EXHIBIT 4
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HSI ASSET SECURITIZATION CORPORATION,
Depositor,
JPMORGAN CHASE BANK, N.A.,
Servicer,
NEW CENTURY MORTGAGE CORPORATION,
Servicer,
NC CAPITAL CORPORATION,
Mortgage Loan Seller,
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2005
-------------------------------
HSI ASSET SECURITIZATION CORPORATION TRUST 2005-NC1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-NC1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations, Warranties and Covenants of the
Mortgage Loan Seller and the Servicer; Remedies
for Breaches of Representations and Warranties
with Respect to the Mortgage Loans..........................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between Subservicers
and the Master Servicer.....................................
Section 3.06 Assumption or Termination of Subservicing
Agreements by Master Servicer...............................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.............................................
Section 3.10 Collection Account...........................................
Section 3.11 Withdrawals from the Collection Account......................
Section 3.12 Investment of Funds in the Collection Account,
Escrow Accounts and the Distribution Account................
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.............................
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements..................................................
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee.........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.............................
Section 3.24 Back-up Certification........................................
Section 3.25 Master Servicer to Act as Servicer...........................
Section 3.26 Compensating Interest........................................
Section 3.27 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
Section 3.28 Transfer of Servicing of Mortgage Loans......................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of
LIBOR.......................................................
Section 4.05 Allocation of Applied Realized Loss Amounts..................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and
Addresses...................................................
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer....................................................
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer....................................................
Section 6.03 Limitation on Liability of the Depositor, the
Servicer and Others.........................................
Section 6.04 Limitation on Resignation of the Servicer....................
Section 6.05 Additional Indemnification by the Servicer; Third
Party Claims................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Master Servicer to Act; Appointment of Successor.............
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.......................................................
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees Indemnification and Expenses..................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Classification of the Excess Reserve Fund
Account and the Cap Agreements..............................
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations......................................
Section 9.02 Annual Statement as to Compliance............................
Section 9.03 [Reserved]...................................................
Section 9.04 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.........................................
Section 9.05 Representations and Warranties of the Master
Servicer....................................................
Section 9.06 Master Servicer Events of Default............................
Section 9.07 Waiver of Default............................................
Section 9.08 Successor to the Master Servicer.............................
Section 9.09 Compensation of the Master Servicer..........................
Section 9.10 Merger or Consolidation......................................
Section 9.11 Resignation of the Master Servicer...........................
Section 9.12 Assignment or Delegation of Duties by the Master
Servicer....................................................
Section 9.13 Limitation on Liability of the Master Servicer...............
Section 9.14 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities
Administrator...............................................
Section 10.03 Securities Administrator Not Liable for
Certificates or Mortgage Loans..............................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities
Administrator...............................................
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the
Securities Administrator....................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans..............................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Assignment...................................................
Section 12.08 Limitation on Rights of Certificateholders...................
Section 12.09 Inspection and Audit Rights..................................
Section 12.10 Certificates Nonassessable and Fully Paid....................
Section 12.11 Assignment; Sales; Advances Facilities.......................
Section 12.12 Rule of Construction.........................................
Section 12.13 Waiver of Jury Trial.........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of JPMorgan Chase Bank, N.A.
Schedule III Representations and Warranties of New Century Mortgage
Corporation
Schedule IV Representations and Warranties of the Mortgage Loan Seller as
to the Individual Mortgage Loans
Schedule V Representations and Warranties as to the Mortgage Loan Seller
EXHIBITS
Exhibit A Form of Class A and Class M Certificates
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Back-Up Certification
Exhibit N-1 Form of Monthly Remittance Advice
Exhibit N-2 Standard Layout for Monthly Defaulted Loan Report
Exhibit N-3 Form 332 Realized Loss Report
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2005,
among HSI ASSET SECURITIZATION CORPORATION, a Delaware corporation, as depositor
(the "Depositor"), JPMORGAN CHASE BANK, N.A., a national banking association, as
servicer ("JPMorgan"), NEW CENTURY MORTGAGE CORPORATION, a California
corporation, as interim servicer ("New Century" and together with JPMorgan, the
"Servicers"), NC CAPITAL CORPORATION, a California corporation, as mortgage loan
seller (the "Mortgage Loan Seller"), XXXXX FARGO BANK, N.A., a national banking
association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator"), and
DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee
(the "Trustee").
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 Trust shall elect that
two segregated asset pools within the Trust Fund be treated for federal income
tax purposes as comprising two REMICs (each, a "REMIC" or, in the alternative,
the Lower Tier REMIC and the Upper Tier REMIC, respectively). Each Class of
Certificates (other than the Class P and Class R Certificates), other than the
right of each Class of LIBOR Certificates to receive Basis Risk Carryover
Amounts and the right of the Class X Certificates to receive payments from the
Cap Agreements, represents ownership of a regular interest in the Upper Tier
REMIC for purposes of the REMIC Provisions. The Class R Certificate represents
ownership of the sole class of residual interest in each of the Lower Tier REMIC
and the Upper Tier REMIC for purposes of the REMIC Provisions. The Startup Day
for each REMIC described herein is the Closing Date. The latest possible
maturity date for each Certificate is the latest date referenced in Section
2.05. The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier REMIC Regular Interests, set out below. Each such
Lower Tier REMIC Regular Interest is hereby designated as a regular interest in
the Lower Tier REMIC. The Class P Certificates represent beneficial ownership of
the Prepayment Charges, each Class of LIBOR Certificates represents beneficial
ownership of a regular interest in the Upper Tier REMIC and the right to receive
Basis Risk Carryover Amounts and the Class X Certificates represent beneficial
ownership of a regular interest in the Upper Tier REMIC, the Excess Reserve Fund
Account and the Cap Agreements, which portions of the Trust Fund shall be
treated as a grantor trust.
Lower Tier REMIC
Corresponding
Lower Tier Upper Tier
Lower Tier REMIC REMIC Initial Lower Tier REMIC Regular
Class Designation Interest Rate REMIC Principal Amount Interest
----------------- ------------- ---------------------- -------------
Class LT-I-A-1 (1) 1/4 Corresponding Upper Tier I-A-1
REMIC Regular Interest
initial Class Principal
Balance
Class LT-I-A-2 (1) 1/4 Corresponding Upper Tier I-A-2
REMIC Regular Interest
initial Class Principal
Balance
Class LT-II-A-1 (1) 1/4 Corresponding Upper Tier II-A-1
REMIC Regular Interest
initial Class Principal
Balance
Class LT-II-A-2 (1) 1/4 Corresponding Upper Tier II-A-2
REMIC Regular Interest
initial Class Principal
Balance
Class LT-II-A-3 (1) 1/4 Corresponding Upper Tier II-A-3
REMIC Regular Interest
initial Class Principal
Balance
Class LT-II-A-4 (1) 1/4 Corresponding Upper Tier II-A-4
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-1 (1) 1/4 Corresponding Upper Tier M-1
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-2 (1) 1/4 Corresponding Upper Tier M-2
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-3 (1) 1/4 Corresponding Upper Tier M-3
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-4 (1) 1/4 Corresponding Upper Tier M-4
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-5 (1) 1/4 Corresponding Upper Tier M-5
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-6 (1) 1/4 Corresponding Upper Tier M-6
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-7 (1) 1/4 Corresponding Upper Tier M-7
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-8 (1) 1/4 Corresponding Upper Tier M-8
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-9 (1) 1/4 Corresponding Upper Tier M-9
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-10 (1) 1/4 Corresponding Upper Tier M-10
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-11 (1) 1/4 Corresponding Upper Tier M-11
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-12 (1) 1/4 Corresponding Upper Tier M-12
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-13 (1) 1/4 Corresponding Upper Tier M-13
REMIC Regular Interest
initial Class Principal
Balance
Class LT-M-14 (1) 1/4 Corresponding Upper Tier M-14
REMIC Regular Interest
initial Class Principal
Balance
Class LT-Accrual (1) 1/4 Pool Stated Principal N/A
Balance plus 1/4
Overcollateralization Amount
Class LT- (1) 0.01% initial N/A
Group I(SUB) Group Subordinate Amount of
the Group I Mortgage Loans
Class LT- (2) 0.01% initial aggregate N/A
Group I Stated Principal Balance of
the Group I Mortgage Loans
Class LT- (1) 0.01% initial N/A
Group II(SUB) Group Subordinate Amount of
the Group II Mortgage Loans
Class LT- (3) 0.01% initial aggregate N/A
Group II Stated Principal Balance of
the Group II Mortgage Loans
Class LT-XX (1) 1/2 initial aggregate Stated N/A
Principal Balance of the
Mortgage Loans, less
aggregate Initial Lower-Tier
REMIC Principal Amounts of
Class LT-Group I(SUB),
Class LT-Group I,
Class LT-Group II(SUB) and
Class LT-Group II Interests
Class LT-R (4) (4) N/A
----------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the Lower-Tier REMIC WAC
Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Group I Available
Funds Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Group II
Available Funds Cap.
(4) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Charges, the Cap Agreements, the Excess
Reserve Fund Account, and the Lower Tier REMIC Regular Interests.
The Class LT-I-A-1, Class LT-I-A-2, Class LT-II-A-1, Class
LT-II-A-2, Class LT-II-A-3, Class LT-II-A-4, Class LT-M-1, Class LT-M-2, Class
LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-M-7, Class LT-M-8,
Class LT-M-9, Class LT-M-10, Class LT-M-11, Class LT-M-12, Class LT-M-13 and
Class LT-M-14 Interests are hereby designated the LT Accretion Directed Classes
(the "LT Accretion Directed Classes"). On each Distribution Date, 25% of the
increase in the Overcollateralization Amount will be payable as a reduction of
the Lower-Tier REMIC Principal Amount of the LT Accretion Directed Classes (each
such Class will be reduced by an amount equal to 25% of any increase in the
Overcollateralization Amount that is attributable to a reduction in the Class
Certificate Balance of its Corresponding Class) and will be accrued and added to
the Lower-Tier REMIC Principal Amount of the Class LT-Accrual Interest. On each
Distribution Date, the increase in the Lower-Tier REMIC Principal Amount of the
Class LT-Accrual Interest may not exceed interest accruals for such Distribution
Date for the Class LT-Accrual Interest. All payments of scheduled principal and
prepayments of principal generated by the Mortgage Loans and all Subsequent
Recoveries allocable to principal shall be allocated (i) 25% to the Class
LT-Accrual Interest, (ii) 25% to the LT Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such LT
Accretion Directed Classes in an amount equal to 25% of the principal amounts
allocated to their respective Corresponding Classes), until paid in full and
(iii) 50% to Class LT-Group I(SUB) Interest, Class LT-Group I Interest, Class
LT-Group II(SUB) Interest, Class LT-Group II Interest and Class LT-XX Interest
(and further allocated among these Lower-Tier REMIC Regular Interests in the
manner described in the next sentence). As among the Class LT-Group I(SUB)
Interest, Class LT-Group I Interest, Class LT-Group II(SUB) Interest, Class
LT-Group II Interest and Class LT-XX Interest, all payments of scheduled
principal and prepayments of principal generated by the Mortgage Loans and
Subsequent Recoveries referred to in clause (iii) of the previous sentence shall
be allocated (i) first, to the Class LT-Group I(SUB) Interest, and Class
LT-Group II(SUB) Interest, each from the related Loan Group, so that their
respective Lower-Tier REMIC Principal Amount (computed to at least eight decimal
places) is equal to 0.01% of the related Group Subordinate Amount (except that
if any such amount is a larger number than in the preceding distribution period,
the least amount of principal shall be distributed to the Class LT-Group I(SUB)
Interest and Class LT-Group II(SUB) Interest, as applicable, such that the Lower
Tier REMIC Subordinate Balance Ratio is maintained); (ii) second, to the Class
LT-Group I Interest and the Class LT-Group II Interest 0.01% of the principal
collected in respect of the related Loan Group; and (iii) third, any remaining
amounts of principal shall be distributed to the Class LT-XX Interest.
Notwithstanding the above, principal payments allocated to the Class X Interest
that result in the reduction in the Overcollateralization Amount shall be
allocated (i) 50% to the Class LT-Accrual Interest (until paid in full) and (ii)
50% to the Class LT-Group I(SUB) Interest, the Class LT-Group II(SUB) Interest,
the Class LT-Group I Interest, the Class LT-Group II Interest and the Class
LT-XX Interest (and allocated among these Lower-Tier REMIC Regular Interests in
a manner similar to that described in the immediately preceding sentence).
Reductions to Lower-Tier REMIC Principal Amounts as a result of
Realized Losses and increases in Lower-Tier REMIC Principal Amounts as a result
of Subsequent Recoveries shall be applied so that after all distributions have
been made on each Distribution Date (i) the Lower Tier REMIC Principal Amount of
each LT Accretion Directed Class is equal to 25% of the Class Certificate
Balance of its Corresponding Class, (ii) the Class LT-Accrual Interest is equal
to 25% of the aggregate Stated Principal Balance of the Mortgage Loans plus 25%
of the Overcollateralization Amount, (iii) the Class LT-Group I(SUB) Interest is
equal to 0.01% of the Group Subordinate Amount of the Group I Mortgage Loans,
(iv) the Class LT-Group II(SUB) Interest is equal to 0.01% of the Group
Overcollateralization Amount of the Group II Mortgage Loans, (v) the Class
LT-Group I Interest is equal to 0.01% of the aggregate Stated Principal Balance
of the Group I Mortgage Loans, (vi) the Class LT-Group II Interest is equal to
0.01% of the aggregate Stated Principal Balance of the Group II Mortgage Loans
and (vii) the remainder shall be applied to the Class LT-XX Interest.
The Upper Tier REMIC shall issue the following classes of Upper Tier
REMIC Regular Interests and each such interest, other than the Class UT-R
Interest, is hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier REMIC
Initial Upper
Upper Tier REMIC Tier REMIC
Interest Rate and Principal Amount
Corresponding and Corresponding Corresponding
Upper Tier REMIC Class Interest Class Certificate Class of
Class Designation Rate Balance Certificates
----------------- ---- ------- ------------
Class I-1-A (1) $181,669,000 Class I-1A(10)
Class I-A-2 (2) $ 10,248,000 Class I-A-2(10)
Class II-A-1 (3) $162,565,000 Class II-A-1(10)
Class II-A-2 (4) $123,256,000 Class II-A-2(10)
Class II-A-3 (5) $ 25,210,000 Class II-A-3(10)
Class II-A-4 (6) $ 17,545,000 Class II-A-4(10)
Class M-1 (7) $ 18,318,000 Class M-1(10)
Class M-2 (7) $ 13,265,000 Class M-2(10)
Class M-3 (7) $ 12,001,000 Class M-3(10)
Class M-4 (7) $ 10,422,000 Class M-4(10)
Class M-5 (7) $ 9,475,000 Class M-5(10)
Class M-6 (7) $ 8,211,000 Class M-6(10)
Class M-7 (7) $ 7,264,000 Class M-7(10)
Class M-8 (7) $ 3,790,000 Class M-8(10)
Class M-9 (7) $ 3,159,000 Class M-9(10)
Class M-10 (7) $ 6,000,000 Class M-10(10)
Class M-11 (7) $ 4,421,000 Class M-11(10)
Class M-12 (7) $ 5,053,000 Class M-12(10)
Class M-13 (7) $ 5,053,000 Class M-13(10)
Class M-14 (7) $ 4,741,891 Class M-14(10)
Class X (8) $ 0 Class X(9)
Class UT-R (9) $ 0 Class R
(1) The Class I-1A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group I Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group I Available Funds Cap.
(2) The Class I-A-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group I Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group I Available Funds Cap.
(3) The Class II-A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap.
(4) The Class II-A-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap.
(5) The Class II-A-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap.
(6) The Class II-A-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin and (ii) the Group II Available Funds Cap.
(7) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class M-10, Class M-11, Class M-12, Class
M-13 and Class M-14 Interests will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
Optional Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the Available Funds Cap or (b) after the
Optional Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the Available Funds Cap.
(8) The Class X Interest has an initial principal balance of $0. The Class X
Interest will not accrue interest on its principal balance from time to
time, but will accrue interest on a notional principal balance. As of any
Distribution Date, the Class X Interest shall have a notional principal
balance equal to the aggregate of the principal balances of the Lower Tier
REMIC Regular Interests as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of the
Lower-Tier REMIC WAC Cap over the product of (i) 2 and (ii) the weighted
average Lower Tier REMIC Interest Rate of the Lower Tier REMIC Regular
Interests (other than Class LT-Group I(SUB), Class LT-Group I, Class
LT-Group II(SUB), Class LT-Group II and Class LT-XX Interests), where the
Lower Tier REMIC Interest Rate on the Class LT-Accrual Interest is subject
to a cap equal to zero and each LT Accretion Directed Class is subject to
a cap equal to the Interest Rate on its Corresponding Class. With respect
to any Distribution Date, interest that so accrues on the notional
principal balance of the Class X Interest shall be deferred in an amount
equal to any increase in the Overcollateralization Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Cap Agreements, and amounts in the Excess Reserve Fund
Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk Carryover Amounts. For
federal income tax purposes, the Securities Administrator will treat a
Class X Certificateholder's obligation to make payments from the Excess
Reserve Fund Account as payments made pursuant to an interest rate cap
contract written by the Class X Certificateholders in favor of each Class
of LIBOR Certificates. Such rights of the Class X Certificateholders and
LIBOR Certificateholders shall be treated as held in a portion of the
Trust Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(9) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(10) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier REMIC Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account in respect
of any Basis Risk Carryover Amounts. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to receive
payments from the Excess Reserve Fund Account as payments made pursuant to
an interest rate cap contract written by the Class X Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof except that one Certificate in each Class may
be issued in a different amount. The minimum denomination for each of the Class
P and Class X Certificates will be a 1% Percentage Interest in such Class, and
the minimum denomination for the Class R Certificates shall be 100% Percentage
Interest in such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class I-A-1, Class I-A-2, Class II-1A-1,
Class II-A-2, Class II-A-3 and Class II-A-4
Certificates.
Class M Certificates......... Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8, Class M-9,
Class M-10, Class M-11, Class M-12, Class M-13 and
Class M-14 Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class M-13, Class M-14, Class R, Class P and Class
X Certificates; any certificate with a rating
below the lowest applicable permitted rating under
the Underwriters' Exemption.
LIBOR Certificates........... Class A and Class M Certificates.
Non-Delay Certificates....... Class A, Class X and Class M 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 M-12, Class M-13, Class M-14, Class P,
Class X and Class R Certificates.
Rating Agencies.............. Xxxxx'x, Fitch and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the
Class P and Class R Certificates.
Residual Certificates........ Class R Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, the
servicing and administration of such Mortgage Loan (i) in the same manner in
which, and with the same care, skill, prudence and diligence with which the
Servicer generally services and administers similar mortgage loans with similar
mortgagors (A) for other third parties, giving due consideration to customary
and usual standards of practice of prudent institutional residential mortgage
lenders servicing their own mortgage loans or (B) held in the Servicer's own
portfolio, whichever standard is higher, and (ii) in accordance with applicable
local, state and federal laws, rules and regulations.
Account: Any of the Collection Account, the Distribution
Account, any Escrow Account or the Excess Reserve Fund Account. Each Account
shall be an Eligible Account.
Adjustment Date: As to any 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.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 12.11.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 12.11.
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.
Aggregate Cap Agreement: The interest rate cap agreement, dated
August 25, 2005, between the Cap Provider and the Securities Administrator,
relating to the LIBOR Certificates.
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 the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end of the
related Prepayment Period and (ii) all Scheduled Payments on the Mortgage Loans
due after the end of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment 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 Master Servicer (x) the sum of (i)
all scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicer on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
received by the Servicer during the related Prepayment Period (in each case, net
of 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 by the Servicer during the related
Prepayment Period together with all Compensating Interest paid by the Servicer
in connection therewith (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur on or prior to the related Determination Date; (v) all amounts
received with respect to such Distribution Date as the Repurchase Price in
respect of a Mortgage Loan repurchased by the Mortgage Loan Seller or the
Purchaser on or prior to the related Determination Date; and (vi) the proceeds
with respect to the termination of the Trust Fund pursuant to clause (a) of
Section 11.01; reduced by (y) amounts in reimbursement for Advances previously
made with respect to the Mortgage Loans and other amounts as to which the
Servicer, the Depositor, the Master Servicer, the Securities Administrator or
the Trustee are entitled to be paid or reimbursed pursuant to this Agreement.
Available Funds Cap: With respect to the Mortgage Loans as of any
Distribution Date, the product of (i) the weighted average of (x) the Expense
Adjusted Mortgage Rates for the Group I Mortgage Loans and (y) the Expense
Adjusted Mortgage Rates for the Group II Mortgage Loans then in effect on the
beginning of the related Due Period, in each case weighted on the basis of the
related Group Subordinate Amount, 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. For federal income tax
purposes, the economic equivalent of the Available Funds Cap shall be expressed
as the weighted average of the Lower Tier REMIC Interest Rate on (a) the Class
LT-Group I(SUB), subject to a cap and floor equal to the Lower Tier REMIC
Interest Rate of the Class LT-Group I Interest and (b) the Class LT-Group
II(SUB), subject to a cap and floor equal to the Lower Tier REMIC Interest Rate
of the Class LT-Group II Interest, weighted on the basis of the respective Lower
Tier REMIC Principal Amounts of the Class LT-Group I(SUB) and Class LT-Group
II(SUB), respectively.
Basic Principal Payment Amount: With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Excess Overcollateralization Amount, if any, for such
Distribution Date.
Basis Risk Carryover Amount: 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 Class of LIBOR Certificates is based
upon a Group Available Funds Cap or the Available Funds Cap, as applicable, 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 Interest Margin on such Class of
Certificates for such Distribution Date, over (ii) the amount of interest
payable on such Class of Certificates at, with respect to the Class I-A-1 and
Class I-A-2 Certificates, the Group I Available Funds Cap, with respect to the
Class II-A-1, Class II-A-2, Class II-A-3 and Class II-A-4 Certificates, the
Group II Available Funds Cap, and with respect to each other Class of LIBOR
Certificates, the Available Funds Cap, as applicable, for such Distribution Date
and (B) the portion of any such excess described in clause (A) for such Class of
Certificates from all previous Distribution Dates not previously paid, together
with interest thereon at a rate equal to the sum of LIBOR and the applicable
Interest Margin for such Class of Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carryover Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, California, Maryland, Minnesota, Arizona or Delaware, (b) the State in
which the Servicer's servicing operations are located, or (c) any State in which
the Corporate Trust Office is located, are authorized or obligated by law or
executive order to be closed.
Cap Agreements: The Aggregate Cap Agreement, the Group I Cap
Agreement, the Group II Cap Agreement and the Class M Cap Agreement.
Cap Provider: Bear Xxxxxxx Financial Products, Inc., a Delaware
corporation, and its successors in interest.
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, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class P, Class X and Class R Certificates have no Certificate Balance.
Certificate Group: The Group I Certificates or the Group II
Certificates, as applicable.
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 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 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.
Certification: As defined in Section 8.12(c).
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class I-A-1 Certificates: All Certificates bearing the class
designation of "Class I-A-1".
Class I-A-2 Certificates: All Certificates bearing the class
designation of "Class I-A-2".
Class II-A-1 Certificates: All Certificates bearing the class
designation of "Class II-A-1".
Class II-A-2 Certificates: All Certificates bearing the class
designation of "Class II-A-2".
Class II-A-3 Certificates: All Certificates bearing the class
designation of "Class II-A-3".
Class II-A-4 Certificates: All Certificates bearing the class
designation of "Class II-A-4".
Class A Certificates: As specified in the Preliminary Statement.
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 LT-R Interest: The sole class of "residual interest" in the
Lower Tier REMIC evidenced by the Class R Certificates.
Class M Cap Agreement: The interest rate cap agreement, dated August
25, 2005, between the Cap Provider and the Securities Administrator, relating to
the Class M Certificates.
Class M Certificates: As specified in the Preliminary Statement.
Class M Principal Payment Amount: With respect to any Distribution
Date and any Class of Class M Certificates is the lesser of (i) the excess of
(a) the Principal Payment Amount over (b) the aggregate amount distributed on
that Distribution Date as principal to all Classes of Certificates more senior
than that Class of Class M Certificates and (ii) the excess of (a) the sum of
the aggregate Class Certificate Balances of all Class of Certificates more
senior than that Class of Class M Certificates (after giving effect to all
amounts distributed on that Distribution Date to those Classes of more senior
certificates) and the Class Certificate Balance of that Class of Class M
Certificates immediately prior to that Distribution Date over (b) the lesser of:
(x) the percentage set forth in the table below for the applicable
Class of Class M Certificates multiplied by the aggregate Stated Principal
Balance of the Mortgage Loans for that Distribution Date:
Class Percentage
---------- ------------
M-1 69.60%
M-2 73.80%
M-3 77.60%
M-4 80.90%
M-5 83.90%
M-6 86.50%
M-7 88.80%
M-8 90.00%
M-9 91.00%
M-10 92.90%
M-11 94.30%
M-12 95.90%
M-13 97.50%
M-14 99.00%
and
(y) the excess, if any, of the aggregate Stated Principal Balance
of the Mortgage Loans for that Distribution Date over 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date, until the Class Certificate Balance of that Class of Class M
Certificates has been reduced to zero.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-7 Certificates: All Certificates bearing the class
designation of "Class M-7".
Class M-8 Certificates: All Certificates bearing the class
designation of "Class M-8".
Class M-9 Certificates: All Certificates bearing the class
designation of "Class M-9".
Class M-10 Certificates: All Certificates bearing the class
designation of "Class M-10".
Class M-11 Certificates: All Certificates bearing the class
designation of "Class M-11".
Class M-12 Certificates: All Certificates bearing the class
designation of "Class M-12".
Class M-13 Certificates: All Certificates bearing the class
designation of "Class M-13".
Class M-14 Certificates: All Certificates bearing the class
designation of "Class M-14".
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 UT-R Interest: The sole class of "residual interest" in the
Upper Tier REMIC evidenced by the Class R Certificate.
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 Interest (as set forth in the Preliminary Statement) and
not applied as an Extra Principal Payment 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 Interest which is distributable
as an Overcollateralization Reduction Amount, minus (iii) any amounts paid as a
Basis Risk Payment.
