and the Depositor) and including the
information as provided in Exhibit W hereto, containing such information as
shall be reasonably requested (i) by the Depositor to enable the Depositor to
disclose "static pool information", as required by Item 1105 of Regulation AB,
with respect to the Mortgage Loans, and (ii) by the Securities Administrator
(and including the information as provided in Exhibit W hereto) to enable the
Securities Administrator to provide the reports required by Section 4.03(a) as
to the accompanying remittance and the period ending on the close of business on
the last day of the preceding month. Each Servicer shall deliver to the
Depositor a data tape containing a supplemental report of principal prepayment
made during such period, in form and substance reasonably satisfactory to the
Depositor, containing the information required pursuant to this Section 4.03(d)
on a loan-by-loan basis for all of the Mortgage Loans.
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Not later than the 18th day of each month (or if such day is a
Saturday, the prior Business Day and if such day is a Sunday or otherwise not a
Business Day, prior to, the following Business Day), (x) Master Financial shall
furnish to the Master Servicer, the Backup Servicer and, subject to the terms of
the confidentiality agreement between the related Servicer and the Unaffiliated
Seller, the Unaffiliated Seller and (y) Saxon shall furnish, subject to the
terms of the confidentiality agreement between the related Servicer and the
Unaffiliated Seller, the Unaffiliated Seller, an individual loan accounting
report, as of the Determination Date of each month to document Mortgage Loan
payment activity on an individual Mortgage Loan basis. The corresponding
individual loan accounting report (in electronic format) shall contain the
following:
(i) with respect to each Scheduled Payment, the amount of
such remittance allocable to principal (including a separate breakdown of
any Principal Prepayment);
(ii) with respect to each Scheduled Payment, the amount of
such remittance allocable to interest and assumption fees;
(iii) the amount of servicing compensation received by each
Servicer during the related distribution period;
(iv) the individual and aggregate Stated Principal Balance of
the Mortgage Loans;
(v) the individual and aggregate Scheduled Principal Balances
of the Mortgage Loans;
(vi) the aggregate of any expenses reimbursed to each Servicer
during the prior distribution period pursuant to Section 3.05 and 3.11;
(vii) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (a) as to which the Scheduled Payment is delinquent (1) 31
to 60 days, (2) 61 to 90 days and (3) 91 days or more; (b) as to which
foreclosure has commenced; (c) as to which REO Property has been acquired
and (d) that are in bankruptcy.
Section 4.04 Certain Matters Relating to the Determination of
LIBOR.
LIBOR shall be calculated by the Securities Administrator in
accordance with the definition of LIBOR. Until all of the LIBOR Certificates are
paid in full, the Securities Administrator will at all times retain at least
four Reference Banks for the purpose of
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determining LIBOR with respect to each LIBOR Determination Date. The Securities
Administrator, after consultation with the Depositor, initially shall designate
the Reference Banks. Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Securities Administrator and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Securities Administrator should terminate a Reference Bank, the
Securities Administrator, after consultation with the Depositor, shall promptly
appoint or cause to be appointed another Reference Bank. The Securities
Administrator shall have no liability or responsibility to any Person for (i)
the selection of any Reference Bank for purposes of determining LIBOR or (ii)
any inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 [Reserved]
Section 4.06 [Reserved]
Section 4.07 Allocation of Applied Realized Loss Amounts.
Any Applied Realized Loss Amounts shall be allocated by the
Securities Administrator to the most junior Class of Subordinated Certificates
then outstanding in reduction of the Class Certificate Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount and aggregate
denominations per Class set forth in the Preliminary Statement).
The Depositor hereby directs the Securities Administrator to
register the Class X Certificates and the Class P Certificates initially to
Xxxxx Fargo Bank, National Association, as
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indenture trustee on behalf of the Noteholders of the IXIS Real Estate Capital
Inc. NIM 2006-HE3N Notes, and to deliver such Class X Certificates and Class P
Certificates on the Closing Date to Xxxxx Fargo Bank National Association, or as
otherwise directed by the Depositor.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
(x) by wire transfer in immediately available funds to the account of such
holder at a bank or other entity having appropriate facilities therefor, or (y)
upon the request, in writing, of the applicable Certificateholder, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer and authenticated by the
Securities Administrator by manual or facsimile signature by an authorized
officer. Certificates bearing the manual or facsimile signatures of individuals
who were, at the time such signatures were affixed, authorized to sign on behalf
of the Trustee or Securities Administrator, respectively, shall bind the Trustee
and the Securities Administrator, respectively, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
execution, authentication and delivery of any such Certificates or did not hold
such offices at the date of such Certificate. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless
authenticated by the Securities Administrator by manual signature, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Securities Administrator, on behalf of the Trustee, shall
maintain, or cause to be maintained in accordance with the provisions of Section
5.06, a Certificate Register for the Trust Fund in which, subject to the
provisions of subsections (b) and (c) below and to such reasonable regulations
as it may prescribe, the Securities Administrator shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of transfer of any Certificate,
the Securities Administrator shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument
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of transfer in form satisfactory to the Securities Administrator duly executed
by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to (i) the transfer of Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
and Class P Certificates to the NIM Issuer, if any, or the NIM Trustee, if any,
or (iii) a transfer of the Class X or Class P Certificates from the NIM Issuer,
if any, or the NIM Trustee, if any, to the Depositor, Unaffiliated Seller or an
Affiliate of the Depositor or the Unaffiliated Seller, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit I (the "Transferor Certificate") and either (i) there shall be
delivered to the Securities Administrator a letter in substantially the form of
Exhibit J (the "Rule 144A Letter") or (ii) there shall be delivered to the
Securities Administrator at the expense of the transferor an Opinion of Counsel
that such transfer may be made without registration under the Securities Act. In
the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. The Depositor shall, and
the Unaffiliated Seller may, provide to any Holder of a Private Certificate and
any prospective transferee designated by any such Holder, information regarding
the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee, the Securities Administrator, the Master Servicer, the Backup
Servicer and each Servicer shall cooperate with the Depositor and the
Unaffiliated Seller in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor and the Unaffiliated Seller shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does
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hereby agree to, indemnify the Trustee, the Securities Administrator, the
Depositor, the Servicers, the Master Servicer, the Backup Servicer and the
Unaffiliated Seller against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of Class X, Class P or Class
R Certificates to the Depositor or an Affiliate of the Depositor, (ii) a
transfer of the Class X and Class P Certificates to the NIM Issuer, if any, or
the NIM Trustee, if any, or (iii) a transfer of the Class X or Class P
Certificates from the NIM Issuer, if any, or the NIM Trustee, if any, to the
Depositor, Unaffiliated Seller or an Affiliate of the Depositor or the
Unaffiliated Seller, no transfer of an ERISA-Restricted Certificate shall be
made unless the Securities Administrator shall have received a representation
letter from the transferee in substantially the form of Exhibit J, to the effect
that either (A) such transferee is not an employee benefit plan or arrangement
subject to Title I of ERISA, Section 4975 of the Code or any Federal, state or
local law materially similar to the foregoing provisions of ERISA or the Code
(each, a "Plan"), and is not acting on behalf of any Plan or using the assets of
any Plan to effect such transfer or (B) with respect to the transfer of an
ERISA-Restricted Certificate that is not a Class P, Class X or Class R
Certificate, such transferee is an insurance company that is purchasing the
Certificate with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and the conditions for exemptive relief under Sections I
and III of PTCE 95-60 are satisfied with respect to the purchase and holding of
such Certificate. For purposes of the preceding sentence, with respect to (i)
the transfer of an ERISA-Restricted Certificate that is not a Physical
Certificate and (ii) the transfer of the Class X or Class P Certificates from
the NIM Issuer, if any, or the NIM Trustee, if any, to an Affiliate of the
Depositor or Unaffiliated Seller, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Securities Administrator by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificate. In the event that such representation is violated,
such attempted transfer or acquisition shall be void and of no effect.
Each purchaser or transferee of an Offered Certificate that is a
Plan, or that is acting on behalf of a Plan or using the assets of a Plan to
acquire such Offered Certificate, shall be deemed to represent that (i) it
qualifies as an accredited investor as defined in Rule 501(a)(1) of Regulation D
of the Securities and Exchange Commission under the Securities Act and, for so
long as the Interest Rate Swap Agreement is in effect, (ii) its acquisition and
holding of an interest in the Supplemental Interest Trust will be eligible for
the exemptive relief available under an Investor-Based Exemption.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Securities Administrator in accordance with the
foregoing requirements.
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(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Securities Administrator of any change or impending
change in its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit H;
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Residual Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Residual
Certificate, and (C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person (i) is a Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
Section 5.02(b) and this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in violation of
the provisions of Section 5.02(b) and this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of registration of Transfer of such
Residual Certificate. The Securities Administrator shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by
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the Securities Administrator shall be paid and delivered by the Securities
Administrator to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Securities
Administrator, all information necessary to compute any tax imposed under
Section 860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Residual Certificate to any Holder who is a Non-Permitted
Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the
Trustee, the Securities Administrator, the Unaffiliated Seller or the Servicers,
to the effect that the elimination of such restrictions will not cause the
transfer to be disregarded under Treasury regulations section 1.860E-1(c), cause
any REMIC created hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Residual Certificate hereby consents to any
amendment of this Agreement which, based on an Opinion of Counsel furnished to
the Securities Administrator, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is a Non-Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is a Non-Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of Holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
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All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor or (y)
after the occurrence of an Event of Default, Certificate Owners representing at
least a majority of the Certificate Balance of the Book-Entry Certificates
together advise the Securities Administrator and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Securities Administrator shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully-registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Securities Administrator of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Securities Administrator shall issue the Definitive Certificates. Neither the
Servicers, the Depositor, the Securities Administrator nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Securities Administrator with an adequate inventory of
Certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided, that the Securities Administrator shall
not by virtue of its assumption of such obligations become liable to any party
for any act or failure to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or change of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
is delivered to the Depositor, each Servicer, the Securities
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Administrator and the Trustee such security or indemnity as may be required by
them to hold each of them harmless, then, in the absence of notice to the
Securities Administrator that such Certificate has been acquired by a bona fide
purchaser, the Securities Administrator shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Securities Administrator may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Securities
Administrator and its counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
Each Servicer, the Trustee, the Securities Administrator, the Master
Servicer, the Backup Servicer and the Depositor and any agent of the Servicers,
the Depositor, the Securities Administrator, the Master Servicer, the Backup
Servicer or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicers, the Trustee, the Securities
Administrator, the Master Servicer, the Backup Servicer and the Depositor nor
any agent of the Servicers, the Depositor, the Securities Administrator, the
Master Servicer, the Backup Servicer or the Trustee shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request in writing such
information from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor or a Servicer shall request such information in
writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
Depositor, such Servicer or such Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such Trust Fund held by the
Securities Administrator, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency.
The Securities Administrator will maintain or cause to be maintained
at its expense an office or offices or agency or agencies in Minnesota where
Certificates may be surrendered for registration of transfer or exchange. The
Securities Administrator initially designates its office for such purposes
located at Sixth and Marquette Avenue, Minneapolis, MN
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55479. The Securities Administrator shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicers.
The Depositor and each Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicers.
The Depositor and each Servicer will each keep in full effect its
existence, rights and franchises as a corporation or limited partnership, as the
case may be, under the laws of the United States or under the laws of one of the
states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any person succeeding to the
business of the Depositor or a Servicer, shall be the successor of the Depositor
or such Servicer, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to such Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx or
FHLMC.
Each Servicer is and shall continue to be an institution which is a
Xxxxxx Mae and FHLMC approved seller/servicer in good standing.
Section 6.03 Limitation on Liability of the Depositor, the
Servicers and Others.
None of the Depositor, the Servicers, the Custodian, the Securities
Administrator, the Trustee, the Master Servicer, the Backup Servicer nor any of
their respective directors, officers, employees or agents shall be under any
liability to the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Depositor, the Servicers, the Custodian, the Securities Administrator, the
Trustee, the Master Servicer, the Backup Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicers, the Custodian, the Securities Administrator, the
Trustee, the Master Servicer, the Backup Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence (or with respect to the Depositor, gross negligence) in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor and any director, officer, employee
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or agent of the Depositor may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Servicers, the Custodian, the Securities
Administrator, the Trustee, the Master Servicer, the Backup Servicer and any
director, officer, employee or agent of the Depositor, the Servicers, the
Custodian, the Securities Administrator, the Master Servicer, the Backup
Servicer or the Trustee shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action and, in the case of the Trustee, the Master Servicer and the
Securities Administrator, other matters (other than standard administrative
expenses incurred in its role as Securities Administrator) relating to this
Agreement or the Certificates (including, as to the Trustee and the Securities
Administrator, the undertaking of actions as directed by the Unaffiliated Seller
pursuant to Section 2.03), other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence (or with respect to the
Depositor, gross negligence) in the performance of their respective duties
hereunder or by reason of reckless disregard of their respective obligations and
duties hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action (or direct the Securities Administrator to undertake any such
actions pursuant to Section 2.03 hereof for the benefit of the
Certificateholders) that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Securities Administrator and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor shall be entitled to be reimbursed therefor out of the Collection
Accounts.
Neither Servicer nor any of the officers, employees or agents of
each Servicer shall be under any liability to the Trustee, the Custodian, the
Securities Administrator, the Master Servicer, the Backup Servicer or the
Depositor for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement; provided, however, that this provision
shall not protect each Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in compliance with the terms of this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. Each Servicer and any officer, employee or agent of such Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. Neither
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that each Servicer may undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust Fund, and such Servicer
shall be entitled to be reimbursed therefor out of its Collection Account. In
the event such Servicer agrees, at the request of the Depositor, to act on
behalf of the Depositor in any litigation relating to the origination of a
Mortgage Loan, the Depositor shall pay all expenses associated with the defense
and management of such claim (without reimbursement from the Trust Fund).
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Section 6.04 Limitation on Resignation of the Servicers.
Neither Servicer shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of such
Servicer, the Securities Administrator, the Master Servicer, the Backup
Servicer, the Depositor and the Trustee (and written notice to the Custodian) or
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by such Servicer. Any such
determination permitting the resignation of a Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Depositor and the Securities
Administrator which Opinion of Counsel shall be in form and substance acceptable
to the Depositor and the Securities Administrator. No such resignation shall
become effective until a successor shall have assumed such Servicer's
responsibilities and obligations hereunder. Notwithstanding anything to the
contrary herein, such Servicer may pledge or assign as collateral all its
rights, title and interest under this Agreement to a lender (the "Lender");
provided that the Lender may only terminate a Servicer under this Agreement if
there has been an Event of Default under this Agreement, in which event the
Lender may replace such Servicer in the same manner and subject to the same
conditions applicable in the event such Servicer is appointing a successor
Servicer upon a servicer termination pursuant to Section 7.02.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Rating Agencies' ratings of the
Certificates in effect immediately prior to such action will not be qualified,
reduced or withdrawn as a result thereof (as evidenced by a letter to such
effect from the Rating Agencies) and (ii) such Servicer shall be liable for all
costs and expenses associated with the transfer of servicing, provided further,
that such Servicer shall indemnify and hold each of the Trust Fund, the Master
Servicer, the Backup Servicer, the Trustee, the Custodian, the Depositor, the
other Servicers hereunder, any sub-servicer, the successor Servicer and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that such party may sustain in any way related to such
assignment except with respect to a successor Servicer's failure to comply with
the terms of this Agreement. No assignment by such Servicer shall become
effective until a successor Servicer acceptable to the Depositor and the Master
Servicer shall have assumed in writing such Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement. Any such assignment shall
not relieve a Servicer of responsibility for any of the obligations specified
herein except to the extent that such responsibilities have been expressly
assumed by the successor Servicer.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims.
(a) Each Servicer shall indemnify the Depositor (and its
Affiliate, Xxxxxx Xxxxxxx Mortgage Capital Inc.), the Unaffiliated Seller, the
Custodian, the Securities Administrator, the Master Servicer, the Backup
Servicer and the Trustee and any director, officer, employee, or agent of the
Depositor (or its Affiliate, Xxxxxx Xxxxxxx Mortgage Capital
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Inc.), the Unaffiliated Seller, the Custodian, the Securities Administrator, the
Master Servicer, the Backup Servicer and the Trustee and hold them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain in any way related to any
breach by such Servicer, of any of its representations and warranties referred
to in Section 2.03(a)(i) or the failure of such Servicer to perform its duties
and service the Mortgage Loans in compliance with the terms of this Agreement
(including without limitation, the failure to deliver accurate and complete
information on a timely basis pursuant to Section 4.03(d)). Each Servicer shall
indemnify the Unaffiliated Seller and any director, officer, employee, or agent
of the Unaffiliated Seller and the Trust Fund and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that it may sustain in any way related to any breach by such Servicer,
of any of its representations and warranties referred to in Section 2.03(a)(ii).
Each Servicer immediately shall notify the Depositor, the Unaffiliated Seller,
the Custodian, the Securities Administrator, the Master Servicer, the Backup
Servicer and the Trustee if a claim is made by a third party with respect to any
such breach or failure by the related Servicer under this Agreement, assume
(with the prior written consent of the Depositor, the Unaffiliated Seller, the
Custodian, the Securities Administrator, the Master Servicer, the Backup
Servicer and the Trustee, as applicable) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Unaffiliated Seller, the Custodian, the
Securities Administrator, the Master Servicer, the Backup Servicer or the
Trustee in respect of such claim; provided, that if it is determined that the
Servicer is not obligated to indemnify such parties in accordance with this
Section 6.05, each such party (or the Trust Fund, if applicable) shall promptly
reimburse the applicable Servicer in connection with each of the foregoing
payments made to such party by such Servicer. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of each
Servicer.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Servicer shall indemnify the Depositor (and its Affiliate Xxxxxx
Xxxxxxx Mortgage Capital Inc.), the Unaffiliated Seller, the Custodian, the
Trustee, the Securities Administrator, the Master Servicer, the Backup Servicer
and any director, officer, employee or agent of the Depositor (and its Affiliate
Xxxxxx Xxxxxxx Mortgage Capital Inc.), the Unaffiliated Seller, the Custodian,
the Trustee, the Securities Administrator, the Master Servicer and the Backup
Servicer and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any failure by such Servicer or any Subservicer
engaged by such Servicer or any Subcontractor utilized by such Servicer to
deliver any information, report, certification or accountants' letter when and
as required under Sections 3.22, 3.23, 6.02 or 8.12, including without
limitation any failure by such Servicer to identify pursuant to Section 3.02(e)
any Subcontractor "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then the applicable Servicer shall contribute to the
amount paid or payable by the Person entitled to
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indemnification as a result of the losses, claims, damages or liabilities of
such Person in such proportion as is appropriate to reflect the relative fault
of such Person on the one hand and the applicable Servicer, on the other, in
connection with such Servicer's obligations pursuant to this Section 6.05. This
Section 6.05 shall survive the termination of this Agreement or the earlier
resignation or removal of the applicable Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means with respect to each
Servicer individually, any one of the following events:
(a) any failure by the applicable Servicer to remit to the
Securities Administrator or the Master Servicer any payment required to be made
under the terms of this Agreement which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to such Servicer by the
Depositor, by the Securities Administrator, by the Master Servicer or by the
Trustee or to such Servicer, the Trustee, the Depositor, the Securities
Administrator or the Master Servicer by Certificateholders entitled to at least
25% of the Voting Rights in the Certificates; or
(b) failure on the part of the related Servicer to duly observe or
perform in any material respect any other of the covenants or agreements on the
part of such Servicer set forth in this Agreement which continues unremedied for
a period of forty-five days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten in the case of a failure to observe or perform any of the obligations set
forth in Sections 3.02, 3.22, 3.23, 6.02 or 8.12 (provided that with respect to
Sections 3.22, 3.23 and 8.12, the number of days shall in no case result in the
related Servicer's delivery of the required documents thereunder to be delivered
after March 1 of each year)) after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor, by the Securities Administrator, the Master
Servicer or by the Trustee, or to the Master Servicer by Certificateholders
entitled to at least 25% of the Voting Rights in the Certificates and (ii)
actual knowledge of such failure by a Servicing Officer of the applicable
Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the applicable
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty days; or
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(d) the applicable Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Servicer or of or relating to all or
substantially all of its property; or
(e) the applicable Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its obligations;
or
(f) with respect to Saxon only, Fitch reduces its servicer rating
of Saxon to "RPS2-" or lower, Moody's reduces its servicer rating of Saxon to
"SQ3" or lower, or Standard & Poor's reduces its servicer rating of Saxon to
"Average" or lower; or
(g) any failure of the related Servicer to make any P&I Advance on
any Remittance Date required to be made from its own funds pursuant to Section
4.01 which continues unremedied for one Business Day immediately following the
Remittance Date; or
(h) a breach of any representation and warranty of the applicable
Servicer referred to in Section 2.03(a), which materially and adversely affects
the interests of the Certificateholders and which continues unremedied for a
period of thirty days after the earlier of (i) the date upon which written
notice of such breach is given to such Servicer by the Trustee, by the
Securities Administrator, by the Master Servicer or by the Depositor, or to such
Servicer, the Depositor, the Master Servicer, the Securities Administrator and
the Trustee by any Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates and (ii) actual knowledge of such breach by a
Servicing Officer of such Servicer; or
(i) with respect to Saxon only, any reduction, withdrawal or
qualification of Saxon's servicer rating by any Rating Agency which results in
Saxon being deemed unacceptable by any Rating Agency to act as a primary
servicer for this transaction or a primary servicer or a special servicer for
any other mortgage-backed or asset-backed transaction rated or to be rated by
any such Rating Agency.
