================================================================================
MORGAN STANLEY ABS CAPITAL I INC.,
as Depositor,
WELLS 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
----
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; Gramm-Leach-Bliley
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 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 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 MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as
depositor
(the "Depositor"), WELLS 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............................
Moody's, Fitch and Standard & Poor's.
Regular Certificates.......................
All Classes of Certificates other than the Class P and
Class R Certificates.
Residual Certificates......................
Class R Certificates.
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: Wells 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 "Wells 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
Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention:
Corporate Trust Services - IXIS 2006-HE3, and (ii) for all other
purposes 9062
Old Annapolis Road, Columbia, Maryland 21045, 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 1761 East St. Andrew Place, Santa Ana,
California
92705, Attn: Trust Administration IX0603, facsimile no. (714)
247-6470 and which
is the address to which notices to and correspondence with the
Trustee should be
directed.
Corresponding Class: As described in the Preliminary Statement.
Corresponding Distribution Date:
Corresponding Distribution Date is
REMIC III Regular Interest
the Distribution Date occurring in:
--------------------------------------------------------------------------------
Class III-C1a-c
October 2006
--------------------------------------------------------------------------------
Class III-C2a-c
November 2006
--------------------------------------------------------------------------------
Class III-C3a-c
December 2006
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
Class III-C11a-c
August 2007
--------------------------------------------------------------------------------
Class III-C12a-c
September 2007
--------------------------------------------------------------------------------
Class III-C13a-c
October 2007
--------------------------------------------------------------------------------
Class III-C14a-c
November 2007
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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: Morgan Stanley ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a
"clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of
the State of New York.
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 "Wells 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 "Wells 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.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Final Certification: A certification submitted by the Custodian in
substantially the form of Exhibit G hereto.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by an Originator as contemplated by the Assignment and Recognition
Agreements),
a determination made by the 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., One State
Street Plaza, New York, New York 10004, 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 FlexPoint.
42
Floor Amount: 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.
46
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: Wells 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.
47
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: Moody's Investors Service, Inc, and its successors in
interest. If Moody's is designated as a Rating Agency in the
Preliminary
Statement, for purposes of Section
48
10.06 the address for notices to Moody's shall be Moody's Investors
Service,
Inc., 99 Church Street, New York, New York 10007, Attention:
Residential
Mortgage Pass-Through Group, or such other address as Moody's may
hereafter
furnish to the Depositor, the Trustee, and the 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
49
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.
50
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
Wells 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.
51
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 Wells Fargo Advantage Prime Money Market Fund or any other fund
for
which Wells 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) Wells Fargo Bank, National Association, or an affiliate thereof
charges and collects fees and expenses from such funds for services
rendered, (ii) Wells
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 Wells 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 "Wells 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 Moody's. If
such
organization or a successor is no longer in existence, "Rating
Agency" shall be
such nationally recognized statistical rating organization, or
other comparable
Person, as is designated by the Depositor, notice of which
designation shall be
given to the Trustee 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.
59
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: Morgan Stanley & Co. Incorporated, as
representative
on behalf of itself, Bank of America Securities LLC, Countrywide
Securities
Corporation and IXIS Securities LLC.
Repurchase Price: With respect to any Mortgage Loan, an amount
equal
to the sum (without duplication) of (i) the unpaid principal
balance of such
Mortgage Loan as of the date of repurchase and (ii) (x) if such
Mortgage Loan is
being repurchased by the Unaffiliated Seller, the sum of (A)
interest on such
unpaid principal balance of such Mortgage Loan at the Mortgage Rate
from the
last date through which interest has been paid and distributed to
the Trustee to
the last day of the month in which such repurchase occurs, (B) all
unreimbursed
P&I
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: Wells 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.
62
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 McGraw-Hill Companies, Inc., and its successors in interest. If
Standard &
Poor's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.06 the address for notices to Standard &
Poor's shall be
Standard & Poor's, 55 Water Street, New York, New York 10041,
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
65
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).
66
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 "Wells
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).
67
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)
68
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
69
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);
70
(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
71
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.
72
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
73
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
74
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.
75
(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
76
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
77
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
78
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
79
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,
80
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
81
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
82
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;
83
(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 Tru