Class X Interest: The Upper Tier REMIC Regular Interest represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Closing Date: August 25, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount, if any, by which the Prepayment Interest Shortfall, if any, for such
Distribution Date, with respect to all voluntary Principal Prepayments
(excluding any payments made upon liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such Distribution Date, and (b) the aggregate
amount of the Servicing Fee payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards or 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, to the office of the Securities Administrator at (i) for
certificate transfer purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services -
HASCO 2005-NC1, and (ii) for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services - HASCO 2005-NC1
or at such other address as the Securities Administrator may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer
and the Trustee. With respect to the Trustee, to the designated office of the
Trustee in the State of California at which any particular time its corporate
trust business with respect to this Agreement is administered, which office at
the date of the execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: Trust Administration -
HB0501, facsimile number (000) 000-0000, and its telephone number is
000-000-0000 and which is the address to which notices to and correspondence
with the Trustee should be directed.
Corresponding Class: The class of interests in either REMIC created
under this Agreement that corresponds to the Class of interests in the other
such REMIC or to a Class of Certificates in the manner set out below:
Corresponding Corresponding
Lower Tier REMIC Upper Tier REMIC Corresponding Class of
Class Designation Regular Interest Certificates
----------------- ---------------- ------------
Class LT-I-1-A Class I-1-A Class I-1-A
Class LT-I-A-2 Class I-A-2 Class I-A-2
Class LT-II-A-1 Class II-A-1 Class II-A-1
Class LT-II-A-2 Class II-A-2 Class II-A-2
Class LT-II-A-3 Class II-A-3 Class II-A-3
Class LT-II-A-4 Class II-A-4 Class II-A-4
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-M-7 Class M-7 Class M-7
Class LT-M-8 Class M-8 Class M-8
Class LT-M-9 Class M-9 Class M-9
Class LT-M-10 Class M-10 Class M-10
Class LT-M-11 Class M-11 Class M-11
Class LT-M-12 Class M-12 Class M-12
Class LT-M-13 Class M-13 Class M-13
Class LT-M-14 Class M-14 Class M-14
N/A Class X Class X
Corresponding Upper Tier REMIC Regular Interest: As defined in
the Preliminary Statement.
Credit 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 Certificates and (ii) the
Overcollateralization Amount (in each case after taking into account the
distributions of the Principal Payment Amount for such Distribution Date) by (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
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 such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: If, with respect to any Distribution
Date, the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Prepayment Period, divided by (y) the Cut-off Date Pool Principal
Balance, exceeds the applicable Cumulative Loss Percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
---------------------------------- ------------------------------------
September 2007 through August 2008 1.20% for the first month, plus an
additional 1/12th of 1.50% for each
month thereafter
September 2008 through August 2009 2.70% for the first month, plus an
additional 1/12th of 1.50% for
each month thereafter
September 2009 through August 2010 4.20% for the first month, plus an
additional 1/12th of 0.80% for each
month thereafter
September 2010 through August 2011 5.00% for the first month, plus an
additional 1/12th of 0.50% for each
month thereafter
September 2011 and thereafter 5.50%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of the items in Section 2.01(b).
Cut-off Date: August 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Data Tape Information: With respect to each Mortgage Loan, the
following information as of the Cut-off Date provided by the Mortgage Loan
Seller to the Purchaser pursuant to the New Century Purchase Agreement: (1) the
Mortgage Loan Seller's Mortgage Loan identifying number; (2) the Mortgagor's
first and last name; (3) the street address of the Mortgaged Property including
the state and zip code; (4) a code indicating whether the Mortgaged Property is
owner-occupied; (5) the type of residential dwelling constituting the Mortgaged
Property; (6) the original months to maturity; (7) the original date of the
Mortgage Loan and the remaining months to maturity from the Cut-off Date, based
on the original amortization schedule; (8) the Loan-to-Value Ratio at
origination; (9) the Mortgage Rate in effect immediately following the Cut-off
Date; (10) the date on which the first Scheduled Payment was due on the Mortgage
Loan; (11) the stated maturity date; (12) the amount of the Scheduled Payment at
origination; (13) the amount of the Scheduled Payment as of the Cut-off Date;
(14) the last Due Date on which a Scheduled Payment was actually applied to the
unpaid Stated Principal Balance; (15) the original principal amount of the
Mortgage Loan; (16) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date; (17) the first Adjustment Date; (18) the
Gross Margin; (19) a code indicating the purpose of the loan (i.e., purchase
financing, rate/term refinancing, cash-out refinancing); (20) Maximum Mortgage
Rate under the terms of the Mortgage Note; (21) the Minimum Mortgage Rate under
the terms of the Mortgage Note; (22) the Mortgage Rate at origination; (23) the
Periodic Mortgage Rate Cap; (24) the first Adjustment Date immediately following
the Cut-off Date; (25) the Index; (26) the date on which the first 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; (27) a code indicating the
documentation style (i.e., full (providing two years employment verification - 2
years W-2's and current paystub or 2 years 1040's for self employed borrowers),
alternative or reduced); (28) the Appraised Value of the Mortgaged Property;
(29) the sale price of the Mortgaged Property, if applicable; (30) a code
indicating whether the Mortgage Loan is subject to a Prepayment Charge; (31) the
amount and the term of any Prepayment Charge; (32) with respect to each MERS
Designated Mortgage Loan, the related MIN; (33) a code indicating if the
Mortgage Loan is a negative amortization Mortgage Loan; (34) the term of the
interest-only period of such Mortgage Loan; and (35) a code indicating whether
the Mortgage Loan is a Group I Morgtgage Loan or a Group II Mortgage Loan. 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 principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Rate: For any calendar month, a fraction, expressed as a
percentage, the numerator of which is the aggregate Stated Principal Balance of
60+ Day Delinquent Mortgage Loans as of the close of business on the last day of
such month, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the close of business on the last day of
such month.
Delinquency Trigger Event: With respect to any Distribution Date,
the circumstances in which the Rolling Three Month Delinquency Rate as of the
last day of the immediately preceding calendar month exceeds 40% of the Credit
Enhancement Percentage for the Class A Certificates.
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: HSI Asset Securitization Corporation, a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the United States of America or any State thereof, (b) is
subject to supervision and examination by federal or state banking authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated P-1 by Moody's, F1+ by Fitch and A-1 by Standard
& Poor's.
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
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Remittance Date occurs.
Disqualified Non-U.S. Person: With respect to a Class R Certificate,
any Non-U.S. Person or agent thereof other than (i) a Non-U.S. Person that holds
the Class R or Class LR Certificate in connection with the conduct of a trade or
business within the United States and has furnished the transferor and the
Securities Administrator with an effective IRS Form W-8ECI or (ii) a Non-U.S.
Person that has delivered to both the transferor and the Securities
Administrator an opinion of a nationally recognized tax counsel to the effect
that the transfer of the Class R Certificate to it is in accordance with the
requirements of the Code and the regulations promulgated thereunder and that
such transfer of the Class R Certificate will not be disregarded for federal
income tax purposes.
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 as paying agent for the benefit of the
Trustee and the Certificateholders and designated "Xxxxx Fargo Bank, N.A. as
paying agent in trust for registered holders of HSI Asset Securitization
Corporation Trust 2005-NC1 Mortgage Pass-Through Certificates, Series 2005-NC1".
Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the third Business Day immediately preceding
such Distribution Date.
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
September 2005.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any 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: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Securities Administrator.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated at least "A-1+" by Standard &
Poor's if the amounts on deposit are to be held in the account for no more than
365 days (or at least "A-2" if the amounts on deposit are to be held in the
account for no more than 30 days), "P-1" by Moody's and "F1+" by Fitch (or a
comparable rating if another Rating Agency is specified by the Depositor by
written notice to the Servicer and the Securities Administrator) or long-term
unsecured debt obligations are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 96-84, 61 Fed. Reg. 58234 (1996), as amended by
XXX 00-00, 00 Xxx. Xxx. 00000 (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and
PTE 2002-41, 67 Fed. Reg. 54487 (2002) (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
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 Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Amount
on such Distribution Date over (b) the Overcollateralization Target Amount for
such Distribution Date.
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 as paying agent for the
benefit of the Regular Certificateholders and designated "Xxxxx Fargo Bank, N.A.
as paying agent in trust for registered holders of HSI Asset Securitization
Corporation Trust 2005-NC1, Mortgage Pass-Through Certificates, Series
2005-NC1". Funds in the Excess Reserve Fund Account shall be held in trust for
the Regular Certificateholders for the uses and purposes set forth in this
Agreement. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested.
Exchange Act: As defined in Section 8.12(b).
Expense Adjusted Mortgage Rate: With respect to any Distribution
Date and as to each Mortgage Loan, the per annum rate equal to the Mortgage Rate
as of the first day of the related Due Period less the Expense Fee Rate.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and the Master Servicing Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Master Servicing Fee.
Extra Principal Payment Amount: As of any Distribution Date, the
lesser of (x) the related Total Monthly Excess Spread for such Distribution Date
and (y) the related Overcollateralization Deficiency for such Distribution Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Mortgage Loan Seller or the Purchaser as contemplated by this Agreement
or Purchase Agreement, as applicable), a determination made by the Servicer that
all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in July
2035.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(c) the address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - HSI Asset
Securitization Corporation Trust 2005-NC1, or such other address as Fitch may
hereafter furnish to the Depositor and the Securities Administrator.
Xxxxxxx Mac: 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.
Gross Margin: With respect to each 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.
Group I Available Funds Cap: With respect to the Group I Mortgage
Loans as of any Distribution Date, the product of (i) the weighted average of
the Expense Adjusted Mortgage Rates then in effect on the beginning of the
related Due Period on the Group I Mortgage Loans and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Group I Cap Agreement: The interest rate cap agreement, dated August
25, 2005, between the Cap Provider and the Securities Administrator, relating to
the Group I Certificates.
Group I Certificates: The Class I-A-1 Certificates and the Class
I-A-2 Certificates, collectively.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group I Principal Payment Amount: With respect to any Distribution
Date, the Principal Payment Amount multiplied by the Group Principal Allocation
Percentage for the Group I Certificates.
Group I Senior Principal Payment Amount: With respect to any
Distribution Date, the lesser of (i) the Group I Principal Payment Amount for
that Distribution Date and (ii) the excess of (a) the aggregate Class
Certificate Balance of the Group I Certificates immediately prior to that
Distribution Date over (b) the lesser of (x) 63.80% of the aggregate Stated
Principal Balance of the Group I Mortgage Loans for that Distribution Date and
(y) the excess, if any, of the aggregate Stated Principal Balance of the Group I
Mortgage Loans for that Distribution Date over 0.50% of the aggregate State
Principal Balance of the Group I Mortgage Loans as of the Cut-off Date.
Group II Available Funds Cap: With respect to the Group II Mortgage
Loans as of any Distribution Date, the product of (i) the weighted average of
the Expense Adjusted Mortgage Rates then in effect on the beginning of the
related Due Period on the Group II Mortgage Loans and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Group II Cap Agreement: The interest rate cap agreement, dated
August 25, 2005, between the Cap Provider and the Securities Administrator,
relating to the Group II Certificates.
Group II Certificates: The Class II-A-1 Certificates, the Class
II-A-2 Certificates, Class II-A-3 Certificates and the Class II-A-4
Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Group II Principal Payment Amount: With respect to any Distribution
Date, the Principal Payment Amount multiplied by the Group Principal Allocation
Percentage for the Group II Certificates.
Group II Senior Principal Payment Amount: With respect to any
Distribution Date, the lesser of (i) the Group II Principal Payment Amount for
that Distribution Date and (ii) the excess of (a) the aggregate Class
Certificate Balance of the Group II Certificates immediately prior to that
Distribution Date over (b) the lesser of (x) 63.80% of the aggregate Stated
Principal Balance of the Group II Mortgage Loans for that Distribution Date and
(y) the excess, if any, of the aggregate Stated Principal Balance of the Group
II Mortgage Loans for that Distribution Date over 0.50% of the aggregate State
Principal Balance of the Group II Mortgage Loans as of the Cut-off Date.
Group II Sequential Certificates: Collectively, the Class II-A-1,
Class II-A-2 and Class II-A-3 Certificates.
Group Available Funds Cap: The Group I Available Funds Cap or the
Group II Available Funds Cap, as applicable.
Group Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows:
(i) with respect to the Group I Certificates, a fraction,
the numerator of which is the portion of the Principal Remittance
Amount for that Distribution Date that is attributable to the
principal received or advanced on the Group I Mortgage Loans and the
denominator of which is the Principal Remittance Amount for that
Distribution Date; and
(ii) with respect to the Group II Certificates, a fraction,
the numerator of which is the portion of the Principal Remittance
Amount for that Distribution Date that is attributable to the
principal received or advanced on the Group II Mortgage Loans and
the denominator of which is the Principal Remittance Amount for that
Distribution Date.
Group Subordinate Amount: For any Distribution Date and (i) for the
Group I Mortgage Loans, the excess of the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the beginning of the related Due Period over
the aggregate Class Certificate Balance of the Class I-A-1 and Class I-A-2
Certificates immediately prior to the current Distribution Date and (ii) for the
Group II Mortgage Loans, the excess of the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the beginning of the related Due Period over
the aggregate Class Certificate Balance of the Class II-A-1, Class II-A-2, Class
II-A-3 and Class II-A-4 Certificates immediately prior to such Distribution
Date.
Index: As to each 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 Certification: As defined in Section 2.02.
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 each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier REMIC Regular Interests
and any Distribution Date, the period commencing on the Distribution Date
occurring in the month preceding the month in which the current Distribution
Date occurs and ending on the day immediately preceding the current 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). For
purposes of computing interest accruals on each Class of Non-Delay Certificates,
each Interest Accrual Period has the actual number of days in such month and
each year is assumed to have 360 days.
Interest Carry Forward Amount: As of any Distribution Date and any
Class of LIBOR Certificates, the sum of (i) the excess of (a) the sum of (x) the
Interest Payment Amount with respect to the current Distribution Date (excluding
any Basis Risk Carryover Amount with respect to such Class), plus (y) the
portion of the Interest Payment Amount from Distribution Dates prior to the
current Distribution Date remaining unpaid immediately prior to the current
Distribution Date, over (b) the amount actually paid to such Class with respect
to interest on such prior Distribution Dates, and (ii) interest on the amount in
clause (i) above at the applicable Interest Rate (to the extent permitted by
applicable law).
Interest Margin: Except as set forth in the following sentence, with
respect to each Class of Regular Certificates, the following percentages: Class
I-A-1 Certificates, 0.250%; Class I-A-2 Certificates, 0.310%; Class II-A-1
Certificates, 0.130%; Class II-A-2 Certificates, 0.250%; Class II-A-3
Certificates, 0.360%; Class II-A-4 Certificates, 0.320%; Class M-1 Certificates,
0.510%; Class M-2 Certificates, 0.540%; Class M-3 Certificates, 0.640%; Class
M-4 Certificates, 0.660%; Class M-5 Certificates, 0.740%; Class M-6
Certificates, 1.200%; Class M-7 Certificates, 1.340%; Class M-8 Certificates,
1.850%; Class M-9 Certificates, 2.300%; Class M-10 Certificates, 3.000%; Class
M-11 Certificates, 3.000%; Class M-12 Certificates, 3.000%; Class M-13
Certificates, 3.000%; and Class M-14 Certificates, 3.000%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class I-A-1 Certificates, 0.500%; Class I-A-2 Certificates,
0.620%; Class II-A-1 Certificates, 0.260%; Class II-A-2 Certificates, 0.500%;
Class II-A-3 Certificates, 0.720%; Class II-A-4 Certificates, 0.640%; Class M-1
Certificates, 0.765%; Class M-2 Certificates, 0.810%; Class M-3 Certificates,
0.960%; Class M-4 Certificates, 0.990%; Class M-5 Certificates, 1.110%; Class
M-6 Certificates, 1.800%; Class M-7 Certificates, 2.010%; Class M-8
Certificates, 2.775%; Class M-9 Certificates, 3.450%; Class M-10 Certificates,
4.500%; Class M-11 Certificates, 4.500%; Class M-12 Certificates, 4.500%; Class
M-13 Certificates, 4.500%; and Class M-14 Certificates, 4.500%.
Interest Payment Amount: With respect to any Distribution Date for
each Class of LIBOR Certificates, the amount of interest accrued during the
related Interest Accrual Period at the applicable Interest 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 Interest Shortfalls for such Distribution Date allocated to such Class
pursuant to Section 4.02.
Interest Rate: For each Class of Certificates, each Class of Upper
Tier REMIC Regular Interest and each Class of Lower Tier REMIC Regular Interest,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Interest Rate Cap Payment: (a) With respect to the LIBOR
Certificates, for the first 27 Distribution Dates, the amount, if any, equal to
the product of (i) the excess, if any, of (A) the one-month LIBOR rate as of the
related reset date under the Aggregate Cap Agreement over (B) 3.85000%, (ii)
250, and (iii) the lesser of (x) the applicable aggregate cap notional amount
set forth on Schedule I to such Cap Agreement for the calculation period
relating to such Distribution Date and (y) the aggregate Class Certificate
Balance of the LIBOR Certificates for that Distribution Date, calculated on an
"actual/360" basis; (b) with respect to the Group I Certificates, for the 28th
to 51st Distribution Date, the amount, if any, equal to the product of (i) the
excess, if any, of the lesser of (A) the one-month LIBOR rate as of the related
reset date under the Group I Cap Agreement and (B) 11.75000%, over the
applicable cap strike rate set forth on Schedule I to such Cap Agreement for the
calculation period relating to such Distribution Date, (ii) 250, and (iii) the
lesser of (x) the applicable group I cap notional amount set forth on Schedule I
to such Cap Agreement for the calculation period relating to such Distribution
Date and (y) the aggregate Class Certificate Balance of the LIBOR Certificates
for that Distribution Date, calculated on an "actual/360" basis; (c) with
respect to the Group II Certificates, for the 28th to 46th Distribution Dates,
the amount, if any, equal to the product of (i) the excess, if any, of the
lesser of (A) the one-month LIBOR rate as of the related reset date under the
Group II Cap Agreement and (B) 11.75000%, over the applicable cap strike rate
set forth on Schedule I to such Cap Agreement for the calculation period
relating to such Distribution Date, (ii) 250, and (iii) the lesser of (x) the
applicable group II cap notional amount set forth on Schedule I to such Cap
Agreement for the calculation period relating to such Distribution Date and (y)
the aggregate Class Certificate Balance of the LIBOR Certificates for that
Distribution Date, calculated on an "actual/360" basis; and (d) with respect to
the Class M Certificates, for the 28th to 51st Distribution Date, the amount, if
any, equal to the product of (i) the excess, if any, of the lesser of (A) the
one-month LIBOR rate as of the related reset date under the Class M Cap
Agreement and (B) the applicable cap ceiling rate set forth on Schedule I to
such Cap Agreement for the calculation period relating to such Distribution
Date, over the applicable cap strike rate set forth on Schedule I to such Cap
Agreement for the calculation period elating to such Distribution Date, (ii)
250, and (iii) the lesser of (x) the applicable Class M cap notional amount set
forth on Schedule I to such Cap Agreement for the calculation period relating to
such Distribution Date and (y) the aggregate Class Certificate Balance of the
LIBOR Certificates for that Distribution Date, calculated on an "actual/360"
basis.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
IRS: The Internal Revenue Service.
JPMorgan: JPMorgan Chase, N.A., a national banking association, and
its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries 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.
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 the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the 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 for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified to the Securities Administrator 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 Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan-to-Value Ratio or LTV: As of any date and as to any Mortgage
Loan, the ratio (expressed as a percentage) of the outstanding principal balance
of the Mortgage Loan to (a) in the case of a purchase, the lesser of (i) the
sale price of the Mortgaged Property and (ii) its appraised value at the time of
sale or (b) in the case of a refinancing or modification, the appraised value of
the Mortgaged Property at the time of the refinancing or modification.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier REMIC: As described in the Preliminary Statement.
Lower Tier REMIC Interest Rate: As described in the Preliminary
Statement.
Lower-Tier REMIC Principal Amount: The principal balance of each
Lower Tier REMIC Regular Interest, determined as set forth in the Preliminary
Statement. The Lower-Tier REMIC Principal Amount shall be computed to at least
eight (8) decimal places.
Lower Tier REMIC Regular Interest: Each of the Class LT-I-A-1, Class
LT-I-A-2, Class LT-II-A-1, Class LT-II-A-2, Class XX XX-A-3, Class XX XX-A-4,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class M-10, Class M-11, Class M-12, Class M-13, Class
M-14, Class LT-Group I (SUB), Class LT-Group I, Class LT-Group II (SUB), Class
LT-Group II, Class LT-XX and Class LT-Accrual Interests as described in the
Preliminary Statement.
Lower Tier REMIC Subordinate Balance Ratio: The ratio between the
Lower Tier REMIC Principal Amounts of the Class LT-Group I(SUB) Interest and
Class LT-Group II(SUB) Interest, equal to the ratio between the Group
Subordinate Amount of the Group I Mortgage Loans and the Group Subordinate
Amount of the Group II Mortgage Loans, respectively.
Lower-Tier REMIC WAC Cap: With respect to the Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Expense
Adjusted Mortgage Rates then in effect on the beginning of the related Due
Period on the Mortgage Loans and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
Master Servicer: Xxxxx Fargo, and if a successor Master Servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.06.
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to 1/12th the product of (a) the Master Servicing Fee Rate
and (b) the outstanding Stated Principal Balance of such Mortgage Loan as of the
prior Distribution Date (or as of the Cut-off Date in the case of the first
Distribution Date).
Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.010%.
Master Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and master servicing of the
Mortgage Loans.
Maximum Mortgage Rate: With respect to each 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
Mortgage Loan may be increased during the lifetime of such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Mortgage Loan Seller has designated or will designate MERS as, and has taken or
will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Mortgage Loan Seller, in accordance with the MERS
Procedure Manual and (b) the Mortgage Loan Seller has designated or will
designate the Trustee as the Investor on the MERS System.
MERS Procedure 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.
MIN: The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Mortgage Rate: With respect to each 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
Mortgage Loan may be decreased during the lifetime of such Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 12.05(c)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Securities Administrator.
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 that 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, Subsequent Recoveries, 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.
Mortgage Loan Schedule: A schedule of Mortgage Loans prepared by the
Depositor, delivered to the Trustee on the Closing Date and referred to on
Schedule I, such schedule setting forth, for each Loan Group, the Data Tape
Information with respect to each Mortgage Loan.
Mortgage Loan Seller: NC Capital Corporation, a California
corporation, and its successors in interest.
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.
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.
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 Compensating Interest payments made with
respect to such Distribution Date.
New Century: New Century Mortgage Corporation, a California
corporation, and its successors in interest.
New Century Purchase Agreement: The Master Mortgage Loan Purchase
and Interim Servicing Agreement, dated as of June 1, 2005, by and among NC
Capital, as seller, New Century, as interim servicer, and HSBC Bank, as initial
purchaser.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
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 any Rating
Agency.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Non-U.S. Person: A person that is not a U.S. Person.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, the Master Servicer, as successor
servicer, or any successor Master Servicer including the Trustee, as applicable,
will not or, in the case of a proposed P&I Advance, would not be ultimately
recoverable from related Late Collections 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 accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections.
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 the
Servicer or the Master Servicer, as applicable, with responsibility for the
servicing of the Mortgage Loans and listed on a list delivered to the Trustee
and the Securities Administrator pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or any Subservicer, reasonably acceptable to
the Trustee and/or the Securities Administrator, as applicable (and/or such
other Persons as may be set forth herein); provided, that any Opinion of Counsel
relating to (a) qualification of either the Lower Tier REMIC or the Upper Tier
REMIC or (b) compliance with the REMIC Provisions, must be (unless otherwise
stated in such Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of the Servicer of the Mortgage Loans or the Master Servicer, (ii)
does not have any material direct or indirect financial interest in the Servicer
of the Mortgage Loans or the Master Servicer or in an affiliate of either and
(iii) is not connected with the Servicer of the Mortgage Loans or the Master
Servicer as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is less than 10% of the Cut-off Date Pool Principal
Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the 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.
Overcollateralization Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the LIBOR Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralization Target Amount
applicable to such Distribution Date over (b) the Overcollateralization Amount
applicable to such Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralization Amount and (b) the Net Monthly Excess Cash Flow.
Overcollateralization Target Amount: Prior to the Stepdown Date, an
amount equal to 0.50% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to the greater of (i) 1.00% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (ii) $3,158,334; provided, however, that if, on any Distribution
Date, a Trigger Event exists, the Overcollateralization Target Amount shall not
be reduced to the applicable percentage of the then current aggregate Stated
Principal Balance of the Mortgage Loans 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 Overcollateralization Target
Amount will thereafter equal zero.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent 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.
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.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Securities Administrator, the Trustee or
any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed
as to timely payment of principal and interest by, the United States
or any agency or instrumentality thereof, provided such obligations
are backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
F1+ by Fitch, A-1+ by Standard & Poor's and P-1 by Moody's;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
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
Standard & Poor's and Moody's (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement), and by
each other 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 Standard & Poor's and
Moody's (in each case, to the extent they are designated as Rating
Agencies in the Preliminary Statement), and by each other Rating
Agency that rates such securities, in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds, including money market
funds managed or advised by the Trustee, the Securities
Administrator or an Affiliate thereof, that have been rated "Aaa" by
Moody's, "AAA" by Standard & Poor's and, if rated by Fitch, "AAA" by
Fitch; 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 each of 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 a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual Certificate is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other 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 either the Lower
Tier REMIC or the Upper Tier REMIC 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 Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by the Servicer with respect to any Mortgage Loan
serviced by the Servicer as to which a Principal Prepayment 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.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
related Prepayment Period from the first day of such Prepayment Period through
the last day of the month preceding the month in which such Distribution Date
occurs, the subject of a Principal Prepayment which is not accompanied by an
amount equal to one month of interest that would have been due on such Mortgage
Loan on the Due Date that occurs during such Prepayment Period and which was
applied by the Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date, an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and (a) any
Principal Prepayments in Full (including all unscheduled receipts of principal
on the Mortgage Loans), 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 the Cut-off Date) to and including the 15th
day of the month in which such Distribution Date occurs or (b) any partial
Principal Prepayments, the calendar month preceding the month in which such
Distribution Date occurs.
Principal Payment Amount: For any Distribution Date, the sum of (i)
the Basic Principal Payment Amount for such Distribution Date and (ii) the Extra
Principal Payment 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: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, (ii) all Principal Prepayments received during the
related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually collected by the Servicer during the
related Prepayment Period; (iv) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased by the Mortgage Loan
Seller or the Purchaser that was repurchased on or prior to the related
Determination Date; and (v) all Substitution Adjustment Amounts allocable to
principal with respect to the substitutions of Mortgage Loans that occur on or
prior to the related Determination Date; (vi) the allocable portion of the
proceeds received with respect to the termination of the Trust Fund pursuant to
clause (a) of Section 11.01 (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated August 24,
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as
of August 1, 2005, between the Depositor and the Purchaser.