(j) the occurrence of a Servicing Trigger Event.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Master
Servicer may, or at the direction of Holders holding a majority of the Voting
Rights, the Master Servicer shall, by notice in writing to the related Servicer
(with a copy to each Rating Agency), terminate all of the rights and obligations
of such Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Master Servicer shall not be required to give
written notice to the related Servicer of the occurrence of an Event of Default
described in clauses (b) through (i) of this Section 7.01 unless and until a
Responsible Officer of the Master Servicer has actual knowledge of the
occurrence of such an Event of Default. In the event that a Responsible Officer
of the Master Servicer has actual knowledge of the occurrence of an event of
default described in clause (a) of this Section 7.01, the Master Servicer shall
give written notice to the applicable Servicer and the Unaffiliated
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Seller of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided, however, that the failure of the Master Servicer to
provide such notice within one Business Day will not affect the rights of the
Depositor or the Certificateholders to provide notice as required pursuant to
clause (a) of this Section 7.01. On and after the receipt by the applicable
Servicer of such written notice, all authority and power of such Servicer
hereunder, whether with respect to the Mortgage Loans serviced by such Servicer
or otherwise, shall pass to and be vested in the Backup Servicer, with respect
to Master Financial, or the Master Servicer, with respect to Saxon. If an Event
of Default described in clause (g) shall occur, and shall not have been cured at
least two (2) Business Days, prior to the related Distribution Date, the Master
Servicer shall, prior to the related Distribution Date, immediately terminate
the rights and obligations of the applicable Servicer hereunder and the Backup
Servicer or the Master Servicer, as the case may be, shall succeed to the rights
and obligations of such Servicer hereunder pursuant to Section 7.02, including
the obligation to immediately make any P&I Advances, which the applicable
Servicer failed to make subject to Section 4.01 pursuant to the terms hereof
prior to such Distribution Date. Any costs related to the transfer of servicing
from the Servicer to any Backup Servicer or the Master Servicer, as applicable,
shall be reimbursable by the Trust Fund. Each of the Backup Servicer and the
Master Servicer is hereby authorized and empowered to execute and deliver, on
behalf of the applicable Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of either Servicer to pay amounts owed pursuant to Article VIII. Master
Financial agrees to cooperate with the Backup Servicer and Saxon agrees to
cooperate with the Master Servicer in effecting the termination of such
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Backup Servicer or the Master Servicer, as applicable, of
all cash amounts which shall at the time be credited to the Collection Account
of such predecessor Servicer, or thereafter be received with respect to the
Mortgage Loans serviced by such predecessor Servicer.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to the
notice terminating such Servicer's rights and obligations as a Servicer
hereunder and received after such notice, that portion thereof to which such
Servicer would have been entitled pursuant to Section 3.11, and any other
amounts payable to such Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder in accordance with Section 3.11
and in the time period specified in Section 3.11. Such Servicer shall continue
to be entitled to the benefits of Section 6.03, notwithstanding any termination
hereunder, with respect to events occurring prior to such termination.
Section 7.02 Backup Servicer and Master Servicer to Act;
Appointment of Successor.
On and after the time the applicable Servicer receives a notice of
termination pursuant to Section 3.24 or Section 7.01, subject to the third
paragraph of this Section 7.02, the Backup Servicer (in the case of any such
notice of termination that is received by Master
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Financial) or the Master Servicer (in the case any such notice of termination
that is received by Saxon) shall, subject to and to the extent provided in
Section 3.24, be the successor to such Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on such Servicer by the terms and provisions hereof and
applicable law including the obligation to make P&I Advances and Servicing
Advances pursuant to Section 4.01. As compensation therefor, the Backup Servicer
or the Master Servicer, as the case may be, shall be entitled to all funds
relating to the Mortgage Loans that the applicable Servicer would have been
entitled to charge to the related Collection Account or the Distribution Account
if such Servicer had continued to act hereunder including, if such Servicer was
receiving the Servicing Fee, the Servicing Fee and the income on investments or
gain related to the related Collection Account and the Distribution Account. The
predecessor Servicer shall pay all costs and expenses incurred in connection
with a transfer of servicing in the event of termination of the Servicer for
cause to a successor Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Backup Servicer or the Master
Servicer, as applicable, are not paid by the predecessor Servicer, such costs
shall be paid by the Trust.
Notwithstanding the foregoing, if the Backup Servicer or the Master
Servicer has become the successor to a Servicer in accordance with Section 7.01,
the Backup Servicer or the Master Servicer, as applicable, may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act, or at the direction of Holders holding a majority of the
Voting Rights, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution the appointment of
which does not adversely affect the then current rating of the Certificates by
each Rating Agency, as the successor to such Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
such Servicer hereunder. Any successor to such Servicer shall be an institution
which is a Xxxxxx Xxx and FHLMC approved seller/servicer in good standing, which
is willing to service the Mortgage Loans and which executes and delivers to the
Depositor and the Trustee an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such Servicer (other than
liabilities of such Servicer under Section 6.03 incurred prior to termination of
such Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a Servicer hereunder, the
Backup Servicer (in the case of Master Financial) or the Master Servicer (in the
case of Saxon), unless the Backup Servicer or Master Servicer, as the case may
be, is prohibited by law from so acting, shall, subject to Section 3.05, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Backup Servicer or the Master Servicer, as the case may be, may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans serviced by such predecessor Servicer as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of
the Servicing Fee Rate and amounts paid to the predecessor Servicer from
investments. The Backup Servicer or the Master Servicer, as applicable, and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Backup Servicer (in the
case of Master Financial) or the Master Servicer (in the case of Saxon) nor any
other
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successor Servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the predecessor Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it. If no successor
Servicer meeting such qualifications shall have been approved by the Depositor
within 30 days after the giving of such notice or resignation, the Backup
Servicer or the Master Servicer, as the case may be, may petition any court of
competent jurisdiction for the appointment of a successor Servicer meeting the
qualifications set forth in Section 7.02.
Notwithstanding any provision in this Agreement to the contrary,
prior to the 20th day following the notice of termination of a Servicer, the
terminated Servicer may appoint a successor Servicer that satisfies the
eligibility criteria of a successor Servicer set forth in this Section 7.02;
provided any successor Servicer hereunder agrees to fully effect the servicing
transfer within 30 days following the termination of the predecessor Servicer
and to make all P&I Advances, Servicing Advances and payments pursuant to
Section 7.01(a) that would otherwise be made by the Servicer under this Section
7.02 as of the date of such appointment and prior thereto, the terminated
Servicer makes all P&I Advances, Servicing Advances and payments pursuant to
Section 7.02; provided, however, that, in the event that such terminated
Servicer does not make such P&I Advances, Servicing Advances or payments under
Section 7.01(a), the provisions of this paragraph shall not apply; otherwise the
Master Servicer shall appoint a successor Servicer as otherwise set forth in
this Section 7.02. Any proceeds received in connection with the appointment of
such successor Servicer shall be the property of the terminated Servicer or its
designee.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to a
Servicer, the Securities Administrator shall give prompt written notice thereof
to Certificateholders, the Unaffiliated Seller, the Swap Provider and to each
Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Securities Administrator shall transmit by mail to all Certificateholders,
the Unaffiliated Seller, the Swap Provider and each Rating Agency notice of each
such Event of Default hereunder known to the Securities Administrator, unless
such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
The Trustee, before the occurrence of a Master Servicer Event of
Default and after the curing of Master Servicer Events of Default that may have
occurred, shall undertake to
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perform such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless a Master Servicer Event of Default of which a Responsible
Officer of the Trustee has actual knowledge or written notice has occurred and
is continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement; and
(d) none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer under this
Agreement except during such time, if any, as the Trustee shall be the successor
to, and be vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian.
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Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require indemnity satisfactory to the Trustee
against such cost, expense or liability as a condition to taking any such
action;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) except as otherwise provided in Section 7.01 or if a
Responsible Officer of the Trustee has actual knowledge or written notice of the
occurrence of a Master Servicer Event of Default, the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Default until a
Responsible Officer of the Trustee shall have received written notice thereof;
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(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the powers
granted hereunder; and
(l) the Custodian shall be entitled to the same protections,
immunities and indemnities afforded the Trustee in and under this Agreement.
(m) the Custodian shall be permitted to utilize one or more
Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Custodian complies with Section 3.02(e) as if the
Custodian were a "Servicer" pursuant to that Section. The Custodian shall
indemnify the Depositor (and its Affiliate Xxxxxx Xxxxxxx Mortgage Capital
Inc.), the Unaffiliated Seller, the Trustee, the Securities Administrator, the
Master Servicer, the Backup Servicer and any director, officer, employee or
agent of the Depositor (and its Affiliate Xxxxxx Xxxxxxx Mortgage Capital Inc.),
the Unaffiliated Seller, the Trustee, the Securities Administrator, the Master
Servicer and the Backup Servicer and hold them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain in any way related to the failure of the Custodian
to perform any of its obligations under Section 3.23, including without
limitation any failure by the Custodian to identify pursuant to Section 3.02(e)
any Subcontractor that is a Servicing Function Participant. This indemnity shall
survive the termination of this Agreement or the earlier resignation or removal
of the Custodian.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect solely as to the Trustee's execution of
the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Backup Servicer, the
Securities Administrator or any Servicer of any funds paid to the Depositor, the
Master Servicer, the Backup Servicer, the Securities Administrator or any
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Distribution Account or any Collection Account by the Depositor, the Master
Servicer, the Backup Servicer, the Securities Administrator or any Servicer.
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The Trustee, the Securities Administrator, and the Master Servicer
shall have no responsibility for filing or recording any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder (unless the Backup Servicer (or the Master Servicer as successor
Backup Servicer) shall have become a successor Servicer).
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Trustee's and Custodian's Fees and Expenses.
(a) As compensation for its activities under this Agreement, the
Trustee and the Custodian each shall be paid its fee by the Securities
Administrator from the Securities Administrator's own funds pursuant to a
separate fee schedule and shall have no lien on the Trust Fund for the payment
of such fees. The Custodian, the Trustee and any director, officer, employee, or
agent of the Custodian or the Trustee shall be indemnified by the Servicers
against any loss, liability, or expense (including reasonable attorney's fees)
resulting from any failure by the Servicers to perform their obligations under
this Agreement. This indemnity shall survive the termination of this Agreement
or the resignation or removal of the Trustee and the Custodian, as applicable,
under this Agreement.
(b) [Reserved].
(c) Each of the undertakings and agreements made on the part of
the Trustee on behalf of the Trust Fund in the Certificates is made and intended
not as a personal undertaking or agreement by the Trustee but is made and
intended for the purpose of binding only the Trust Fund.
Section 8.06 Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause any of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicers and their affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor, the Unaffiliated Seller or the Servicers other
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than the Trustee as Backup Servicer who may become a successor to Master
Financial as a servicer.
Section 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicers, the Custodian, the Unaffiliated Seller, the Securities Administrator,
the Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer, one copy to the Master
Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and each Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, each Servicer, Securities Administrator
and the predecessor trustee shall
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execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder; provided that such corporation shall be eligible under
Section 8.06 without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. In connection with the succession to the Trustee under this
Agreement by any Person (i) into which the Trustee may be merged or
consolidated, or (ii) which may be appointed as a successor to the Trustee, the
Trustee shall notify the Securities Administrator and the Depositor of such
succession or appointment and shall furnish to the Securities Administrator and
the Depositor in writing and in form and substance reasonably satisfactory to
the Securities Administrator and the Depositor, all information reasonably
necessary for the Securities Administrator to accurately and timely report,
pursuant to Section 8.12(g), the event under Item 6.02 of Form 8-K pursuant to
the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, each Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as each
Servicer and the Trustee may consider appropriate. If a Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the
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terms of eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee (except for the obligation of the Trustee as successor Master
Servicer under this Agreement to advance funds), shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust, and not the Master Servicer, shall be liable for
the payment of reasonable compensation and expenses to any such separate trustee
or co-trustee on each Distribution Date.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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Section 8.11 Tax Matters.
As set forth in the Preliminary Statement, the assets within the
Trust Fund for which any REMIC election is to be made shall constitute, and the
conduct of matters relating to such assets shall be consistent with the
treatment of such assets as, a REMIC. To this end, the Securities Administrator
covenants and agrees to act as agent (and the Securities Administrator is hereby
appointed to act as agent) on behalf of any REMIC created hereunder, and that in
such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to any REMIC described in
the Preliminary Statement containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, furnish to the
Internal Revenue Service on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of REMIC I, REMIC II, REMIC III,
REMIC IV and REMIC V be treated as a REMIC on the federal tax return for its
first taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of any REMIC created hereunder as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC
created hereunder;
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(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC created hereunder
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or the Securities Administrator or such
other person as may be required to sign such returns by the Code or state or
local laws, regulations or rules;
(j) maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for REMIC I, REMIC II, REMIC III,
REMIC IV and REMIC V, within the meaning of Treasury regulations section
1.860F-4(d), and the Securities Administrator is hereby designated as agent of
such Certificateholder for such purpose (or if the Securities Administrator is
not so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall, as
and when necessary and appropriate, represent each REMIC created hereunder in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of each REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any REMIC created hereunder, and
otherwise act on behalf of the REMIC in relation to any tax matter or
controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to Prepayment Charges as the beneficial ownership of
interests in a grantor trust, and not as an obligation of any REMIC created
hereunder, for federal income tax purposes.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value to each Class
of Certificates of the right to receive Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account and the Swap Account. Thereafter, the Depositor
shall provide to the Securities Administrator promptly upon written request
therefor any additional information or data that the Securities Administrator
may, from time to time, reasonably request to enable the Securities
Administrator to perform its duties under this Agreement. The Depositor hereby
indemnifies the Securities Administrator for any
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losses, liabilities, damages, claims, or expenses of the Securities
Administrator arising from any errors or miscalculations of the Securities
Administrator that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Securities
Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any REMIC
created hereunder as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of such REMIC as defined in Section 860G(c) of
the Code, on any contribution to the REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, including any minimum
tax imposed on the REMIC pursuant to Sections 23153 and 24874 of the California
Revenue and Taxation Code, if not paid as otherwise provided for herein, the tax
shall be paid by (i) the Master Servicer or the Securities Administrator if such
tax arises out of or results from negligence of the Securities Administrator in
the performance of any of its obligations under this Agreement, (ii) the
applicable Servicer if such tax arises out of or results from a breach by such
Servicer of any of its obligations under this Agreement, (iii) the Unaffiliated
Seller shall pay if such tax arises out of or results from the Unaffiliated
Seller's obligation to repurchase a Mortgage Loan pursuant to Section 2.03, or
(iv) in all other cases, or if the Master Servicer, the Securities
Administrator, a Servicer or the Unaffiliated Seller fails to honor its
obligations under the preceding clauses (i), (ii) or (iii), any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 4.02(a).
Section 8.12 Periodic Filings.
(a) The Securities Administrator, the Master Servicer and each
Servicer shall reasonably cooperate with the Depositor in connection with the
reporting requirements of the Trust under the Exchange Act. The Securities
Administrator shall prepare for execution by the Depositor any Forms 8-K, 10-D
and 10-K required by the Exchange Act and the rules and regulations of the
Commission thereunder, in order to permit the timely filing thereof, pursuant to
the terms of this Section 8.12, and the Securities Administrator shall file (via
the Commission's Electronic Data Gathering and Retrieval System) such Forms
executed by the Depositor.
(b) The Securities Administrator shall compile all such
information provided to it in a Form 10-D prepared by it.
As set forth on Exhibit R hereto, by the related Distribution Date,
certain parties to this Agreement, within five (5) calendar days after the
related Distribution Date, shall be required to provide to the Securities
Administrator, in XXXXX compatible form, or in such other form as agreed upon by
the Securities Administrator and such party and shall be required to provide to
the Securities Administrator and the Depositor, to the extent known by such
additional parties, any additional information required to be disclosed on Form
10-D ("Additional Form 10-D Disclosure"), if applicable and the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure. Within 10 days after each
Distribution Date (subject to permitted extensions under the Exchange Act), the
Securities Administrator shall prepare and provide to the Depositor for approval
on behalf of the Trust any Form 10-D required by the Exchange Act, in form and
substance as required by the
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Exchange Act, including, without limitation the Additional Form 10-D Disclosure,
as applicable. The Securities Administrator will have no duty or liability for
any failure hereunder to determine or prepare any Additional Form 10-D
Disclosure, except as set forth in the next paragraph.
(c) Each 10-D filing prepared by the Securities Administrator
shall be submitted to the Depositor for approval no later than the fifth
calendar day preceding the filing deadline for such 10-D filing. Upon receipt of
written notice via electronic mail from the Depositor that the 10-D has been
approved, the Securities Administrator shall submit such 10-D for filing with
the commission. If a Form 10-D cannot be filed on time or if a previously filed
Form 10-D needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 8.12(f)(ii). The signing party at the Depositor
can be contacted at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or
such other address as to which the Depositor has provided prior written notice
to the Securities Administrator. The Depositor, the Master Servicer and each
Servicer acknowledge that the performance by the Securities Administrator of its
duties under this Section 8.12(c) related to the timely preparation and filing
of Form 10-D is contingent upon each Servicer, the Master Servicer and the
Depositor and any other Person obligated to provide Additional Form 10-D
Disclosure as set forth on Exhibit R hereto observing all applicable deadlines
in the performance of their duties under this Section 8.12(c). The Securities
Administrator shall have no liability for any loss, expense, damage, or claim
arising out of or with respect to any failure to properly prepare and/or timely
file such Form 10-D, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information or signatures from any party hereto (other than the Securities
Administrator or any Subcontractor utilized by the Securities Administrator)
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct. The Depositor shall be
responsible for reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with the preparation of such Form 10-D.
Promptly (but no later than one Business Day) after filing with the SEC, the
Securities Administrator will make available on its internet website a final
executed copy of each Form 10-D prepared and filed by the Securities
Administrator.
Form 10-D requires the registrant to indicate (by checking "yes" or
"no") that it (1) has filed all reports required to be filed by Section 13 and
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. The Depositor shall
notify the Securities Administrator in writing, no later than the fifth calendar
day after the related Distribution Date with respect to the filing of a report
on Form 10-D if the answer to the questions should be "no".
Within 90 days after the end of each fiscal year of the Trust or
such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline"), commencing in March 2007, the Securities Administrator shall prepare
and file on behalf of the Trust a Form 10-K, in form and substance as required
by the Exchange Act. Each such Form 10-K shall include the following items, in
each case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (i) an annual
compliance statement for each Servicer, the Master Servicer and each Subservicer
engaged by any Servicer or the Master Servicer, as described under Section 3.22,
(ii)(A) the annual reports on assessment of compliance with servicing criteria
for the Securities Administrator, each
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Servicer, the Master Servicer, each Subservicer engaged by any Servicer and each
Servicing Function Participant utilized by a Servicer, the Master Servicer or
the Securities Administrator, as described under Section 3.23, and (B) if any
such report on assessment of compliance with servicing criteria described under
Section 3.23 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or such report on assessment of
compliance with servicing criteria described under Section 3.23 is not included
as an exhibit to such Form 10-K, disclosure that such report is not included,
(iii)(A) the registered public accounting firm attestation report for the
Securities Administrator, each Servicer, the Master Servicer, each Subservicer
engaged by a Servicer and each Servicing Function Participant utilized by a
Servicer, the Master Servicer or the Securities Administrator, as described
under Section 3.23, and (B) if any registered public accounting firm attestation
report described under Section 3.23 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
such registered public accounting firm attestation report is not included as an
exhibit to such Form 10-K, disclosure that such report is not included, and (iv)
a certification in the form attached hereto as Exhibit M, with such changes as
may be necessary or appropriate as a result of changes promulgated by the
Commission (the "Sarbanes Certification"), which shall be signed by the officer
of the Depositor in charge of securitization. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form 10-K
("Additional Form 10-K Disclosure") shall be delivered to the Securities
Administrator by the Depositor. Pursuant to the following paragraph, the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next paragraph.
All materials delivered to the Securities Administrator for purposes
of this Section 8.12 shall be provided in electronic format compatible with the
XXXXX system. As set forth on Exhibit S hereto, no later than March 1st of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007, certain parties to this Agreement shall be required to
provide to the Securities Administrator and the Depositor, to the extent known
by such applicable parties, any Additional Form 10-K Disclosure, which is
identified as such, if applicable. The Securities Administrator shall compile
all such information provided to it in a Form 10-K prepared by it. The Depositor
will review the Additional Form 10-K Disclosure and either approve or disapprove
the information and inclusion. The Depositor shall be responsible for reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with the preparation of such Additional Form 10-K Disclosure.
After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Depositor for
review. On the 3rd Business Day prior to the 10-K Filing Deadline, an officer of
the Depositor shall sign the Form 10-K and return an electronic or fax copy of
such signed Form 10-K (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. If a Form 10-K cannot be filed
on time or if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 8.12(f)(ii). The
signing party at the Depositor can be contacted at 0000 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, or such other address as to which the Depositor has
provided prior written notice to the Securities Administrator. The Depositor,
each Servicer and the Master Servicer acknowledge that the performance by the
Securities Administrator of its duties under this Section 8.12(c) related to the
timely preparation and filing of Form 10-K is contingent upon each Servicer, the
Master Servicer (and any
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Subservicer or Servicing Function Participant engaged by a Servicer) and the
Depositor and any other Person obligated to provide Additional Form 10-K
Disclosure as set forth on Exhibit R hereto, observing all applicable deadlines
in the performance of their duties under this Section 8.12(c), Section 8.12(e),
Section 3.22 and Section 3.23. The Securities Administrator shall have no
liability for any loss, expense, damage or claim arising out of or with respect
to any failure to properly prepare and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information or signatures from any
party hereto (other than the Securities Administrator or any Subcontractor
utilized by the Securities Administrator) needed to prepare, arrange for
execution or file such Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct. Promptly (but no later than on Business Day) after
filing with the SEC, the Securities Administrator will make available on its
internet website a final executed copy of each Form 10-K prepared and filed by
the Securities Administrator.
Form 10-K requires the registrant to indicate (by checking "yes" or
"no") that it (1) has filed all reports required to be filed by Section 13 and
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. The Depositor shall
notify the Securities Administrator in writing, no later than the fifth calendar
day after the related Distribution Date with respect to the filing of a report
on Form 10-K if the answer to the questions should be "no".
(d) In connection with the execution of a Sarbanes Certification,
the Securities Administrator shall sign a certification (in the form attached
hereto as Exhibit O, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Commission) for the benefit of the
Depositor and its officers and directors and the Master Servicer and each
Servicer shall sign a certification solely with respect to the Master Servicer
or the applicable Servicer, as the case may be, (in the form attached hereto as
Exhibit N, with such changes as may be necessary or appropriate as a result of
changes promulgated by the Commission) for the benefit of the Depositor, the
Securities Administrator and their respective officers, directors and
Affiliates. Each such certification shall be delivered to the Depositor no later
than March 15th of each year (or if such day is not a Business Day, the
immediately following Business Day) and the Depositor shall deliver the Sarbanes
Certification no later than the time set forth for the delivery to the
Securities Administrator of the signed Form 10-K pursuant to Section 8.12(e) for
such year). In the event that prior to the filing date of the Form 10-K in March
of each year, a Responsible Officer of the Securities Administrator, the Master
Servicer or any Servicer has actual knowledge of information material to the
Sarbanes Certification, that party shall promptly notify the Depositor and each
of the other parties signing the certifications. In addition, (i) the Securities
Administrator shall indemnify and hold harmless the Depositor and its officers,
directors, employees, agents and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any breach of the Securities Administrator's obligations under this Section
8.12(d) or the Securities Administrator's negligence, bad faith or willful
misconduct in connection therewith, (ii) each Servicer, severally and not
jointly, shall indemnify and hold harmless the Depositor, the Securities
Administrator, the Master Servicer and their respective officers, directors,
employees, agents and Affiliates from and against any losses, damages,
penalties, fines, forfeitures,
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reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon any breach of the applicable
Servicer's obligations under this Section 8.12(d) or any negligence, bad faith
or willful misconduct of the applicable Servicer in connection therewith, and
(iii) the Master Servicer shall indemnify and hold harmless the Depositor, the
Securities Administrator and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
applicable Servicer's obligations under this Section 8.12(d) or any negligence,
bad faith or willful misconduct of the applicable Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless any indemnified party, then (i) the Securities
Administrator agrees in connection with a breach of the Securities
Administrator's obligations under this Section 8.12(d) or the Securities
Administrator's negligence, bad faith or willful misconduct in connection
therewith that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Securities Administrator on the other and
(ii) each Servicer agrees that it shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities of such indemnified party in such proportion as is appropriate to
reflect the relative fault of such indemnified party, on the one hand, and the
applicable Servicer, on the other hand, in connection with a breach of such
Servicer' obligations under this Section 8.12(d) or any material misstatement or
omission, negligence, bad faith or willful misconduct of such Servicer in
connection therewith.
(e) Upon any filing with the Commission, the Securities
Administrator shall promptly notify the Depositor of such filing.
(f) (i) The obligations set forth in paragraphs (a) through (e)
of this Section shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. Prior to
January 30 of the first year in which the Securities Administrator is able to do
so under applicable law, the Securities Administrator shall file a Form 15
Suspension Notification with respect to the Trust, with a copy to the Depositor.
At any time after the filing of a Form 15 Suspension Notification, if the number
of Holders of the Offered Certificates of record exceeds the number set forth in
Section 15(d) of the Exchange Act or the regulations promulgated pursuant
thereto which would cause the Trust to again become subject to the reporting
requirements of the Exchange Act, the Securities Administrator shall, solely at
the written direction and expense of the Depositor, recommence preparing and
filing reports on Form 10-K, 10-D and 8-K as required pursuant to this Section
8.12 and the parties hereto shall again have the obligations set forth in this
Section.
(ii) In the event that the Securities Administrator is unable
to timely file with the Commission all or any required portion of any Form 8-K,
10-D or 10-K required to be filed pursuant to this Agreement because required
disclosure information was either not delivered to it or delivered to it after
the delivery deadlines set forth in this Agreement, the Securities Administrator
will immediately notify the Depositor and, to the extent affected thereby, each
Servicer and the Master Servicer. In the case of Form 10-D and 10-K, the
Depositor, the Servicers, the Master Servicer and Securities Administrator will
thereupon cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to
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Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Securities
Administrator will, upon receipt of all disclosure information required to be
included on Form 8-K, include such disclosure information on the next Form 10-D.
In the event that any previously filed Form 8-K, 10-D or 10-K needs to be
amended, the party to this Agreement deciding that an amendment to such Form
8-K, 10-D or 10-K is required will notify the Depositor, the Securities
Administrator and, to the extent affected thereby, and, to the extent affected
thereby, each Servicer and the Master Servicer and such parties will cooperate
to prepare any necessary Form 8-KA, 10-DA or 10-KA. Any Form 15, Form 12b-25 or
any amendment to Form 8-K, 10-D or 10-K shall be signed by an officer of the
Depositor. The Depositor, the Master Servicer and Servicers acknowledge that the
performance by the Securities Administrator of its duties under this Section
8.12(f) related to the timely preparation and filing of Form 15, a Form 12b-25
or any amendment to Form 8-K, 10-D or 10-K is contingent upon the Master
Servicer, each Servicer and the Depositor observing all applicable deadlines in
the performance of their duties under this Section 8.12 and Sections 3.22 and
3.23. The Securities Administrator shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file any such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information or signatures from any party hereto (other than the Securities
Administrator or any Subcontractor utilized by the Securities Administrator)
needed to prepare, arrange for execution or file such Form 15, Form 12b-25 or
any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(g) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), solely
upon the prior written request and at the expense of the Depositor, the
Securities Administrator shall prepare and file on behalf of the Trust any Form
8-K, as required by the Exchange Act, provided that the Depositor shall file the
initial Form 8-K in connection with the issuance of the Certificates. Any
disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K ("Form 8-K Disclosure Information") shall be
prepared by the party responsible for preparing such disclosure as set forth on
Exhibit T hereto and compiled by the Securities Administrator at the direction
of the Depositor pursuant to the following paragraph and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K, except
as set forth in the next paragraph. The Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Form 8-K
Disclosure Information. The Depositor shall be responsible for reasonable fees
and expenses assessed or incurred by the Securities Administrator in connection
with the preparation of such Form 8-K Disclosure Information.
As set forth on Exhibit T hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the 2nd Business Day after the occurrence of a Reportable Event,
certain parties to this Agreement shall be required to provide to the Depositor
and the Securities Administrator, to the extent known by such applicable
parties, any Form 8-K Disclosure Information which shall be identified as such,
if applicable. The Securities Administrator shall compile all such information
provided to it in a Form 8-K prepared by it.
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After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor for review.
No later than 12:00 noon on the 4th Business Day after the Reportable Event, an
officer of the Depositor shall sign the Form 8-K and return an electronic or fax
copy of such signed Form 8-K (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. If a Form 8-K cannot be filed
on time or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 8.12(f)(ii).
Promptly (but in any case within one Business Day) after filing with the
Commission, the Securities Administrator will, make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The signing party at the Depositor can be contacted at
0000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxxx, or such other
address as to which the Depositor has provided prior written notice to the
Securities Administrator. The Depositor, the Master Servicer and the Servicers
acknowledge that the performance by the Securities Administrator of its duties
under this Section 8.12(g) related to the timely preparation and filing of Form
8-K is contingent upon the Master Servicer, each Servicer and the Depositor and
any other Person obligated to proved Form 8-K Disclosure Information as set
forth on Exhibit T hereto, observing all applicable deadlines in the performance
of their duties under this Section 8.12(g). The Securities Administrator shall
have no liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare and/or timely file such Form 8-K,
where such failure results from the Securities Administrator's inability or
failure to obtain or receive, on a timely basis, any information or signatures
from any party hereto (other than the Securities Administrator or any
Subcontractor utilized by the Securities Administrator) needed to prepare,
arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(h) The Securities Administrator shall have no liability for any
loss, expense, damage or claim arising out of or resulting from (i) the accuracy
or inaccuracy of any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information (excluding any information therein
provided by the Securities Administrator or any Subcontractor utilized by the
Securities Administrator) provided to the Securities Administrator in connection
with the preparation of Forms 10-D, 10-K and 8-K pursuant to this Section 8.12,
or (ii) the failure of the Depositor to approve for filing any Forms 10-D, 10-K
and 8-K required to be prepared by the Securities Administrator pursuant to this
Section 8.12, in either case, not resulting from the Securities Administrator's
own negligence, bad faith or misconduct.
(i) To the extent no notice is provided to the Securities
Administrator as described in this section 8.12 of events or in formation set
forth in this section 8.12, the Securities Administrator shall, without further
notice, conclude that there is no event or information to be reported pursuant
to this Section 8.12.
Section 8.13 Tax Classification of the Supplemental Interest
Trust, the Excess Reserve Fund Account and the Swap Account.
For federal income tax purposes, the Securities Administrator shall
treat each of the Supplemental Interest Trust, the Excess Reserve Fund Account
and the Swap Account as an outside reserve fund, within the meaning of Treasury
Regulation ss. 1.860G-2(h), that is
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beneficially owned by the holder of the Class X Certificate. The Securities
Administrator shall treat the rights that each Class of LIBOR Certificates has
to receive payments of Basis Risk Carry Forward Amounts from the Excess Reserve
Fund Account and the Swap Account as rights to receive payments under a notional
principal contract written by the Class X Certificateholder in favor of each
Class. Accordingly, each Class of Certificates (excluding the Class X, Class P
and Class R Certificates) will be comprised of two components - a REMIC V
Regular Interest and an interest in a notional principal contract. The
Securities Administrator shall allocate the issue price for a Class of
Certificates between such two components for purposes of determining the issue
price of the REMIC V Regular Interest component based on information received
from the Depositor.
Section 8.14 Interest Rate Swap Agreement.
The Securities Administrator is hereby authorized and directed to
execute and deliver the Interest Rate Swap Agreement not in its individual
capacity but solely on behalf of the Supplemental Interest Trust of the Trust
and to acknowledge the provisions thereof. The Securities Administrator is
directed to administer the Interest Rate Swap Agreement in accordance with the
terms thereof and hereof. The Securities Administrator shall not enter into any
amendment to the Interest Rate Swap Agreement other than pursuant to the terms
thereof. In the event that the Swap Provider fails to make a payment as required
pursuant to the Interest Rate Swap Agreement, the Securities Administrator shall
make a demand for such payment from the guarantor of the Interest Rate Swap
Agreement.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of the
Servicers' Obligations.
(a) In addition to the other duties of the Master Servicer set
forth in this Agreement, the Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the Servicers under this Agreement (other than in
connection with defaulted or REO Properties), and (except as set forth below)
shall use its reasonable good faith efforts to cause the Servicers to duly and
punctually perform their duties and obligations hereunder as applicable. Upon
the occurrence of an Event of Default of which a Responsible Officer of the
Master Servicer has actual knowledge, the Master Servicer shall promptly notify
the Securities Administrator and the Trustee and shall specify in such notice
the action, if any, the Master Servicer plans to take in respect of such
default. So long as an Event of Default shall occur and be continuing, the
Master Servicer shall take the actions specified in Article VII.
(b) The Master Servicer shall bear the costs of monitoring the
Servicers as required hereunder. The costs associated with (i) termination of
any Servicer, (ii) the appointment of a successor Servicer or (iii) the transfer
to and assumption of, the servicing by the Master Servicer shall be paid by the
terminated Servicer. In the event the full costs
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associated with the transition of servicing responsibilities to the Master
Servicer are not paid for by the predecessor or successor Servicer (provided
such successor Servicer is not the Master Servicer), such costs shall be paid by
the Trust.
(c) If the Master Servicer assumes the servicing with respect to
any of the Mortgage Loans, it will not assume liability for the representations
and warranties of any Servicer it replaces or for any errors or omissions of
such Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under the Agreement without the prior written consent of the Master
Servicer and the Depositor, which consent, in the case of the Depositor, shall
not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
(a) The Master Servicer, at its expense, shall maintain in effect
a blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 9.03 Representations and Warranties of the Master Servicer
and the Backup Servicer.
(a) The Master Servicer and the Backup Servicer each hereby
represents and warrants to the Depositor, the Securities Administrator and the
Trustee, for the benefit of the Certificateholders, as of the Closing Date that:
(i) it is a banking association organized under the laws of
the United States of America, validly existing and in good standing under
the laws of the United States of America, and as Master Servicer and
Backup Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and Backup Servicer and its performance and compliance
with the terms of this Agreement will not (A) violate the Master
Servicer's charter or bylaws, (B) violate any law or regulation or any
administrative decree or order to which it is subject or (C) constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer and
Backup Servicer are a party or by which it is bound or to which any of its
assets are subject, which violation, default or breach would materially
and adversely affect the Master Servicer's ability to perform its
obligations under this Agreement;
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(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer and the Backup
Servicer, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights in general, and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or at
law);
(iv) neither the Master Servicer nor the Backup Servicer is in
default with respect to any order or decree of any court or any order or
regulation of any federal, state, municipal or governmental agency to the
extent that any such default would materially and adversely affect its
performance hereunder;
(v) neither the Master Servicer nor the Backup Servicer is a
party to or bound by any agreement or instrument or subject to any charter
provision, bylaw or any other corporate restriction or any judgment,
order, writ, injunction, decree, law or regulation that may materially and
adversely affect its ability as Master Servicer to perform its obligations
under this Agreement or that requires the consent of any third person to
the execution of this Agreement or the performance by the Master Servicer
of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer or the Backup
Servicer which would prohibit its entering into this Agreement or
performing its obligations under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
or Backup Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and the Backup Servicer.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery of
this Agreement. The Master Servicer and Backup Servicer shall indemnify the
Depositor, Securities Administrator, the Trustee and the Trust and hold them
harmless against any loss, damages, penalties, fines,
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forfeitures, reasonable legal fees and related costs, judgments, and other
reasonable costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a material breach of the
Master Servicer's or Backup Servicer's respective representations and warranties
contained in Section 9.03(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer and the Backup Servicer set
forth in this Section 9.03 to indemnify the Depositor, Securities Administrator,
the Trustee and the Trust constitutes the sole remedy of the Depositor and the
Trustee, respecting a breach of the foregoing representations and warranties.
Such indemnification shall survive any termination of the Master Servicer as
Master Servicer or of the Backup Servicer as Backup Servicer hereunder and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer, the Backup Servicer, Securities Administrator or the Trustee or
notice thereof by any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to remit to the Securities
Administrator for deposit in the Distribution Account any payment received by it
from any Servicer or required to be made by the Master Servicer under the terms
of this Agreement which continues unremedied for a period of two (2) Business
Days after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by any other
party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization
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statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations for three (3) Business Days;
(f) Except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Trustee, Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement, in each case, where such
indictment materially and adversely affects the ability of the Master Servicer
to perform its obligations under this Agreement (subject to the condition that
such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the
Securities Administrator may have at law or equity to damages, including
injunctive relief and specific performance, the Securities Administrator, by
notice in writing to the Master Servicer may, and at the direction of the
Holders of Certificates representing at least 51% of the Voting Rights, shall,
terminate with cause all the rights and obligations of the Master Servicer under
this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and place in such
successor's possession all such documents with respect to the master servicing
of the Mortgage Loans and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
at the Master Servicer's sole expense. The Master Servicer shall cooperate with
the Trustee and such successor master servicer in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including without
limitation, the transfer to such successor master servicer for administration by
it of all cash amounts which shall at the time be credited to the Distribution
Account or are thereafter received with respect to the Mortgage Loans.
Section 9.05 Waiver of Default. By a written notice, the Trustee
may, with the consent of a Holders of Certificates evidencing at least 51% of
the Voting Rights waive any default by the Master Servicer or the Backup
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Master Servicer Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
Section 9.06 Successor to the Master Servicer or Backup Servicer.
Upon termination of the Master Servicer's or Backup Servicer's responsibilities
and duties under this
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Agreement, the Trustee shall appoint a successor, which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Master Servicer or Backup Servicer under this Agreement, except liabilities
incurred by the terminated Master Servicer or Backup Servicer (unless such
terminated Master Servicer or Backup Servicer is the Trustee) for which the
terminated Master Servicer or Backup Servicer shall still be responsible. Any
successor shall be a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good
standing and acceptable to the Depositor and the Rating Agencies. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that in no event shall the master
servicing fee paid to such successor master servicer exceed the Securities
Administrator, Backup Servicer and Master Servicer Fee paid to the Master
Servicer or Backup Servicer hereunder. In the event that the Master Servicer's
or Backup Servicer's duties, responsibilities and liabilities under this
Agreement are terminated, the Master Servicer or Backup Servicer shall continue
to discharge its duties and responsibilities hereunder until the effective date
of such termination with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement and shall take no action whatsoever
that might impair or prejudice the rights of its successor. The termination of
the Master Servicer or Backup Servicer shall not become effective until a
successor shall be appointed pursuant hereto and shall in no event (i) relieve
the Master Servicer or Backup Servicer of responsibility for the representations
and warranties made pursuant to Section 9.03(a) hereof and the remedies
available to the Trustee under Section 9.03(b) hereof, it being understood and
agreed that the provisions of Section 9.03 hereof shall be applicable to the
Master Servicer and Backup Servicer notwithstanding any such sale, assignment,
resignation or termination of the Master Servicer or Backup Servicer or the
termination of this Agreement; or (ii) affect the right of the Master Servicer
or Backup Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer or Backup Servicer continues to
perform its duties hereunder prior to the date the successor master servicer or
successor backup servicer fully assumes its duties).