Purchaser: HSBC Bank USA, National Association, a national banking
association, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. 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 12.05(c), 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 either
such Rating Agency may hereafter furnish to the Depositor and the Securities
Administrator.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that, for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the 21st day
of the month in which such Distribution Date occurs, or, if the 21st is not a
Business Day, the immediately succeeding Business Day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
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.
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Rate from the last date through which interest has
been paid to the date of repurchase, (iii) all unreimbursed Servicing Advances
and (iv) all expenses incurred by the Master Servicer, Servicer or Trustee
arising out of the Master Servicer's, Servicer's or Trustee's enforcement of the
Mortgage Loan Seller's repurchase obligation hereunder.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator, the Master Servicer, any vice president, any assistant
vice president, any assistant secretary, any assistant treasurer, any associate,
or any other officer of the Trustee, the Securities Administrator or the Master
Servicer customarily performing functions similar to those performed by any of
the above designated officers who at such time shall be officers to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Agreement.
Rolling Three Month Delinquency Rate: With respect to any
Distribution Date, the average of the Delinquency Rates for each of the three
(or one or two, in the case of the first and second Distribution Dates)
immediately preceding calendar months.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo, and if a successor Securities
Administrator is appointed hereunder, such successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution Account, the
period commencing on the Remittance Date immediately preceding such Distribution
Date and ending on such Distribution Date.
Senior Interest Payment Amount: With respect to any Distribution
Date and any Class of Class A Certificates, the sum of the Interest Payment
Amount and the Interest Carry Forward Amount, if any, for that Distribution Date
for that Class.
Sequential Trigger Event: With respect to any Distribution Date
exists if (i) for any Distribution Date prior to September 2007, the aggregate
amount of Realized Losses incurred since the Cut-off Date through the last day
of the related Prepayment Period divided by the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date exceeds 1.20%, or (ii) for
any Distribution Date in or after September 2007, a Trigger Event exists.
Servicer: When the term "Servicer" is used in this Agreement prior
to the Servicing Transfer Date, New Century, and after the Servicing Transfer
Date, JPMorgan, and their respective successors in interest, and if a successor
servicer is appointed hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement 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 Sections 3.01, 3.09,
3.13 and 3.15. The Servicing Advances shall also include any reasonable
"out-of-pocket" costs and expenses (including legal fees) incurred by the
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments of Mortgage in connection with any
satisfaction or foreclosure in respect of any Mortgage Loan to the extent not
recovered from the Mortgagor or otherwise payable under this Agreement and
obtaining or correcting any legal documentation required to be included in the
Mortgage File and necessary for the Servicer to perform its obligations under
this Agreement. The Servicer shall not be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment 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 as of the first day of such calendar
month. Such fee shall be payable monthly, and shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Servicer under this
Agreement. The Servicing Fee is payable solely from the interest portion
(including recoveries with respect to interest from Liquidation Proceeds,
Subsequent Recoveries, Insurance Proceeds, Condemnation Proceeds and proceeds
received with respect to REO Properties) of such Scheduled Payment collected by
the Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.500% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Master Servicer and the Trustee by the Servicer on the Closing Date pursuant
to this Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan,
September 1, 2005.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage 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, each Mortgage Loan related to REO Property
and each Mortgage Loan where the related Mortgagor has filed for bankruptcy.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 12.05(c) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - HSI Asset Securitization Corporation Trust 2005-NC1, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Securities Administrator.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: 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 (whether or not 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 Balance of any Mortgage Loan will give effect to any scheduled
payments of principal received by the Servicer on or prior to the related
Determination Date or advanced by the Servicer for 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 first Distribution Date
following the Distribution Date on which the aggregate Class Certificate
Balances of the Class A Certificates have been reduced to zero and (ii) the
later to occur of (a) the Distribution Date in September 2008 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account payments of principal applied to
reduce the Stated Principal Balance of the Mortgage Loans for that Distribution
Date but prior to any applications of Principal Payment Amounts to the
Certificates on that Distribution Date) is greater than or equal to 36.20%.
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
Class M Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be included as part of the Principal Remittance Amount
for the related Distribution Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Mortgage Loan Seller or the Purchaser for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (i) have a Stated Principal Balance,
after deduction of all Scheduled Payments due in the month of substitution, not
in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate not lower than and not more than 1% higher than that
of the Deleted Mortgage Loan; (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan; (iv) be of the same type as the Deleted Mortgage Loan; and (v) comply with
each representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of the Lower Tier REMIC and the Upper Tier
REMIC, respectively, in the manner provided under Treasury Regulations Section
1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 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 (other
than Prepayment Interest Excesses) received by the Servicer on or prior to the
related Determination Date or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable
to the Certificates pursuant to Section 4.02(a)(i) on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution 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) the Cap Agreements;
(v) the Depositor's rights under the 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.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 96-84, 61 Fed. Reg. 58234
(1996), as amended by XXX 00-00, 00 Xxx. Xxx. 00000 (1997), PTE 2000-58, 65 Fed.
Reg. 67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487 (2002), or any successor
exemption.
Unpaid Realized Loss Amount: With respect to any Class of Class M
Certificates and as to any Distribution Date, is the excess of (i) Applied
Realized Loss Amounts 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 Class M Certificates in respect of any Unpaid Realized Loss Amount will
not be applied to reduce the Class Certificate Balance of such Class.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: As described in the Preliminary
Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., a national banking association,
and its successors in interest.
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. On the Closing Date, the Depositor shall
pay, without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in the related Cap Agreement) due and payable to the
Cap Provider pursuant to the terms of each Cap Agreement.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements necessary to show a complete chain of endorsements from the
original payee, endorsed in blank, "Pay to the order of _____________,
without recourse", and, if previously endorsed, signed in the name of the
last endorsee by a duly qualified officer of the last endorsee;
(ii) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Mortgage shall be
assigned, with assignee's name left blank;
(iii) the original of each guarantee executed in connection with the
Mortgage Note, if any;
(iv) the original recorded Mortgage, with evidence of recording
thereon. If in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or prior to the
Closing 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, the Mortgage Loan Seller shall deliver or
cause to be delivered to the Trustee, (A) in the case of a delay caused by
the public recording office, a copy of such Mortgage certified by the
Mortgage Loan Seller, escrow agent, title insurer or closing attorney to
be a true and complete copy of the original recorded Mortgage and (B) in
the case 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;
(v) originals or a certified copy of each modification agreement,
if any;
(vi) the originals of all intervening assignments of Mortgage with
evidence of recording thereon evidencing a complete chain of ownership
from the originator of the Mortgage Loan to the last assignee, or if any
such intervening assignment of Mortgage has not been returned from the
applicable public recording office or has been lost or if such public
recording office retains the original recorded intervening assignments of
Mortgage, a photocopy of such intervening assignment of Mortgage, together
with (A) in the case of a delay caused by the public recording office, an
officer's certificate of the Mortgage Loan Seller, escrow agent, closing
attorney or the title insurer insuring the Mortgage stating that such
intervening assignment of Mortgage has been delivered to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of Mortgage or a copy of such intervening
assignment of Mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of Mortgage will be promptly delivered to the Trustee upon
receipt thereof by the party delivering the officer's certificate or by
the Mortgage Loan Seller; or (B) in the case of an intervening assignment
of mortgage where a public recording office retains the original recorded
intervening assignment of Mortgage or in the case where an intervening
assignment of Mortgage is lost after recordation in a public recording
office, a copy of such intervening assignment of Mortgage with recording
information thereon certified by such public recording office to be a true
and complete copy of the original recorded intervening assignment of
Mortgage;
(vii) if the Mortgage Note, the Mortgage, any Assignment of Mortgage
or any other related document has been signed by a Person on behalf of the
Mortgagor, the copy of the power of attorney or other instrument that
authorized and empowered such Person to sign;
(viii) the original lender's title insurance policy (or a marked
title insurance commitment, in the event that an original lender's title
insurance policy has not yet been issued) in the form of an ALTA mortgage
title insurance policy, containing each of the endorsements required by
Xxxxxx Xxx and insuring the Trustee and its successors and assigns as to
the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan; and
(ix) original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage, if any.
To the extent not previously delivered to the Purchaser pursuant to
the New Century Purchase Agreement, the Mortgage Loan Seller shall promptly upon
receipt from the respective recording office cause to be delivered to the
Trustee the original recorded document described in, (iv) and (vi) above.
From time to time, the Mortgage Loan Seller, the Depositor or the
Servicer, as applicable, shall forward to the Trustee, additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
this Agreement upon receipt of such documents. All such mortgage documents held
by the Trustee as to each Mortgage Loan shall constitute the "Custodial File".
To the extent not previously delivered to the Purchaser pursuant to
the New Century Purchase Agreement, on or prior to the Closing Date, the
Mortgage Loan Seller shall deliver to the Trustee, Assignments of Mortgages, in
blank, for each Mortgage Loan. No later than thirty (30) Business Days following
the later of the Closing Date and the date of receipt by the Servicer of the
complete recording information for a Mortgage, the Servicer shall promptly
submit or cause to be submitted for recording, at the expense of the Mortgage
Loan Seller and at no expense to the Trust Fund, the Trustee, the Servicer or
the Depositor, in the appropriate public office for real property records, each
Assignment of Mortgage referred to in Section 2.01(b)(ii). Notwithstanding the
foregoing, however, for administrative convenience and facilitation of servicing
and to reduce closing costs, the Assignments of Mortgage shall not be required
to be completed and submitted for recording with respect to any Mortgage Loan if
the Trustee and each Rating Agency have received an Opinion of Counsel,
satisfactory in form and substance to the Trustee and each Rating Agency to the
effect that the recordation of such Assignments of Mortgage in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned by the Mortgage Loan Seller, at the expense of the Mortgage
Loan Seller, to "Deutsche Bank National Trust Company, as trustee under the
Pooling and Servicing Agreement dated as of Xxxxxx 0, 0000, XXX Xxxxx
Securitization Corporation Trust 2005-NC1". In the event that any such
Assignment of Mortgage is lost or returned unrecorded because of a defect
therein, the Mortgage Loan Seller shall promptly cause to be delivered a
substitute Assignment of Mortgage to cure such defect and thereafter cause each
such assignment to be duly recorded at no expense to the Trust Fund.
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 Trustee within 180 days (or such other time period as may be required by
any Rating Agency) following the Closing Date, and in the event that the
Mortgage Loan Seller does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the related
Mortgage Loan shall, upon the request of the Depositor, be repurchased by the
Mortgage Loan Seller at the price and in the manner specified in Section 2.03.
The foregoing repurchase obligation shall not apply in the event that the
Mortgage Loan Seller 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 Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of an officer of the Mortgage Loan Seller,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Mortgage Loan Seller shall be deemed to have been satisfied upon delivery by
the Mortgage Loan Seller to the Trustee, prior to the Closing Date of a copy of
such Mortgage or assignment, as the case may be, certified (such certification
to be an original thereof) by the public recording office to be a true and
complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "HSI Asset Securitization
Corporation Trust 2005-NC1" 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, including without limitation, the representation and warranty set
forth in paragraph (44) of Schedule IV.
(d) 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 on behalf of the Trust is hereby authorized and
directed to enter into the Cap Agreements.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee shall acknowledge, on the Closing Date, receipt by the Trustee, of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E ("Initial Certification"), 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, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee shall maintain possession of the related
Mortgage Notes in the State of California, unless otherwise permitted by the
Rating Agencies.
In connection with the Closing Date, the Trustee shall be required
to deliver via facsimile (with original to follow the next Business Day) to the
Depositor an Initial Certification prior to the Closing Date, or, as the
Depositor agrees on the Closing Date, certifying receipt of a Mortgage Note and
Assignment of Mortgage for each Mortgage Loan. The Trustee shall not be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F are in its possession, and shall
deliver to the Depositor, JPMorgan and New Century a Document Certification and
Exception Report, in the form annexed hereto as Exhibit F, to the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as an exception and not covered by such certification): (i) all
documents identified in the Document Certification and Exception Report and
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), (3), (15), (18) and (22) of the Data
Tape Information respecting such Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 2.01 of this Agreement.
The Trustee shall not be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Mortgage Loan Seller shall deliver to the Servicer copies of all
trailing documents required to be included in the Custodial File at the same
time the original or certified copies thereof are delivered to the Trustee,
including but not limited to such documents as the title insurance policy and
any other Mortgage Loan documents upon return from the public recording office.
The documents shall be delivered by the Mortgage Loan Seller at the Mortgage
Loan Seller's expense to the Servicer.
Section 2.03 Representations, Warranties and Covenants of the
Mortgage Loan Seller and the Servicer; Remedies for Breaches of Representations
and Warranties with Respect to the Mortgage Loans. (a) JPMorgan and New Century,
severally and not jointly, hereby make the representations and warranties set
forth in Schedule II and Schedule III hereto, respectively, to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee, as of the
Closing Date.
(b) The Mortgage Loan Seller hereby makes the representations and
warranties set forth in Schedule IV and Schedule V hereto to the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, as of the
Servicing Transfer Date and the Closing Date, respectively.
(c) It is understood and agreed by JPMorgan, New Century and the
Mortgage Loan Seller that the representations and warranties set forth in this
Section 2.03 shall survive the transfer of the Mortgage Loans by the Depositor
to the Trustee on the Closing Date, and shall inure to the benefit of the
Depositor and the Trustee 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 Mortgage Loan
Seller, the Depositor, the Securities Administrator, the Trustee, the Master
Servicer, JPMorgan or New Century of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
(d) Within 30 days of the earlier of either discovery by or notice
to the Mortgage Loan Seller that any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial File
or within 60 days of the earlier of either discovery by or notice to the
Mortgage Loan Seller of any breach of a representation or warranty set forth in
Section 2.03(b) that materially and adversely affects the value of any Mortgage
Loan or the interest of the Trustee or the Certificateholders therein, the
Mortgage Loan Seller shall use its best efforts to cause to be remedied a
material defect in a document constituting part of a Mortgage File or promptly
to cure such breach in all material respects and, if such defect or breach
cannot be remedied, the Mortgage Loan Seller shall, at the Depositor's option as
specified in writing and provided to the Mortgage Loan Seller and the Trustee,
(i) if such 30- or 60-day period, as applicable, expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted 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 clause (i) above shall not be
effected prior to the delivery to the Trustee of a Request for Release
substantially in the form of Exhibit J, and the delivery of the Mortgage File to
the Trustee for any such Substitute Mortgage Loan. Notwithstanding the
foregoing, a breach (i) which causes a Mortgage Loan not to constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code or
(ii) by the Mortgage Loan Seller of any of the representations and warranties
set forth in clause (44), (47), (54), (56), (57), (58), (59), (63), (82) or (83)
of Schedule IV, in each case, will be deemed automatically to materially and
adversely affect the value of such Mortgage Loan and the interests of the
Trustee and Certificateholders in such Mortgage Loan. In the event that the
Trustee receives notice of a breach by the Mortgage Loan Seller of any of the
representations and warranties set forth in clause (44), (47), (54), (56), (57),
(58), (59), (62), (63), (82) or (83) of Schedule IV, the Trustee shall give
notice of such breach to the Mortgage Loan Seller and request the Mortgage Loan
Seller to repurchase the Mortgage Loan at the Repurchase Price within sixty (60)
days of the Mortgage Loan Seller receipt of such notice. The Mortgage Loan
Seller shall repurchase each such Mortgage Loan within 60 days of the earlier of
discovery or receipt of notice with respect to each such Mortgage Loan.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Mortgage Loan Seller shall deliver to 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 with respect to any
Distribution Date after the end of the related Prepayment Period. 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
Mortgage Loan Seller 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 Mortgage Loan Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
(f) The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Mortgage Loan 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 Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount required to
be deposited therein in connection with such substitution as described in the
following paragraph, the Trustee shall release the Mortgage File held for the
benefit of the Certificateholders relating to such Deleted Mortgage Loan to the
Mortgage Loan Seller and shall execute and deliver at the Mortgage Loan Seller's
direction such instruments of transfer or assignment prepared by the Mortgage
Loan Seller, in each case without recourse, as shall be necessary to vest title
in the Mortgage Loan Seller, of the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
(g) For any month in which the Mortgage Loan Seller substitutes
one or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Servicer will determine the amount (if any) by which the aggregate unpaid
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 amount of such shortage plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans (collectively, the "Substitution Adjustment Amount") shall be remitted by
the Mortgage Loan Seller to the Servicer for deposit into the Collection Account
on or before the Distribution Account Deposit Date for the Distribution Date in
the month succeeding the calendar month during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
(h) In addition to such repurchase or substitution obligation
referred to in Section 2.03(d), the Mortgage Loan Seller shall indemnify the
Depositor, any of its Affiliates, the Master Servicer, the Servicer, the
Securities Administrator, the Trustee and the Trust and hold such parties
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses (including, without limitation, any taxes payable by the Trust)
resulting from any third party claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach by the Mortgage Loan Seller of any of
its representations and warranties or obligations contained in this Agreement.
(i) The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the Servicer shall deliver the amended Mortgage Loan Schedule
to the Trustee, the Master Servicer and the Securities Administrator.
(j) In the event that a Mortgage Loan shall have been repurchased
pursuant to this Agreement or the Purchase Agreement, the proceeds from such
repurchase shall be deposited by the Servicer in the Collection Account pursuant
to Section 3.10 on or before the Remittance Date for the Distribution Date in
the month following the month during which the Mortgage Loan Seller became
obligated to repurchase or replace such Mortgage Loan and upon such deposit of
the Repurchase Price, and receipt of a Request for Release in the form of
Exhibit J hereto, the Trustee shall release the related Custodial File held for
the benefit of the Certificateholders to such Person as directed by the
Servicer, and the Trustee shall execute and deliver at such Person's direction
such instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. In
accordance with Section 12.05(b), the Securities Administrator shall promptly
notify each Rating Agency of a purchase of a Mortgage Loan pursuant to this
Section 2.03.
It is understood and agreed that the obligation of the Mortgage Loan
Seller under this Agreement to cure, repurchase or substitute any Mortgage Loan
as to which a breach of a representation and warranty has occurred and is
continuing, together with any related indemnification obligations of the
Mortgage Loan Seller set forth in Section 2.03(h), shall constitute the sole
remedies against such Person respecting such breach available to
Certificateholders, the Depositor and any of its Affiliates, or the Trustee on
their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders.
Section 2.04 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 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 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date occurring in
July 2035, which is the Distribution Date in the month following the month in
which the latest Mortgage Loan maturity date occurs.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Master
Servicer, JPMorgan, New Century and the Securities Administrator 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 power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite company 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 received or obtained 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 bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 12.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Mortgage Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in accordance with
Accepted Servicing Practices, but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall at its own expense be responsible for
preparing and recording all lien releases and mortgage satisfactions in
accordance with state and local regulations. The Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee shall
execute, at the written request of the Servicer, and furnish to the Servicer and
any Subservicer such documents provided to the Trustee as are necessary or
appropriate to enable the Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Servicer, and this Agreement shall constitute, a power of attorney to carry
out such duties including a power of attorney to take title to Mortgaged
Properties after foreclosure on behalf of the Trustee. The Trustee shall execute
a separate power of attorney, furnished to it by the Servicer, in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicers under such powers of
attorney. Notwithstanding anything contained herein to the contrary, no Servicer
or Subservicer shall without the Trustee's consent: (i) initiate any action,
suit or proceeding solely under the Trustee's name without indicating such
Servicer's or Subservicer's, as applicable, representative capacity, or (ii)
knowingly take any action with the intent to, or which actually does cause, the
Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards
of the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (except for a reduction of interest payments resulting from the
application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause either the Upper Tier
REMIC or the Lower Tier REMIC to fail to qualify as a REMIC under the Code or
the imposition of any tax on "prohibited transactions" or "contributions after
the startup day" under the REMIC Provisions, or (iii) except as provided in
Section 3.07(a), waive any Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements"). The Trustee shall not be
required to review or consent to such Subservicing Agreements and shall have no
liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Master Servicer, the Securities Administrator, the Trustee and the Depositor
copies of all Subservicing Agreements, and any amendments or modifications
thereof, promptly upon the Servicer's execution and delivery of such
instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement. In the event of termination of
any Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the Servicer without any act or deed on the part of such
Subservicer or the Servicer, and the Servicer either shall service directly the
related Mortgage Loans or shall enter into a Subservicing Agreement with a
successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Master Servicer without fee, in
accordance with the terms of this Agreement, in the event that the Servicer
shall, for any reason, no longer be the Servicer (including termination due to
an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Master Servicer. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and neither the Trustee nor the Master Servicer (nor any
successor Master Servicer) shall be deemed a party thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Subservicer except as set forth in Section 3.06. The Servicer shall be solely
liable for all fees owed by it to any Subservicer, irrespective of whether the
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Master Servicer. In the event the Servicer at any time shall for any reason no
longer be the Servicer (including by reason of the occurrence of an Event of
Default), the Master Servicer, or its designee or the successor Servicer if the
successor is not the Master Servicer, shall thereupon assume all of the rights
and obligations of the Servicer under each Subservicing Agreement that the
Servicer may have entered into, with copies thereof provided to the Master
Servicer or the successor Servicer if the successor is not the Master Servicer,
prior to the Master Servicer or the successor Servicer if the successor is not
the Master Servicer, assuming such rights and obligations, unless the Master
Servicer elects to terminate any Subservicing Agreement in accordance with its
terms as provided in Section 3.03.
Upon such assumption, the Master Servicer, its designee or the
successor servicer shall be deemed, subject to Section 3.03, to have assumed all
of the Servicer's interest therein and to have replaced the Servicer as a party
to each Subservicing Agreement to the same extent as if each Subservicing
Agreement had been assigned to the assuming party, except that (i) the Servicer
shall not thereby be relieved of any liability or obligations under any
Subservicing Agreement that arose before it ceased to be the Servicer and (ii)
none of the Depositor, the Master Servicer, their designees or any successor
Servicer shall be deemed to have assumed any liability or obligation of the
Servicer that arose before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Master
Servicer, its designee or the successor Servicer deliver to the assuming party
all documents and records relating to each Subservicing Agreement and the
Mortgage Loans then being serviced and an accounting of amounts collected and
held by or on behalf of it, and otherwise use its best efforts to effect the
orderly and efficient transfer of the Subservicing Agreements to the assuming
party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest, extend the final maturity date of such Mortgage Loan or waive, in
whole or in part, a Prepayment Charge), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"Forbearance"); provided, however, that the Servicer's approval of a
modification of a Due Date shall not be considered a modification for purposes
of this sentence; provided, further, that the final maturity date of any
Mortgage Loan may not be extended beyond the Final Scheduled Distribution Date
for the LIBOR Certificates. The Servicer's analysis supporting any Forbearance
and the conclusion that any Forbearance meets the standards of Section 3.01
shall be reflected in writing in the Servicing File or on the Servicer's
servicing records. In addition, notwithstanding the foregoing, the Servicer may
also waive (or permit a Subservicer to waive), in whole or in part, a Prepayment
Charge if such waiver would, in the Servicer's judgment, maximize recoveries on
the related Mortgage Loan or if such Prepayment Charge is (i) not permitted to
be collected by applicable law, or the collection of the Prepayment Charge would
be considered "predatory" pursuant to written guidance published by any
applicable federal, state or local regulatory authority having jurisdiction over
such matters, or (ii) the enforceability of such Prepayment Charge is limited
(1) by bankruptcy, insolvency, moratorium, receivership or other similar laws
relating to creditors' rights or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If a Prepayment Charge is waived other
than as permitted in this Section 3.07(a), then the Servicer is required to pay
the amount of such waived Prepayment Charge, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the related Collection
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the related Collection Account;
provided, however, that the Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Charge if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time. The Master Servicer shall have no
responsibility for verifying the accuracy of the amount of prepayment charges
waived or remitted by the Servicer.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and any Interest Rate Cap Payment and to secure
their limited recourse obligation to pay to the LIBOR Certificateholders Basis
Risk Carryover Amounts.
(ii) On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment and any Interest Rate Cap
Payment for such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk Carryover Amount on any Class of Certificates, the Securities Administrator
shall (1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(B), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk Payment (to the extent
remaining after the distributions specified in Sections 4.02(a)(iii)(A)-(D)) and
(y) the aggregate Basis Risk Carryover Amounts for such Distribution Date and
(2) withdraw from the Excess Reserve Fund Account amounts necessary to pay to
such Class or Classes of Certificates the Basis Risk Carryover Amount. Such
payments shall be allocated to those Classes on a pro rata basis based upon the
amount of Basis Risk Carryover Amount owed to each such Class and shall be paid
in the priority set forth in Sections 4.02(a)(iii)(C)-(D).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of a grantor trust under subpart E, Part
I of subchapter J of the Code and not as an asset of any REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve
Fund Account are the Class X Certificateholders. For all federal tax
purposes, amounts transferred by the Upper Tier REMIC to the Excess
Reserve Fund Account shall be treated as distributions by the Securities
Administrator to the Class X Certificateholders.
(iii) Any Basis Risk Carryover Amounts paid by the Securities
Administrator to the LIBOR Certificateholders shall be accounted for by
the Securities Administrator as amounts paid first to the Holders of the
Class X Certificates and then to the respective Class or Classes of LIBOR
Certificates. In addition, the Securities Administrator shall account for
the LIBOR Certificateholders' rights to receive payments of Basis Risk
Carryover Amounts as rights in a limited recourse interest rate cap
contract written by the Class X Certificateholders in favor of the LIBOR
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any payments from
the Excess Reserve Fund Account except as expressly set forth in this
Section 3.07(c) and Sections 4.02(a)(iii)(C)-(D) and (E).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Master Servicer
shall, promptly upon receipt, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicer to the Master
Servicer pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Securities Administrator in
writing to withdraw such amount from the Distribution Account, any provision
herein to the contrary notwithstanding. Such direction may be accomplished by
delivering notice to the Securities Administrator which describes the amounts
deposited in error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by the Securities Administrator in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 4.02.
(e) The Securities Administrator may invest the funds in the
Distribution Account during the Securities Administrator Float Period in one or
more Permitted Investments in accordance with Section 3.12. The Securities
Administrator may withdraw from the Distribution Account any income or gain
earned from the investment of funds deposited therein for its own benefit.
(f) The Servicer shall give notice to the Securities Administrator
of any proposed change of the location of the Collection Account not later than
30 days and not more than 45 days prior to any change thereof and the Securities
Administrator shall forward such notice to each Rating Agency and the Depositor.