If no successor Master Servicer or successor Backup Servicer has
accepted its appointment within 90 days of the time the Trustee receives the
resignation of the Master Servicer or Backup Servicer, the Trustee shall become
the successor Master Servicer or successor Backup Servicer in all respects under
this Agreement until another successor Master Servicer or Backup Servicer is
appointed, and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities, except liabilities incurred by the
terminated Master Servicer or Backup Servicer (unless such terminated Master
Servicer or Backup Servicer is the Trustee) for which the terminated Master
Servicer or Backup Servicer shall still be responsible, including the obligation
to make P&I Advances; provided, however, that any failure to perform any duties
or responsibilities caused by the Master Servicer's or Backup Servicer's failure
to provide information required by this Agreement shall not be considered a
default by the Trustee hereunder. In the Trustee's capacity as such successor
Master Servicer or successor Backup Servicer, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer and Backup
Servicer. As compensation therefor, the Trustee shall be entitled to receive the
compensation, reimbursement and indemnities otherwise payable to the Master
Servicer and Backup Servicer, including the fees and other amounts payable
pursuant to Section 9.07 hereof.
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Any successor master servicer or successor backup servicer appointed
as provided herein, shall execute, acknowledge and deliver to the predecessor
Master Servicer or Backup Servicer and to the Trustee an instrument accepting
such appointment, wherein the successor shall make the representations and
warranties set forth in Section 9.03 hereof, and whereupon such successor shall
become fully vested with all of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer or Backup Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or Backup Servicer or termination of this
Agreement shall not affect any claims that the Trustee may have against the
Master Servicer or Backup Servicer arising out of the Master Servicer's or
Backup Servicer's actions or failure to act prior to any such termination or
resignation or in connection with the Trustee's assumption of such obligations,
duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer or Backup Servicer shall notify by mail the Trustee of such
appointment.
Section 9.07 Compensation of the Master Servicer and Backup
Servicer. As compensation for its activities under this Agreement, the Master
Servicer and the Backup Servicer shall be paid the Securities Administrator,
Backup Servicer and Master Servicer Fee.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer or Backup Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion, other change in form or consolidation to
which the Master Servicer or Backup Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer or Backup Servicer, shall be
the successor to the Master Servicer or Backup Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or resulting Person to the Master Servicer or Backup
Servicer shall (i) be a Person (or have an Affiliate) that is qualified and
approved to service mortgage loans for Xxxxxx Xxx and FHLMC (provided further
that a successor Master Servicer or successor Backup Servicer that satisfies
subclause (i) through an Affiliate agrees to service the Mortgage Loans in
accordance with all applicable Xxxxxx Mae and FHLMC guidelines) and (ii) have a
net worth of not less than $25,000,000. In connection with the succession to the
Master Servicer or the Backup Servicer under this Agreement by any Person (i)
into which the Master Servicer or the Backup Servicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Master
Servicer or the Backup Servicer, the Master Servicer or the Backup Servicer
shall notify the Securities Administrator and the Depositor of such succession
or appointment and shall furnish to the Securities Administrator and the
Depositor, all information reasonably necessary for the Securities Administrator
to accurately and timely report, pursuant to Section 8.12(g), the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act).
Section 9.09 Resignation of the Master Servicer or Backup
Servicer. Except as otherwise provided in Sections 9.08 and 9.10 hereof, the
Master Servicer or Backup Servicer shall not resign from the obligations and
duties hereby imposed on it unless the Master Servicer's or Backup Servicer's
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it
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and cannot be cured. Any such determination permitting the resignation of the
Master Servicer or Backup Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or a
successor master servicer or successor backup servicer satisfactory to the
Trustee and the Depositor shall have assumed, the Master Servicer's or Backup
Servicer's responsibilities and obligations under this Agreement. Notice of such
resignation shall be given promptly by the Master Servicer or Backup Servicer
and the Depositor to the Trustee.
If at any time, Xxxxx Fargo Bank, National Association, as Master
Servicer, resigns under this Section 9.09, or is removed as Master Servicer
pursuant to Section 9.04, then at such time Xxxxx Fargo Bank, National
Association, shall also resign (and shall be entitled to resign) as Securities
Administrator and Backup Servicer under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer or Backup Servicer. Except as expressly provided herein, the Master
Servicer and Backup Servicer shall not assign or transfer any of its rights,
benefits or privileges hereunder to any other Person, or delegate to or
subcontract with, or authorize or appoint any other Person to perform any of the
duties, covenants or obligations to be performed by the Master Servicer or
Backup Servicer; provided, however, that the Master Servicer and Backup Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the
Trustee, the Securities Administrator and the Depositor of a letter from each
Rating Agency to the effect that such action shall not result in a downgrade of
the ratings assigned to any of the Certificates, to delegate or assign to or
subcontract with or authorize or appoint any qualified Person to perform and
carry out any duties, covenants or obligations to be performed and carried out
by the Master Servicer and Backup Servicer hereunder, provided, further, that
the Master Servicer complies with Section 3.02(e) as if the Master Servicer were
a "Servicer" pursuant to that Section. Notice of such permitted assignment shall
be given promptly by the Master Servicer or Backup Servicer to the Depositor,
the Securities Administrator and the Trustee. If, pursuant to any provision
hereof, the duties of the Master Servicer or Backup Servicer are transferred to
a successor master servicer or successor backup servicer, the entire
compensation payable to the Master Servicer and Backup Servicer pursuant hereto
shall thereafter be payable to such successor master servicer or successor
backup servicer but in no event shall the fee payable to the successor master
servicer or successor backup servicer exceed that payable to the predecessor
master servicer or predecessor backup servicer.
Section 9.11 Limitation on Liability of the Master Servicer and
Backup Servicer. Neither the Master Servicer, the Backup Servicer, nor any of
the directors, officers, employees or agents of the Master Servicer or Backup
Servicer shall be under any liability to the Trustee, Securities Administrator,
the Servicers or the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Master Servicer or Backup Servicer or any such person against any liability that
would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer, the
Backup Servicer and any director, officer, employee or agent of the Master
Servicer or Backup Servicer may rely in good faith on any document prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Master Servicer or
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Backup Servicer shall be under no obligation to appear in, prosecute or defend
any legal action that is not incidental to its duties as Master Servicer or
Backup Servicer with respect to the Mortgage Loans under this Agreement and that
in its opinion may involve it in any expenses or liability; provided, however,
that the Master Servicer or Backup Servicer may in its sole discretion undertake
any such action that it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom, shall be liabilities of the
Trust Fund, and the Master Servicer and Backup Servicer shall be entitled to be
reimbursed therefor out of the Master Servicer Account in accordance with the
provisions of Section 9.07 and Section 9.12.
Neither the Master Servicer nor the Backup Servicer shall be liable
for any acts or omissions of any Servicer except to the extent that damages or
expenses are incurred as a result of such act or omissions and such damages and
expenses would not have been incurred but for the negligence, willful
malfeasance, bad faith or recklessness of the Master Servicer or the Backup
Servicer in supervising, monitoring and overseeing the obligations of the
Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. Each of the
Master Servicer and the Backup Servicer agree to indemnify the Depositor, each
Servicer, the Trustee, the Custodian, the Securities Administrator and the Trust
Fund, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liability, fees and expenses that the Depositor, such Servicer, the
Trustee, the Custodian, the Securities Administrator or the Trust Fund may
sustain as a result of the Master Servicer's or Backup Servicer's respective
willful malfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of its reckless disregard for its obligations and duties
under this Agreement, including, without limitation, its obligations under
Sections 3.02(e), 3.22 and 3.23 notwithstanding any transfer to a successor
master servicer or securities administrator, as the case may be. The Depositor,
Securities Administrator, the applicable Servicer, the Custodian and the Trustee
shall immediately notify the Master Servicer or Backup Servicer, as applicable,
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans which would entitle the Depositor, such Servicer, the Trustee,
the Securities Administrator, the Custodian or the Trust Fund to indemnification
under this Section 9.12, whereupon the Master Servicer or the Backup Servicer
shall assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.
Each of the Master Servicer and the Backup Servicer agree to
indemnify and hold harmless the Trustee from and against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, liability, fees and expenses (including reasonable
attorneys' fees) that the Trustee may sustain as a result of such respective
liability or obligations of the Master Servicer or Backup Servicer, as
applicable, and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer or the Backup Servicer prior to its replacement
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as Master Servicer or Backup Servicer) of the Master Servicer's or Backup
Servicer's obligations, as applicable, duties or responsibilities under such
agreement.
The Trust Fund will indemnify each of the Master Servicer and Backup
Servicer and hold it harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liabilities, fees and expenses that the Master Servicer or Backup
Servicer, as applicable may incur or sustain in connection with, arising out of
or related to this Agreement or the Certificates, except to the extent that any
such loss, liability or expense is related to (i) a material breach of the
Master Servicer's and Backup Servicer's, as applicable, representations and
warranties in this Agreement or (ii) the Master Servicer's and Backup
Servicer's, as applicable, willful malfeasance, bad faith or negligence or by
reason of its reckless disregard of its duties and obligations under any such
agreement; provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). Each of the Master Servicer and Backup
Servicer shall be entitled to reimbursement for any such indemnified amount from
funds on deposit in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities
Administrator shall be determined solely by the express provisions of this
Agreement, the Securities Administrator shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished
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to the Securities Administrator and conforming to the requirements of this
Agreement which it believed in good faith to be genuine and to have been
duly executed by the proper authorities respecting any matters arising
hereunder;
(ii) the Securities Administrator shall not be liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Securities Administrator, unless it shall be
conclusively determined by a court of competent jurisdiction, such
determination no longer subject to appeal, that the Securities
Administrator was negligent in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with
respect to any action or inaction taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the Holders of
Certificates evidencing not less than 25% of the Voting Rights of
Certificates relating to the time, method and place of conducting any
proceeding for any remedy available to the Securities Administrator, or
exercising or omitting to exercise any trust or power conferred upon the
Securities Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable,
shall have no liability and makes no representation as to any acts or
omissions hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively
rely upon and shall be fully protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
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(iv) the Securities Administrator shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to
risk or expend its own funds or otherwise incur any financial liability in
the performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not assured to it, and none of the provisions
contained in this Agreement shall in any event require the Securities
Administrator to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer or the Backup Servicer
under this Agreement;
(vii) the Securities Administrator shall be under no obligation
to exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby;
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the
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Certificateholders hereunder. In such event, the legal expenses and costs
of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Securities Administrator
shall be entitled to be reimbursed therefor out of the Distribution
Account;
(ix) the right of the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and the Securities Administrator shall not be answerable for other
than its negligence, bad faith or willful misconduct in the performance of
such act; and
(x) the Securities Administrator shall not be required to
give any bond or surety in respect of the execution of the Trust Fund
created hereby or the powers granted hereunder.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
not be taken as the statements of the Securities Administrator, and the
Securities Administrator assumes no responsibility for their correctness. The
Securities Administrator makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Securities Administrator's
execution and authentication of the Certificates. The Securities Administrator
shall not be accountable for the use or application by the Depositor or the
Master Servicer of any funds paid to the Depositor or the Master Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Distribution
Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account. The Securities Administrator and any
director, officer, employee, agent or "control person" within the meaning of the
Securities Act of 1933, as amended, and the Securities Exchange of 1934, as
amended ("Control Person"), of the Securities Administrator shall be indemnified
by the Trust and held harmless against any loss, liability or expense (including
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reasonable attorney's fees) (i) incurred in connection with any claim or legal
action relating to (a) this Agreement, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder, (ii) incurred in connection with
the performance of any of the Securities Administrator's duties hereunder, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Securities
Administrator's duties hereunder or (iii) incurred by reason of any action of
the Securities Administrator taken at the direction of the Certificateholders,
provided that any such loss, liability or expense constitutes an "unanticipated
expense incurred by the REMIC" within the meaning of Treasury Regulations
Section 1.860G 1(b)(3)(ii). Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Securities Administrator
hereunder. Without limiting the foregoing, and except for any such expense,
disbursement or advance as may arise from the Securities Administrator's
negligence, bad faith or willful misconduct, or which would not be an
"unanticipated expense" within the meaning of the second preceding sentence, the
Securities Administrator shall be reimbursed by the Trust for all reasonable
expenses, disbursements and advances incurred or made by the Securities
Administrator in accordance with any of the provisions of this Agreement with
respect to: (A) the reasonable compensation and the expenses and disbursements
of its counsel not associated with the closing of the issuance of the
Certificates, (B) the reasonable compensation, expenses and disbursements of any
accountant, engineer, appraiser or other agent that is not regularly employed by
the Securities Administrator, to the extent that the Securities Administrator
must engage such Persons to perform acts or services hereunder and (C) printing
and engraving expenses in connection with preparing any Definitive Certificates.
The Trust shall fulfill its obligations under this paragraph from amounts on
deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
The Securities Administrator shall not be entitled to payment or
reimbursement from the Unaffiliated Seller for any routine ongoing expenses
incurred by Xxxxx Fargo Bank, National Association, in its capacity as
Securities Administrator and/or Master Servicer or Backup Servicer in the
ordinary course of its duties as Securities Administrator, Master Servicer,
Backup Servicer, Registrar, or paying agent under this Agreement or for any
other expenses, including indemnification payments, except as set forth herein.
The Trustee executes the Certificates and the Securities
Administrator authenticates the Certificates not in its individual capacity but
solely as Trustee and Securities Administrator, respectively, of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement.
Section 10.06 Eligibility Requirements for Securities
Administrator. The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
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least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 10.06 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Backup Servicer, a Servicer, the Depositor or an
affiliate of the Depositor unless the Securities Administrator functions are
operated through an institutional trust department of the Securities
Administrator, (ii) must be authorized to exercise corporate trust powers under
the laws of its jurisdiction of organization, and (iii) must be rated at least
"A/F1" by Fitch, if Fitch is a Rating Agency and rates such successor, or the
equivalent rating by S&P or Xxxxx'x. If no successor Securities Administrator
shall have been appointed and shall have accepted appointment within 60 days
after the Securities Administrator ceases to be the Securities Administrator
pursuant to Section 10.07, then the Trustee may (but shall not be obligated to)
become the successor Securities Administrator. The Depositor shall appoint a
successor to the Securities Administrator in accordance with Section 10.07. The
Trustee shall notify the Rating Agencies of any change of Securities
Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the Swap Provider and the Trustee and each Rating
Agency not less than 60 days before the date specified in such notice when,
subject to Section 10.08, such resignation is to take effect, and acceptance by
a successor Securities Administrator in accordance with Section 10.08 meeting
the qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities
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Administrator so removed, one copy of which shall be delivered to the Master
Servicer and one copy to the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Swap Provider
and the Depositor and to its predecessor Securities Administrator and the
Trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor Securities Administrator shall become
effective and such successor Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the Trustee,
the Master Servicer, the Backup Servicer and the predecessor Securities
Administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor Securities Administrator all such rights, powers,
duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. In connection with the succession to the Securities
Administrator under this Agreement by any Person (i) into which the Securities
Administrator may be merged or consolidated, or (ii) which may be appointed as a
successor to the Securities Administrator, the Securities Administrator shall
notify the Depositor of such succession or appointment and shall furnish to the
Depositor all information reasonably necessary for the Securities
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Administrator to accurately and timely report, pursuant to Section 8.12(g), the
event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports
under the Exchange Act are required to be filed under the Exchange Act).
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed) and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder, provided, further, that the Securities
Administrator complies with Section 3.02(e) as if the Securities Administrator
were a "Servicer" pursuant to that Section. Notice of such permitted assignment
shall be given promptly by the Securities Administrator to the Depositor, the
Swap Provider and the Trustee. If, pursuant to any provision hereof, the duties
of the Securities Administrator are transferred to a successor securities
administrator, the entire compensation payable to the Securities Administrator
pursuant hereto shall thereafter be payable to such successor securities
administrator but in no event shall the fee payable to the successor Securities
Administrator exceed that payable to the predecessor Securities Administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.
Subject to Section 11.03, the obligations and responsibilities of
the Depositor, each Servicer, the Securities Administrator and the Trustee
created hereby with respect to the Trust Fund shall terminate upon the earlier
of (a) the purchase, on or after the applicable Optional Termination Date, by
one or more Servicers, the Master Servicer or the Class X Certificateholders
(subject to the restrictions set forth in the definition of "Optional
Termination Date") of all Mortgage Loans (and REO Properties) at the price equal
to the sum of (i) 100% of the unpaid principal balance of each Mortgage Loan
(other than in respect of REO Property) plus accrued and unpaid interest thereon
at the applicable Mortgage Rate, (ii) the lesser of (x) the appraised value of
any REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the party exercising the optimal termination
at the expense of the party exercising the optimal termination plus, accrued and
unpaid interest on each Mortgage Loan at the applicable Mortgage Rate and (y)
the unpaid principal balance of each Mortgage Loan related to any REO Property,
in each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, (iii) all costs and expenses incurred by, or on behalf of, the Trust Fund,
of which the Securities Administrator has actual knowledge, in connection with
any violation by such Mortgage Loan of any predatory or abusive-lending law and
(iv) any Swap Termination Payment, other than a Defaulted Swap Termination
Payment, owed to the Swap
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Provider (the "Termination Price") and (b) the later of (i) the maturity or
other liquidation of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
Notwithstanding the foregoing, if Standard & Poor's has rated a
class of debt securities ("NIM Securities") that are backed by the Class X
Certificates and Class P Certificates and that are outstanding on any date on
which a Servicer intends or the Servicers intend to exercise its option to
purchase the Mortgage Loans, a Servicer or the Servicers will be permitted to
exercise such option only if one of the following additional conditions is met:
(i) after distribution of the Termination Price to the Certificateholders (other
than the Holders of the Class X Certificates, Class P Certificates and Class R
Certificates) to redeem the related Certificates, the remainder of the
Termination Price (the "Remainder Amount") is distributed to the Holders of the
Class X Certificates and Class P Certificates and is sufficient to pay the
outstanding principal amount of and accrued and unpaid interest on the NIM
Securities to the extent the NIM Securities are then outstanding; or (ii) (A) at
the same time that a Servicer remits or the Servicers remit the Termination
Price to the Master Servicer, it also remits to the Securities Administrator an
additional amount which, in combination with the Remainder Amount, is sufficient
to pay the outstanding principal amount of and accrued and unpaid interest on
the NIM Securities, to the extent the NIM Securities are then outstanding, and
(B) the Securities Administrator remits the Remainder Amount to the Holders of
the Class X Certificates and Class P Certificates and remits that additional
amount directly to the NIM Trustee (plus any outstanding fees and expenses due
and owing to the NIM Trustee) under the indenture creating the NIM Securities.
Section 11.02 Final Distribution on the Certificates.
If on any Remittance Date, the Servicers determine that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Accounts, the Servicers shall direct the
Securities Administrator promptly to send a Notice of Final Distribution to each
Certificateholder. If any Servicer individually elects to terminate the Trust
Fund pursuant to clause (a) of Section 11.01, such Servicer shall notify the
other Servicer of such election by the 15th day of the month preceding the month
of the final distribution and the other Servicer shall have 5 days to elect, by
notice to the other Servicer, to purchase the Mortgage Loans it services. If the
other such Servicer does not so elect to purchase the Mortgage Loans it
services, the terminating Servicer shall be required to purchase all the
Mortgage Loans. If any Servicer or both Servicers so elect to terminate, by the
25th day of the month preceding the month of the final distribution, such
Servicer or Servicers shall notify the Depositor, the Securities Administrator
and the Trustee of the final Distribution Date the Servicers or the Class X
Certificateholder of the date such Servicer or Servicers intend to terminate the
Trust Fund and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
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A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. A Servicer or the Servicers, as the case may be, will give such
Notice of Final Distribution to each Rating Agency and the Swap Provider at the
time such Notice of Final Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in its Collection Account to be remitted to the
Master Servicer for deposit in the Distribution Account on the Business Day
prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Securities Administrator of a
Request for Release therefor, the Securities Administrator shall forward the
Request for Release to the Custodian and the Custodian shall promptly release to
the applicable Servicer or Servicers, as the case may be, the Custodial Files
for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers, the Depositor,
the Swap Provider and the Trustee hereunder), in each case on the final
Distribution Date and in the order set forth in Section 4.02, in proportion to
their respective Percentage Interests, with respect to Certificateholders of the
same Class, up to an amount equal to (i) as to each Class of Regular
Certificates (except the Class X Certificates), the Certificate Balance thereof
plus for each such Class and the Class X Certificates accrued interest thereon
in the case of an interest-bearing Certificate and all other amounts to which
such Classes are entitled pursuant to Section 4.02 and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account (other than the amounts retained to meet claims) after application
pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
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Section 11.03 Additional Termination Requirements.
In the event the applicable Servicer or all of the Servicers
exercise their purchase option with respect to the Mortgage Loans as provided in
Section 11.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Securities Administrator has been
supplied with an Opinion of Counsel, at the expense of the applicable Servicer
or all of the Servicers or the Class X Certificateholder, as applicable, to the
effect that the failure to comply with the requirements of this Section 11.03
will not (i) result in the imposition of taxes on "prohibited transactions" on
any REMIC created hereunder as defined in Section 860F of the Code, or (ii)
cause any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall
sell all of the assets of the Trust Fund to the applicable Servicer and, no
later than the next Distribution Date after such sale (and in no event more than
90 days after such sale), shall, in the order set forth in Section 4.02 and
subject to the payment of all amounts payable under Section 4.02, distribute to
the Certificateholders the proceeds of such sale in complete liquidation of each
of the REMICs created hereunder; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the REMICs created hereunder stating
that pursuant to Treasury regulations section 1.860F-1, the first day of the
90-day liquidation period for each such REMIC was the date on which the
Securities Administrator on behalf of the Trustee sold the assets of the Trust
Fund to the applicable Servicer or Servicers, as the case may be.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.
This Agreement may be amended from time to time (x) by the
Depositor, each Servicer, the Custodian, the Securities Administrator, the
Master Servicer, the Backup Servicer and the Trustee (y) with the consent of the
Unaffiliated Seller unless the Securities Administrator and the Trustee receive
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Securities Administrator, the Master Servicer, the Backup Servicer, the Trustee
or the Trust) stating that the amendment will not adversely affect the
Unaffiliated Seller, but (z) without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Master Servicer, the Backup Servicer, the Securities
Administrator or the Servicers, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided,
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Securities Administrator, the Trustee,
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the Master Servicer, the Backup Servicer or the Trust), adversely affect in any
material respect the interests of any Certificateholder (it being understood
that any Opinion of Counsel with respect to income tax matters will be limited
to an opinion that such amendment will not cause the imposition of any federal
income tax on any REMIC created hereunder or the Certificateholders or cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding); and provided, further, that any such action
pursuant to clause (iv) or (v) above shall not be deemed to adversely affect in
any material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating.
In addition, this Agreement may also be amended from time to time
(x) by the Trustee, the Depositor, the Custodian, the Securities Administrator,
the Master Servicer, the Backup Servicer and the Servicers and (y) with the
consent of the Unaffiliated Seller unless the Trustee and the Securities
Administrator receive an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Securities Administrator, the Master Servicer, the Backup
Servicer, the Trustee or the Trust) stating that the amendment will not
adversely affect the Unaffiliated Seller, but (z) without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
REMIC I, REMIC II, REMIC III, REMIC IV and REMIC V under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on REMIC I, REMIC II, REMIC III,
REMIC IV or REMIC V pursuant to the Code that would be a claim at any time prior
to the final redemption of the Certificates or (iii) comply with any other
requirements of the Code; provided, that the Trustee and the Securities
Administrator has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Securities Administrator, the Master Servicer, the Backup
Servicer, the Trustee or the Trust, to the effect that such action is necessary
or helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time (x) by the
Depositor, the Servicers, the Master Servicer, the Backup Servicer, the
Custodian, the Securities Administrator and the Trustee (y) with the consent of
the Unaffiliated Seller unless the Securities Administrator receives an Opinion
of Counsel (which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Master Servicer, the Backup Servicer, the Trustee or the
Trust) stating that the amendment will not adversely affect the Unaffiliated
Seller, and (z), except as set forth in Section 3.27, with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% of each Class of Certificates (based on the aggregate outstanding
principal balance of such class at such time) affected thereby, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
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Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating not less than 66-2/3%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Securities Administrator, the Master Servicer, the Backup Servicer, the
Trustee or the Trust, to the effect that such amendment will not cause the
imposition of any federal income tax on any REMIC or the Certificateholders or
cause any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee, the Securities Administrator, the Master Servicer, the Backup
Servicer or the Servicers, any Certificate beneficially owned by the Depositor,
the Unaffiliated Seller or any of their respective Affiliates shall be deemed
not to be outstanding (and shall not be considered when determining the
percentage of Certificateholders consenting or when calculating the total number
of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 12.01 have been
obtained.
Notwithstanding any contrary provision of this Agreement, the
Securities Administrator shall not consent to any amendment, modification or
change to this Agreement without the prior written consent of the Swap Provider,
if such amendment, modification or change could reasonably be expected to have a
material adverse effect on the rights or obligations of the Swap Provider under
this Agreement or under the Interest Rate Swap Agreement. Unless notified by the
Swap Provider that the Swap Provider could reasonably be materially and
adversely affected by such amendment, modification or change, for purposes of
determining whether an amendment, modification or change could reasonably be
expected to have a material adverse effect on the Swap Provider, the Trustee and
the Securities Administrator shall be entitled to rely on an Opinion of Counsel
(which Opinion of Counsel shall not be an expense of the Securities
Administrator or the Trustee) after giving notice of such amendment,
modification or change to the Swap Provider. The Securities Administrator shall
furnish to the Swap Provider a copy of each proposed amendment, modification or
change to this Agreement at least ten Business Days prior to the execution
thereof and a copy of each executed amendment, modification or change to this
Agreement promptly upon execution thereof, along with copies of the letter from
each Rating Agency stating that the amendment, modification or change would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Securities Administrator shall
furnish written notification of the substance or a copy of such amendment to the
Swap Provider, each Certificateholder and each Rating Agency.
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It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Securities
Administrator, the Trustee or the Custodian to enter into an amendment without
receiving an Opinion of Counsel (which Opinion shall not be an expense of the
Trustee, the Custodian, the Securities Administrator, the Master Servicer, the
Backup Servicer or the Trust), satisfactory to the Trustee, the Securities
Administrator, the Master Servicer, the Backup Servicer and the Custodian that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 12.01.
Section 12.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by each Servicer at its expense, but only upon receipt of an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance
(i) of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be, or if for any other reason this Agreement is held or deemed to create a
security interest in either
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such assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders and the
Swap Provider, shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Trust Fund, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement. The
Depositor shall arrange for filing any Uniform Commercial Code continuation
statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.
Section 12.05 Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of a Servicer, the Securities
Administrator, the Master Servicer, the Backup Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly
furnish to each Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
and
2. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands, consents, notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
to (a) in the case of the Depositor or the Representative, Xxxxxx Xxxxxxx ABS
Capital I Inc. or Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxx Xxx, with a copy to Xxxxx Xxx,
Esq., 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (b) in the case of
the Servicers, Master Financial, Inc., 000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx,
000
Xxxxxxxxxx, 00000, Attention: Xxxxx Xxxxxxxx; and Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx, 00000, Attention: Xxxxx Xxxx,
President, with a copy to Saxon Capital, Inc., 0000 Xxx Xxxx, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxxx 00000, Attention: General Counsel, or such other address as may
be hereafter furnished to the parties hereto in writing, (c) in the case of the
Securities Administrator or Master Servicer to the Corporate Trust Office or
such other address as the Securities Administrator or Master Servicer may
hereafter furnish to the parties hereto, (d) in the case of the Trustee and the
Custodian to Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: Trust Administration - IX0603, (e)
in the case of the Unaffiliated Seller, IXIS Real Estate Capital, Inc., 0 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel, or such other
address as the Unaffiliated Seller may hereafter furnish to the parties hereto,
(f) in the case of each of the Rating Agencies, the address specified therefor
in the definition corresponding to the name of such Rating Agency, (g) in the
case of any Originator, the address specified therefor in the applicable
Mortgage Loan Purchase Agreement and (h) in the case of the Swap Provider, the
address specified therefor in the Interest Rate Swap Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.04, this Agreement may not be assigned by any Servicer
without the prior written consent of the Trustee, the Securities Administrator
and the Depositor; provided, however, that, subject to Section 3.27, a Servicer
may pledge or sell its interest in any reimbursements for P&I Advances or
Servicing Advances hereunder.
Section 12.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to
188
any third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights.
Each Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Unaffiliated Seller, the
Securities Administrator, the Master Servicer, the Backup Servicer or the
Trustee during such Servicer's normal business hours, to examine all the books
of account, records, reports and other papers of such Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the party
conducting the inspection and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision each Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any customary out-of-pocket expense of a Servicer incident to the
exercise by the Depositor, the Unaffiliated Seller, the Securities Administrator
or the Trustee of any right under this Section 12.09 shall be borne by such
Servicer.
Section 12.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
189
Section 12.11 [Reserved]
Section 12.12 Third Party Beneficiary.
The parties agree that the Swap Provider is intended and shall have
all rights of a third-party beneficiary of this Agreement.
Section 12.13 Waiver of Jury Trial.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES
(TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT
ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with reasonable requests made by the Depositor in good faith for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, the Master
Servicer, each Servicer, the Securities Administrator, the Backup Servicer, the
Trustee and the Custodian shall cooperate fully with the Depositor to deliver to
the Depositor (including its assignees or designees), any and all statements,
reports, certifications, records and any other information available to such
party and reasonably necessary in the good faith determination of the parties
hereto to permit the Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Master Servicer, each Servicer,
the Securities Administrator, the Backup Servicer, the Trustee and the
Custodian, as applicable, reasonably believed by the Depositor to be necessary
in order to effect such compliance.
190
IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated
Seller, the Servicers, the Securities Administrator, the Master Servicer, the
Backup Servicer and the Custodian have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:________________________________________
Name:
Title:
XXXXX FARGO BANK, National Association, as
Master Servicer, Backup Servicer and
Securities Administrator
By:________________________________________
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual
capacity, and as Custodian
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
MASTER FINANCIAL, INC., as Servicer
By:________________________________________
Name:
Title:
SAXON MORTGAGE SERVICES, INC., as Servicer
By:________________________________________
Name:
Title:
IXIS REAL ESTATE CAPITAL INC., as
Unaffiliated Seller
191
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
Signature Page to Pooling and Servicing Agreement
192
SCHEDULE I
Mortgage Loan Schedule
[On File with Xxxxx Xxxxxxxxxx LLP]
I-A-1
SCHEDULE IA
Schedule of Master Financial Serviced Loans
[On File with Xxxxx Xxxxxxxxxx LLP]
IA-1
SCHEDULE IB
Schedule of Saxon Serviced Loans
[On File with Xxxxx Xxxxxxxxxx LLP]
IB-1
SCHEDULE II
IXIS REAL ESTATE CAPITAL TRUST 2006-HE3
Mortgage Pass-Through Certificates,
Series 2006-HE3
Representations and Warranties of Master Financial
(1) The Servicer is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the state of Texas
and is licensed and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
the Servicer in any state in which a Mortgaged Property securing a
Mortgage Loan is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with the
doing business laws of any such State, to the extent necessary to ensure
its ability to enforce each Mortgage Loan and to service the Mortgage
Loans in accordance with the terms of this Pooling and Servicing
Agreement;
(2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's
II-1
knowledge, would in the future materially and adversely affect, (x) the
ability of the Servicer to perform its obligations under this Pooling and
Servicing Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for Xxxxxx Mae or
Xxxxxxx Mac in good standing;
(5) No action, suit, proceeding or investigation is pending or, to
the best of the Servicer's knowledge, threatened against the Servicer,
before any court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in business,
operations, financial conditions, properties or assets of the Servicer, or
in any material impairment of the right or ability of the Servicer to
carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations
of the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(7) The Servicer represents that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the
Servicer can service the Mortgage Loans in accordance with the terms of
this Pooling and Servicing Agreement; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided
monthly reports to the three credit repositories, the Servicer has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulation, accurate and compete information (i.e., favorable
and unfavorable) on its borrower credit files to Equifax, Experian, and
Trans Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
II-2
SCHEDULE IIA
Further Representations and Warranties of Master Financial
(1) Mortgage Loan Schedule. With respect to each Mortgage Loan, as
of the applicable Cut-off Date, each of (1) the last Due Date on which a
payment was actually applied to the outstanding principal balance of each
Mortgage Loan; (2) the Stated Principal Balance of each Mortgage Loan,
after deduction of payments of principal due and collected on or before
the applicable Cut-off Date; and (3) the Servicing Transfer Date for each
Mortgage Loan, in each case, as listed on the Mortgage Loan Schedule, is
true and correct;
(2) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled
Payment is 30 days or more Delinquent as of the Cut-off Date nor has any
Payment been 30 days or more Delinquent at any time from and after the
Servicing Transfer Date through the Cut-off Date;
(3) Original Terms Unmodified. With respect to each Mortgage Loan,
the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified by or on behalf of the Servicer from and after
the Servicing Transfer Date;
(4) No Satisfaction of Mortgage. With respect to each Mortgage
Loan, since the related Servicing Transfer Date and except for prepayments
in full, the Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. From and after the Servicing Transfer Date,
the Servicer has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Servicer waived any default
resulting from any action or inaction by the Mortgagor;
(5) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage
Note;
(6) Escrow Payments/Interest Rate Adjustments. With respect to
each Mortgage Loan, since the Servicing Transfer Date, the servicing and
collection practices used by the Servicer with respect to such Mortgage
Loan have been in all material respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
material respects legal and proper. With respect to escrow deposits and
Escrow Payments, if any, all such deposits and payments received by the
Servicer are in the possession of, or under the control of, the Servicer
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full
II-A-1
compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage (to the extent not otherwise prohibited by
law). From and after the Servicing Transfer Date, all Mortgage Rate
adjustments (if any) have been made in strict compliance with state and
federal law and the terms of the related Mortgage Note;
(7) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with
a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the area
where the Mortgaged Property is located; and
(8) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has
notified the Servicer, and the Servicer has no knowledge, of any relief
requested and allowed to the Mortgagor under the Servicemembers Civil
Relief Act or any similar state or local law.
II-A-2
SCHEDULE III
IXIS REAL ESTATE CAPITAL TRUST 2006-HE3
Mortgage Pass-Through Certificates,
Series 2006-HE3
Representations and Warranties of Saxon
(1) The Servicer is duly organized as a corporation and is validly
existing and in good standing under the laws of the state of Texas and is
licensed and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by the Servicer in
any state in which a Mortgaged Property securing a Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's
III-1
knowledge, would in the future materially and adversely affect, (x) the
ability of the Servicer to perform its obligations under this Pooling and
Servicing Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac;
(5) No action, suit, proceeding or investigation is pending or, to
the best of the Servicer's knowledge, threatened against the Servicer,
before any court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in business,
operations, financial conditions, properties or assets of the Servicer, or
in any material impairment of the right or ability of the Servicer to
carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations
of the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(7) The Servicer represents that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the
Servicer can service the Mortgage Loans in accordance with the terms of
this Pooling and Servicing Agreement; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided
monthly reports to the three credit repositories, the Servicer has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulation, accurate and compete information (i.e., favorable
and unfavorable) on its borrower credit files to Equifax, Experian, and
Trans Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
III-2
SCHEDULE IIIA
Further Representations and Warranties of Saxon
(1) Mortgage Loan Schedule. With respect to each Mortgage Loan, as
of the applicable Cut-off Date, each of (1) the last Due Date on which a
payment was actually applied to the outstanding principal balance of each
Mortgage Loan; (2) the Stated Principal Balance of each Mortgage Loan,
after deduction of payments of principal due and collected on or before
the applicable Cut-off Date; and (3) the Servicing Transfer Date for each
Mortgage Loan, in each case, as listed on the Mortgage Loan Schedule, is
true and correct;
(2) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled
Payment is 30 days or more Delinquent as of the Cut-off Date nor has any
Payment been 30 days or more Delinquent at any time from and after the
Servicing Transfer Date through the Cut-off Date;
(3) Original Terms Unmodified. With respect to each Mortgage Loan,
the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified by or on behalf of the Servicer from and after
the Servicing Transfer Date;
(4) No Satisfaction of Mortgage. With respect to each Mortgage
Loan, since the related Servicing Transfer Date and except for prepayments
in full, the Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. From and after the Servicing Transfer Date,
the Servicer has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Servicer waived any default
resulting from any action or inaction by the Mortgagor;
(5) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage
Note;
(6) Escrow Payments/Interest Rate Adjustments. With respect to
each Mortgage Loan, since the Servicing Transfer Date, the servicing and
collection practices used by the Servicer with respect to such Mortgage
Loan have been in all material respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
material respects legal and proper. With respect to escrow deposits and
Escrow Payments, if any, all such deposits and payments received by the
Servicer are in the possession of, or under the control of, the Servicer
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full
III-A-1
compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage (to the extent not otherwise prohibited by
law). From and after the Servicing Transfer Date, all Mortgage Rate
adjustments (if any) have been made in strict compliance with state and
federal law and the terms of the related Mortgage Note;
(7) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with
a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the area
where the Mortgaged Property is located; and
(8) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has
notified the Servicer, and the Servicer has no knowledge, of any relief
requested and allowed to the Mortgagor under the Servicemembers Civil
Relief Act or any similar state or local law.
III-A-2
SCHEDULE IV
(a) Due Organization and Authority. The Unaffiliated Seller is a corporation
duly organized, validly existing and in good standing under the laws of
the state of New York and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state wherein it owns or leases any material properties
or where a Mortgaged Property is located, if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Unaffiliated Seller, and in any event the
Unaffiliated Seller is in compliance with the laws of any such state to
the extent necessary; the Unaffiliated Seller has the full corporate
power, authority and legal right to execute and deliver this Agreement and
to perform its obligations hereunder; the execution, delivery and
performance of this Agreement by the Unaffiliated Seller and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid, legal,
binding and enforceable obligations of the Unaffiliated Seller, regardless
of whether such enforcement is sought in a proceeding in equity or at law;
and all requisite corporate action has been taken by the Unaffiliated
Seller to make this Agreement and all agreements contemplated hereby valid
and binding upon the Unaffiliated Seller in accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Agreement, will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Unaffiliated Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Unaffiliated
Seller is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, except such
unfulfillment, non-compliance or default or acceleration does not in the
aggregate have a material adverse effect on the operation, business,
condition (business or otherwise) of the Unaffiliated Seller or result in
the violation of any law, rule, regulation, order, judgment or decree to
which the Unaffiliated Seller or its property is subject, except such
violation does not in the aggregate have a material adverse effect on the
operation, business, condition (business or otherwise) of the Unaffiliated
Seller or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending nor, to the Unaffiliated Seller's knowledge,
threatened against the Unaffiliated Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in
the aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Unaffiliated
Seller, or in any material impairment of the right or ability of the
Unaffiliated Seller to carry on its business substantially as now
conducted, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Unaffiliated Seller contemplated herein, or
IV-1
which would be likely to impair materially the ability of the Unaffiliated
Seller to perform under the terms of this Agreement; and
(d) No Consent Required. No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental agency
or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Unaffiliated Seller of or compliance by
the Unaffiliated Seller with this Agreement or the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date.
IV-2
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede, has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
ASSETS.