(g) In order to comply with its duties under the USA Patriot Act
of 2001, the Trustee shall obtain and verify certain information and
documentation from the other parties to this Agreement, including, but not
limited to, each such party's name, address and other identifying information.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each Mortgage Loan (each, a "Tax Service Contract"). Each Tax Service Contract
shall be assigned to a successor Servicer, at the Servicer's expense in the
event that the Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) hereof, the Servicer undertakes to perform such functions. To
the extent the related Mortgage provides for Escrow Payments, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse the Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; or
(vi) recover amounts deposited in error. As part of its servicing duties, the
Servicer or Subservicers shall pay to the Mortgagors interest on funds in Escrow
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Escrow Accounts is insufficient, to pay such interest from its
or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Servicer shall determine
whether any such payments are made by the Mortgagor in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Servicer assumes full responsibility for the
payment of all such bills within such time and shall effect payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make advances from its own
funds to effect such payments; provided, however, that such advances are deemed
to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more segregated Eligible Accounts (such account or accounts,
the "Collection Account"), held in trust for the benefit of the Trustee. On
behalf of the Trustee, the Servicer shall deposit or cause to be deposited in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit into the Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices, Liquidation Proceeds and
Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected by the Servicer.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Securities Administrator, the Master Servicer,
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Master
Servicer (A) the Master Servicing Fee with respect to such Distribution
Date and (B) all Available Funds in respect of the related Distribution
Date together with all amounts representing Prepayment Charges (payable to
the Class P Certificateholders) from the Mortgage Loans received during
the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made by the Servicer in accordance
with the provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections or
other amounts as may be collected by the Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Mortgage Loan Seller, with respect to each
Mortgage Loan that has previously been repurchased or replaced pursuant to
this Agreement, all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for (A) any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees to the extent not recoverable from Late Collections or
other amounts received with respect to the related Mortgage Loan under
Section 3.11(a)(iii);
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.15;
(viii) to reimburse the Master Servicer, the Servicer, the
Depositor, the Securities Administrator or the Trustee for expenses
incurred by or reimbursable to the Master Servicer, the Servicer, the
Depositor, the Securities Administrator or the Trustee, as the case may
be, pursuant to Section 6.03, Section 7.02, Section 8.05, Section 9.13 or
Section 10.02;
(ix) to reimburse the Master Servicer, the Servicer or the Trustee,
as the case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the repurchase obligation of the Mortgage
Loan Seller under this Agreement that were included in the Repurchase
Price of the Mortgage Loan, including any expenses arising out of the
enforcement of the repurchase obligation, to the extent not otherwise paid
pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification (as set forth in Section
4.01(d)) to the Master Servicer, on or prior to the next succeeding Remittance
Date, upon making any withdrawals from the Collection Account pursuant to
subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account. (a) The Servicer may invest the funds in
the Collection Account and the Escrow Accounts (to the extent permitted by law
and the related Mortgage Loan documents) and the Securities Administrator may
invest funds in the Distribution Account during the Securities Administrator's
Float Period and shall invest such funds in the Distribution Account (for
purposes of this Section 3.12, each such Account is referred to as an
"Investment Account"), in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement; provided, however,
that any such Permitted Investment managed by or advised by the Securities
Administrator or any of its Affiliates may mature, unless payable on demand, no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. All such Permitted Investments shall be held
to maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Servicer or the Securities
Administrator, as applicable. The Servicer or the Securities Administrator, as
applicable, shall be entitled to sole possession over each such investment, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Servicer or the Securities Administrator or its agent,
as applicable, together with any document of transfer necessary to transfer
title to such investment to the Servicer or the Securities Administrator or its
agent, as applicable. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
Servicer or the Securities Administrator, as applicable, may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account or Escrow Account, as applicable, held by or
on behalf of the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in the manner set forth in Section 3.11. The Servicer
shall deposit in the Collection Account or Escrow Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Securities Administrator
during the Securities Administrator's Float Period, shall be for the benefit of
the Securities Administrator, and shall be subject to the Securities
Administrator's withdrawal in the manner set forth in Section 3.07(e).
Notwithstanding anything in this Section 3.12(c), the Securities Administrator
shall be liable to the Trust for any such loss on any funds it has invested
under this Section 3.12(c) only during the Securities Administrator Float
Period, and the Securities Administrator shall deposit in the Distribution
Account the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such account immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted Investment
of funds held in the Escrow Account or the Collection Account, or if a default
occurs in any other performance required under any Permitted Investment of funds
held in the Escrow Account or the Collection Account, the Servicer or the
Securities Administrator, as applicable, shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator or its Affiliates are permitted
to receive additional compensation that could be deemed to be in the Securities
Administrator's economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or sub-custodian with
respect to certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments. Such compensation shall not be considered an
amount that is reimbursable for payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
outstanding principal balance of such Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss to the improvements that are a part
of such property on a replacement cost basis and (iii) the maximum insurable
value of the improvements which are a part of such Mortgaged Property, in each
case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property, plus accrued interest at
the Mortgage Rate and related Servicing Advances. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts required to be deposited in
the Escrow Account and applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Master Servicer, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a general policy rating of A:VI or better in
Best's (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself and the
Trustee, claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Master Servicer with copies
of any such insurance policies and fidelity bond. The Servicer shall be deemed
to have complied with this provision if an Affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Master Servicer. The Servicer shall also cause each Subservicer to maintain a
policy of insurance covering errors and omissions and a fidelity bond which
would meet such requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its good faith
business judgment, the Servicer believes it is not in the best interests of the
Trust Fund and shall not exercise any such rights if prohibited by law from
doing so. If the Servicer, in its good faith business judgment, believes it is
unable under applicable law to enforce such "due-on-sale" clause or if any of
the other conditions set forth in the proviso to the preceding sentence apply,
the Servicer will enter into either (i) an assumption and modification agreement
from or with the person to whom such property has been conveyed or is proposed
to be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon or (ii) a substitution agreement as provided in the succeeding
sentence. The Servicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Mortgagor
is released from liability and such person is substituted as the Mortgagor and
becomes liable under the Mortgage Note, provided, that no such substitution
shall be effective unless such person satisfies the underwriting criteria of the
Servicer and has a credit risk rating at least equal to that of the original
Mortgagor. In connection with any assumption, modification or substitution, the
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. The
Servicer shall not take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by the Servicer in respect of an
assumption or substitution of liability agreement will be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
The Servicer shall notify the Master Servicer that any such substitution,
modification or assumption agreement has been completed and shall forward to the
Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Securities Administrator, taking into account,
among other things, the timing of foreclosure proceedings. The foregoing is
subject to the provisions that the Servicer shall not be required to expend its
own funds in connection with foreclosure or other conversion, correction of a
default on a senior mortgage or restoration of any property unless it shall
determine in its sole discretion (i) that such foreclosure, correction or
restoration will increase the net Liquidation Proceeds of the related Mortgage
Loan to the Securities Administrator, after reimbursement to itself for such
expenses and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or Subsequent
Recoveries from the related Mortgaged Property, as contemplated in Section 3.11.
The Servicer shall be responsible for all other costs and expenses incurred by
it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the related property, as contemplated in Section
3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or Subsequent Recoveries or any income from an
REO Property, will be applied in the following order of priority: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances, pursuant to Section 3.11 or 3.17; second, to reimburse the Servicer
for any related xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which such amounts are to be distributed if
not in connection with a liquidation or REO Disposition; and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The portions of
the recovery so allocated to interest at the Mortgage Rate (net of the Servicing
Fee Rate) and to principal of the Mortgage Loan shall be applied as follows:
first, to reimburse the Servicer or any Subservicer for any related unreimbursed
Servicing Advances in accordance with Section 3.11 or 3.17, and second, to the
Securities Administrator in accordance with the provisions of Section 4.02,
subject to paragraph (g) of Section 3.17 with respect to certain excess
recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee or the Master Servicer otherwise requests,
the Servicer shall cause an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector. Upon completion of the
inspection, the Servicer shall promptly provide the Trustee, the Master Servicer
and the Depositor with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices how to proceed with
respect to the Mortgaged Property. In the event (a) the environmental inspection
report indicates that the Mortgaged Property is contaminated by hazardous or
toxic substances or wastes and (b) the Servicer proceeds with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11. In the event the Servicer does not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
from general collections for all Servicing Advances made with respect to the
related Mortgaged Property from the Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the Servicer
pursuant to this paragraph or otherwise.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, within five (5) Business Days of the payment in full, notify the
Trustee by a certification (which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Collection Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Custodial File by submitting a Request for
Release, which Request for Release may be in an electronic format in a form
acceptable to the Trustee, to the Trustee. Upon receipt of such certification
and Request for Release, the Trustee shall promptly release the related
Custodial File to the Servicer within five (5) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release,
which Request for Release may be in an electronic format in a form acceptable to
the Trustee, release the related Custodial File to the Servicer, and the Trustee
shall, at the direction of the Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Custodial File to the Trustee when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered to the Trustee a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release shall be released
by the Trustee to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the deed
or certificate of sale shall be issued to the Trust, or if not permitted by law,
to Deutsche Bank National Trust Company (or, if applicable, the name of the
successor Trustee) as Trustee for HSI Asset Securitization Corporation 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1, or to its nominee, for the
benefit of the Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders. The Servicer shall notify the Trustee from time to time as
to the status of each REO Property.
(c) The Servicer shall use Accepted Servicing Practices to dispose
of the REO Property as soon as possible and shall sell such REO Property in any
event within one year after title has been taken to such REO Property, unless
the Servicer determines, and gives an appropriate notice to the Trustee and the
Master Servicer to such effect, that a longer period is necessary for the
orderly liquidation of such REO Property. If a period longer than one year is
permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Master Servicer as to the
progress being made in selling such REO Property.
(d) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited in the Collection
Account, in no event later than two Business Days after the deposit of such
funds into the clearing account, all revenues received with respect to the
related REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess
of the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(h) The Servicer shall use Accepted Servicing Practices to sell,
or cause the Subservicer to sell, in accordance with Accepted Servicing
Practices, any REO Property as soon as possible, but in no event later than the
conclusion of the third calendar year beginning after the year of its
acquisition by the Lower Tier REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the Lower Tier REMIC of such REO
Property subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
Lower Tier REMIC or the Upper Tier REMIC to fail to qualify as a REMIC under the
REMIC Provisions or comparable provisions of relevant state laws at any time.
The Servicer shall manage, conserve, protect and operate each REO Property for
the Trustee solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) or result in the receipt by
the Lower Tier REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under Section 860G(a)(1) of the Code.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Trustee on behalf of the Certificateholders for
the period prior to the sale of such REO Property; provided, however, that any
rent received or accrued with respect to such REO Property qualifies as "rents
from real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Mortgage Loan, the Servicer shall adjust the Mortgage Rate on the related
Adjustment Date and shall adjust the Scheduled Payment on the related mortgage
payment adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. In the event that an
Index becomes unavailable or otherwise unpublished, the Servicer shall select a
comparable alternative index over which it has no direct control and which is
readily verifiable. The Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Rate and Scheduled Payment adjustments. The
Servicer shall promptly, upon written request therefor, deliver to the Master
Servicer such notifications and any additional applicable data regarding such
adjustments and the methods used to calculate and implement such adjustments.
Upon the discovery by the Servicer or the receipt of notice from the Master
Servicer that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC and
the examiners and supervisory agents thereof, access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon 10 days (or, if an Event of Default has occurred and is continuing, 3
Business Days) prior written request and during normal business hours at the
offices of the Servicer or, if applicable, any Subservicer. Nothing in this
Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Nothing in this Section 3.19 shall require the Servicer to collect,
create, collate or otherwise generate any information that it does not generate
in its usual course of business. The Servicer shall not be required to make
copies of or to ship documents to any Person who is not a party to this
Agreement, and then only if provisions have been made for the reimbursement of
the costs thereof.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. Not later than thirty days after each
Distribution Date, the Servicer shall forward to the Trustee, the Master
Servicer and the Securities Administrator a statement prepared by the Servicer
setting forth the status of the Collection Account as of the close of business
on the last day of the calendar month relating to such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.10(a) and each category of withdrawal specified
in Section 3.11. Such statement shall be provided substantially in the form of
Exhibit N-1 hereto. Copies of such statement shall be provided by the Securities
Administrator to any Certificateholder and to any Person identified to the
Securities Administrator as a prospective transferee of a Certificate, upon the
request and at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Securities Administrator.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Subsequent Recoveries and
REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related Late Collections and as otherwise permitted under
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; provided, however, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein. The Servicer shall also be
entitled as additional servicing compensation, to interest or other income
earned on deposits in the Escrow Account (to the extent permitted by law and the
related Mortgage Loan documents) in accordance with Section 3.12. The Servicer
shall also be entitled to retain net Prepayment Interest Excesses (to the extent
not required to offset Prepayment Interest Shortfalls), but only to the extent
such amounts are received by the Servicer.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. JPMorgan, New
Century and each successor Servicer shall deliver or cause to be delivered to
the Depositor, the Master Servicer, the Rating Agencies, the Securities
Administrator and the Trustee on or before March 15th of each calendar year,
commencing in 2006, an Officer's Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement or a similar
agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 0000, Xxx Xxxxxxx, XXXxxxxx and each successor Servicer, at its
expense, shall cause a nationally recognized firm of independent certified
public accountants to furnish to the Depositor, the Master Servicer, the Rating
Agencies and the Trustee a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those Subservicers.
Section 3.24 Back-up Certification. For so long as a certificate
under the Xxxxxxxx-Xxxxx Act of 2002, as amended ("Xxxxxxxx-Xxxxx"), is required
to be given on behalf of the Trust, no later than March 15th of each calendar
year, commencing in 2006, or at any other time that the Master Servicer provides
a certification pursuant to Xxxxxxxx-Xxxxx and upon 30 days written request of
such parties, an officer of New Century, JPMorgan and each successor Servicer
shall execute and deliver an Officer's Certificate to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee for the benefit of the
Trust and the Master Servicer and its officers, directors and affiliates, in the
form set forth in Exhibit M.
Section 3.25 Master Servicer to Act as Servicer. (a) Subject to
Section 7.02, in the event that the Servicer shall for any reason no longer be
the Servicer hereunder (including by reason of an Event of Default), the Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter, except that the Master
Servicer shall not be (i) liable for losses of the predecessor Servicer pursuant
to Section 3.10 or any acts or omissions of the predecessor Servicer hereunder,
(ii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including but not limited to repurchases or substitutions pursuant to
Section 2.03, (iii) responsible for expenses of the predecessor Servicer
pursuant to Section 2.03 or (iv) deemed to have made any representations and
warranties of the Servicer hereunder. Any such assumption shall be subject to
Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Master Servicer (or any other successor Servicer)
shall not incur any liability or have any obligations in its capacity as
successor Servicer under a Subservicing Agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the Subservicing Agreement
arising prior to the date of such succession.
(d) The Servicer shall, upon request of the Master Servicer, but
at the expense of the Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement (if any) and the Mortgage Loans
then being serviced thereunder and an accounting of amounts collected and held
by it, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreement to the assuming party.
Section 3.26 Compensating Interest. The Servicer shall remit to the
Master Servicer on each Remittance Date an amount from its own funds equal to
the Compensating Interest payable by the Servicer for the related Distribution
Date.
Section 3.27 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on the
primary borrower of such Mortgage Loan to Equifax, Experian and TransUnion
Credit Information Company (three of the credit repositories) on a monthly
basis.
(b) The Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.28 Transfer of Servicing of Mortgage Loans. Prior to the
Servicing Transfer Date, New Century shall have complied with each of the
servicing transfer requirements in accordance with JPMorgan's commercially
reasonable instructions provided to New Century in writing and reasonably in
advance of the Servicing Transfer Date.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date, plus (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of the
Scheduled Payments (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date in respect of
the related Mortgage Loans, over the net income from such REO Property
transferred to the Collection Account for distribution on such Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in
immediately available funds to the Master Servicer an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Remittance Date either (i) from its own
funds or (ii) from the Collection Account, to the extent of funds held therein
for future distribution (in which case, it will cause to be made an appropriate
entry in the records of Collection Account that Amounts Held for Future
Distribution have been, as permitted by this Section 4.01, used by the Servicer
in discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by the
Servicer with respect to the Mortgage Loans and REO Properties. Any Amounts Held
for Future Distribution and so used shall be appropriately reflected in the
Servicer's records and replaced by the Servicer by deposit in the Collection
Account on or before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Master Servicer. In
addition the Servicer shall not be required to advance any Relief Act Interest
Shortfalls.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds, Condemnation Proceeds and
Subsequent Recoveries) with respect to the related Mortgage Loan.
(f) On each Remittance Date, the Master Servicer shall deposit in
the Distribution Account all funds remitted to it by the Servicer pursuant to
Sections 3.11(a)(i) and 3.26 and this Section 4.01. The Securities Administrator
may retain or withdraw from the Distribution Account, (i) the Master Servicing
Fee, (ii) amounts necessary to reimburse the Master Servicer or the Servicer for
any previously unreimbursed Advances and any Advances the Master Servicer deems
to be nonrecoverable from the related Mortgage Loan proceeds, (iii) an amount to
indemnify the Master Servicer or the Servicer for amounts due in accordance with
this Agreement, and (iv) any other amounts that each of the Master Servicer and
the Securities Administrator is entitled to receive hereunder for reimbursement,
indemnification or otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator will make the disbursements and transfers
from amounts then on deposit in the Distribution Account in the following order
of priority and to the extent of the Available Funds remaining:
(i) to the holders of each Class of LIBOR Certificates in the
following order of priority:
(A) from the Interest Remittance Amounts for both Loan
Groups, to the Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-1,
Class II-A-3 and Class II-A-4 Certificates, the related Senior
Interest Payment Amount for such Distribution Date, in each case
pursuant to the allocation set forth in clauses (iv) and (v) of this
Section 4.02(a);
(B) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(C) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class M-7 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class M-8 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class M-9 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(K) from any remaining Interest Remittance Amounts, to the
Class M-10 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(L) from any remaining Interest Remittance Amounts, to the
Class M-11 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(M) from any remaining Interest Remittance Amounts, to the
Class M-12 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(N) from any remaining Interest Remittance Amounts, to the
Class M-13 Certificates, the Interest Payment Amount for such Class
on such Distribution Date; and
(O) from any remaining Interest Remittance Amounts, to the
Class M-14 Certificates, the Interest Payment Amount for such Class
on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of LIBOR Certificates then entitled to
distributions of principal as set forth below, from amounts remaining on
deposit in the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Payment Amount in the
following order of priority:
(a) concurrently:
1. to the Group I Certificates, the Group I Principal
Payment Amount, allocated among the classes of
Group I Certificates as described in Section
4.02(c), until their respective Class Certificate
Balances are reduced to zero;
2. to the Group II Certificates, the Group II
Principal Payment Amount, allocated among the
classes of Group II Certificates as described in
Section 4.02(c), until their respective Class
Certificate Balances are reduced to zero; and
(b) sequentially to the Class M Certificates, in ascending
order by numerical class designation, until their respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Payment Amount
in the following amounts and order of priority:
(a) concurrently:
1. to the Group I Certificates, the Group I Senior
Principal Payment Amount, allocated among those
classes as described in Section 4.02(c), until
their respective Class Certificate Balances are
reduced to zero;
2. to the Group II Certificates, the Group II Senior
Principal Payment Amount, allocated among those
classes as described in Section 4.02(c), until
their respective Class Certificate Balances are
reduced to zero; and
(b) sequentially to the Class M certificates, in ascending
order by numerical class designation, the Class M Principal Payment
Amount for the related class of Class M certificates.
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) sequentially, to the holders of the Class M
Certificates, in ascending order by numerical class designation,
first any Interest Carry Forward Amount for that Class, and second,
any Unpaid Realized Loss Amount for that Class;
(B) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(C) concurrently, (i) from any Interest Rate Cap Payments
with respect to the Aggregate Cap Agreement on deposit in the Excess
Reserve Fund Account with respect to such Distribution Date, an
amount equal to any unpaid Basis Risk Carryover Amount with respect
to the LIBOR Certificates for such Distribution Date, allocated (a)
first, among the LIBOR Certificates, pro rata, based upon their
respective Class Certificate Balances (only with respect to those
LIBOR Certificates with an outstanding Basis Risk Carryover Amount)
and (b) second, any remaining amounts to the LIBOR Certificates, pro
rata, based on any such Basis Risk Carryover Amounts remaining
unpaid, to reimburse such Basis Risk Carryover Amounts remaining
unpaid, (ii) from any Interest Rate Cap Payments with respect to the
Group I Cap Agreement on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
unpaid Basis Risk Carryover Amount with respect to the Group I
Certificates for such Distribution Date to the Group I Certificates,
allocated (a) first, among the Group I Certificates, pro rata, based
upon their respective Class Certificate Balances (only with respect
to those Group I Certificates with an outstanding Basis Risk
Carryover Amount) and (b) second, any remaining amounts to the Group
I Certificates, pro rata, based on any such Basis Risk Carryover
Amounts remaining unpaid, to reimburse such Basis Risk Carryover
Amounts remaining unpaid, (iii) from any Interest Rate Cap Payments
with respect to the Group II Cap Agreement on deposit in the Excess
Reserve Fund Account with respect to such Distribution Date, an
amount equal to any unpaid Basis Risk Carryover Amount with respect
to the Group II Certificates for such Distribution Date to the Group
II Certificates, allocated (a) first, among the Group II
Certificates, pro rata, based upon their respective Class
Certificate Balances (only with respect to those Group II
Certificates with an outstanding Basis Risk Carryover Amount) and
(b) second, any remaining amounts to the Group II Certificates, pro
rata, based on any such Basis Risk Carryover Amounts remaining
unpaid, to reimburse such Basis Risk Carryover Amounts remaining
unpaid, and (iv) from any Interest Rate Cap Payments with respect to
the Class M Cap Agreement on deposit in the Excess Reserve Fund
Account with respect to such Distribution Date, an amount equal to
any unpaid Basis Risk Carryover Amount with respect to the Class M
Certificates for such Distribution Date to the Class M Certificates,
allocated (a) first, among the Class M Certificates, pro rata, based
upon their respective Class Certificate Balances (only with respect
to those Class M Certificates with an outstanding Basis Risk
Carryover Amount) and (b) second, any remaining amounts to the Class
M Certificates, pro rata, based on any such Basis Risk Carryover
Amounts remaining unpaid, to reimburse such Basis Risk Carryover
Amounts remaining unpaid;
(D) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in such
account) with respect to such Distribution Date, an amount equal to
any remaining unpaid Basis Risk Carryover Amount with respect to any
LIBOR Certificate for such Distribution Date to the LIBOR
Certificates in the same order and priority in which the Interest
Payment Amount is allocated among such Classes of Certificates,
except that the Class A Certificates shall be paid (a) first, among
the Class I-A-1 Certificates, Class I-A-2 Certificates, Class II-A-1
Certificates, Class II-A-2 Certificates, Class II-A-3 Certificates
and Class II-A-4 Certificates, pro rata, based upon their respective
Class Certificate Balances (only with respect to those Class A
Certificates with an outstanding Basis Risk Carryover Amount) and
(b) second, any remaining amounts to the Class I-A-1 Certificates,
Class I-A-2 Certificates, Class II-A-1 Certificates, Class II-A-2
Certificates, Class II-A-3 Certificates and Class II-A-4
Certificates, pro rata, based on any such Basis Risk Carryover
Amounts remaining unpaid;
(E) to the holders of the Class X Certificates, the
remainder of the Class X Distributable Amount not distributed
pursuant to Sections 4.02(a)(iii)(A)-(D) and any remaining Interest
Rate Cap Payments in the Excess Reserve Fund Account; and
(F) to the holders of the Class R Certificates, any
remaining amount;
(iv) solely for purposes of interest allocation calculations, the
Interest Remittance Amounts attributable to Group I Mortgage Loans will be
allocated:
(a) first, concurrently, to the Class I-A-1 and Class I-A-2
Certificates, pro rata (based on the amounts distributable or
payable under Section 4.02(a)(i)(A) to the Class I-A-1 and Class
I-A-2 Certificates), the Senior Interest Payment Amount for the
Class I-A-1 and Class I-A-2 Certificates, respectively; and
(b) second, concurrently, to the Class II-A-1, Class II-A-2,
Class II-A-3 and Class II-A-4 Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(A) to the
Class II-A-1, Class II-A-2, Class II-A-3 and Class II-A-4
Certificates), the Senior Interest Payment Amount for the Class
II-A-1, Class II-A-2, Class II-A-3 and Class II-A-4 Certificates,
respectively; and
(v) solely for purposes of interest allocation calculations, the
Interest Remittance Amounts attributable to Group II Mortgage Loans will
be allocated:
(a) first, concurrently, to the Class II-A-1, Class II-A-2,
Class II-A-3 and Class II-A-4 Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(A) to the
Class II-A-1, Class II-A-2, Class II-A-3 and Class II-A-4
Certificates), the Senior Interest Payment Amount for the Class
II-A-1, Class II-A-2, Class II-A-3 and Class II-A-4 Certificates,
respectively; and
(b) second, concurrently, to the Class I-A-1 and Class I-A-2
Certificates, pro rata (based on the amounts distributable or
payable under Section 4.02(a)(i)(A) to the Class I-A-1 and Class
I-A-2 Certificates), the Senior Interest Payment Amount for the
Class I-A-1 and Class I-A-2 Certificates, respectively; and
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Interest Payment Amount or the related Interest Carry Forward Amounts, if any,
then such shortfall will be allocated to the Holders of such Class, with
interest thereon, on future Distribution Dates, as Interest Carry Forward
Amounts, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Certificates, on the one hand, and the Group II Certificates, on the
other hand, based on the Group Principal Allocation Percentage for the Group I
Certificates and the Group II Certificates, as applicable, for such Distribution
Date; provided, however, that, if the Class Certificate Balances of the Class A
Certificates in either Certificate Group are reduced to zero, then the remaining
amount of principal distributions distributable to the Class A Certificates on
such Distribution Date, and the amount of such principal distributions
distributable on all subsequent Distribution Dates, shall be distributed to the
holders of the Class A Certificates in the other Certificate Group remaining
outstanding, in accordance with the principal distribution allocations described
in this Section 4.02(c), until their Class Certificate Balances have been
reduced to zero. Any distributions of principal to the Group I Certificates
shall be made first from Available Funds relating to the Group I Mortgage Loans,
and any distributions of principal to the Group II Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
Any principal allocated to the Group I Certificates shall be
distributed pro rata (based on their respective Class Certificate Balances);
provided, however, that if a Sequential Trigger Event is in effect, any
principal distributions allocated to the Group I Certificates shall be
distributed first to the Class I-A-1 Certificates, until their Class Certificate
Balance has been reduced to zero and then to the Class I-A-2 Certificates, until
their Class Certificate Balance has been reduced to zero.
Any principal allocated to the Group II Certificates shall be
distributed pro rata between the Group II Sequential Certificates, on the one
hand, and the Class II-A-4 Certificates on the other (based on their respective
Class Certificate Balances); provided, however, that if a Sequential Trigger
Event is in effect, any principal distributions allocated to the Group II
Certificates shall be distributed first to the Group II Sequential Certificates,
until their Class Certificate Balances have been reduced to zero, and then to
the Class II-A-4 Certificates, until their Class Certificate Balance has been
reduced to zero. Any principal allocated to the Group II Sequential Certificates
shall be distributed first to the Class II-A-1 Certificates, until their Class
Certificate Balance has been reduced to zero, then to the Class II-A-2
Certificates, until their Class Certificate Balance has been reduced to zero,
and then to the Class II-A-3 Certificates, until their Class Certificate Balance
has been reduced to zero; provided, however, that on and after the Distribution
Date on which the aggregate Class Certificate Balances of the Class M
Certificates and the principal balance of the Class X Certificates have been
reduced to zero, any principal allocated to the Group II Sequential Certificates
shall be distributed pro rata among the classes of Group II Sequential
Certificates, based on their respective Class Certificate Balances.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) First, to the amount of interest payable to the Class X
Certificates; and
(2) Second, pro rata, as a reduction of the Interest Payment
Amount for the Class A and Class M Certificates, based on the amount of interest
to which such Classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Master Servicer, the Servicer, the Depositor, the
Trustee and each Rating Agency a statement, based on information provided by the
Servicer, setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments, Liquidation
Proceeds and Subsequent Recoveries;
(ii) the amount thereof allocable to interest, any Interest Carry
Forward Amounts included in such distribution and any remaining Interest
Carry Forward Amounts after giving effect to such distribution, any Basis
Risk Carryover Amount for such Distribution Date and the amount of all
Basis Risk Carryover Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carryover Amount not covered by amounts
in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of the Expense Fees (in the aggregate and
separately stated) paid to or retained by the Servicer or Subservicer
(with respect to the Subservicers, in the aggregate) and the Master
Servicer with respect to such Distribution Date;
(vii) the Interest Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicer as outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) with respect to Mortgage Loans that became REO Properties
during the preceding calendar month, the number and the aggregate Stated
Principal Balance of such Mortgage Loans as of the close of business on
the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any REO
Properties as of the close of business on the Determination Date preceding
such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation thereof and the aggregate outstanding balance
of all 60+ Day Delinquent Mortgage Loans), and whether a Sequential
Trigger Event has occurred and is continuing;
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Interest Carry Forward
Amounts;
(xvi) the Overcollateralization Amount and Overcollateralization
Target Amount;
(xvii) Prepayment Charges collected by the Servicer;
(xviii) the Interest Rate Cap Payments (stated separately), if any,
for such Distribution Date; and
(xix) the Cumulative Loss Percentage.
(b) The Securities Administrator's responsibility for providing
the above statement to the Certificateholders, each Rating Agency, the Master
Servicer, the Servicer, the Trustee and the Depositor is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer and the Servicer. The Securities Administrator will provide the above
statement via the Securities Administrator's internet website. The Securities
Administrator's website will initially be located at xxxxx://xxx.xxxxxxx.xxx and
assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are unable
to use the above distribution method are entitled to have a paper copy mailed to
them via first class mail by calling the customer service desk and indicating
such. The Securities Administrator shall have the right to change the manner in
which the above statement is distributed in order to make such distribution more
convenient and/or more accessible, and the Securities Administrator shall
provide timely and adequate notification to the Certificateholders and the
parties hereto regarding any such changes. A paper copy of the statement will
also be made available upon request.
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i), (a)(ii) and
(a)(vi) of this Section 4.03 aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall have
previously been provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
(d) On the 10th day of each calendar month (or, if such 10th day
is not a Business Day, then on the next succeeding Business Day), the Servicer
shall furnish to the Master Servicer (i) a monthly remittance advice in the
format set forth in Exhibit N-1 hereto, a monthly defaulted loan report in the
format set forth in Exhibit N-2 hereto and a realized loss report in the format
set forth in Exhibit N-3 hereto (or in such other format mutually agreed to
between the Servicer and the Master Servicer) relating to the period ending on
the last day of the preceding calendar month and (ii) all such information
required pursuant to clause (i) above on a magnetic tape or other similar media
reasonably acceptable to the Master Servicer. No later than three Business Days
after the fifteenth day of each calendar month, the Servicer shall furnish to
the Master Servicer a monthly report containing such information regarding
prepayments of Mortgage Loans during the applicable Prepayment Period and in a
format as mutually agreed to between the Servicer and the Master Servicer.
Such monthly remittance advice shall also be accompanied by a
supplemental report provided to the Master Servicer which includes on an
aggregate basis for the previous calendar month (i) the amount of any insurance
claims filed, (ii) the amount of any claim payments made and (iii) the amount of
claims denied or curtailed. The Master Servicer will convert such data into a
format acceptable to the Securities Administrator and provide monthly reports to
the Securities Administrator pursuant to this Agreement.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Securities Administrator will at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference Banks
(after consultation with the Depositor). Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
The Interest Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Interest Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Class M Certificates then outstanding in reduction
of the Class Certificate Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and Class
P Certificates in the name of the NIM Trustee, or such other name or names as
the Depositor shall request, and to deliver the Class X and Class P Certificates
to the NIM Trustee or to such other Person or Persons as the Depositor shall
request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the related Record Date or (y) by check mailed by first class mail
to such Certificateholder at the address of such holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Except with
respect to (i) the transfer of the Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "Transferor Certificate") and either (i) there shall be
delivered to the Securities Administrator a letter in substantially the form of
Exhibit I (the "Rule 144A Letter") or (ii) there shall be delivered to the
Securities Administrator at the expense of the transferor an Opinion of Counsel
stating that such transfer may be made without registration under the Securities
Act. In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. As directed by the
Depositor, the Securities Administrator shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Depositor, the Master Servicer, the
Servicer and the Trustee shall cooperate with the Securities Administrator in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Securities Administrator such information regarding
the Certificates, the Mortgage Loans and other matters regarding the Trust Fund
as the Securities Administrator shall reasonably determine to meet its
obligation under the preceding sentence. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Securities Administrator, the Servicer and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
Except with respect to (i) the transfer of the Class X, Class P or
Class R Certificates to the Depositor or an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Securities
Administrator shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Securities Administrator's receipt of a representation letter from
the transferee substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
Federal, state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or the Code, nor a person acting on behalf of any such plan
or arrangement nor using the assets of any such plan or arrangement to effect
such transfer, or (ii) in the case of an ERISA-Restricted Certificate other than
a Residual Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Depositor, the Trustee, the Master Servicer, the Servicer, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such ERISA-Restricted Certificate
will not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee, the Depositor, the Securities Administrator, the Master
Servicer or the Servicer to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a Physical
Certificate or a Residual Certificate, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Securities Administrator by the
transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Securities Administrator of an Opinion of Counsel satisfactory
to the Securities Administrator as described above shall be void and of no
effect and (b) any purported transfer of a Class P Certificate or Residual
Certificate to a transferee that does not make the representation in clause (i)
above shall be void and of no effect.
None of the Class R or Class P Certificates may be sold to any
employee benefit plan subject to Title I of ERISA, any plan subject to Section
4975 of the Code, or any plan subject to any Similar Law or any person investing
on behalf or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as, in the
case of a Physical Certificate, the transfer was registered by the Securities
Administrator in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the
Trustee, the Securities Administrator or the Servicer, to the effect that the
elimination of such restrictions will not cause either the Lower Tier REMIC or
the Upper Tier REMIC hereunder to fail to qualify as a REMIC at any time that
the Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Residual Certificate hereby consents to
any amendment of this Agreement which, based on an Opinion of Counsel furnished
to the Securities Administrator, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is a Non-Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is a Non-Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicer, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Securities Administrator and the Trustee such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Securities Administrator and any agent of the Trustee, the Depositor or the
Securities Administrator may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Trustee, the Depositor, the Securities Administrator
nor any agent of the Trustee, the Depositor or the Securities Administrator
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor or Servicer shall request such information in
writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
Depositor, the Servicer or such Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such Trust Fund held by the
Securities Administrator, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange. The Securities Administrator initially
designates its offices located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000. The Securities Administrator shall give prompt
written notice to the Certificateholders of any change in such location of any
such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. (a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) The Servicer is and shall continue to be an institution which
is a Xxxxxx Xxx-approved and Xxxxxxx Mac-approved seller/servicer, shall
maintain a net worth of at least $30,000,000 (as determined in accordance with
generally accepted accounting principles) and shall maintain its license to do
business or service residential mortgage loans in any jurisdictions in which the
Mortgaged Properties are located.
(c) Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Servicer shall
make the covenant set forth in Section 6.02(b).
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer, nor any of their respective
directors, officers, employees or agents, shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, its Affiliates, the Servicer
and any of their respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
its Affiliates, the Servicer and any of their respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence (or gross
negligence in the case of the Depositor) in the performance of duties hereunder
or by reason of reckless disregard of obligations and duties hereunder. Neither
the Depositor nor the Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action (or direct the Trustee to undertake such actions pursuant to
Section 2.03 for the benefit of the Certificateholders) that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor and the Servicer shall be entitled to be
reimbursed therefor out of the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Section 7.01, the Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor, the Master Servicer and the Securities Administrator
with prior written notice to the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such resignation shall not
relieve the Servicer of responsibility for any of the obligations specified in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer. Any such determination permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Depositor, the Securities Administrator and the Master Servicer
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor, the Securities Administrator and the Master Servicer. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any Affiliate, director, officer,
employee or agent of the Depositor and hold each of them harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain in any way related to any breach by the
Servicer, of (i) any of its representations and warranties referred to in
Section 2.03(a), (ii) any error in any tax or information return prepared by the
Servicer or (iii) the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Servicer
immediately shall notify the Depositor, the Master Servicer, the Securities
Administrator and the Trustee if a claim is made by a third party with respect
to this Agreement or the Mortgage Loans, assume (with the prior written consent
of the Depositor and the Securities Administrator) the defense of any such claim
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Securities Administrator or the Trustee in
respect of such claim. This indemnity shall survive the termination of this
Agreement and the earlier resignation or removal of the Servicer and the parties
indemnified by the Servicer under this paragraph.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Master Servicer
any payment required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or by the Master Servicer, or to the
Servicer, the Depositor, the Master Servicer, the Securities Administrator and
the Trustee by Certificateholders entitled to at least 25% of the Voting Rights
in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of forty-five days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten in the case of a failure to observe or perform any of the obligations set
forth in Sections 3.22, 3.23 or 8.12) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or by the Master Servicer, or to the
Servicer, the Depositor, the Master Servicer, the Securities Administrator and
the Trustee by Certificateholders entitled to at least 25% of the Voting Rights
in the Certificates and (ii) actual knowledge of such failure by a Servicing
Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty consecutive days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability generally to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(g) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Master Servicer or by the Depositor, or to the Servicer,
the Master Servicer, the Depositor, the Securities Administrator and the Trustee
by Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or
(h) Fitch reduces its primary subprime servicer rating of the
Servicer to "RPS2-" or lower, Xxxxx'x reduces its primary subprime servicer
rating of the Servicer to "SQ3" or lower, or Standard & Poor's reduces its
primary subprime servicer rating of the Servicer to "Average" or lower, and any
such downgrade continues unremedied for a period of ninety days.
If an Event of Default described in clauses (a) through (h) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Master Servicer may, or at
the direction of a majority of the Voting Rights the Master Servicer shall, by
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Master Servicer shall
not be required to give written notice to the Servicer of the occurrence of an
Event of Default described in clauses (b) through (h) of this Section 7.01
unless and until a Responsible Officer of the Master Servicer has actual
knowledge of the occurrence of such an event; provided further, that the
Depositor shall give written notice to the Servicer and the Master Servicer of
the occurrence of an Event of Default described in clause (h) of this Section
7.01 upon obtaining actual knowledge of the occurrence of such an event. In the
event that a Responsible Officer of the Master Servicer has actual knowledge of
the occurrence of an event of default described in clause (a) of this Section
7.01, the Master Servicer shall give written notice to the Servicer of the
occurrence of such an event within one Business Day of the first day on which
such Responsible Officer obtains actual knowledge of such occurrence. On and
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Master Servicer. Subject to
Section 7.02, the Master Servicer is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Master Servicer in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Master Servicer of all cash amounts which shall at the time
be credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Master Servicer to Act; Appointment of Successor. On
and after the time the Servicer receives a notice of termination pursuant to
Section 3.25 or Section 7.01, the Master Servicer shall, subject to and to the
extent provided in Section 3.05, and subject to the rights of the Master
Servicer to appoint a successor Servicer pursuant to this Section 7.02, be the
successor to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof and applicable law including the
obligation to make P&I Advances and Servicing Advances, pursuant to Section 3.25
or Section 7.01. It is understood and acknowledged by the parties hereto that
there will be a period of transition before the transfer of servicing
obligations is fully effective. Notwithstanding the foregoing, the Master
Servicer will have a period (not to exceed 90 days) to complete the transfer of
all servicing data and correct or manipulate such servicing data as may be
required by the Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise enable the Master Servicer to service the Mortgage
Loans in accordance with Accepted Servicing Practices. As compensation therefor,
the Master Servicer shall be entitled to all funds relating to the Mortgage
Loans that the Servicer would have been entitled to charge to the Collection
Account if the Servicer had continued to act hereunder including, if the
Servicer was receiving the Servicing Fee, the Servicing Fee and the income on
investments or gain related to the Collection Account which the Servicer would
be entitled to receive. Notwithstanding the foregoing, if the Master Servicer
has become the successor to the Servicer in accordance with Section 7.01, the
Master Servicer may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making P&I Advances and Servicing Advances
pursuant to Section 4.01, if it is otherwise unable to so act or at the written
request of Certificateholders entitled to at least a majority of the Voting
Rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the Servicer shall make the covenant set forth in
Section 6.02(b). Any successor to the Servicer shall be an institution which is
willing to service the Mortgage Loans and which executes and delivers to the
Depositor and the Master Servicer an agreement accepting such delegation and
assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer (other
than liabilities of the Servicer under Section 6.03 incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided, that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced, as a result of
such assignment and delegation. Pending appointment of a successor to the
Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to Section 3.05, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of
the Servicing Fee Rate and amounts paid to the Servicer from investments. The
Master Servicer and such successor Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Master Servicer nor any other successor to the Servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Notwithstanding the foregoing, the parties hereto agree that the
Master Servicer, in its capacity as successor Servicer, immediately shall assume
all of the obligations of the Servicer to make Advances and the Master Servicer
will assume the other duties of the Servicer as soon as practicable, but in no
event later than 90 days after the Master Servicer becomes successor Servicer
pursuant to the preceding paragraph. Notwithstanding the foregoing, the Master
Servicer, in its capacity as successor Servicer, shall not be responsible for
the lack of information and/or documents that it cannot obtain through
reasonable efforts.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall provide notices to the Mortgagors, transfer
the Servicing Files to a successor Servicer and pay all of its own out-of-pocket
costs and expenses at its own expense. In addition, in the event that the
Servicer is terminated pursuant to Section 7.01, the terminated Servicer shall
pay all reasonable out-of-pocket costs and expenses of a servicing transfer
incurred by parties other than the terminated Servicer promptly upon
presentation of reasonable documentation of such costs. If the Master Servicer
is the terminated Servicer (except in the case where the Master Servicer in its
role as successor Servicer is being terminated pursuant to Section 7.01 by
reason of an Event of Default caused solely by the Master Servicer as the
successor Servicer and not by the predecessor Servicer's actions or omissions),
such costs shall be paid by the prior terminated Servicer promptly upon
presentation of reasonable documentation of such costs. If the terminated
Servicer defaults in its obligation to pay such costs and expenses, the same
shall be paid by the successor Servicer or the Master Servicer, in which case
the successor Servicer or the Master Servicer, as applicable, shall be entitled
to reimbursement therefor from the Trust Fund.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders and
each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Securities Administrator shall transmit by mail to all Certificateholders
and each Rating Agency notice of each such Event of Default hereunder known to
the Securities Administrator, unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of a Master Servicer Event of Default and after the curing of all
Master Servicer Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believes in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties and the Trustee shall have no responsibility to ascertain or
confirm the genuineness of any signature of any such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants, custodians, nominees or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agents,
accountants or attorneys appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
indemnity satisfactory to it against such risk or liability is not assured to
it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of a Master Servicer Event of Default or an Event of
Default, the Trustee shall not be deemed to have knowledge of a Master Servicer
Event of Default or an Event of Default until a Responsible Officer of the
Trustee shall have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby; and
(j) if the Trustee, in its role as successor Master Servicer under
this Agreement, assumes the servicing or master servicing with respect to any of
the Mortgage Loans, it shall not assume liability for the representations and
warranties of the Servicer or Master Servicer, as applicable, or for any errors
or omissions of the Servicer or Master Servicer, as applicable.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, the Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, the Servicer or the
Securities Administrator.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Master Servicer).
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees Indemnification and Expenses. (a) As
compensation for its activities under this Agreement, the Trustee shall be paid
its fee by the Master Servicer from the Master Servicer's own funds pursuant to
a separate agreement. The Trustee shall have no lien on the Trust Fund for the
payment of such fees.
(b) The Trustee shall be entitled to be reimbursed, from funds on
deposit in the Distribution Account, amounts sufficient to indemnify and hold
harmless the Trustee and any director, officer, employee, or agent of the
Trustee against any loss, liability, or expense (including reasonable attorneys'
fees) incurred in connection with any claim or legal action relating to:
(i) this Agreement,
(ii) the Certificates, or
(iii) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of the Mortgage Loan Seller's obligations in
connection with this Agreement for which the Mortgage Loan Seller has performed
its obligation to indemnify the Trustee pursuant to Section 2.03(h), (iii)
resulting from any breach of the Master Servicer's obligation hereunder for
which the Master Servicer has performed its obligation to indemnify the Trustee
pursuant to this Agreement or (iv) incurred because of willful misconduct, bad
faith, or negligence in the performance of any of the Trustee's duties under
this Agreement. Without limiting the foregoing, except as otherwise agreed upon
in writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
The Trustee's right to indemnity and reimbursement under this
Section 8.05(b) shall survive the termination of this Agreement and the
resignation or removal of the Trustee under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other routine expenses incurred by the Trustee; provided,
further, that no expense shall be reimbursed hereunder if it would not
constitute an "unanticipated expense incurred by the REMIC" within the meaning
of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Master Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Master Servicer, the
Securities Administrator and each Rating Agency not less than 60 days before the
date specified in such notice, when, subject to Section 8.08, such resignation
is to take effect and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If no
successor trustee meeting such qualifications shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to the Servicer and one copy
to the successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein. The Depositor, the Servicer and
the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor Master
Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
the Lower Tier REMIC and Upper Tier REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to the
Lower Tier REMIC and Upper Tier REMIC containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the
Upper Tier REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each of the Upper Tier REMIC and Lower Tier REMIC as a
REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on the Lower Tier REMIC and the
Upper Tier REMIC created hereunder before its termination when and as the same
shall be due and payable (but such obligation shall not prevent the Securities
Administrator or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Securities Administrator from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Securities Administrator or, if required by
applicable tax law, the Trustee or such other person as may be required to sign
such returns by the Code or state or local laws, regulations or rules; and
(j) maintain records relating to the Lower Tier REMIC and the
Upper Tier REMIC created hereunder, including the income, expenses, assets, and
liabilities thereof on a calendar year basis and on the accrual method of
accounting and the adjusted basis of the assets determined at such intervals as
may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for the Lower Tier REMIC and the
Upper Tier REMIC, within the meaning of Treasury Regulations Section
1.860F-4(d), and the Securities Administrator is hereby designated as agent of
such Certificateholder for such purpose (or if the Securities Administrator is
not so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall, as
and when necessary and appropriate, represent the Lower Tier REMIC and the Upper
Tier REMIC created hereunder in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of the Lower Tier
REMIC and the Upper Tier REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the Lower Tier REMIC and the Upper Tier
REMIC created hereunder, and otherwise act on behalf of each REMIC in relation
to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Charges, the rights of the Class X
Certificateholders to receive Interest Rate Cap Payments and amounts in the
Excess Reserve Fund Account (subject, other than in the case of the Class X
Certificates, to the obligation to pay Basis Risk Carryover Amounts) and the
rights of the LIBOR Certificateholders to receive Basis Risk Carryover Amounts
as the beneficial ownership of interests in a grantor trust, and not as an
obligation of either the Lower Tier REMIC or Upper Tier REMIC created hereunder,
for federal income tax purposes. The Securities Administrator shall file or
cause to be filed with the IRS together with Form 1041 or such other form as may
be applicable and shall furnish or cause to be furnished, to the Class P
Certificateholders, the Class X Certificateholders and the LIBOR
Certificateholders, the respective amounts described above that are received, in
the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value to each Class
of Certificates of the right to receive Basis Risk Carryover Amounts from the
Excess Reserve Fund Account. Unless otherwise advised by the Depositor, for
federal income tax purposes, the Securities Administrator is hereby directed to
assign a value of zero to the right of each Holder allocating the purchase price
of an initial Offered Certificateholder between such right and the related Upper
Tier Regular Interest. Thereafter, the Depositor shall provide to the Securities
Administrator promptly upon written request therefor any additional information
or data that the Securities Administrator may, from time to time, reasonably
request to enable the Securities Administrator to perform its duties under this
Agreement; provided, however, that the Depositor shall not be required to
provide any information regarding the Mortgage Loans that the Servicer is
required to provide to the Securities Administrator pursuant to this Agreement.
The Depositor hereby indemnifies the Securities Administrator for any losses,
liabilities, damages, claims, or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide, pursuant to this paragraph,
accurate information or data to the Securities Administrator on a timely basis.
None of the Master Servicer, the Securities Administrator or the
Trustee shall (i) permit the creation of any interests in either REMIC other
than the regular and residual interests set forth in the Preliminary Statement,
(ii) receive any amount representing a fee or other compensation for services
(except as otherwise permitted by this Agreement or the related Mortgage Loan
documents) or (iii) otherwise knowingly or intentionally take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of either REMIC as a
REMIC or (ii) result in the imposition of a tax upon either REMIC or the Trust
Fund (including but not limited to the tax on "prohibited transactions" as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code, or the tax on "net income from
foreclosure property") unless the Securities Administrator receives an Opinion
of Counsel (at the expense of the party seeking to take such action or, if such
party fails to pay such expense, and the Securities Administrator determines
that taking such action is in the best interest of the Trust Fund and the
Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Securities Administrator) to the effect that the contemplated
action will not, with respect to the Trust Fund or either REMIC created
hereunder, endanger such status or result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of either the
Lower Tier REMIC or Upper Tier REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of the
Lower Tier REMIC as defined in Section 860G(c) of the Code, on any contribution
to either the Lower Tier REMIC or Upper Tier REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on either REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Master Servicer, the Trustee, or the
Securities Administrator, as applicable, if such tax arises out of or results
from negligence of the Master Servicer, the Trustee or the Securities
Administrator, as applicable, in the performance of any of its obligations under
this Agreement, (ii) the Mortgage Loan Seller if such tax arises out of or
results from the Mortgage Loan Seller's obligation to repurchase a Mortgage Loan
pursuant to Section 2.03, (iii) the Servicer, in the case of any such minimum
tax, and otherwise if such tax arises out of or results from a breach by the
Servicer of any of its obligations under this Agreement, or (iv) in all other
cases, or if the Master Servicer, the Trustee, the Securities Administrator or
the Servicer fails to honor its obligations under the preceding clause (i) or
(ii), any such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) Promptly upon receipt by the
Master Servicer of (i) any officer's certificate relating to the Servicer's
annual compliance pursuant to Section 3.22 and (ii) any report of the Servicer's
independent public accountants relating to the Servicer's compliance with
servicing standards pursuant to Section 3.23, the Master Servicer shall review
such officer's certificate and reports. As part of the Form 10-K required to be
filed pursuant to paragraph (c) of this Section 8.12, the Master Servicer shall
include the Servicer's annual statement of compliance, and each such
accountant's report, as well as a report of any significant deficiencies
relating to the Servicer's performance of its obligations under this Agreement.
(b) The Master Servicer shall reasonably cooperate with the
Depositor to enable the Trust to satisfy its reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Master
Servicer shall prepare on behalf of the Trust any Forms 8-K (or other comparable
required Form containing the same or comparable information or other information
mutually agreed upon) and 10-K customary for similar securities as required by
the Exchange Act and the rules and regulations promulgated thereunder, and the
Master Servicer shall sign and file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such forms on
behalf of the Trust.
(c) Each Form 8-K shall be filed by the Master Servicer within 15
days after each Distribution Date and shall include a copy of the Distribution
Date Statement for such Distribution Date as an exhibit thereto. On or prior to
March 30th of each year beginning in March 2006 (or such earlier date as may be
required by the Exchange Act and the rules and regulations promulgated
thereunder), the Master Servicer shall file a Form 10-K, in substance as
required by applicable law or applicable Securities and Exchange Commission
staff's interpretations. Such Form 10-K shall include as exhibits the annual
statements of compliance, the accountant's reports, any report of significant
deficiencies relating to the Servicer's performance of its obligations under
this Agreement described in paragraph (a) of this Section 8.12 and any other
exhibits that may be required as a result of any new rules adopted by the
Securities and Exchange Commission, in each case to the extent they have been
timely delivered to the Master Servicer. In accordance with the Exchange Act and
the rules and regulations promulgated thereunder, if such exhibits are not so
timely delivered, the Master Servicer shall (i) file the balance of the Form
10-K, indicating on the cover page thereof which of such exhibits are omitted,
and (ii) no later than one Business Day after the due date for Form 10-K, file a
Form 12b-25, notifying the Securities and Exchange Commission of its inability
to timely file all or any required portion of Form 10-K. No later than the
fifteenth calendar day after the due date for Form 10-K, the Master Servicer
shall, to the extent in its possession, file such exhibits with the Securities
and Exchange Commission. If the Master Servicer has not received such exhibits
by the tenth calendar day after such due date, the Master Servicer shall notify
the Depositor. The Master Servicer shall have no liability with respect to any
failure to properly prepare or file such periodic reports resulting from or
relating to the Master Servicer's inability or failure to obtain any information
not resulting from its own negligence, bad faith or willful misconduct. Each
Form 10-K shall also include a certification in the form attached hereto as
Exhibit L or in such other form as may be required by Rules 13a-14 and 15d-14
under the Exchange Act, as applicable, and any existing or future directives or
interpretations thereof or rules subsequently adopted by the Securities and
Exchange Commission (the "Certification"), which Certification shall be signed
by a Master Servicing Officer.