EACH PURCHASER OR TRANSFEREE OF THIS CERTIFICATE THAT IS AN EMPLOYEE BENEFIT
PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL, STATE OR LOCAL LAW
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, (EACH, A
"PLAN"), OR THAT IS ACTING ON BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO
ACQUIRE THIS CERTIFICATE, SHALL BE DEEMED TO REPRESENT THAT (I) IT QUALIFIES AS
AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1) OF REGULATION D OF THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 AND, FOR SO
LONG AS THE INTEREST RATE SWAP AGREEMENT (AS DEFINED IN THE AGREEMENT) IS IN
EFFECT, (II) ITS ACQUISITION AND HOLDING OF AN INTEREST IN THE SUPPLEMENTAL
INTEREST TRUST (AS DEFINED IN THE AGREEMENT) WILL BE ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER AN INVESTOR-BASED EXEMPTION (AS DEFINED IN THE
AGREEMENT).
Certificate No. : [A-1-1/A-2-1/A-3-1/A-4-1//M-1-1/M-2-1/M-
3-1/M-4-1/M-5-1/M-6-1/B-1-1/B-2-1/B-3-
1/B-4-1]
Cut-off Date : September 1, 2006
First Distribution Date : June 26, 2006
Initial Certificate Balance of this
Certificate ("Denomination") :
Initial Certificate Balances of all
Certificates of this Class :
CUSIP :
ISIN :
A-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
[Class A-1] [Class A-2] [Class A-3] [Class A-4] [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] [Class B-4] [Class B-5]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as set forth
herein. Accordingly, the Certificate Balance at any time may be less than the
Certificate Balance as set forth herein. This Certificate does not evidence an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Unaffiliated Seller, the Securities Administrator, the Master Servicer, any
Originator, the Servicers or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital I Inc., as
depositor (the "Depositor"), Master Financial, Inc., as a servicer ("Master
Financial"), Saxon Mortgage Services, Inc., as a servicer ("Saxon" and together
with Master Financial, the "Servicers"), IXIS Real Estate Capital Inc., as
unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National Trust
Company, as trustee and custodian (in each such capacity, respectively, the
"Trustee" and the "Custodian") and Xxxxx Fargo Bank, National Association, as
securities administrator, master servicer and backup servicer (in each such
capacity, respectively, the "Securities Administrator", the "Master Servicer"
and the "Backup Servicer"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose unless manually authenticated by an authorized signatory
of the Securities Administrator.
* * *
A-2
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:_____________
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Securities Administrator
By:__________________________________________
Authenticated:
By:__________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Certificate Registrar
A-3
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
This Certificate is one of a duly authorized issue of Certificates designated as
IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through Certificates,
Series 2006-HE3 (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that it
will look solely to the funds on deposit in the Distribution Account for payment
hereunder and that the Securities Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee and the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the Business Day immediately preceding such Distribution Date; provided,
however, that for any Definitive Certificates, the Record Date shall be the last
Business Day of the month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of immediately
available funds to the account of the Holder hereof at a bank or other entity
having appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes, or such other location specified in the notice
to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee, the
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement, with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of
A-4
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Servicers, the Unaffiliated Seller, the Securities
Administrator, the Master Servicer, the Backup Servicer and the Trustee and any
agent of any of them may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and no such party shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of the related Due Period, is less than or
equal to 10% of the Maximum Pool Principal Balance, one or more Servicers and/or
the Class X Certificateholders will have the option to repurchase, in whole,
from the Trust Fund all remaining Mortgage Loans and all property acquired in
respect of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the meaning
assigned in the Agreement, and nothing herein shall be deemed inconsistent with
that meaning.
A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _______, or, if mailed by check, to _____________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ________________________________________________
the assignee named above, or ___________________________________________________
as its agent.
A-7
EXHIBIT B
IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO
THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN
THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE
FORM OF EXHIBIT J TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE
IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE
SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT EITHER (I)
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY FEDERAL, STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS
OF ERISA OR THE CODE (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN
OR USING THE ASSETS OF ANY PLAN TO ACQUIRE THIS CERTIFICATE, OR (II) SUCH
TRANSFEREE IS AN INSURANCE COMPANY AND IS PURCHASING THIS CERTIFICATE WITH FUNDS
CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN
SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND
THE CONDITIONS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PTCE 95-60 ARE
SATISFIED WITH RESPECT TO ITS PURCHASE AND HOLDING OF THIS CERTIFICATE. IF THIS
CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, EACH TRANSFEREE WILL BE DEEMED TO HAVE
MADE THE FOREGOING REPRESENTATION.
-viii-
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
ASSETS.
Certificate No. : B-5-1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Initial Certificate Balance of this
Certificate ("Denomination") :
Initial Certificate Balances of all $10,270,000
Certificates of this Class :
CUSIP
ISIN :
B-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
Class B-5
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Unaffiliated Seller, any Originator, any Servicer, the Securities
Administrator, the Master Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO., is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Master Financial, Inc., as a servicer
("Master Financial"), Saxon Mortgage Services, Inc., as a servicer ("Saxon" and
together with Master Financial, the "Servicers"), IXIS Real Estate Capital Inc.,
as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National Trust
Company, as trustee and custodian (in each such capacity, respectively, the
"Trustee" and the "Custodian") and Xxxxx Fargo Bank, National Association, as
securities administrator, master servicer and backup servicer (in each such
capacity, respectively, the "Securities Administrator", the "Master Servicer"
and the "Backup Servicer"). To the extent not defined herein, the capitalized
terms used herein shall have the meanings assigned to them in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
B-2
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Securities Administrator
By: _________________________________________
Authenticated:
By: _______________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Certificate Registrar
B-3
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through
Certificates, Series 2006-HE3 (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Securities Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement, with the consent of the
Holders of Certificates affected by such amendment evidencing the
B-4
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Servicers, the Unaffiliated Seller, the
Securities Administrator, the Master Servicer, the Backup Servicer and the
Trustee and any agent of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and no such
party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is
less than or equal to 10% of the Maximum Pool Principal Balance, one or more
Servicers and/or the Class X Certificateholders will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
B-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _______, or, if mailed by check, to _____________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ________________________________________________
the assignee named above, or ___________________________________________________
as its agent.
B-7
EXHIBIT C
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL,
STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE, (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE
ASSETS OF ANY PLAN TO EFFECT SUCH TRANSFER. ANY PURPORTED TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH IN THE AGREEMENT
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : P-1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
Initial Certificate Balance of all : $100
Certificates of this Class
CUSIP : N/A
C-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable monthly as set
forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Unaffiliated Seller,
the Securities Administrator, the Master Servicer, the Backup Servicer, any
Originator, the Servicers or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE
is the registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Master
Financial, Inc., as a servicer ("Master Financial"), Saxon Mortgage Services,
Inc., as a servicer ("Saxon" and together with Master Financial, the
"Servicers"), IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian") and Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be entitled to
distributions only to the extent set forth in the Agreement. In addition, any
distribution of the proceeds of any remaining assets of the Trust will be made
only upon presentment and surrender of this Certificate at the offices
designated by the Securities Administrator for such purposes, or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of a Certificate of this Class shall be made unless such disposition
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and any applicable state securities laws or is made in
accordance with the 1933 Act and such laws. In the event of any such transfer,
the Securities Administrator shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement) and
deliver either (i) a Rule 144A Letter, in either case substantially in the form
attached to the Agreement, or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
C-2
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
Except as provided in the Agreement, no transfer of a Certificate of this Class
shall be made unless the Securities Administrator shall have received a
representation letter from the transferee of this Certificate, acceptable to and
in form and substance satisfactory to the Securities Administrator, to the
effect that such transferee is not a Plan, and is not acting on behalf of any
Plan or using the assets of any Plan to effect such transfer. Any purported
transfer of a Certificate of this Class in violation of the transfer
restrictions set forth in the Agreement shall be void and of no effect.
Reference is hereby made to the further provisions of this Certificate set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose unless manually authenticated by an authorized signatory
of the Securities Administrator.
* * *
C-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:__________________________________________
Authenticated:
By: _______________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Certificate Registrar
C-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
This Certificate is one of a duly authorized issue of Certificates designated as
IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through Certificates,
Series 2006-HE3 (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that it
will look solely to the funds on deposit in the Distribution Account for payment
hereunder and that the Securities Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of immediately
available funds to the account of the Holder hereof at a bank or other entity
having appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee, the
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement, with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or
C-5
in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Servicers, the Unaffiliated Seller, the Securities
Administrator, the Master Servicer, the Backup Servicer and the Trustee and any
agent of any of them may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and no such party shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of the related Due Period, is less than or
equal to 10% of the Maximum Pool Principal Balance, one or more Servicers and/or
the Class X Certificateholders will have the option to repurchase, in whole,
from the Trust Fund all remaining Mortgage Loans and all property acquired in
respect of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the meaning
assigned in the Agreement, and nothing herein shall be deemed inconsistent with
that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_____________________________________________
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________;
account number _______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
C-8
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS FIVE
"RESIDUAL INTERESTS" IN FIVE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEREE DELIVERS TO THE
SECURITIES ADMINISTRATOR A TRANSFER AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL,
STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE
ASSETS OF ANY PLAN TO EFFECT SUCH TRANSFER. ANY PURPORTED TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH IN THE AGREEMENT
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : N/A
D-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable monthly as set
forth herein. This Class R Certificate has no Certificate Balance and is not
entitled to distributions in respect of principal or interest. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Unaffiliated Seller, the Securities Administrator, the Master
Servicer, any Originator, the Servicers or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage Loans
are guaranteed or insured by any governmental agency or instrumentality.
This certifies that IXIS REAL ESTATE CAPITAL INC. is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Master Financial, Inc., as a
servicer ("Master Financial"), Saxon Mortgage Services, Inc., as a servicer
("Saxon" and together with Master Financial, the "Servicers"), IXIS Real Estate
Capital Inc., as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank
National Trust Company, as trustee and custodian (in each such capacity,
respectively, the "Trustee" and the "Custodian") and Xxxxx Fargo Bank, National
Association, as securities administrator, master servicer and backup servicer
(in each such capacity, respectively, the "Securities Administrator", the
"Master Servicer" and the "Backup Servicer"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust Fund will
be made only upon presentment and surrender of this Class R Certificate at the
offices designated by the Securities Administrator for such purposes or such
other location specified in the notice to Certificateholders of such final
distribution.
Except as provided in the Agreement, no transfer of a Class R Certificate shall
be made unless the Securities Administrator shall have received a representation
letter from the transferee of this Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that such
transferee is not a Plan, and is not acting on behalf of any Plan or using the
assets of any Plan to effect such transfer. Any purported transfer of a Class R
Certificate in violation of the transfer restrictions set forth in the Agreement
shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the acceptance or
acquisition an Ownership Interest in this Class R Certificate to have agreed to
be bound by the following provisions, and the rights of each Person acquiring
any Ownership Interest in this Class R
D-2
Certificate are expressly subject to the following provisions: (i) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall be
a Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit H to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate and (C) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this Certificate set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose unless manually authenticated by an authorized signatory
of the Securities Administrator.
D-3
IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By: _________________________________________
Authenticated:
By: _______________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Certificate Xxxxxxxxx
X-0
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
This Certificate is one of a duly authorized issue of Certificates designated as
IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through Certificates,
Series 2006-HE3 (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that it
will look solely to the funds on deposit in the Distribution Account for payment
hereunder and that the Securities Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th
day of each month or, if such day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of immediately
available funds to the account of the Holder hereof at a bank or other entity
having appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee, the
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement, with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or
D-5
in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Servicers, the Securities Administrator, the Master Servicer,
the Backup Servicer, the Unaffiliated Seller and the Trustee and any agent of
any of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and no such party shall be affected by any
notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of the related Due Period, is less than or
equal to 10% of the Maximum Pool Principal Balance, one or more Servicers and/or
the Class X Certificateholder will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the meaning
assigned in the Agreement, and nothing herein shall be deemed inconsistent with
that meaning.
D-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated:
_____________________________________________
Signature by or on behalf of assignor
D-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________;
account number _______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
D-8
EXHIBIT E
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT J TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL,
STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE
ASSETS OF ANY PLAN TO EFFECT SUCH TRANSFER. ANY PURPORTED TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH IN THE AGREEMENT
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : N/A
E-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable monthly as set
forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Unaffiliated Seller,
the Securities Administrator, the Master Servicer, any Originator, the Servicers
or the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE
is the registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Master
Financial, Inc., as a servicer ("Master Financial"), Saxon Mortgage Services,
Inc., as a servicer ("Saxon" and together with Master Financial, the
"Servicers"), IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian") and Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or a Pass-Through Rate and
will be entitled to distributions only to the extent set forth in the Agreement.
In addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the offices designated by the Securities Administrator for such purposes, or
such other location specified in the notice to Certificateholders of such final
distribution.
No transfer of a Certificate of this Class shall be made unless such disposition
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and any applicable state securities laws or is made in
accordance with the 1933 Act and such laws. In the event of any such transfer,
the Securities Administrator shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement) and
deliver either (i) a Rule 144A Letter, in either case substantially in the form
attached to the Agreement, or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made
E-2
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor.
Except as provided in the Agreement, no transfer of a Certificate of this Class
shall be made unless the Securities Administrator shall have received a
representation letter from the transferee of this Certificate, acceptable to and
in form and substance satisfactory to the Securities Administrator, to the
effect that such transferee is not a Plan, and is not acting on behalf of any
Plan or using the assets of any Plan to effect such transfer. Any purported
transfer of a Certificate of this Class in violation of the transfer
restrictions set forth in the Agreement shall be void and of no effect.
Reference is hereby made to the further provisions of this Certificate set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose unless manually authenticated by an authorized signatory
of the Securities Administrator.
* * *
E-3
IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By: _________________________________________
Authenticated:
By: _______________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Certificate Registrar
E-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS Real Estate Capital Trust 2006-HE3
Mortgage Pass-Through Certificates, Series 2006-HE3
This Certificate is one of a duly authorized issue of Certificates designated as
IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through Certificates,
Series 2006-HE3 (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that it
will look solely to the funds on deposit in the Distribution Account for payment
hereunder and that the Securities Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Securities Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of immediately
available funds to the account of the Holder hereof at a bank or other entity
having appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee, the
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement, with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or
E-5
in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Servicers, the Unaffiliated Seller, the Securities
Administrator, the Master Servicer, the Backup Servicer and the Trustee and any
agent of any of them may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and no such party shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of the related Due Period, is less than or
equal to 10% of the Maximum Principal Balance, one or more Servicers and/or the
Class X Certificateholders will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the meaning
assigned in the Agreement, and nothing herein shall be deemed inconsistent with
that meaning.
E-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
E-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________;
account number _______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
E-8
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Master Financial, Inc.
000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxx 00000
IXIS Real Estate Capital Inc.
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of September 1, 2006 (the
"Pooling and Servicing Agreement"), among IXIS Real Estate Capital
Inc., as unaffiliated seller, Master Financial, Inc., as a servicer,
Saxon Mortgage Services, Inc., as a servicer, Xxxxx Fargo Bank,
National Association, as securities administrator, master servicer
and backup servicer, and Deutsche Bank National Trust Company, as
trustee and custodian of the IXIS Real Estate Capital Trust 2006-HE3
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement, for each Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
F-1
(ii) an executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments) except for the MERS Designated
Mortgage Loans.
Based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan.
The Custodian has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, perfection, priority, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Custodian
By:___________________________________
Name:
Title:
F-2
EXHIBIT G
FORM OF FINAL CERTIFICATION OF CUSTODIAN
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Master Financial, Inc.
000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxx 00000
IXIS Real Estate Capital Inc.
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
--------------------------
Re: Pooling and Servicing Agreement, dated as of September 1,
2006, among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor,
Master Financial, Inc., as a Servicer, Saxon Mortgage
Services, Inc., as a Servicer, IXIS Real Estate Capital Inc.,
as Unaffiliated Seller, Deutsche Bank National Trust Company,
as Trustee and Custodian and Xxxxx Fargo Bank, National
Association, as Securities Administrator, Master Servicer and
Backup Servicer, IXIS Real Estate Capital Trust Series
2006-HE3
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
G-1
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, a
duly executed assignment of the Mortgage in the form provided in Section
2.01 of the Pooling and Servicing Agreement; or, if the Unaffiliated
Seller has certified or the Custodian otherwise knows that the related
Mortgage has not been returned from the applicable recording office, a
copy of the assignment of the Mortgage (excluding information to be
provided by the recording office).
(iv) Except with respect to MERS Designated Mortgage Loans, the
original or duplicate original recorded assignment or assignments of the
Mortgage showing a complete chain of assignment from the originator to the
last endorsee.
(v) The original or duplicate lender's title policy and all
riders thereto or, if such original is unavailable, any one of an original
title binder, 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.
Based on its review and examination and only as to the foregoing documents, (a)
such documents appear regular on their face and related to such Mortgage Loan,
and (b) the information set forth in items (1), (2) and (18) of the Mortgage
Loan Schedule and items (1), (9) and (17) of the Data Tape Information
accurately reflects information set forth in the Custodial File.
The Custodian has made no independent examination of any documents contained in
each Mortgage File beyond the review of the Custodial File specifically required
in the Pooling and Servicing Agreement. The Custodian makes no representations
as to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, perfection, priority, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
as Custodian,
G-2
By:_______________________________________
Name:_____________________________________
Title:____________________________________
G-3
EXHIBIT H
RESIDUAL TRANSFER AFFIDAVIT
IXIS REAL ESTATE CAPITAL Trust 2006-HE3,
Mortgage Pass-Through Certificates,
Series 2006-HE3
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ___________________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "Certificate")
issued pursuant to the Pooling and Servicing Agreement dated as of September 1,
2006 (the "Agreement"), relating to the above-referenced Series, by and among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Master
Financial, Inc., as a servicer ("Master Financial"), Saxon Mortgage Services
Inc., as a servicer ("Saxon" and together with Master Financial, the
"Servicers"), IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian") and Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"). Capitalized terms used, but not defined herein or in Exhibit
1 hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee for the benefit of the Depositor and the Securities
Administrator.
2. The Transferee is not, as of the date hereof, and will not be, as of the
date of the Transfer, a "disqualified organization" within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986. The Transferee will
endeavor to remain other than a disqualified organization for so long as it
retains its Ownership Interest in the Certificate.
3. The Transferee has historically paid its debts as they came due and will
continue to pay its debts as they come due in the future.
4. The Transferee has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it or become insolvent or subject
to a bankruptcy proceeding for so long as the Certificate remains outstanding.
5. The Transferee has been advised of, and understands that as the holder of
a noneconomic residual interest it may incur tax liabilities in excess of any
cash flows generated by the interest. The Transferee intends to pay such taxes
associated with holding the Certificate as they become due.
H-1
6. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
(1)7. [A. Formula Test] The Transferee agrees that the present value of the
anticipated tax liabilities associated with holding the Certificate does not
exceed the sum of the present value of any consideration given to the Transferee
to acquire the Certificate, the present value of the expected future
distributions on the Certificate, and the present value of the anticipated tax
savings associated with holding the interest as the REMIC generates losses. The
Transferee agrees that it complied with U.S. Treasury regulations section
1.860E-1(c)(8) in making such representation.
The Transferee agrees that it is not a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the
Transferor or another U.S. taxpayer.
[B. Asset Test] The Transferee, at the time of the transfer, and at the
close of the Transferee's two fiscal years preceding the year of the transfer,
had gross assets for financial reporting purposes in excess of $100 million and
net assets in excess of $10 million (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury regulations
section 1.860E-1(c)(6)(ii) or any other asset if a principle purpose for holding
or acquiring the other asset was to permit the Transferee to satisfy the above
stated minimum asset requirements).
The Transferee is an "eligible corporation," as defined in U.S. Treasury
regulations section 1.860E-1(c)(6)(i). The Transferee agrees, in connection with
any subsequent transfer of its Ownership Interest in the Certificate, to
transfer its Ownership Interest only to another "eligible corporation," as
defined in U.S. Treasury regulations section 1.860E-1(c)(6)(i), and to honor the
restrictions on subsequent transfers of the Certificate by transferring its
Ownership Interest only in a transaction that satisfies the requirements of U.S.
Treasury regulations section 1.860E-1(c)(4)(i), (ii) (iii) and U.S. Treasury
regulations section 1.860E-1(c)(5).
The Transferee determined the consideration paid to it to acquire the
Certificate in good faith and based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee).
8. The Transferee is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
_____________________________
(1) Insert either section 7A or 7B.
H-2
9. The Transferee's taxpayer identification number is ____________.
10. The Transferee is not a Plan and is not acting on behalf of any Plan, or
using the assets of any Plan to effect the Transfer.
11. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate, including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
12. The Transferee consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Certificate will only be owned, directly or
indirectly, by a Transferee that is not a disqualified organization.
13. The Transferee will not transfer its interest in the Certificate for the
purpose of impeding the assessment or collection of any tax.
14. The Transferee will not transfer such Certificate unless (i) it has
received from any subsequent transferee an affidavit in substantially the same
form as this affidavit containing the same representations set forth herein, and
(ii) as of the time of the transfer, it does not have actual knowledge that such
affidavit is false. The Transferee will deliver such affidavit to the Securities
Administrator upon receipt.
* * *
H-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its duly
authorized officer and its corporate seal to be hereunto affixed, duly attested,
this __ day of ________, 20__.
__________________________________________
Print Name of Transferee
By:_______________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or proved to me
to be the same person who executed the foregoing instrument and to be the
___________ of the Transferee, and acknowledged that he executed the same as his
free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of ________, 20__.
__________________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
H-4
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: IXIS Real Estate Capital Trust, Series 2006-HE3, Mortgage
Pass-Through Certificates, Series 2006-HE3, Class____
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify that (a)
we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act and (c)
to the extent we are disposing of a Residual Certificate, we have no knowledge
the Transferee is a Non-Permitted Transferee.
Very truly yours,
__________________________________________
Print Name of Transferor
By:_______________________________________
Authorized Officer
I-1
EXHIBIT J
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: IXIS Real Estate Capital Trust, Series 2006-HE3, Mortgage
Pass-Through Certificates, Series 2006-HE3, Class____
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify that (a)
we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan or
arrangement that is subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code (each, a
"Plan"), and we are not acting on behalf of any Plan or using the assets of any
Plan to effect our purchase of the Certificates or (ii) with respect to any
Certificates other than Class P, Class R and Class X Certificates, we are an
insurance company and are purchasing the Certificates with funds contained in an
"insurance company general account" (as defined term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")), and the
conditions for exemptive relief under Sections I and III of PTCE 95-60 are
satisfied with respect to our purchase and holding of the Certificates, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the
J-1
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
In connection with our purchase of the Certificates, we acknowledge
and agree that (i) none of you nor any of your affiliates is acting as a
fiduciary or financial or investment adviser for us; (ii) we are not relying
(for purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of any of you or your
affiliates with respect to the Certificates; (iii) none of you nor any of your
affiliates has given to us (directly or indirectly through any other person) any
assurance, guarantee or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2006-HE3 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2006-HE3 and the other material transaction documents related
thereto.
J-2
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
________ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
________ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking commission
or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
________ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
________ Broker-dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
J-3
________ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of a State, territory or the District of Columbia.
________ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
________ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
________ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
________ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
________ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
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5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
__________________________________________
Print Name of Transferee
By:_______________________________________
Name:
Title:
Date:_____________________________________
J-5
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
________ The Buyer owned $______ in securities (other than the
excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
________ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $ ________ in securities
(other than the excluded securities referred to below) as
of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities
J-6
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
__________________________________________
Print Name of Transferee
By:_______________________________________
Name:
Title:
IF AN ADVISER:
__________________________________________
Print Name of Buyer
Date:_____________________________________
J-7
EXHIBIT K
FORM OF REQUEST FOR RELEASE
To: Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re:
In connection with the administration of the Mortgage Loans held by Deutsche
Bank National Trust Company as the Custodian on behalf of the
Certificateholders, we request the release, and acknowledge receipt, of the
(Custodial File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Reason for Requesting Documents (check one)
________ 1. Mortgage Loan Paid in Full. (The undersigned hereby
certifies that all amounts received in connection
therewith have been credited to the applicable Collection
Account as provided in the Pooling and Servicing
Agreement.)
________ 2. Mortgage Loan Repurchase Pursuant to Subsection 2.03
of the Pooling and Servicing Agreement. (The undersigned
hereby certifies that the repurchase price has been
credited to the applicable Collection Account as provided
in the Pooling and Servicing Agreement.)
________ 3. Mortgage Loan Liquidated By _________________. (The
undersigned hereby certifies that all proceeds of
foreclosure, insurance, condemnation or other liquidation
have been finally received and credited to the applicable
Collection Account pursuant to the Pooling and Servicing
Agreement.)
________ 4. Mortgage Loan in Foreclosure.
________ 5. Other (explain).
K-1
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the Custodian, please acknowledge your receipt by signing in the space
indicated below, and returning this form if requested.
[SERVICER]
By:_______________________________________
Name:
Title:
Date:
K-2
EXHIBIT L
FORM OF SUBSEQUENT TRANSFER AGREEMENT
IXIS REAL ESTATE CAPITAL TRUST 2006-HE3
Pursuant to separate Mortgage Loan Purchase Agreements, First NLC Financial
Services ("First NLC"), NC Capital Corporation ("NC Capital Corporation"),
Accredited Home Lenders, Inc. ("Accredited"), Encore Credit Corp.("Encore"),
Master Financial, Inc.("Master Financial"), Rose Mortgage, Inc. ("Rose
Mortgage"), First Horizon Home Loan Corporation ("First Horizon"), Lime
Financial Services, Ltd. ("Lime"), First Bank Mortgage, Inc. ("First Bank"),
Lenders Direct Capital Corp. ("Lenders Direct"), Quick Loan Funding Inc. ("Quick
Loan"), Funding America Warehouse Trust, a Delaware statutory trust and a wholly
owned subsidiary of Funding America, LLC (together, "Funding America"), Mandalay
Mortgage LLC ("Mandalay"), FlexPoint Funding Corporation ("FlexPoint"), Chapel
Mortgage Corporation ("Chapel") and Maxim Mortgage Corp. ("Maxim")
(collectively, the "Originators") have agreed to sell to IXIS Real Estate
Capital Inc. (the "Unaffiliated Seller") certain mortgage loans (each, a
"Mortgage Loan"). These Mortgage Loans may in turn be sold by the Unaffiliated
Seller to Xxxxxx Xxxxxxx ABS Capital I Inc. (the "Depositor") and then sold by
the Depositor to the IXIS Real Estate Capital Trust 0000-XX0 (xxx "Xxxxx Xxxx").
The Trust Fund was established pursuant to a Pooling and Servicing Agreement
dated as of September 1, 2006 (the "Pooling and Servicing Agreement") among
Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the "Depositor"), Master
Financial, Inc., as a servicer ("Master Financial"), Saxon Mortgage Services,
Inc., as a servicer ("Saxon" and together with Master Financial, the
"Servicers"), IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian") and Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"). The Pooling and Servicing Agreement permits a Pre-Funding
feature, allowing for the acquisition by the Trust Fund of Subsequent Mortgage
Loans during the Pre-Funding Period. Representations and warranties with respect
to the Mortgage Loans have been made by the Originators pursuant to separate
Assignment and Recognition Agreements.
Capitalized terms used herein and not defined herein have their respective
meanings as set forth in the Pooling and Servicing Agreement.
Conveyance of Subsequent Mortgage Loans.
The Unaffiliated Seller does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Depositor, without recourse (except as otherwise
explicitly provided for herein) all of its right, title and interest in and to
the Subsequent Mortgage Loans, exclusive of the obligations of the Unaffiliated
Seller or any other Person with respect to the Subsequent Mortgage Loans but
including specifically, without limitation, the Mortgages, the Custodial Files
and all other documents, materials and properties appurtenant thereto and the
Mortgage Notes, including all interest and principal collected by the
Unaffiliated Seller on or with respect to the Subsequent Mortgage Loans after
the related Subsequent Cut-off Date, together with all of its
L-1
right, title and interest in and to the proceeds received after such Subsequent
Cut-off Date of any related insurance policies on behalf of the Depositor.
The Depositor does hereby irrevocably sell, transfer, assign, set over and
otherwise convey to the Trust Fund, without recourse (except as otherwise
explicitly provided for herein) all of its right, title and interest in and to
the Subsequent Mortgage Loans, exclusive of the obligations of the Depositor or
any other Person with respect to the Subsequent Mortgage Loans but including
specifically, without limitation, the Mortgages, the Custodial Files and all
other documents, materials and properties appurtenant thereto and the Mortgage
Notes, including all interest and principal collected by the Depositor on or
with respect to the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, together with all of its right, title and interest in and to the
proceeds received after such Subsequent Cut-off Date of any related insurance
policies on behalf of the Trust Fund.
The expenses and costs relating to the delivery of the Subsequent Mortgage Loans
specified in this Subsequent Transfer Agreement and the Pooling and Servicing
Agreement shall be borne by the Unaffiliated Seller.
The Unaffiliated Seller hereby affirms the 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 with respect to the Subsequent Mortgage Loans as
of the date hereof. The Unaffiliated Seller hereby delivers notice and confirms
that each of the conditions set forth in Section 2.01(c) of the Pooling and
Servicing Agreement are satisfied as of the date hereof.
Master Financial and Saxon hereby affirm the representations and warranties set
forth in Schedules IIA and IIIA, respectively, to the Pooling and Servicing
Agreement with respect to the Subsequent Mortgage Loans as of the date hereof.
Additional terms of the sale are attached hereto as Attachment A.
To the extent permitted by applicable law, this Subsequent Transfer Agreement,
or a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by each Servicer
at the Unaffiliated Seller's expense, but only when accompanied by an opinion of
counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders or is necessary for the administration
or servicing of the Mortgage Loans.
This Agreement shall be construed in accordance with the laws of the State of
New York and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws, without giving effect to the
principles of conflicts of laws.
This Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute one
and the same Agreement.
L-2
All terms and conditions of the Pooling and Servicing Agreement are hereby
ratified, confirmed and incorporated herein; provided, that in the event of any
conflict the provisions of this Subsequent Transfer Agreement shall control over
the conflicting provisions of the Pooling and Servicing Agreement.
[Remainder of Page Intentionally Left Blank]
L-3
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller
By:_______________________________________
Name:
Title:
By:_______________________________________
Name:
Title:
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:_______________________________________
Name:
Title:
MASTER FINANCIAL, INC.,
as a Servicer
By:_______________________________________
Name:
Title:
SAXON MORTGAGE SERVICES, INC.,
as a Servicer
BY: [____________________________]
By:_______________________________________
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Securities Administrator
and Master Servicer
By:_______________________________________
Name:
Title:
L-4
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
as Trustee
By:_______________________________________
Name:
Title:
L-5
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY DEPOSITOR
Re: IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through
Certificates, Series 2006-HE3, issued pursuant to the Pooling and
Servicing Agreement dated as of September 1, 2006 (the "Pooling and
Servicing Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., as
depositor (the "Depositor"), Master Financial, Inc., as a servicer
("Master Financial"), Saxon Mortgage Services, Inc., as a servicer
("Saxon" and together with Master Financial, the "Servicers"), IXIS Real
Estate Capital Inc., as unaffiliated seller (the "Unaffiliated Seller"),
Deutsche Bank National Trust Company, as trustee and custodian (in each
such capacity, respectively, the "Trustee" and the "Custodian") and Xxxxx
Fargo Bank, National Association, as securities administrator, master
servicer and backup servicer (in each such capacity, respectively, the
"Securities Administrator", the "Master Servicer" and the "Backup
Servicer").
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K ("Annual Report"),
and all reports on Form 10-D containing distribution or servicing
reports (collectively with this Annual Report, the "Reports")
required to be filed in the periods covered by this Annual Report of
the Depositor relating to the above-referenced trust and series of
certificates;
2. Based on my knowledge, the Reports, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this Annual Report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided on Form 10-D for the period
covered by this Annual Report is included in the Reports;
4. Based on my knowledge and the compliance statements required in this
Annual Report under Item 1123 of Regulation AB, and except as
disclosed in the Reports, each Servicer and the Master Servicer has
fulfilled its obligations under the Pooling and Servicing Agreement;
and
5. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria required
to be included in this Annual Report in accordance with Item 1122 of
Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been
included as an exhibit to this Annual Report, except as otherwise
M-1
disclosed in this Annual Report. Any material instances of
non-compliance described in such reports have been disclosed in this
Annual Report.
M-2
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Securities
Administrator, the Master Servicer and each Servicer.
Date: _________________________
_______________________________
[Signature] [Title]
M-3
EXHIBIT N-1
SERVICER CERTIFICATIONS TO BE PROVIDED TO THE MASTER SERVICER AND DEPOSITOR
Re: IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through
Certificates, Series 2006-HE3, issued pursuant to the Pooling and Servicing
Agreement, dated as of September 1, 2006 (the "Pooling and Servicing
Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor)", IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian"), Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"), Master Financial, Inc., as a servicer ("Master Financial"),
Saxon Mortgage Services, Inc., as a servicer ("Saxon").
[NAME OF SERVICER] (the "Servicer"), certifies to the Depositor, the Master
Servicer and the Securities Administrator, as applicable, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. The Servicer has reviewed the servicer compliance statement of the
Servicer and the compliance statements of each Subservicer, if any,
engaged by Servicer provided to the Depositor and the Securities
Administrator for the Trust's fiscal year [___] in accordance with
Item 1123 of Regulation AB (each a "Compliance Statement"), the
report on assessment of the Servicer's compliance with the
applicable servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment
of compliance with servicing criteria for asset-backed securities of
the Servicer and of each Subservicer or Subcontractor, if any,
engaged or utilized by the Servicer provided to the Depositor and
the Securities Administrator for the Trust's fiscal year [___] in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (each a "Servicing Assessment"), the registered public
accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b)
of Regulation AB related to each Servicing Assessment (each an
"Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Servicer, if any, during [_____] that were
delivered or caused to be delivered by the Servicer pursuant to the
Agreement (collectively, the "Servicing Information");
2. Based on the Servicer's knowledge, the Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements
were made, not misleading with respect to the period of time covered
by the Servicing Information;
N-1-1
3. Based on the Servicer's knowledge, the Servicing Information
required to be provided to the Securities Administrator by the
Servicer pursuant to the Pooling and Servicing Agreement has been
provided to the Securities Administrator;
4. Based on the Servicer's knowledge and the compliance review
conducted in preparing Compliance Statement of the Servicer and, if
applicable, reviewing each Compliance Statement of each Subservicer,
if any, engaged by the Servicer, and except as disclosed in such
Compliance Statement[(s)], the Servicer [(directly and through its
Subservicers, if any)] has fulfilled its obligations under the
Pooling and Servicing Agreement in all material respects; and
5. Each Servicing Assessment of the Servicer and of each Subservicer or
Subcontractor, if any, engaged or utilized by the Servicer and its
related Attestation Report required to be included in the Annual
Report in accordance with Item 1122 of Regulation AB and Exchange
Act Rules 13a-18 and 15d-18 has been provided to the Depositor, the
Master Servicer and the Securities Administrator. Any material
instances of non-compliance are described in any such Servicing
Assessment or Attestation Report.
Date: ________________________________
By: ________________________________
Name: ________________________________
Title:________________________________
N-1-2
EXHIBIT N-2
MASTER SERVICER CERTIFICATIONS TO BE PROVIDED TO DEPOSITOR
Re: IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through
Certificates, Series 2006-HE3, issued pursuant to the Pooling and Servicing
Agreement, dated as of September 1, 2006 (the "Pooling and Servicing
Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor)", IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as trustee and
custodian (in each such capacity, respectively, the "Trustee" and the
"Custodian"), Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer (in each such capacity,
respectively, the "Securities Administrator", the "Master Servicer" and the
"Backup Servicer"), Master Financial, Inc., as a servicer ("Master Financial"),
Saxon Mortgage Services, Inc., as a servicer ("Saxon", and together with Master
Financial, the "Servicers").
[NAME OF MASTER SERVICER] (the "Master Servicer"), certifies to the Depositor
and the Securities Administrator, as applicable, and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. The Master Servicer has reviewed the servicer compliance statement
of the Master Servicer provided to the Depositor and the Securities
Administrator for the Trust's fiscal year [___] in accordance with
Item 1123 of Regulation AB (each a "Compliance Statement"), the
report on assessment of the Master Servicer's compliance with the
applicable servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Assessment") and all servicing
reports, officer's certificates and other information relating to
the servicing of the Mortgage Loans by the Master Servicer, if any,
during 200[_] that were delivered or caused to be delivered by the
Master Servicer pursuant to the Agreement (collectively, the
"Servicing Information");
2. Based on the Master Servicer's knowledge, the Servicing Information,
taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in the light of the circumstances under which such
statements were made, not misleading with respect to the period of
time covered by the Servicing Information;
3. Based on the Master Servicer's knowledge, the Servicing Information
required to be provided to the Securities Administrator by the
Master Servicer pursuant to the Pooling and Servicing Agreement has
been provided to the Securities Administrator;
4. Based on the Master Servicer's knowledge and the compliance review
conducted in preparing Compliance Statement of the Master Servicer,
and except as disclosed in such Compliance Statement or Servicing
Assessment, the Master Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement in all material respects; and
N-2-1
5. Each required Servicing Assessment and Compliance Statement has been
provided to the Depositor and the Securities Administrator. Any
material instances of non-compliance are described in such reports.
In making this certification, the Master Servicer is relying upon the
information provided by the Servicers.
Date: ________________________________
By: ________________________________
Name: ________________________________
Title:________________________________
N-2-2
EXHIBIT O
Securities Administrator Certifications to be provided to Depositor
Re: IXIS Real Estate Capital Trust 2006-HE3 Mortgage Pass-Through
Certificates, Series 2006-HE3, issued pursuant to the Pooling and Servicing
Agreement, dated as of September 1, 2006 (the "Pooling and Servicing
Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor)", IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Master Financial, Inc. ("Master Financial"), Saxon
Mortgage Services, Inc. ("Saxon" and, together with Master Financial, the
"Servicers"), Deutsche Bank National Trust Company, as custodian and trustee
(respectively, the "Custodian" and "Trustee"), and Xxxxx Fargo Bank, National
Association, as securities administrator, master servicer and backup servicer
(in each such capacity, respectively, the "Securities Administrator", the
"Master Servicer" and the "Backup Servicer").
Xxxxx Fargo Bank, National Association, not in its individual capacity but
solely as securities administrator, certifies to the Depositor, and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. It has reviewed the annual report on Form 10-K for the fiscal year
20__ (the "Annual Report"), and all reports on Form 10-D required to
be filed in respect of period covered by the Annual Report
(collectively with this Annual Report, the "Reports"), of the
Depositor relating to the above-referenced trust;
2. Based on its knowledge, the distribution information in the
distribution reports contained in all Form 10-D prepared by the
Securities Administrator, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by the Annual Report;
3. Based on its knowledge, the distribution information required to be
provided to the Securities Administrator by the Master Servicer or
any Servicer, as the case may be, under the Pooling and Servicing
Agreement for inclusion in the Reports is included in the Reports;
and
5. The report on assessment of compliance with servicing criteria for
asset-backed securities of the Securities Administrator and its
related attestation report on assessment of compliance with
servicing criteria applicable to it required to be included in the
Annual Report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 has been included as an exhibit
to the Annual Report. Any material instances of non-compliance are
described in such report and have been disclosed in the Annual
Report.
In compiling the distribution information and making the foregoing
certifications, the Securities Administrator has relied upon information
furnished to it by the Master Servicer or any Servicer, as the case may be,
under the Pooling and Servicing Agreement. The Securities
O-1
Administrator shall have no responsibility or liability for any inaccuracy in
such reports resulting from information so provided by the Master Servicer or
any Servicer, as the case may be.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:_______________________________________
Name:
Title:
O-2
EXHIBIT P
------------------------------------------------------------------------------------------------------------------------
[Company Letter head]
------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REALIZED LOSS/GAIN
------------------------------------------------------------------------------------------------------------------------
Prepared By: Date:
------------------------------------------------------------------------------------------------------------------------
Phone:
------------------------------------------------------------------------------------------------------------------------
Servicer Loan # Servicer Name:
------------------------------------------------------------------------------------------------------------------------
Pool: Borrower Name:
------------------------------------------------------------------------------------------------------------------------
Investor loan # Property Address:
------------------------------------------------------------------------------------------------------------------------
TYPE OF LIQUIDATION: REO SHORT SALE
------------------------------------------------------------------------------------------------------------------------
THIRD PARTY CHARGEOFF
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
CREDITS:
------------------------------------------------------------------------------------------------------------------------
Proceeds from Sale of Acquired Property $0.00
------------------------------------------------------------------------------------------------------------------------
Escrow Balance
------------------------------------------------------------------------------------------------------------------------
HIP Refund
------------------------------------------------------------------------------------------------------------------------
Rental Receipts
------------------------------------------------------------------------------------------------------------------------
Hazard Loss Proceeds
------------------------------------------------------------------------------------------------------------------------
Primary Mortgage Insurance Proceeds
------------------------------------------------------------------------------------------------------------------------
Other (itemize):
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
TOTAL CREDITS: $0.00
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
LESS EXPENSES:
------------------------------------------------------------------------------------------------------------------------
Attorney's Fees
------------------------------------------------------------------------------------------------------------------------
Bankruptcy Fees
------------------------------------------------------------------------------------------------------------------------
Court Costs (Recording, Filing Fees, Etc.)