(d) Upon any filing with the Securities and Exchange Commission,
the Securities Administrator shall promptly deliver to the Depositor a copy of
any such executed report, statement or information.
(e) Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15 Suspension Notification with respect to the
Trust unless instructed in writing by the Depositor not to do so.
Section 8.13 Tax Classification of the Excess Reserve Fund Account
and the Cap Agreements. For federal income tax purposes, the Securities
Administrator shall treat the Excess Reserve Fund Account and the Cap Agreements
as beneficially owned by the holders of the Class X Certificates and shall treat
such portion of the Trust Fund as a grantor trust, within the meaning of subpart
E, Part I of subchapter J of the Code. The Securities Administrator shall treat
the rights that each Class of LIBOR Certificates has to receive payments of
Basis Risk Carryover Amounts from the Excess Reserve Fund Account as rights to
receive payments under an interest rate cap contract written by the Class X
Certificateholders in favor of each such Class and beneficially owned by each
such Class through the grantor trust. Accordingly, each Class of Certificates
(excluding the Class X, Class P and Class R Certificates) will be comprised of
two components - an Upper Tier REMIC Regular Interest and an interest in an
interest rate cap contract, and the Class X Certificates will be comprised of
three components - an Upper Tier REMIC Regular Interest, the Cap Agreements and
an interest in the Excess Reserve Fund Account, subject to obligation to pay
Basis Risk Carryover Amounts. The Securities Administrator shall allocate the
issue price for a Class of Certificates among the respective components for
purposes of determining the issue price of the Upper Tier REMIC Regular Interest
component based on information received from the Depositor.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the Servicer's obligations under this Agreement, and
(except as set forth below) shall use its reasonable good faith efforts to cause
the Servicer to duly and punctually perform its duties and obligations
hereunder. Upon the occurrence of an Event of Default of which a Responsible
Officer of the Master Servicer has actual knowledge, the Master Servicer shall
promptly notify the Securities Administrator and the Trustee and shall specify
in such notice the action, if any, the Master Servicer plans to take in respect
of such default. So long as an Event of Default shall occur and be continuing,
the Master Servicer shall take the actions specified in Article VII.
If (i) the Servicer reports a delinquency on a monthly report and
(ii) the Servicer, by 11 a.m. (New York Time) on the related Remittance Date,
neither makes an Advance nor provides the Securities Administrator and the
Master Servicer with an Officer's Certificate certifying that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, then
the Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date an Advance in
an amount equal to the difference between (x) with respect to each Monthly
Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the Servicer was required to make an Advance
pursuant to this Agreement and (y) amounts deposited in the Collection Account
to be used for Advances with respect to such Mortgage Loan, except to the extent
the Master Servicer determines any such Advance to be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance. Subject to the foregoing and
Section 7.02, the Master Servicer shall continue to make such Advances for so
long as the Servicer is required to do so under this Agreement. If applicable,
on the Business Day immediately preceding the Distribution Date, the Master
Servicer shall deliver an Officer's Certificate to the Trustee stating that the
Master Servicer elects not to make an Advance in a stated amount and detailing
the reason(s) it deems the Advance to be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance. Any amounts deposited by the Master Servicer
pursuant to this Section 9.01 shall be net of the Servicing Fee for the related
Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicer as required hereunder (including costs associated with (i) termination
of the Servicer, (ii) the appointment of a successor servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted hereunder, seek reimbursement therefor initially from
the terminated Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Master Servicer are not paid for
by the predecessor or successor Servicer (provided such successor Servicer is
not the Master Servicer), the Master Servicer may be reimbursed therefor by the
Trust for all costs incurred by the Master Servicer associated with any such
transfer of servicing duties from the Servicer to the Master Servicer or any
other successor servicer.
(c) If the Master Servicer assumes the servicing with respect to
any of the Mortgage Loans, it will not assume liability for the representations
and warranties of the Servicer it replaces or for any errors or omissions of the
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by the Servicer of the Servicer's rights and
obligations under this Agreement without the prior written consent of the Master
Servicer, which consent shall not be unreasonably withheld.
Section 9.02 Annual Statement as to Compliance. The Master Servicer
will deliver or cause to be delivered to the Depositor, the Securities
Administrator, the Rating Agencies and the Trustee on or before March 15th of
each calendar year, commencing in 2006, an Officer's Certificate stating, as to
each signatory thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of performance under this
Agreement or a similar agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof.
Section 9.03 [Reserved].
Section 9.04 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 9.05 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or any
other corporate restriction or any judgment, order, writ, injunction,
decree, law or regulation that may materially and adversely affect its
ability as Master Servicer to perform its obligations under this Agreement
or that requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(viii) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor, the Servicer,
Securities Administrator, the Trustee and the Trust and hold them harmless
against any loss, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and other reasonable costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a material breach of the Master Servicer's representations and
warranties contained in Section 9.05(a) above. It is understood and agreed that
the enforcement of the obligation of the Master Servicer set forth in this
Section 9.05 to indemnify the Depositor, the Servicer, Securities Administrator,
the Trustee and the Trust constitutes the sole remedy of the Depositor and the
Trustee, respecting a breach of the foregoing representations and warranties.
Such indemnification shall survive any termination of the Master Servicer as
Master Servicer hereunder, any termination of this Agreement and resignation or
removal of the Trustee.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer, Securities Administrator or the Trustee or notice thereof by
any one of such parties to the other parties.
Section 9.06 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from the Servicer to make any
P&I Advance or required to be made by the Master Servicer under the terms of
this Agreement which continues unremedied for a period of two (2) Business Days
after the date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by any other party
hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations for
three (3) Business Days;
(f) Except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, in each case, where such indictment materially
and adversely affects the ability of the Master Servicer to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least 51% of the
Voting Rights shall, terminate with cause all the rights and obligations of the
Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
Section 9.07 Waiver of Default. By a written notice, the Trustee may
at the direction of Holders of Certificates evidencing at least 51% of the
Voting Rights waive any default by the Master Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Master Servicer Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
Section 9.08 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint a successor, which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good standing and
acceptable to the Depositor and the Rating Agencies. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that in no event shall the master
servicing fee paid to such successor master servicer exceed that paid to the
Master Servicer hereunder. In the event that the Master Servicer's duties,
responsibilities and liabilities under this Agreement are terminated, the Master
Servicer shall continue to discharge its duties and responsibilities hereunder
until the effective date of such termination with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement and shall
take no action whatsoever that might impair or prejudice the rights of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.05(a) hereof and the remedies available to
the Trustee under Section 9.05(b) hereof, it being understood and agreed that
the provisions of Section 9.05 hereof shall be applicable to the Master Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Master Servicer or the termination of this Agreement; or (ii) affect the right
of the Master Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer continues to perform its duties
hereunder prior to the date the successor master servicer fully assumes its
duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances; provided, however, that any failure to perform any
duties or responsibilities caused by the Master Servicer's failure to provide
information required by this Agreement shall not be considered a default by the
Trustee hereunder. In the Trustee's capacity as such successor, the Trustee
shall have the same limitations on liability herein granted to the Master
Servicer. Notwithstanding anything herein to the contrary, the Trustee in its
role as successor Master Servicer shall have no obligation to monitor or
supervise any Servicer, shall only have the obligation to make Advances if it
terminates a Servicer pursuant to Section 7.01 (in its role as successor Master
Servicer), and shall make such Advances only pursuant to Section 7.02. As
compensation therefor, the Trustee shall be entitled to receive the
compensation, reimbursement and indemnities otherwise payable to the Master
Servicer, including the fees and other amounts payable pursuant to Section 9.09
hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.05 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption of
such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.09 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee.
Section 9.10 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable Xxxxxx
Mae and Xxxxxxx Mac guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.11 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or a
successor master servicer satisfactory to the Trustee and the Depositor shall
have assumed, the Master Servicer's responsibilities and obligations under this
Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, Xxxxx Fargo Bank, N.A., as Master Servicer, resigns
under this Section 9.11, or is removed as Master Servicer pursuant to Section
9.06, then at such time Xxxxx Fargo Bank, N.A. shall also resign (and shall be
entitled to resign) as Securities Administrator under this Agreement.
Section 9.12 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the Trustee
and the Depositor of a letter from each Rating Agency to the effect that such
action shall not result in a downgrade of the ratings assigned to any of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof,
the duties of the Master Servicer are transferred to a successor master
servicer, the entire compensation payable to the Master Servicer pursuant hereto
shall thereafter be payable to such successor master servicer but in no event
shall the fee payable to the successor master servicer exceed that payable to
the predecessor master servicer.
Section 9.13 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer or
any such person against any liability that would otherwise be imposed by reason
of willful malfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard for its obligations and duties under this
Agreement. The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Master Servicer shall be under no obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties as Master Servicer
with respect to the Mortgage Loans under this Agreement and that in its opinion
may involve it in any expenses or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action that it may deem
necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom, shall be liabilities of the Trust, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Distribution Account in
accordance with the provisions of Section 9.09 and Section 9.14.
The Master Servicer shall not be liable for any acts or omissions of
the Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the performance of the obligations of the Servicer as required under this
Agreement.
Section 9.14 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Depositor, Securities Administrator, the
Trustee, and the Trust and hold them harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, liability, fees and expenses that the Depositor, the
Securities Administrator, the Trustee or the Trust may sustain as a result of
the Master Servicer's willful malfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement. The Depositor, Securities
Administrator and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans which would entitle the Depositor, the Securities Administrator, the
Trustee or the Trust to indemnification under this Section 9.14, whereupon the
Master Servicer shall assume the defense of any such claim and pay all expenses
in connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this Agreement
or (ii) the Master Servicer's willful malfeasance, bad faith or negligence or by
reason of its reckless disregard of its duties and obligations under this
Agreement; provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
the Securities Administrator shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securities Administrator, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer or the Trustee under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that in the event of a breach or
default by the Cap Provider under the related Cap Agreement, the
Securities Administrator shall pursue all legal remedies available against
the Cap Provider under the related Cap Agreement, in consultation with the
Depositor; provided, further, that the Securities Administrator may in its
discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Collection Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the transferor, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The Securities
Administrator shall not be accountable for the use or application by the
Depositor, the Trustee or the Master Servicer of any funds paid to the
Depositor, the Trustee or the Master Servicer in respect of the Mortgage Loans
or deposited in or withdrawn from the Collection Account by the Depositor, the
Trustee or the Master Servicer.
The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement. Each of the undertakings and agreements made
on the part of the Securities Administrator on behalf of the Trust Fund in the
Certificates is made and intended not as a personal undertaking or agreement by
the Securities Administrator but is made and intended for the purpose of binding
only the Trust Fund.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"), of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Securities Administrator's duties
hereunder, (ii) incurred in connection with the performance of any of the
Securities Administrator's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder or
(iii) incurred by reason of any action of the Securities Administrator taken at
the direction of the Certificateholders, provided that any such loss, liability
or expense constitutes an "unanticipated expense incurred by the REMIC" within
the meaning of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Securities Administrator hereunder. Without limiting the foregoing, and
except for any such expense, disbursement or advance as may arise from the
Securities Administrator's negligence, bad faith or willful misconduct, or which
would not be an "unanticipated expense" within the meaning of the second
preceding sentence, the Securities Administrator shall be reimbursed by the
Trust for all reasonable expenses, disbursements and advances incurred or made
by the Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account.
The Securities Administrator shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be
entitled to reimbursement therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator functions are operated through an
institutional trust department of the Securities Administrator, (ii) must be
authorized to exercise corporate trust powers under the laws of its jurisdiction
of organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a
Rating Agency, or the equivalent rating by Standard & Poor's or Xxxxx'x. If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 10.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor and the Trustee and each Rating Agency not less
than 60 days before the date specified in such notice when, subject to Section
10.08, such resignation is to take effect, and acceptance by a successor
Securities Administrator in accordance with Section 10.08 meeting the
qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
If at any time, Xxxxx Fargo Bank, N.A., as Securities Administrator,
resigns under this Section 10.07, or is removed as Securities Administrator
pursuant to this Section 10.07, then at such time Xxxxx Fargo Bank, N.A. shall
also resign (and shall be entitled to resign) as Master Servicer under this
Agreement.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor and
to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Securities Administrator herein. The Depositor, the Trustee, the Master Servicer
and the predecessor Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Securities
Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor and the Trustee.
If, pursuant to any provision hereof, the duties of the Securities Administrator
are transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the fee
payable to the successor securities administrator exceed that payable to the
predecessor securities administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicer, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) the purchase, on or after the Optional
Termination Date, by the Servicer in the aggregate of all Mortgage Loans (and
REO Properties) at the price (the "Termination Price") equal to the sum of (i)
100% of the unpaid principal balance of each Mortgage Loan (other than in
respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (ii) the lesser of (x) the appraised value of any REO
Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at its expense and (y) the
unpaid principal balance of each Mortgage Loan related to any REO Property, in
each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, (iii) all xxxxxxxxxxxx X&X Advances, Servicing Advances and
indemnification payments payable to the Servicer and (iv) any unreimbursed
indemnification payments payable to the Trustee under this Agreement and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase by the Servicer shall be permitted unless (i) after distribution of the
proceeds thereof to the Certificateholders (other than the Holders of the Class
X, Class P and Residual Certificates) pursuant to Section 11.02, the
distribution of the remaining proceeds to the Class X and Class P Certificates
is sufficient to pay the outstanding principal amount of and accrued and unpaid
interest on the NIM Securities, to the extent the NIM Securities are then
outstanding, or (ii) prior to such purchase, the Servicer remits to the
Securities Administrator an amount that, together with such remaining proceeds,
will be sufficient to pay the outstanding principal amount of, and accrued and
unpaid interest on, the NIM Securities, to the extent the NIM Securities are
then outstanding.
Section 11.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Securities Administrator
promptly to send a Notice of Final Distribution to each Certificateholder. If
the Servicer elects to exercise its option to purchase the Mortgage Loans
pursuant to clause (a) of Section 11.01, at least 20 days prior to the date the
Notice of Final Distribution is to be mailed to the affected Certificateholders,
the Servicer shall notify the Depositor and the Securities Administrator of (a)
the date on which the Servicer intends to exercise such purchase option and (b)
the Termination Price.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Master Servicer for deposit in the Distribution Account on the Business Day
prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Servicer the
Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicer, the Master
Servicer, the Securities Administrator, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the Notice of Final Distribution, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after such second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event the
Servicer exercises its purchase option with respect to the Mortgage Loans as
provided in Section 11.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 11.03 will not (i)
result in the imposition of taxes on "prohibited transactions" on either the
Lower Tier REMIC or the Upper Tier REMIC as defined in Section 860F of the Code
or (ii) cause either the Lower Tier REMIC or the Upper Tier REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall
sell all of the assets of the Trust Fund to the Servicer, and, within 90 days of
such sale, shall distribute to the Certificateholders the proceeds of such sale
in complete liquidation of each of the Lower Tier REMIC and the Upper Tier
REMIC; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Lower Tier REMIC and the Upper
Tier REMIC stating that pursuant to Treasury Regulations Section 1.860F-1, the
first day of the 90-day liquidation period for each such REMIC was the date on
which the Securities Administrator on behalf of the Trustee sold the assets of
the Trust Fund to the Servicer.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Mortgage Loan Seller, the Master Servicer, the
Servicer, the Securities Administrator and the Trustee, without the consent of
any of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to
correct any defective provision herein or to supplement any provision herein
which may be inconsistent with any other provision herein, (iii) to add to the
duties of the Depositor, the Master Servicer, the Servicer, the Securities
Administrator or the Trustee, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided,
that any action pursuant to clause (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
adversely affect in any material respect the interests of any Certificateholder;
provided, further, that any such action pursuant to clause (iv) or (v) above
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Master Servicer, the
Mortgage Loan Seller, the Servicer and the Securities Administrator also may at
any time and from time to time amend this Agreement, but without the consent of
the Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of the Lower Tier REMIC and the Upper Tier REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on the Lower Tier REMIC or the
Upper Tier REMIC pursuant to the Code that would be a claim at any time prior to
the final redemption of the Certificates or (iii) comply with any other
requirements of the Code; provided, that the Trustee and the Master Servicer
have been provided an Opinion of Counsel, which opinion shall be an expense of
the party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Servicer, the Mortgage Loan Seller, the
Securities Administrator and the Trustee, but with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66(2)/3%
of each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66(2)/3% or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement unless (i) it shall have first received an Opinion of Counsel, which
opinion shall not be an expense of the Trustee, the Master Servicer or the Trust
Fund, to the effect that such amendment will not cause the imposition of any tax
on either the Lower Tier REMIC or the Upper Tier REMIC or the Certificateholders
or cause any such REMIC to fail to qualify as a REMIC or the grantor trust to
fail to qualify as a grantor trust at any time that any Certificates are
outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the Trustee
and the Master Servicer) of such amendment, stating the provisions of the
Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
shall be deemed not to be outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
12.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Master
Servicer or the Securities Administrator to enter into an amendment without
receiving an Opinion of Counsel (which opinion shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
satisfactory to the Trustee, the Master Servicer and the Securities
Administrator, as applicable, that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 12.01.
Notwithstanding the foregoing, neither the Mortgage Loan Seller nor
New Century shall be required or permitted to enter into any amendment to this
Agreement unless the amendment would have a material and adverse effect on its
rights or obligations under this Agreement.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Servicer, the Master
Servicer, the Securities Administrator or the Trustee and the appointment
of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
and
2. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
(c) All directions, demands, consents and notices hereunder shall be
in writing and shall be deemed to have been duly given when delivered to: (i) in
the case of the Depositor, HSI Asset Securitization Corporation, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Head MBS Principal
Finance, or such other address as may be hereafter furnished to the other
parties by the Depositor in writing; (ii) in the case of JPMorgan, to JPMorgan
Chase Bank, N.A., in care of Chase Home Finance LLC, 00000 Xxxxxx Xxxxxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Dunks (with a copy to 000 Xxxx Xxxxxx
Xxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel), or such other
address as may be hereafter furnished to the other parties by JPMorgan in
writing; (iii) in the case of New Century, New Century Mortgage Corporation,
00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxxxxxxxx 00000, Attention: General
Counsel, or such other address as may be hereafter furnished to the other
parties by New Century in writing; (iv) in the case of the Mortgage Loan Seller,
NC Capital Corporation, 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx
00000, Attention: General Counsel, or such other address as may be hereafter
furnished to the other parties by the Mortgage Loan Seller in writing; (v) in
the case of Xxxxx Fargo, to Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx XX,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Client Service Manager HASCO 2005-NC1,
or such other address as may be hereafter furnished to the to the other parties
by Xxxxx Fargo in writing; (vi) in the case of the Trustee, to the Corporate
Trust Office, , or such other address as may be hereafter furnished to the to
the other parties by the Trustee in writing; and (vii) in the case of each of
the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency. Notices to Certificateholders
shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6.02, this Agreement may not be
assigned by the Servicer without the prior written consent of the Trustee and
Depositor; provided, however, that the Servicer may pledge its interest in any
reimbursements for P&I Advances or Servicing Advances hereunder.
Section 12.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor
or the Trustee during the Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of the Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 12.09 shall be
borne by the Servicer.
Section 12.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 12.11 Assignment; Sales; Advances Facilities. The Servicer
is hereby authorized to enter into an Advance Facility under which (1) the
Servicer sells, assigns or pledges to Advancing Person the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
and/or (2) an Advancing Person agrees to fund some or all P&I Advances and/or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Depositor, the Trustee, the Certificateholders or
any other party shall be required before the Servicer may enter into an Advance
Facility. The Servicer shall notify each other party to this Agreement prior to
or promptly after entering into or terminating any Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility. If the Servicer enters into an Advance Facility, and for so
long as an Advancing Person remains entitled to receive reimbursement for any
P&I Advances including Nonrecoverable Advances ("P&I Advance Reimbursement
Amounts") and/or Servicing Advances including Nonrecoverable Advances
("Servicing Advance Reimbursement Amounts" and together with P&I Advance
Reimbursement Amounts, "Advance Reimbursement Amounts") (in each case to the
extent such type of Advance Reimbursement Amount is included in the Advance
Facility), as applicable, pursuant to this Agreement, then the Servicer shall
identify such Advance Reimbursement Amounts consistent with the reimbursement
rights set forth in Section 3.11 and remit such Advance Reimbursement Amounts in
accordance with the documentation establishing the Advance Facility to such
Advancing Person or to a trustee, agent or custodian (an "Advance Facility
Trustee") designated by such Advancing Person. Notwithstanding anything to the
contrary herein, in no event shall Advance Reimbursement Amounts be included in
the Available Funds or distributed to Certificateholders.
Advance Reimbursement Amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer or the Advancing Person
had made the related P&I Advance(s) and/or Servicing Advance(s). Notwithstanding
the foregoing, except with respect to reimbursement of Nonrecoverable P&I
Advances as set forth in this Agreement, no Person shall be entitled to
reimbursement from funds held in the Collection Account for future distribution
to Certificateholders pursuant to this Agreement. None of the Depositor, the
Master Servicer, the Securities Administrator or the Trustee shall have any duty
or liability with respect to the calculation of any Advance Reimbursement
Amount, nor shall the Depositor, the Master Servicer, the Securities
Administrator or the Trustee have any responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the related Advancing Person or Advance Facility Trustee. The
Servicer shall maintain and provide to any successor Servicer and (upon request)
the Master Servicer a detailed accounting on a loan by loan basis as to amounts
advanced by, sold, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by the predecessor Servicer, and the successor Servicer shall not be
liable for any errors in such information. Any successor Servicer shall
reimburse the predecessor Servicer and itself for outstanding P&I Advances and
Servicing Advances, respectively, with respect to each Mortgagor Loan on a first
in, first out ("FIFO") basis; provided that the successor Servicer has received
prior written notice from the predecessor Servicer or the Advancing Person of
reimbursement amounts owed to the predecessor Servicer. Liquidation Proceeds
with respect to a Mortgage Loan shall be applied to reimburse P&I Advances
outstanding with respect to that Mortgage Loan before being applied to reimburse
Servicing Advances outstanding with respect to that Mortgage Loan.
An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for P&I Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding or purchase of P&I Advances
and/or Servicing Advances shall not be required to meet the criteria for
qualification of a Subservicer set forth in this Agreement.
Upon the direction and at the expense of the Servicer, the Master
Servicer shall execute such acknowledgments provided by the Servicer recognizing
the interests of any Advance Facility Trustee in such Advance Reimbursement
Amounts as the Servicer may cause to be made subject to Advance Facilities
pursuant to this Section 12.11. The Servicer shall indemnify and hold the Master
Servicer harmless for any claims from any persons arising from the Master
Servicer executing such acknowledgments at the Servicer's direction. The parties
hereto agree that the Master Servicer shall execute such acknowledgement solely
at the direction of the Servicer and shall not be required and shall not perform
any independent investigation in connection therewith.
The Servicer shall remain entitled to be reimbursed for all Advances
funded by the Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
The Servicer shall indemnify the Depositor, the Trustee, the Master
Servicer, the Securities Administrator, any successor servicer and the Trust
Fund for any loss, liability or damage resulting from any claim by the related
Advancing Person.
Any amendment to this Section 12.11 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 12.11, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Securities Administrator, the Master
Servicer and the Servicer without the consent of any Certificateholder,
notwithstanding anything to the contrary in this Agreement upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. All reasonable costs and expenses (including attorney's fees) of
each party hereto of any such amendment shall be borne solely by the Servicer.
Prior to entering into an Advance Facility, the Servicer shall notify the
Advancing Person in writing that: (a) the P&I Advances and/or Servicing Advances
purchased, financed by and/or pledged to the Advancing Person are obligations
owed to the Servicer on a non-recourse basis payable only from the cash flows
and proceeds received under this Agreement for reimbursement of P&I Advances
and/or Servicing Advances only to the extent provided herein, and the Master
Servicer, the Securities Administrator, the Trustee and the Trust are not
otherwise obligated or liable to repay any P&I Advances and/or Servicing
Advances financed by the Advancing Person and (b) none of the Master Servicer,
the Securities Administrator or the Trustee shall have any responsibility to
track or monitor the administration of the Advance Facility between the Servicer
and the Advancing Person.
Section 12.12 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 12.13 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor, the Trustee, Xxxxx Fargo,
JPMorgan, New Century and the Mortgage Loan Seller have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
HSI ASSET SECURITIZATION CORPORATION,
as Depositor
By /s/ Xxx X. Xxxxxxxx
--------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By:/s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
By:/s/ Hang Xxx
--------------------------------------
Name: Hang Xxx
Title: Authorized Signatory
XXXXX FARGO BANK, N.A., as Master
Servicer and Securities
Administrator
By:/s/ Xxx Xxxxx
--------------------------------------
Name: Xxx Xxxxx
Title: Vice President
JPMORGAN CHASE BANK, N.A., as Servicer
By:/s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
NEW CENTURY MORTGAGE CORPORATION, as
Servicer
By:/s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
NC CAPITAL CORPORATION, as Mortgage
Loan Seller
By:/s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to Trustee Upon Closing Date)
SCHEDULE II
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Representations and Warranties of JPMorgan Chase Bank, N.A., as Servicer
JPMorgan Chase Bank, N.A. ("JPMorgan") hereby makes the representations and
warranties set forth in this Schedule II to the Depositor and the Trustee, as of
the Closing Date.
(1) JPMorgan is a national banking association duly organized,
validly existing and in good standing under the federal laws of the United
States of America and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by JPMorgan in
any state in which a Mortgaged Property securing a Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service each Mortgage Loan in accordance
with the terms of this Agreement;
(2) JPMorgan has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of JPMorgan the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor,
the Mortgage Loan Seller, New Century, Xxxxx Fargo and the Trustee,
constitutes a legal, valid and binding obligation of JPMorgan, enforceable
against JPMorgan in accordance with its terms, except to the extent that
(a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Agreement by JPMorgan, the
servicing of the Mortgage Loans by JPMorgan hereunder, the consummation by
JPMorgan of any other of the transactions herein contemplated, and the
fulfillment of or compliance with the terms hereof are in the ordinary
course of business of JPMorgan and will not (A) result in a breach of any
term or provision of the organizational documents of JPMorgan or (B)
conflict with, result in a breach, violation or acceleration of, or result
in a default under, the terms of any other material agreement or
instrument to which JPMorgan is a party or by which it may be bound, or
any statute, order or regulation applicable to JPMorgan of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over JPMorgan; and JPMorgan is not a party to, bound by, or
in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to
JPMorgan's knowledge, would in the future materially and adversely affect,
(x) the ability of JPMorgan to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or assets of JPMorgan taken as a whole;
(4) JPMorgan is an approved seller/servicer for Xxxxxx Xxx and an
approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against JPMorgan that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of JPMorgan to service the Mortgage Loans
or to perform any of its other obligations hereunder in accordance with
the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by JPMorgan of, or compliance by JPMorgan with, this Agreement
or the consummation by JPMorgan of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained prior to the Closing Date;
(7) JPMorgan has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans; and
(8) With respect to each Mortgage Loan, to the extent JPMorgan
serviced such Mortgage Loan and to the extent JPMorgan provided monthly
reports to the three credit repositories, JPMorgan has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
SCHEDULE III
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Representations and Warranties of New Century Mortgage Corporation, as Servicer
New Century hereby makes the representations and warranties set
forth in this Schedule III to the Depositor and the Trustee, as of the Closing
Date.
(1) New Century is a Delaware limited partnership, validly
existing and in good standing under the laws of Delaware and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by New Century in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the extent
necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Agreement;
(2) New Century has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of New Century the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the
Depositor, the Mortgage Loan Seller, JPMorgan, Xxxxx Fargo and the
Trustee, constitutes a legal, valid and binding obligation of New Century,
enforceable against New Century in accordance with its terms, except to
the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Agreement by New Century,
the servicing of the Mortgage Loans by New Century hereunder, the
consummation by New Century of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of New Century and will not (A)
result in a breach of any term or provision of the organizational
documents of New Century or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any other material agreement or instrument to which New Century is a party
or by which it may be bound, or any statute, order or regulation
applicable to New Century of any court, regulatory body, administrative
agency or governmental body having jurisdiction over New Century; and New
Century is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to New Century's knowledge,
would in the future materially and adversely affect, (x) the ability of
New Century to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of New
Century taken as a whole;
(4) New Century is an approved seller/servicer for Xxxxxx Mae and
an approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against New Century that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of New Century to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance
with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by New Century of, or compliance by New Century with, this
Agreement or the consummation by New Century of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date;
(7) New Century covenants that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that New Century
can service the Mortgage Loans in accordance with the terms of this
Agreement; and
(8) With respect to each Mortgage Loan, to the extent New Century
serviced such Mortgage Loan and to the extent New Century provided monthly
reports to the three credit repositories, New Century has fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
SCHEDULE IV
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Representations and Warranties of the Mortgage Loan Seller
as to the Individual Mortgage Loans
The Mortgage Loan Seller hereby makes the representations and
warranties set forth in this Schedule IV as to the Mortgage Loans, to the
Depositor and the Trustee, as of the Closing Date or such other date as may be
specified below. Capitalized terms used but not otherwise defined in this
Agreement (including this Schedule IV) shall have the meanings ascribed thereto
in the Purchase Agreement.
(1) The information set forth in the related Mortgage Loan
Schedule is complete, true and correct in all material respects as of the
Closing Date, unless another date is set forth in the Mortgage Loan
Schedule;
(2) The Mortgage Loan is in compliance with all requirements set
forth in the related Confirmation, and the characteristics of the related
Mortgage Loan Package as set forth in the related Confirmation are true
and correct;
(3) All payments required to be made up to the close of business
on the Closing Date for such Mortgage Loan under the terms of the Mortgage
Note have been made; neither the Mortgage Loan Seller nor New Century has
advanced funds, or induced, solicited or knowingly received any advance of
funds from a party other than the owner of the related Mortgaged Property,
directly or indirectly, for the payment of any amount required by the
Mortgage Note or Mortgage (except for interest accruing from the date of
the Mortgage Note or the date of disbursement of the Mortgage proceeds,
whichever is greater, to the day which precedes by one month the Due Date
of the first installment of principal and interest); and there has been no
delinquency in excess of thirty (30) days, exclusive of any period of
grace, in any payment by the Mortgagor thereunder since the origination of
the Mortgage Loan;
(4) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;
(5) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded, or in the process of being recorded, in the
applicable public recording office if necessary to maintain the lien
priority of the Mortgage, and which have been delivered or will be
delivered to the Trustee on behalf of the Purchaser; the substance of any
such waiver, alteration or modification has been approved by the title
insurer, to the extent required by the related policy, and is reflected on
the related Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and
which assumption agreement has been delivered to the Custodian and the
terms of which are reflected in the related Mortgage Loan Schedule;
(6) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note and the Mortgage, or the exercise of any right thereunder,
render the Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(7) All buildings upon the Mortgaged Property are insured by an
insurer acceptable to Xxxxxx Xxx and Xxxxxxx Mac against loss by fire,
hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located, in an amount not less
than the greatest of (i) 100% of the replacement cost of all improvements
to the Mortgaged Property, (ii) either (A) the outstanding principal
balance of the Mortgage Loan with respect to each first lien Mortgage Loan
or (B) with respect to each second lien Mortgage Loan, the sum of the
outstanding principal balance of the related first lien mortgage loan and
the outstanding principal balance of the second lien Mortgage Loan, (iii)
the amount necessary to avoid the operation of any co-insurance provisions
with respect to the Mortgaged Property, or (iv) the amount necessary to
fully compensate for any damage or loss to the improvements that are a
part of such property on a replacement cost basis. All such insurance
policies contain a standard mortgagee clause naming New Century, its
successors and assigns as mortgagee and all premiums thereon have been
paid. If the Mortgaged Property is in an area identified on a Flood Hazard
Map or Flood Insurance Rate Map issued by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has been
made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to the requirements of the Underwriting Guidelines.
The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(8) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate
settlement procedures, predatory and abusive lending, consumer credit
protection, equal credit opportunity, fair housing or disclosure laws
applicable to the origination and servicing of mortgage loans of a type
similar to the Mortgage Loans have been complied with;
(9) The Mortgage has not been satisfied, cancelled, subordinated
or rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(10) The Mortgage (including any Negative Amortization which may
arise thereunder) is a valid, existing and enforceable first or second (as
indicated on the Mortgage Loan Schedule) lien on the Mortgaged Property,
including all improvements on the Mortgaged Property subject only to (a)
the lien of current real property taxes and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and which do not adversely affect
the Appraised Value of the Mortgaged Property, (c) to the extent the
Mortgage Loan is a second lien Mortgage Loan, the related first lien on
the Mortgaged Property; and (d) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, existing and enforceable first or second (as indicated on the
Mortgage Loan Schedule) lien and first or second (as indicated on the
Mortgage Loan Schedule) priority security interest on the property
described therein and the Mortgage Loan Seller has full right to sell and
assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed
of trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(11) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except only as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by law;
(12) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage
have been duly and properly executed by such parties. The Mortgagor is a
natural person;
(13) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage have been paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due to the Mortgagee
pursuant to the Mortgage Note or Mortgage;
(14) Immediately prior to the transfer and assignment of each
Mortgage Loan by the Mortgage Loan Seller to the Purchaser, the Mortgage
Loan Seller was the sole legal, beneficial and equitable owner of the
Mortgage Note and the Mortgage. The Mortgage Loan Seller has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest;
(15) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in
compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is
located;
(16) The Mortgage Loan is covered by an American Land Title
Association ("ALTA") lender's title insurance policy (which, in the case
of an Adjustable Rate Mortgage Loan has an adjustable rate mortgage
endorsement in the form of ALTA 6.0 or 6.1) issued by a title insurer
acceptable to the Underwriting Guidelines and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (x)(a) and (b) and with respect to
any second lien Mortgage Loan (c) above) the Mortgage Loan Seller, its
successors and assigns as to the first or second (as indicated on the
related Mortgage Loan Schedule) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan (including, if the Mortgage
Loan provides for amortization, the maximum amount of Negative
Amortization in accordance with the Mortgage) and, with respect to any
Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment in the Mortgage Rate and
Scheduled Payment and Negative Amortization provisions of the Mortgage
Note. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein.
New Century is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is in full force and effect and
will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related
Mortgage, including the Mortgage Loan Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;
(17) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and, to
Mortgage Loan Seller's or New Century's knowledge, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration, and the Mortgage Loan Seller has not waived any default,
breach, violation or event of acceleration. With respect to each second
lien Mortgage Loan (i) the first lien mortgage loan is in full force and
effect, (ii) there is no default, breach, violation or event of
acceleration existing under such first lien mortgage or the related
mortgage note, (iii) no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, (iv)
either (A) the first lien mortgage contains a provision which allows or
(B) applicable law requires, the mortgagee under the second lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the first lien
mortgage, (v) the related first lien does not provide for or permit
negative amortization under such first lien Mortgage Loan, and (vi) either
no consent for the Mortgage Loan is required by the holder of the first
lien or such consent has been obtained and is contained in the Mortgage
File;
(18) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with,
the lien of the related Mortgage;
(19) As of the date of origination of the Mortgage Loan, all
improvements which were considered in determining the Appraised Value of
the related Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no improvements
on adjoining properties encroach upon the Mortgaged Property;
(20) The Mortgage Loan was originated by New Century or by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD;
(21) Principal payments on the Mortgage Loan shall commence (with
respect to newly originated Mortgage Loans) or commenced no more than
sixty days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. With respect to each
Mortgage Loan which is not a Negative Amortization Loan, the Mortgage Note
is payable on the first day of each month in Scheduled Payments, which, in
the case of a Fixed Rate Mortgage Loans, are sufficient to fully amortize
the original principal balance over the original term thereof (other than
with respect to a Mortgage Loan identified on the related Mortgage Loan
Schedule as an interest-only Mortgage Loan during the interest-only period
or a Mortgage Loan which is identified on the related Mortgage Loan
Schedule as a Balloon Mortgage Loan) and to pay interest at the related
Mortgage Rate, and, in the case of an Adjustable Rate Mortgage Loan, are
changed on each Adjustment Date, and in any case, are sufficient to fully
amortize the original principal balance over the original term thereof
(other than with respect to a Mortgage Loan identified on the related
Mortgage Loan Schedule as an interest-only Mortgage Loan during the
interest-only period or a Mortgage Loan which is identified on the related
Mortgage Loan Schedule as a Balloon Mortgage Loan) and to pay interest at
the related Mortgage Rate. With respect to each Negative Amortization
Mortgage Loan, the related Mortgage Note requires a Scheduled Payment
which is sufficient during the period following each Payment Adjustment
Date, to fully amortize the outstanding principal balance as of the first
day of such period (including any Negative Amortization) over the then
remaining term of such Mortgage Note and to pay interest at the related
Mortgage Rate; provided, that the Scheduled Payment shall not increase to
an amount that exceeds 107.5% of the amount of the Scheduled Payment that
was due immediately prior to the Payment Adjustment Date; provided,
further, that the payment adjustment cap shall not be applicable with
respect to the adjustment made to the Scheduled Payment that occurs in a
year in which the Mortgage Loan has been outstanding for a multiple of 5
years and in any such year the Scheduled Payment shall be adjusted to
fully amortize the Mortgage Loan over the remaining term. With respect to
each Mortgage Loan identified on the Mortgage Loan Schedule as an
interest-only Mortgage Loan, the interest-only period shall not exceed ten
(10) years (or such other period specified on the Mortgage Loan Schedule)
and following the expiration of such interest-only period, the remaining
Scheduled Payments shall be sufficient to fully amortize the original
principal balance over the remaining term of the Mortgage Loan. With
respect to each Balloon Mortgage Loan, the Mortgage Note requires a
monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at
the related Mortgage Rate and requires a final Scheduled Payment
substantially greater than the preceding monthly payment which is
sufficient to repay the remained unpaid principal balance of the Balloon
Mortgage Loan as the Due Date of such monthly payment. The Index for each
Adjustable Rate Mortgage Loan is as defined in the related Confirmation.
No Mortgage Loan is a Convertible Mortgage Loan;
(22) The origination, servicing and collection practices used by
New Century with respect to each Mortgage Note and Mortgage including,
without limitation, the establishment, maintenance and servicing of the
Escrow Accounts and Escrow Payments, if any, since origination, have been
in all respects legal, proper, prudent and customary in the mortgage
origination and servicing industry. The Mortgage Loan has been serviced by
New Century and any predecessor servicer in accordance with the terms of
the Mortgage Note. With respect to escrow deposits and Escrow Payments
(other than with respect to each Mortgage Loan which is indicated by New
Century to be a second lien Mortgage Loan and for which the mortgagee
under the first lien is collecting Escrow Payments), if any, all such
payments are in the possession of, or under the control of, New Century
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due New Century
have been capitalized under any Mortgage or the related Mortgage Note and
no such escrow deposits or Escrow Payments are being held by New Century
for any work on a Mortgaged Property which has not been completed;
(23) The Mortgaged Property is free of material damage and waste
and there is no proceeding pending for the total or partial condemnation
thereof;
(24) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(b) otherwise by judicial or non-judicial foreclosure. The Mortgaged
Property has not been subject to any bankruptcy proceeding or foreclosure
proceeding and the Mortgagor has not filed for protection under applicable
bankruptcy laws. There is no homestead or other exemption available to the
Mortgagor which would materially interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and rights of redemption. The
Mortgagor has not notified the Mortgage Loan Seller and the Mortgage Loan
Seller has no knowledge of any relief requested by the Mortgagor under the
Servicemembers Civil Relief Act;
(25) The Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines in effect at the time the Mortgage Loan was
originated; and the Mortgage Note and Mortgage are on forms acceptable to
prudent mortgage lending institutions in the secondary market;
(26) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(27) The Mortgage File contains an appraisal of the related
Mortgaged Property which was on appraisal form 1004 or form 2055 with an
interior inspection and was made and signed, prior to the approval of the
Mortgage Loan application, by a qualified appraiser, duly appointed by the
Mortgage Loan Seller or New Century, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval
of the Mortgage Loan and who met the minimum qualifications of Xxxxxx Xxx
and Xxxxxxx Mac. Each appraisal of the Mortgage Loan was made in
accordance with the relevant provisions of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989;
(28) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(29) No Mortgage Loan contains provisions pursuant to which
Scheduled Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Mortgage Loan Seller, New Century,
the Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any
source other than the Mortgagor or (c) contains any other similar
provisions which may constitute a "buydown" provision. The Mortgage Loan
is not a graduated payment mortgage loan and the Mortgage Loan does not
have a shared appreciation or other contingent interest feature;
(30) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law
with respect to the making of fixed rate mortgage loans in the case of
Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the case
of Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans, and such statement is and will remain in the
Mortgage File;
(31) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating
the trade-in or exchange of a Mortgaged Property;
(32) Neither the Mortgage Loan Seller nor New Century has knowledge
of any circumstances or condition with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that
can reasonably be expected to cause the Mortgage Loan to be an
unacceptable investment, or cause the Mortgage Loan to become delinquent,
in each instance, taking into account the relative Underwriting Guidelines
applicable to the related Mortgagor;
(33) No Mortgage Loan had an LTV or CLTV at origination in excess
of 100%;
(34) As of the Closing Date, the Mortgaged Property is lawfully
occupied under applicable law; all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities;
(35) No error, omission, misrepresentation, gross negligence, fraud
or similar occurrence with respect to the origination, modification or
amendment of a Mortgage Loan has taken place on the part of any person,
including without limitation the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage
Loan;
(36) The Assignment of Mortgage is in recordable form, except for
the name of the assignee which is blank, and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(37) Any principal advances made to the Mortgagor after the date of
origination of the Mortgage Loan but prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having
first or second (as indicated on the Mortgage Loan Schedule) lien priority
by a title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx or Xxxxxxx Mac. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan plus any
Negative Amortization;
(38) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit
development project meets the eligibility requirements of the Underwriting
Guidelines;
(39) To the extent required by the Underwriting Guidelines, the
source of the down payment with respect to each Mortgage Loan has been
fully verified by the Mortgage Loan Seller or New Century;
(40) Interest on each Mortgage Loan is calculated on the basis of a
360 day year consisting of twelve 30-day months;
(41) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Mortgage Loan
Seller, New Century nor, to the Mortgage Loan Seller's or New Century's
knowledge, the related Mortgagor, has received any notice of any violation
or potential violation of such law;
(42) The Mortgage Loan Seller shall, at its own expense, cause each
Mortgage Loan to be covered by a Tax Service Contract which is assignable
to the Purchaser or its designee; provided however, that if the Mortgage
Loan Seller fails to purchase such Tax Service Contract, the Mortgage Loan
Seller shall be required to reimburse the Purchaser for all costs and
expenses incurred by the Purchaser in connection with the purchase of any
such Tax Service Contract;
(43) Each Mortgage Loan is covered by a Flood Zone Service Contract
which is assignable to the Purchaser or its designee or, for each Mortgage
Loan not covered by such Flood Zone Service Contract, the Mortgage Loan
Seller agrees to purchase such Flood Zone Service Contract;
(44) As of the Closing Date, no Mortgage Loan is (a) subject to the
provisions of the Homeownership and Equity Protection Act of 1994 as
amended ("HOEPA"), (b) a "high cost" mortgage loan, "covered" mortgage
loan, "high risk home" mortgage loan or "predatory" mortgage loan or any
other comparable term, no matter how defined under any federal, state or
local law, or (c) subject to any comparable federal, state or local
statutes or regulations, or any other statute or regulation providing for
heightened regulatory scrutiny or assignee liability to holders of such
mortgage loans, or (d) a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in the then applicable Standard & Poor's LEVELS(R)
Glossary Revised, Appendix E);
(45) No predatory, abusive or deceptive lending practices,
including but not limited to, the extension of credit to a Mortgagor
without regard for the Mortgagor's ability to repay the Mortgage Loan and
the extension of credit to a Mortgagor which has no apparent benefit to
the Mortgagor, were employed in connection with the origination of the
Mortgage Loan;
(46) The debt-to-income ratio of the related Mortgagor was not
greater than 55% at the origination of the related Mortgage Loan;
(47) No Mortgagor was required to purchase any credit insurance
product (e.g., life, mortgage, disability, accident, unemployment or
health insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit life, mortgage, disability, accident, unemployment or
health insurance product in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase
single premium credit insurance policies as part of the origination of, or
as a condition to closing, such Mortgage Loan;
(48) The Mortgage Loans were not selected from the outstanding one
to four-family mortgage loans in the Mortgage Loan Seller's portfolio at
the Closing Date as to which the representations and warranties set forth
in this Agreement could be made in a manner so as to affect adversely the
interests of the Purchaser;
(49) The Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder;
(50) The Mortgage Loan complies with all applicable consumer credit
statutes and regulations, including, without limitation, the respective
Uniform Consumer Credit Code laws in effect in Alabama, Colorado, Idaho,
Indiana, Iowa, Kansas, Maine, Oklahoma, South Carolina, Utah, West
Virginia and Wyoming, has been originated by a properly licensed entity,
and in all other respects, complies with all of the material requirements
of any such applicable laws;
(51) The information set forth in the Prepayment Charge Schedule is
complete, true and correct in all material respects and, subject to
applicable federal and state law, each Prepayment Charge is permissible,
enforceable and collectable;
(52) The Mortgage Loan was not prepaid in full prior to the Closing
Date and neither the Mortgage Loan Seller nor New Century has received
notification from a Mortgagor that a prepayment in full shall be made
after the Closing Date;
(53) No Mortgage Loan is secured by cooperative housing, commercial
property or mixed use property;
(54) Except as set forth on the related Mortgage Loan Schedule,
none of the Mortgage Loans are subject to a prepayment penalty. For any
Mortgage Loan originated prior to October 1, 2002 that is subject to a
prepayment penalty, such prepayment penalty does not extend beyond five
years after the date of origination. For any Mortgage Loan originated on
or following October 1, 2002 that is subject to a prepayment penalty, such
prepayment penalty does not extend beyond three years after the date of
origination. With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity:
(i) prior to the Mortgage Loan's origination, the Mortgagor agreed to such
premium in exchange for a monetary benefit, including but not limited to a
rate or fee reduction, (ii) prior to the Mortgage Loan's origination, the
Mortgagor was offered the option of obtaining a Mortgage Loan that did not
require payment of such a premium, (iii) the prepayment premium is
disclosed to the Mortgagor in the loan documents pursuant to applicable
state and federal law, and (iv) notwithstanding any state or federal law
to the contrary, New Century shall not impose such prepayment premium in
any instance when the mortgage debt is accelerated as the result of the
Mortgagor's default in making the loan payments;
(55) The Mortgage Loan Seller and New Century have complied with
all applicable anti-money laundering laws and regulations, including
without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Mortgage Loan Seller and New Century
have established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws, have conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for
purposes of the Anti-Money Laundering Laws, including with respect to the
legitimacy of the applicable Mortgagor and the origin of the assets used
by the said Mortgagor to purchase the property in question, and maintains,
and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. No Mortgage Loan
is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of the Treasury (the "OFAC
Regulations") or in violation of the Executive Order or the OFAC
Regulations, and no Mortgagor is subject to the provisions of such
Executive Order or the OFAC Regulations nor listed as a "blocked person"
for purposes of the OFAC Regulations;
(56) No Mortgagor was encouraged or required to select a Mortgage
Loan product offered by the Mortgage Loan Seller or New Century which is a
higher cost product designed for less creditworthy borrowers, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not
qualify taking into account credit history and debt to income ratios for a
lower cost credit product then offered by the Mortgage Loan Seller or any
affiliate of the Mortgage Loan Seller. If, at the time of loan
application, the Mortgagor may have qualified for a for a lower cost
credit product then offered by any mortgage lending affiliate of the
Mortgage Loan Seller, the Mortgage Loan Seller referred the Mortgagor's
application to such affiliate for underwriting consideration;
(57) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical principles which
relate the Mortgagor's income, assets, liabilities and/or credit history
to the proposed payment and such underwriting methodology does not rely on
the extent of the Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan;
(58) With respect to each Mortgage Loan, New Century has fully and
accurately furnished complete information on the related borrower credit
files to Equifax, Experian and Trans Union Credit Information Company, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, on a monthly basis and New Century for each Mortgage Loan
will furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on its
borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company, on a monthly basis;
(59) All points and fees related to each Mortgage Loan were
disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have
resulted in an unprofitable origination, no Mortgagor was charged "points
and fees" (whether or not financed) in an amount greater than 5% of the
principal amount of such Mortgage Loan, such 5% limitation is calculated
in accordance with Xxxxxx Mae's anti-predatory lending requirements as set
forth in the Xxxxxx Mae Guides. All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan were disclosed in writing to the related Mortgagor in
accordance with applicable state and federal laws and regulations;
(60) New Century will transmit full-file credit reporting data for
each Mortgage Loan and for each Mortgage Loan, New Century agrees it shall
report one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or
charged-off;
(61) No Mortgage Loan is a "manufactured housing loan" or "home
improvement home loan" pursuant to the New Jersey Home Ownership Act. No
Mortgage Loan is a "High-Cost Home Loan" or a refinanced "Covered Home
Loan," in each case, as defined in the New Jersey Home Ownership Act
effective November 27, 2003 (N.J.S.A. 46;10B-22 et seq.);
(62) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(63) No Mortgage Loan is secured by real property or secured by a
manufactured home located in the state of Georgia unless (x) such Mortgage
Loan was originated prior to October 1, 2002 or after March 6, 2003, or
(y) the property securing the Mortgage Loan is not, nor will be, occupied
by the Mortgagor as the Mortgagor's principal dwelling. No Mortgage Loan
is a "High Cost Home Loan" as defined in the Georgia Fair Lending Act, as
amended (the "Georgia Act"). Each Mortgage Loan that is a "Home Loan"
under the Georgia Act complies with all applicable provisions of the
Georgia Act. No Mortgage Loan secured by owner occupied real property or
an owner occupied manufactured home located in the State of Georgia was
originated (or modified) on or after October 1, 2002 through and including
March 6, 2003;
(64) No Mortgage Loan is a "High-Cost" loan as defined under the
New York Banking Law Section 6-1, effective as of April 1, 2003;
(65) No Mortgage Loan (a) is secured by property located in the
State of New York; (b) had an unpaid principal balance at origination of
$300,000 or less, and (c) has an application date on or after April 1,
2003, the terms of which Mortgage Loan equal or exceed either the APR or
the points and fees threshold for "high-cost home loans", as defined in
Section 6-1 of the New York State Banking Law;
(66) No Mortgage Loan is a "High Cost Home Loan" as defined in the
Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 or
2003);
(67) No Mortgage Loan is a "High Cost Home Loan" as defined in the
Kentucky high-cost loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(68) No Mortgage Loan secured by property located in the State of
Nevada is a "home loan" as defined in the Nevada Assembly Xxxx No. 284;
(69) No Mortgage Loan is a "manufactured housing loan" or "home
improvement home loan" pursuant to the New Jersey Home Ownership Act. No
Mortgage Loan is a "High-Cost Home Loan" or a refinanced "Covered Home
Loan," in each case, as defined in the New Jersey Home Ownership Act
effective November 27, 2003 (N.J.S.A. 46;10B-22 et seq.);
(70) No Mortgage Loan is a subsection 10 mortgage under the
Oklahoma Home Ownership and Equity protection Act;
(71) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat.
Xxx. xx.xx. 58-21A-1 et seq.);
(72) No Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp.