------------------------------------------------------------------------------------------------------------------------
Advertising/Sheriff's fees
------------------------------------------------------------------------------------------------------------------------
Title Policy/Report
------------------------------------------------------------------------------------------------------------------------
Real Estate Taxes
------------------------------------------------------------------------------------------------------------------------
Hazard Insurance Premiums
------------------------------------------------------------------------------------------------------------------------
MI Insurance Premiums
------------------------------------------------------------------------------------------------------------------------
Inspections
------------------------------------------------------------------------------------------------------------------------
P-1
------------------------------------------------------------------------------------------------------------------------
Property Preservation (Securing, Winterization, Lawn Care, Etc.)
------------------------------------------------------------------------------------------------------------------------
Appraisal/BPO Fees
------------------------------------------------------------------------------------------------------------------------
Repairs
------------------------------------------------------------------------------------------------------------------------
Hazard Loss Expenses
------------------------------------------------------------------------------------------------------------------------
Other (itemize)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SUBTOTAL EXPENSES: $0.00
------------------------------------------------------------------------------------------------------------------------
LESS INTEREST ADVANCED:
------------------------------------------------------------------------------------------------------------------------
Interest Advanced to date at Net Rate $0.00
------------------------------------------------------------------------------------------------------------------------
Last Month's Advanced Net Interest $0.00
------------------------------------------------------------------------------------------------------------------------
Accrued Servicing Fees $0.00
------------------------------------------------------------------------------------------------------------------------
Last month Servicing Fees $0.00
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SUBTOTAL EXPENSES: $0.00
------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES: $0.00
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
GROSS LIQUIDATION PROCEEDS $0.00
------------------------------------------------------------------------------------------------------------------------
SCHEDULED PRINCIPAL BALANCE OF MORTGAGE LOAN $0.00
------------------------------------------------------------------------------------------------------------------------
PRINCIPAL ADVANCES PASSED THROUGH TO INVESTOR $0.00
------------------------------------------------------------------------------------------------------------------------
TOTAL REALIZED (LOSS) OR AMOUNT OF GAIN: $0.00
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
ACTUAL UNPAID PRINCIPAL BALANCE OF MORTGAGE LOAN 0.00
------------------------------------------------------------------------------------------------------------------------
LAST MONTH'S ADVANCED NET INTEREST 0.00
------------------------------------------------------------------------------------------------------------------------
LESS PRINCIPAL ADVANCES 0.00
------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/LOSS 0.00
------------------------------------------------------------------------------------------------------------------------
REMITTANCE DUE TO INVESTOR 0.00
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
AMOUNT ALREADY REMITTED (OR GAIN NOT DUE TO INVESTOR) 0.00
------------------------------------------------------------------------------------------------------------------------
ADJUSTED AMOUNT DUE FROM SERVICER 0.00
------------------------------------------------------------------------------------------------------------------------
This letter certifies that in accordance with the provisions of the respective
------------------------------------------------------------------------------------------------------------------------
Pooling and Servicing Agreement, the attached "Realized Loss Calculation" is
------------------------------------------------------------------------------------------------------------------------
loan level detail of this realized loss for the above referenced deal.
------------------------------------------------------------------------------------------------------------------------
Authorized Signature Printed Name and Title
------------------------------------------------------------------------------------------------------------------------
P-2
P-3
EXHIBIT Q
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by Securities Administrator, the
Master Servicer, [the Servicer], [each Subservicer] and [each Subcontractor]
shall address, at a minimum, the criteria identified as below as "Applicable
Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
-----------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the Master Servicer/
1122(d)(1)(i) transaction agreements. Servicers
-----------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the N/A
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities.
-----------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained. N/A
-----------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and Servicers
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other Servicers
1122(d)(2)(i) number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or Securities Administrator
1122(d)(2)(ii) to an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such Servicers
advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve Servicers/Master
accounts or accounts established as a form of Servicer/Securities
1122(d)(2)(iv) overcollateralization, are separately maintained (e.g., Administrator
-----------------------------------------------------------------------------------------------------------------------
Q-1
-----------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------
with respect to commingling of cash) as set forth in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally insured Servicers/Master
depository institution" with respect to a foreign financial Servicer/Securities
institution means a foreign financial institution that meets the Administrator(2)
1122(d)(2)(v) requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent unauthorized N/A
1122(d)(2)(vi) access.
-----------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date, or
such other number of days specified in the transaction Servicers/Master
agreements; (C) reviewed and approved by someone other than the Servicer
person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original
identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically, Master Servicer/
such reports (A) are prepared in accordance with timeframes and Securities
other terms set forth in the transaction agreements; (B) provide Administrator/
information calculated in accordance with the terms specified in Servicers
the transaction agreements; (C) are filed with the Commission as
1122(d)(3)(i) required by its rules and
-----------------------------------------------------------------------------------------------------------------------
_________________________
(2) This will only be provided by the Master Servicer and Securities
Administrator if it is deemed that such account maintained by the Master
Servicer or Securities Administrator, as applicable, is a custodial
account for purposes of these servicing criteria and is further subject to
clarification from the SEC.
Q-2
-----------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------
regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
-----------------------------------------------------------------------------------------------------------------------
Securities
Amounts due to investors are allocated and remitted in accordance Administrator/
with timeframes, distribution priority and other terms set forth Master Servicer/
1122(d)(3)(ii) in the transaction agreements. Servicers
-----------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business Securities
days to the Servicer's investor records, or such other number of Administrator/
1122(d)(3)(iii) days specified in the transaction agreements. Servicers
-----------------------------------------------------------------------------------------------------------------------
Securities
Amounts remitted to investors per the investor reports agree with Administrator/
cancelled checks, or other form of payment, or custodial bank Master Servicer/
1122(d)(3)(iv) statements. Servicers
-----------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage loan Custodian/Servicers
1122(d)(4)(i) documents.
-----------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required Custodian
1122(d)(4)(ii) by the transaction agreements
-----------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or Servicers/Securities
1122(d)(4)(iii) requirements in the transaction agreements. Administrator
-----------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days Servicers
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance
1122(d)(4)(iv) with the related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree with
the Servicer's records with respect to an obligor's unpaid Servicers
1122(d)(4)(v) principal balance.
-----------------------------------------------------------------------------------------------------------------------
Q-3
-----------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with Servicers
1122(d)(4)(vi) the transaction agreements and related pool asset documents.
-----------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and Servicers
concluded in accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction Servicers
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related Servicers
1122(d)(4)(ix) mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis,
or such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in Servicers
accordance with applicable mortgage loan documents and state
laws; and (C) such funds are returned to the obligor within 30
calendar days of full repayment of the related mortgage loans, or
1122(d)(4)(x) such other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such Servicers
payments, provided that such support has been received by the
1122(d)(4)(xi) servicer at least 30 calendar days prior to these dates, or such
-----------------------------------------------------------------------------------------------------------------------
Q-4
-----------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------
other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due Servicers
1122(d)(4)(xii) to the obligor's error or omission.
-----------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the Servicers
servicer, or such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction Servicers
1122(d)(4)(xiv) agreements.
-----------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is Servicers
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------
Q-5
EXHIBIT R
ADDITIONAL FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
--------------------------------------------------------------------------------------------------------
Item 1: Distribution and Pool Performance Servicer
Information Securities Administrator
Any information required by Item 1121 of Servicer
Regulation AB which is NOT included on the
Monthly Statement
--------------------------------------------------------------------------------------------------------
Item 2: Legal Proceedings (i) All parties to the Agreement (as to
themselves to the extent applicable), (ii) the
per Item 1117 of Regulation AB Depositor as to the sponsor, and each
Originator (other than a Responsible Party) or
any Regulation AB Item 1100(d)(1) party
--------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Depositor
--------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
--------------------------------------------------------------------------------------------------------
Item 5: Submission of Matters to a Vote of Depositor or the party to this Agreement
Security Holders submitting such matter to a vote of
Certificateholders
--------------------------------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool Assets N/A
--------------------------------------------------------------------------------------------------------
Item 7: Significant Enhancement Provider Depositor
Information
--------------------------------------------------------------------------------------------------------
Item 8: Other Information Any party to the Agreement responsible for
disclosure items on Form 8-K to the extent
applicable
--------------------------------------------------------------------------------------------------------
Item 9: Exhibits
--------------------------------------------------------------------------------------------------------
To the extent no notice is provided to the Securities Administrator as described
under the Pooling and Servicing Agreement of the events or information set forth
above in this Exhibit R, the Securities Administrator shall, without such
further notice, conclude that there is no event or information to be reported.
R-1
EXHIBIT S
ADDITIONAL FORM 10-K DISCLOSURE
--------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
--------------------------------------------------------------------------------------------------------
Item 9B: Other Information Any party to the Agreement responsible for
disclosure items on Form 8-K to the extent
applicable
--------------------------------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Depositor
Schedules
--------------------------------------------------------------------------------------------------------
Additional Item: (i) All parties to the Agreement (as to themselves
to the extent applicable), (ii) the Depositor as to
Disclosure per Item 1117 of Regulation AB the sponsor and each Originator (other than a
Responsible Party) or any 1100(d)(1) party
--------------------------------------------------------------------------------------------------------
Additional Item: (i) All parties to the Agreement as to themselves
Disclosure per Item 1119 of Regulation AB to the extent applicable, (ii) the Depositor as to
the sponsor, or any derivative provider
--------------------------------------------------------------------------------------------------------
Additional Item: N/A
Disclosure per Item 1112(b) of Regulation
AB
--------------------------------------------------------------------------------------------------------
Additional Item: Depositor
Disclosure per Items 1114(b) and 1115(b)
of Regulation AB
--------------------------------------------------------------------------------------------------------
To the extent no notice is provided to the Securities Administrator as described
under the Pooling and Servicing Agreement of the events or information set forth
above in this Exhibit S, the Securities Administrator shall, without such
further notice, conclude that there is no event or information to be reported.
S-1
EXHIBIT T
FORM 8-K DISCLOSURE INFORMATION
--------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
--------------------------------------------------------------------------------------------------------
Item 1.01- Entry into a Material Definitive The party to this Agreement entering into
Agreement such material definitive agreement
--------------------------------------------------------------------------------------------------------
Item 1.02- Termination of a Material Definitive The party to this Agreement requesting
Agreement termination of a material definitive
agreement
--------------------------------------------------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership (i) All parties to the Agreement (as to
themselves to the extent applicable), (ii)
the Servicer as to the Trust, (iii) the
Depositor as to the sponsor and each
Originator (other than a Responsible
Party) or any 1100(d)(1) party
--------------------------------------------------------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Master Servicer/Securities Administrator/Depositor
Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
--------------------------------------------------------------------------------------------------------
Item 3.03- Material Modification to Rights of Securities Administrator/Depositor
Security Holders
--------------------------------------------------------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation Depositor
or Bylaws; Change of Fiscal Year
--------------------------------------------------------------------------------------------------------
Item 6.01- ABS Informational and Computational Depositor
Material
--------------------------------------------------------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Servicer
--------------------------------------------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement or Depositor
External Support
--------------------------------------------------------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
--------------------------------------------------------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
--------------------------------------------------------------------------------------------------------
Item 7.01- Regulation FD Disclosure Depositor
--------------------------------------------------------------------------------------------------------
Item 8.01 Depositor
--------------------------------------------------------------------------------------------------------
To the extent no notice is provided to the Securities Administrator as described
under the Pooling and Servicing Agreement of the events or information set forth
above in this Exhibit T, the Securities Administrator shall, without such
further notice, conclude that there is no event or information to be reported.
T-1
EXHIBIT U
Interest Rate Swap Agreement
U-1
EXHIBIT V
FORM OF ADVANCE REIMBURSEMENT NOTICE
[__________], 200[_]
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Loan and Security Agreement, dated as of [__________], 200[_]
(the "Loan and Security Agreement"), by and between [__________]
and [__________] ("Advancing Person").
Ladies and Gentlemen:
[__________] ("[__________]") currently acts as the servicer (a "Servicer") for
a pool of Mortgage Loans (a "Trust") owned by Deutsche Bank National Trust
Company as trustee on behalf of IXIS Real Estate Capital Trust 2006-HE3 (the
"Owner"). The servicing arrangements regarding [__________]'s duties as the
Servicer of such Trust on behalf of the Owner are governed by a pooling and
servicing agreement dated as of September 1, 2006, among Xxxxxx Xxxxxxx ABS
Capital I Inc. as depositor, Xxxxx Fargo Bank, National Association as master
servicer, backup servicer and securities administrator (in its capacity as
securities administrator, the "Securities Administrator"), Saxon Mortgage
Services, Inc. as servicer, Master Financial, Inc., as servicer, IXIS Real
Estate Capital, Inc. as unaffiliated seller and Deutsche Bank National Trust
Company as trustee and custodian (the "Pooling and Servicing Agreement").
Pursuant to the Loan and Security Agreement referenced above, the Advancing
Person has agreed to finance the principal and interest advances and the
servicing advances (collectively, the "Advances") [__________] is required to
make with respect to the Mortgage Loans under the terms of the Pooling and
Servicing Agreement. In exchange therefore, [__________] has pledged its right
of reimbursement for such Advances to the Advancing Person.
In furtherance of the foregoing, [__________] and the Advancing Person agree,
and the Owner and the Securities Administrator acknowledge (and, with respect to
paragraph (5) below, agree) as follows:
(1) Notwithstanding the Advancing Person's financing of the Advances
related to the Trust, the parties hereto are not releasing
[__________] from any of its obligations under the Pooling and
Servicing Agreement and neither the Owner nor the Securities
Administrator has any right or ability to require the Advancing
Person to make any advances.
(2) The parties acknowledge that the reimbursement obligations pledged
to the Advancing Person for Advances financed by it are obligations
owed only to [__________] on a non-recourse basis payable only from
the cash flows and proceeds (liquidation or otherwise) of the
related Mortgage Loans pursuant to the terms of the Pooling and
Servicing Agreement. Neither the Owner nor the
V-1
Securities Administrator is obligated or liable to repay any
Advances made by [__________] or financed by the Advancing Person.
(3) The parties acknowledge that neither the Owner nor the Securities
Administrator shall have any rights or remedies against the
Advancing Person for any failure by the Servicer to service the
Mortgage Loans in accordance with the terms of the Pooling and
Servicing Agreement; provided, that such acknowledgement does not
excuse the Advancing Person from performing its obligations as a
seller under the Pooling and Servicing Agreement.
(4) [__________] will be responsible for remitting the applicable
amounts collected by it on a Mortgage Loan to the Advancing Person
as reimbursement for any Advances funded by the Advancing Person
related to such Mortgage Loan, subject to the restrictions and
priorities created by the Pooling and Servicing Agreement. Neither
the Owner nor the Securities Administrator shall have any
responsibility to track or monitor the administration of this
financing vehicle between [__________] and the Advancing Person.
(5) If [__________] resigns or is otherwise removed as the Servicer of
the Trust, the Owner or the Securities Administrator, as applicable,
will cooperate in good faith with the Advancing Person and
[__________] to assist in the reimbursement of any amounts then
outstanding to the Advancing Person for Advances previously financed
by the Advancing Person with respect to the Mortgage Loans in such
Trust.
(6) The Advancing Person is an intended third party beneficiary of this
letter agreement.
[SIGNATURE PAGES FOLLOW ON NEXT PAGE]
V-2
[__________].
By:_______________________________
Name:
Title:
Acknowledged and Agreed:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
securities administrator for the benefit of
the holders of the certificates issued by
IXIS Real Estate Capital Trust 2006-HE3
By:____________________________________________
Name:
Title:
V-3
EXHIBIT W
FORM OF MASTER SERVICER'S REPORT
------------------------------------------------------------------------------------------------------------------------------
STANDARD FILE LAYOUT - MASTER SERVICING
------------------------------------------------------------------------------------------------------------------------------
MAX
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT SIZE
------------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 10 digits 20
define a group of loans.
------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each Text up to 10 digits 10
loan by the investor.
------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by Text up to 10 digits 10
the Servicer. This may be different
than the LOAN_NBR.
------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME The borrower name as received in the Maximum length of 30 30
file. It is not separated by first (Last, First)
and last name.
------------------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and 2 No commas(,) or dollar 11
scheduled interest payment that a signs ($)
borrower is expected to pay, P&I
constant.
------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by 4 Max length of 6 6
the Servicer.
------------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the 4 Max length of 6 6
service fee rate as reported by the
Servicer.
------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6 6
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan 2 No commas(,) or dollar 11
as reported by the Servicer. signs ($)
------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as 2 No commas(,) or dollar 11
reported by the Servicer. signs ($)
------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6 6
Servicer.
------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6 6
calculate a forecasted rate.
------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar 11
balance at the beginning of the signs ($)
processing cycle.
------------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar 11
balance at the end of the processing signs ($)
cycle.
------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing MM/DD/YYYY 10
cycle that the borrower's next payment
is due to the Servicer, as reported by
Servicer.
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be 2 No commas(,) or dollar 11
applied. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with MM/DD/YYYY 10
the first curtailment amount.
------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar 11
curtailment amount, if applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar 11
applied. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with MM/DD/YYYY 10
the second curtailment amount.
------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar 11
curtailment amount, if applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be 2 No commas(,) or dollar 11
applied. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with MM/DD/YYYY 10
the third curtailment amount.
------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar 11
curtailment amount, if applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or dollar 11
reported by the Servicer. signs ($)
------------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by MM/DD/YYYY 10
the Servicer.
------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used to Action Code Key: 2
------------------------------------------------------------------------------------------------------------------------------
W-1
------------------------------------------------------------------------------------------------------------------------------
STANDARD FILE LAYOUT - MASTER SERVICING
------------------------------------------------------------------------------------------------------------------------------
MAX
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT SIZE
------------------------------------------------------------------------------------------------------------------------------
indicate the default/delinquent status 15=Bankruptcy,
of a particular loan. 00xXxxxxxxxxxx, ,
00xXXX, 63=Substitution,
65=Repurchase,70=REO
------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment 2 No commas(,) or dollar 11
as reported by the Servicer. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar 11
applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as 2 No commas(,) or dollar 11
a loss, if applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or dollar 11
amount due at the beginning of the signs ($)
cycle date to be passed through to
investors.
------------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar 11
investors at the end of a processing signs ($)
cycle.
------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as 2 No commas(,) or dollar 11
reported by the Servicer for the signs ($)
current cycle -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount 2 No commas(,) or dollar 11
less the service fee amount for the signs ($)
current cycle as reported by the
Servicer -- only applicable for
Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected 2 No commas(,) or dollar 11
by the Servicer for the current signs ($)
reporting cycle -- only applicable for
Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less 2 No commas(,) or dollar 11
the service fee amount for the current signs ($)
reporting cycle as reported by the
Servicer -- only applicable for
Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a 2 No commas(,) or dollar 11
borrower prepays on his loan as signs ($)
reported by the Servicer.
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PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the 2 No commas(,) or dollar 11
loan waived by the servicer. signs ($)
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MOD_DATE The Effective Payment Date of the MM/DD/YYYY 10
Modification for the loan.
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MOD_TYPE The Modification Type. Varchar - value can be 30
alpha or numeric
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DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar 11
interest advances made by Servicer. signs ($)
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W-2