Stat. 137/1 et seq.);
(73) No Loan that is secured by property located within the State
of Maine meets the definition of a (i) "high-rate, high-fee" mortgage loan
under Article VIII, Title 9-A of the Maine Consumer Credit Code or (ii)
"High-Cost Home Loan" as defined under the Maine House Xxxx 383 X.X. 494,
effective as of September 13, 2003;
(74) With respect to any Mortgage Loan for which a mortgage loan
application was submitted by the Mortgagor after April 1, 2004, no such
Loan secured by Mortgaged Property in the State of Illinois which has a
Loan Interest Rate in excess of 8.0% per annum has lender-imposed fees (or
other charges) in excess of 3.0% of the original principal balance of the
Loan;
(75) No Mortgage Loan secured by a Mortgaged Property located in
the Commonwealth of Massachusetts was made to pay off or refinance an
existing loan or other debt of the related borrower (as the term
"borrower" is defined in the regulations promulgated by the Massachusetts
Secretary of State in connection with Massachusetts House Xxxx 4880
(2004)) unless either (1) (a) the related Mortgage Rate (that would be
effective once the introductory rate expires, with respect to Adjustable
Rate Mortgage Loans) did or would not exceed by more than 2.25% the yield
on United States Treasury securities having comparable periods of maturity
to the maturity of the related Mortgage Loan as of the fifteenth day of
the month immediately preceding the month in which the application for the
extension of credit was received by the related lender or (b) the Mortgage
Loan is an "open-end home loan" (as such term is used in the Massachusetts
House Xxxx 4880 (2004)) and the related Mortgage Note provides that the
related Mortgage Rate may not exceed at any time the Prime rate index as
published in The Wall Street Journal plus a margin of one percent, or (2)
such Mortgage Loan is in the "borrower's interest," as documented by a
"borrower's interest worksheet" for the particular Mortgage Loan, which
worksheet incorporates the factors set forth in Massachusetts House Xxxx
4880 (2004) and the regulations promulgated thereunder for determining
"borrower's interest," and otherwise complies in all material respects
with the laws of the Commonwealth of Massachusetts;
(76) No Loan is a "High Cost Home Loan" governed by the Indiana
Home Loan Practices Act, Ind. Code Xxx. xx.xx. 24-9-1-1 et seq.;
(77) The Mortgagor has not made or caused to be made any payment in
the nature of an "average" or "yield spread premium" to a mortgage broker
or a like Person which has not been fully disclosed to the Mortgagor;
(78) The sale or transfer of the Mortgage Loan by the Mortgage Loan
Seller complies with all applicable federal, state, and local laws, rules,
and regulations governing such sale or transfer, including, without
limitation, the Fair and Accurate Credit Transactions Act ("FACT Act") and
the Fair Credit Reporting Act, each as may be amended from time to time,
and the Mortgage Loan Seller has not received any actual or constructive
notice of any identity theft, fraud, or other misrepresentation in
connection with such Mortgage Loan or any party thereto;
(79) With respect to each MOM Loan, a MIN has been assigned by MERS
and such MIN is accurately provided on the Mortgage Loan Schedule. The
related Assignment of Mortgage to MERS has been duly and properly
recorded, or has been delivered for recording to the applicable recording
office;
(80) With respect to each MOM Loan, the Mortgage Loan Seller has
not received any notice of liens or legal actions with respect to such
Mortgage Loan and no such notices have been electronically posted by MERS;
(81) With respect to each Mortgage Loan, (i) if the related first
lien provides for negative amortization, the CLTV was calculated at the
maximum principal balance of such first lien that could result upon
application of such negative amortization feature, and (ii) either no
consent for the Mortgage Loan is required by the holder of the first lien
or such consent has been obtained and is contained in the Mortgage File;
(82) No Mortgagor was required to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction; and
(83) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of the Xxxxxx Mae Guides.
SCHEDULE V
Mortgage Pass-Through Certificates,
Series 2005-NC1
Representations and Warranties as to the Mortgage Loan Seller
The Mortgage Loan Seller hereby makes the representations and
warranties set forth in this Schedule V to the Depositor and the Trustee, as of
the Closing Date.
(1) The Mortgage Loan Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each
state wherein it owns or leases any material properties or where a
Mortgaged Property is located, if the laws of such state require licensing
or qualification in order to conduct business of the type conducted by the
Mortgage Loan Seller, and in any event the Mortgage Loan Seller is in
compliance with the laws of any such state to the extent necessary; the
Mortgage Loan Seller has the full corporate power, authority and legal
right to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement by
the Mortgage Loan Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
and all agreements contemplated hereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable
obligations of the Mortgage Loan Seller, regardless of whether such
enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Mortgage Loan Seller to
make this Agreement and all agreements contemplated hereby valid and
binding upon the Mortgage Loan Seller in accordance with their terms;
(2) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Agreement, will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Mortgage Loan Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Mortgage Loan
Seller is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Mortgage Loan Seller or its property is subject, or result in the
creation or imposition of any lien, charge or encumbrance that would have
an adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument;
(3) There is no action, suit, proceeding or investigation pending
or threatened against the Mortgage Loan Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in
the aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Mortgage Loan
Seller, or in any material impairment of the right or ability of the
Mortgage Loan Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Mortgage Loan
Seller, or which would draw into question the validity of this Agreement
or of any action taken or to be taken in connection with the obligations
of the Mortgage Loan Seller contemplated herein, or which would be likely
to impair materially the ability of the Mortgage Loan Seller to perform
under the terms of this Agreement; and
(4) No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental agency
or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Mortgage Loan Seller of or compliance by
the Mortgage Loan Seller with this Agreement or the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date.
EXHIBIT A
[To be added to the Class M-12 Certificates, Class M-13 Certificates and the
Class M-14 Certificates while such Certificates remain Private Certificates.] IF
THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO
THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN
THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE
FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
[To be added to the Class M-13 and Class M-14 Certificates: NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE
DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR
LAW AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE SERVICER TO ANY OBLIGATION IN ADDITION
TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No: I-A-1-[ ]
I-A-2-[ ]
II-A-1-[ ]
II-A-2-[ ]
II-A-3-[ ]
II-A-4-[ ]
M-1-[ ]
M-2-[ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
M-7-[ ]
M-8-[ ]
M-9-[ ]
M-10-[ ]
M-11[ ]
M-12-[ ]
M-13-[ ]
M-14-[ ]
Cut-off Date: August 1, 2005
First Distribution Date: September 26, 2005
Initial Certificate Balance
of this Certificate
("Denomination"): $[ ]
Initial Certificate
Balances of all
Certificates of this Class: [I-A-1] $181,669,000
[I-A-2] $10,248,000
[II-A-1] $162,565,000
[II-A-2] $123,256,000
[II-A-3] $25,210,000
[II-A-4] $17,545,000
[M-1] $18,318,000
[M-2] $13,265,000
[M-3] $12,001,000
[M-4] $10,422,000
[M-5] $9,475,000
[M-6] $8,211,000
[M-7] $7,264,000
[M-8] $3,790,000
[M-9] $3,159,000
[M-10] $6,000,000
[M-11] $4,421,000
[M-12] $5,053,000
[M-13] $5,053,000
[M-14] $4,741,891
CUSIP: [I-A-1] 40430H AA 6
[I-A-2] 40430H AB 4
[II-A-1] 40430H AC 2
[II-A-2] 40430H AD 0
[II-A-3] 40430H AE 8
[II-A-4] 40430H AF 5
[M-1] 40430H AG 3
[M-2] 40430H AH 1
[M-3] 40430H AJ 7
[M-4] 40430H AK 4
[M-5] 40430H AL 2
[M-6] 40430H AM 0
[M-7] 40430H AP 3
[M-8] 40430H AQ 1
[M-9] 40430H AR 9
[M-10] 40430H AS 7
[M-11] 40430H AT 5
[M-12] 40430H AU 2
[M-13] 40430H AV 0
[M-14] 40430H AW 8
ISIN: [I-A-1] US40430HAA68
[I-A-2] US40430HAB42
[II-A-1] US40430HAC25
[II-A-2] US40430HAD08
[II-A-3] US40430HAE80
[II-A-4] US40430HAF55
[M-1] US40430HAG39
[M-2] US40430HAH12
[M-3] US40430HAJ77
[M-4] US40430HAK41
[M-5] US40430HAL24
[M-6] US40430HAM07
[M-7] US40430HAP38
[M-8] US40430HAQ11
[M-9] US40430HAR93
[M-10] US40430HAS76
[M-11] US40430HAT59
[M-12] US40430HAU23
[M-13] US40430HAV06
[M-14] US40430HAW88
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
[Class A-][Class M-]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among HSI Asset Securitization
Corporation, as depositor (the "Depositor"), JPMorgan Chase Bank, N.A., as
servicer ("JPMorgan"), New Century Mortgage Corporation, as interim servicer, NC
Capital Corporation, as mortgage loan seller, Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator (the "Securities Administrator"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.,
not in its individual capacity, but
solely as
Securities Administrator
By: __________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
HSI ASSET SECURITIZATION CORPORATION TRUST
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Depositor, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Cut-off Date Pool
Principal Balance, JPMorgan will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number __________, or, if mailed by check, to________________________.
Applicable statements should be mailed to ___________________________________,
______________________________________________________________________________
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, STATING THAT
SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : P-1
Cut-off Date : August 1, 2005
First Distribution Date : September 26, 2005
Percentage Interest of
this Certificate
("Denomination") : [___]%
CUSIP : 40430H AY 4
ISIN : US40430HAY45
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [__________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among HSI Asset Securitization
Corporation, as depositor (the "Depositor"), JPMorgan Chase Bank, N.A., as
servicer ("JPMorgan"), New Century Mortgage Corporation, as interim servicer, NC
Capital Corporation, as mortgage loan seller, Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator (the "Securities Administrator"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have an Interest Rate and will be entitled
to distributions only to the extent set forth in the Agreement. In addition, any
distribution of the proceeds of any remaining assets of the Trust will be made
only upon presentment and surrender of this Certificate at the offices
designated by the Securities Administrator for such purpose, or such other
location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Securities Administrator that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.,
not in its individual capacity, but
solely as
Securities Administrator
By: __________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Depositor, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Cut-off Date Pool
Principal Balance, JPMorgan will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number __________, or, if mailed by check, to________________________.
Applicable statements should be mailed to ___________________________________,
______________________________________________________________________________
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : August 1, 2005
First Distribution Date : September 26, 2005
Percentage Interest of :
this Certificate
("Denomination") 100%
CUSIP : 40430H AZ 1
ISN : US40430HAZ10
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Class R
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [__________________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among HSI Asset
Securitization Corporation, as depositor (the "Depositor"), JPMorgan Chase Bank,
N.A., as servicer ("JPMorgan"), New Century Mortgage Corporation, as servicer,
NC Capital Corporation, as mortgage loan seller, Xxxxx Fargo Bank, N.A., as
master servicer and securities administrator (the "Securities Administrator"),
and Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purpose, or such other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Depositor, the Master Servicer or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.,
not in its individual capacity, but
solely as
Securities Administrator
By: ___________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purpose, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Depositor, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Cut-off Date Pool
Principal Balance, JPMorgan will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number __________, or, if mailed by check, to________________________.
Applicable statements should be mailed to ___________________________________,
______________________________________________________________________________
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN
INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE
DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE SERVICER TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO
ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : August 1, 2005
First Distribution Date : September 26, 2005
Percentage Interest of this
Certificate ("Denomination") : [___]%
CUSIP : 40430H AX 6
ISIN : US40430HAX61
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
Class X
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [____________________] is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among HSI Asset
Securitization Corporation, as depositor (the "Depositor"), JPMorgan Chase Bank,
N.A., as servicer ("JPMorgan"), New Century Mortgage Corporation, as interim
servicer, NC Capital Corporation, as mortgage loan seller, Xxxxx Fargo Bank,
N.A., as master servicer and securities administrator (the "Securities
Administrator"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or an Interest
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purpose, or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Securities Administrator that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or Section 4975
of the Code or any materially similar provisions of applicable Federal, state or
local law ("Similar Law") or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator, or (ii) if the transferee is an insurance company,
a representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60, or (iii) in the case of a
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Depositor,
the Securities Administrator or the Servicer to any obligation in addition to
those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A.,
not in its individual capacity, but
solely as
Securities Administrator
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Depositor, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Cut-off Date Pool
Principal Balance, JPMorgan will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and all property acquired in respect
of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number __________, or, if mailed by check, to________________________.
Applicable statements should be mailed to ___________________________________,
______________________________________________________________________________
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
HSI Asset Securitization Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank, N.A.
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx XX
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of August 1, 2005, among
HSI Asset Securitization Corporation, as Depositor, JPMorgan Chase
Bank, N.A., as servicer, New Century Mortgage Corporation, as
interim servicer, NC Capital Corporation, as Mortgage Loan Seller,
Xxxxx Fargo Bank, N.A., as Master Servicer and as Securities
Administrator, and Deutsche Bank National Trust Company, as Trustee,
HSI Asset Securitization Corporation Trust, Series 2005-NC1
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name: _____________________________
Title: ____________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
HSI Asset Securitization Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank, N.A.
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx XX
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of August 1, 2005, among
HSI Asset Securitization Corporation, as Depositor, JPMorgan Chase
Bank, N.A., as servicer, New Century Mortgage Corporation, as
interim servicer, NC Capital Corporation, as Mortgage Loan Seller,
Xxxxx Fargo Bank, N.A., as Master Servicer and as Securities
Administrator, and Deutsche Bank National Trust Company, as Trustee,
HSI Asset Securitization Corporation Trust, Series 2005-NC1
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Mortgage Loan Seller has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable recording
office, a copy of the assignment of the Mortgage (excluding information to
be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (15),
(18) and (22) of the Data Tape Information accurately reflects information set
forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name: _____________________________
Title: ____________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates, Series 2005-NC1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Pooling and
Servicing Agreement, dated as of August 1, 2005, among HSI Asset Securitization
Corporation, as Depositor, JPMorgan Chase Bank, N.A., as servicer, New Century
Mortgage Corporation, as interim servicer, NC Capital Corporation, as Mortgage
Loan Seller, Xxxxx Fargo Bank, N.A., as Master Servicer and as Securities
Administrator, and Deutsche Bank National Trust Company, as Trustee. Capitalized
terms used, but not defined herein, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee for the benefit of the Depositor, the
Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that, among other things, such Transferee has no
actual knowledge that the Person to which the Transfer is to be made is a
Non-Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is not a Disqualified Non-U.S. Person as
defined in the Agreement.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
12. Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does not exceed the sum
of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of _______, 20__.
---------------------------------------
Print Name of Transferee
By:
------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
---------------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ___ day of _______, 20__.
---------------------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
HSI Asset Securitization Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Head MBS Principal Finance
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services - HASCO 2005-NC1
Re: HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, Series 2005-NC1, Class [__]
-------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
---------------------------------------
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
HSI Asset Securitization Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Head MBS Principal Finance
Xxxxx Fargo Bank, N.A.,
as Securities Administrator
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services - HASCO 2005-NC1
Re: HSI Asset Securitization Corporation Trust 2005-NC1 Mortgage
Pass-Through Certificates, Series 2005-NC1, Class [__]
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class I-A-1, Class
I-A-2, Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class M-10, Class M-11 or Class M-12 Certificate or we are not an employee
benefit plan that is subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a plan or arrangement that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, or a
plan subject to materially similar provisions of applicable federal, state or
local law, nor are we acting on behalf of any such plan or arrangement nor using
the assets of any such plan or arrangement to effect such acquisition or, with
respect to a Class M-13, Class M-14 or Class X Certificate, the purchaser is an
insurance company that is purchasing this certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $________(1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------------
Print Name of Transferee
By:____________________________________
Name:
Title:
Date: _________________________________
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended, and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
---------------------------------------
Print Name of Transferee
By:
------------------------------------
Name:
Title:
IF AN ADVISER:
---------------------------------------
Print Name of Buyer
Date:
` ----------------------------------
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: [____________]
Re: Pooling and Servicing Agreement, dated as of August 1, 2005, among
HSI Asset Securitization Corporation, as Depositor, JPMorgan Chase
Bank, N.A., as servicer, New Century Mortgage Corporation, as
interim servicer, NC Capital Corporation, as Mortgage Loan Seller,
Xxxxx Fargo Bank, N.A., as Master Servicer and as Securities
Administrator, and Deutsche Bank National Trust Company, as Trustee
In connection with the administration of the Mortgage Loans held by
you as the [Trustee] on behalf of the Certificateholders, we request the
release, and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Delivery Method (check one)
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to Collection Account as provided
in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SERVICER]
By:____________________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATION TRUST COMPANY
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The documents or instruments set forth as items (i) to (ix) in
Section 2.01(b) of the Agreement.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on Mortgagor.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property.
(j) Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Hazard insurance policy.
(o) Tax receipts, insurance premium receipts, ledger sheets,
payment history from date of origination, insurance claim files,
correspondence, current and historical computerized data files, and all
other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to
document the Mortgage Loan or to service the Mortgage Loan.
(p) Amortization schedule, if available.
(q) Payment history for Mortgage Loans that have been closed for
more than 90 days.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
HSI Asset Securitization Corporation Trust 2005-NC1
Mortgage Pass-Through Certificates
Series 2005-NC1
This Certification is being made pursuant to Section 8.12(c) of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") relating
to the above-referenced Series, among HSI Asset Securitization Corporation, as
Depositor, JPMorgan Chase Bank, N.A., as servicer ("JPMorgan"), New Century
Mortgage Corporation, as interim servicer ("New Century"), NC Capital
Corporation, as Mortgage Loan Seller, Xxxxx Fargo Bank, N.A., as Master Servicer
and as Securities Administrator, and Deutsche Bank National Trust Company, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K (the "Annual
Report"), and all reports on Form 8-K containing distribution
date reports (collectively with this Annual Report, the
"Reports") filed in respect of periods included in the year
covered by this Annual Report, of the Trust;
2. Based on my knowledge, the information in the Reports, taken
as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under
which such statements were made, not misleading as of the last
day of the period covered by this Annual Report;
3. Based on my knowledge, the servicing information required to
be provided to the Securities Administrator by the Master
Servicer under the Pooling and Servicing Agreement for
inclusion in the Reports is included in the Reports;
4. I am responsible for reviewing the activities performed by
[New Century] [JPMorgan] under the Pooling and Servicing
Agreement and based upon my knowledge and the annual
compliance review required under the Pooling and Servicing
Agreement, and except as disclosed in the Reports, [New
Century] [JPMorgan] has fulfilled its obligations under the
Pooling and Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating
to [New Century's] [JPMorgan's] compliance with the minimum
servicing standards based upon the report provided by an
independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure as set forth in the
Pooling and Servicing Agreement, that is included in the
Reports.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [New Century]
[JPMorgan].
Capitalized terms used but not defined herein have the meanings assigned
in the Pooling and Servicing Agreement among the Depositor, the Transferor, the
Master Servicer, the Trust Administrator, the Custodian and the Trustee.
---------------------------------------
[Signature]
Name:
----------------------------
Title:
---------------------------
EXHIBIT M
FORM OF BACK-UP CERTIFICATION
[JPMORGAN CHASE] [NEW CENTURY]
[Name and address of
master servicer]
Re: HSI Asset Securitization Corporation Trust 2005-NC1
[JPMorgan Chase] [New Century], as Servicer hereby certifies to the
Depositor, the Master Servicer, the Trustee and the Securities Administrator,
and each of their officers, directors and affiliates that:
1. To our knowledge, the information in the annual statement of
compliance, the annual independent public accountant's servicing report and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Master Servicer taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by such reports;
2. To our knowledge, the servicing information required to be provided to
the Master Servicer by the Servicer under the Pooling and Servicing Agreement
has been provided to the Master Servicer;
3. Based upon the review required by the Pooling and Servicing Agreement,
and except as disclosed in the annual statement of compliance or the annual
independent public accountant's servicing report, the Servicer has, as of the
last day of the period covered by such reports fulfilled the obligations of the
Servicer under the Pooling and Servicing Agreement; and
4. The Servicer has disclosed to the Master Servicer all significant
deficiencies relating to the Servicer's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar standard as set forth
in the Pooling Servicing Agreement.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling Servicing Agreement, dated as of August 1, 2005 (the
"Pooling and Servicing Agreement"), among HSI Asset Securitization Corporation,
as depositor (the "Depositor"), JPMorgan Chase Bank, N.A., as servicer, New
Century Mortgage Corporation, as interim servicer, NC Capital Corporation, as
mortgage loan seller, Xxxxx Fargo Bank, N.A., as master servicer (the "Master
Servicer") and as securities administrator (the "Securities Administrator"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee").
[JPMorgan Chase] [New Century],
as Servicer
By:____________________________________
Name:
Title:
Date:
EXHIBIT N-1
FORM OF MONTHLY REMITTANCE ADVICE
---------------------------------------------------------------------------------------
FIELD NAME DESCRIPTION FORMAT
---------------------------------------------------------------------------------------
INVNUM INVESTOR LOAN NUMBER Number no decimals
---------------------------------------------------------------------------------------
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
---------------------------------------------------------------------------------------
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL,
REQUIRED
---------------------------------------------------------------------------------------
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR Number two decimals
SCHEDULED/SCHEDULED ACTUAL PRINCIPAL
COLLECTED FOR ACTUAL/ACTUAL, REQUIRED, .00
IF NO COLLECTIONS
---------------------------------------------------------------------------------------
CURT1 CURTAILMENT 1 AMOUNT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MM-YY
---------------------------------------------------------------------------------------
CURTIADJ CURTAILMENT 1 ADJUSTMENT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
CURT2 CURTAILMENT 2 AMOUNT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
CURT2DATE CURTAILMENT 2 DATE, DD-MM-YY
BLANK IF NOT APPLICABLE
---------------------------------------------------------------------------------------
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
OTHPRIN OTHER PRINCIPAL, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
TOTREMIT TOTAL REMITTANCE AMOUNT, Number two decimals
.00 IF NOT APPLICABLE
---------------------------------------------------------------------------------------
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR Number two decimals
SCHEDULED/SCHEDULED
ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
---------------------------------------------------------------------------------------
ENDACTBAL ENDING TRIAL BALANCE Number two decimals
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
---------------------------------------------------------------------------------------
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID DD-MM-YY
INSTALLMENT
---------------------------------------------------------------------------------------
ACTCODE 60 IF PAIDOFF, BLANK IF NOT APPLICABLE Number no decimals
---------------------------------------------------------------------------------------
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MM-YY
---------------------------------------------------------------------------------------
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for
7.00%
---------------------------------------------------------------------------------------
SFRATE. SERVICING ADMINISTRATION FEE RATE, REQUIRED Number seven decimals
Example .0025000
for .25%
---------------------------------------------------------------------------------------
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for
6.75%
---------------------------------------------------------------------------------------
PIPMT P&I CONSTANT, REQUIRED .00 IF PAIDOFF Number two decimals
---------------------------------------------------------------------------------------
EXHIBIT N-2
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
1. Deal Identifier by Loan
2. SBO Loan Number
3. Loan Number
4. Investor Loan Number
5. Street Address
6. City
7. State
8. Zip Code
9. Original Loan Amount
10. Origination Date
11. First Payment Date
12. Current Loan Amount
13. Current Interest Rate
14. Current P&I Payment Amount
15. [Reserved]
16. [Reserved]
17. Next Rate Adjustment Date
18. Next Payment Adjustment Date
19. Loan Term
20. Loan Type
21. [Reserved]
22. Product Type
23. Property Type
24. Ownership Code
25. Actual Due Date
26. Delinquency Status
27. [Reserved]
28. FC Flag
29. Date Loan Reinstated
30. FC Suspended Date
31. Reason Suspended
32. FC Start Date (referral date)
33. Actual Notice of Intent Date
34. Actual First Legal Date
35. [Reserved]
36. Date F/C Sale Scheduled
37. Foreclosure Actual Sale Date
38. Actual Redemption End Date
39. Occupancy Status
40. Occupancy Status Date
41. Actual Eviction Start Date
42. Actual Eviction Complete Date
43. Loss Mit Workstation Status
44. Loss Mit Flag
45. Loss Mit Type
46. Loss Mit Start Date
47. Loss Mit Approval Date
48. Loss Mit Removal Date
49. REO Flag
50. Actual REO Start Date
51. REO List Date
52. REO List Price
53. Date REO Offer Received
54. Date REO Offer Accepted
55. REO Scheduled Close Date
56. REO Actual Closing Date
57. REO Net Sales proceeds
58. REO Sales Price
59. Paid Off Code
60. Paid in Full Date
61. MI Certificate Number
62. [Reserved]
63. [Reserved]
64. [Reserved]
65. [Reserved]
66. [Reserved]
67. [Reserved]
68. [Reserved]
69. [Reserved]
70. [Reserved]
71. [Reserved]
72. Actual Claim Filed Date
73. Actual Claim Amount Filed
74. Claim Amount Paid
75. Claim Funds Received Date
76. Realized Gain or Loss
77. BK Flag
78. Bankruptcy Chapter
79. Actual Bankruptcy Start Date
80. Actual Payment Plan Start Date
81. Actual Payment Plan End Date
82. Date POC Filed
83. Date Filed Relief/Dismissal
84. Relief/Dismissal Hearing Date
85. Date Relief/Dismissal Granted
86. Post Petition Due Date
87. Prepayment Flag
88. Prepayment Waived
89. Prepayment Premium Collected
90. Partial Prepayment Amount Collected
91. Prepayment Expiration Date
92. Origination Value Date
93. Origination Value Source
94. Original Value Amount
95. FC Valuation Amount
96. FC Valuation Source
97. FC Valuation Date
98. REO Value Source
99. REO Value(As-is)
100. REO Repaired Value
101. REO Value Date
102. Investor/Security Billing Date Sent
Table: Delinquency
Name Type Max Character Size
---- ---- ------------------
Servicer Loan # Number 10
Investor Loan # Number 10
Servicer Investor # Text 3
Borrower Name Text 20
Xxxxxxx Xxxx 00
Xxxxx Xxxx 0
Xxx Xxxx 5
Due Date Date/Time 8
Loan Type Text 8
BK Filed Date Date/Time 8
BK Chapter Text 6
BK Case Number Text 30 Maximum
Post Petition Due Date/Time 8
Motion for Relief Date/Time 8
Lift of Stay Date/Time 8
BK Discharge/Dismissal Date Date/Time 8
Loss Mit Approval Date Date/Time 8
Loss Mit Type Text 5
Loss Mit Code Number 2
Loss Mit Estimated Completion Date Date/Time 8
Loss Mit Actual Completion Date Date/Time 8
FC Approval Date Date/Time 8
File Referred to Attorney Date/Time 8
NOD Date/Time 8
Complaint Filed Date/Time 8
Scheduled Sale Date Date/Time 8
Actual Sale Date Date/Time 8
F/C Sale Amount Currency 8
Eviction Start Date Date/Time 8
Eviction Completed Date Date/Time 8
List Price Currency 8
List Date Date/Time 8
Accepted Offer Price Currency 8
Accepted Offer Date Date/Time 8
Estimated REO Closing Date Date/Time 8
Actual REO Sale Date Date/Time 8
Occupant Code Text 10
Property Condition Code Text 2
Property Inspection Date Date/Time 8
Property Value Date Date/Time 8
Current Property Value Currency 8
Repaired Property Value Currency 8
Current LTV Currency 8
FNMA Delinquent Status Code Text 2
FNMA Delinquent Reason Code Text 3
If applicable:
--------------
MI Cancellation Date Date/Time 8
MI Claim Filed Date Date/Time 8
MI Claim Amount Currency 8
MI Claim Reject Date Date/Time 8
MI Claim Resubmit Date Date/Time 8
MI Claim Paid Date Date/Time 8
MI Claim Amount Paid Currency 8
Pool Claim Filed Date Date/Time 8
Pool Claim Amount Currency 8
Pool Claim Reject Date Date/Time 8
Pool Claim Paid Date Date/Time 8
Pool Claim Amount Paid Currency 8
Pool Claim Resubmit Date Date/Time 8
FHA Part A Claim Filed Date Date/Time 8
FHA Part A Claim Amount Currency 8
FHA Part A Claim Paid Date Date/Time 8
FHA Part A Claim Paid Amount Currency 8
FHA Part B Claim Filed Date Date/Time 8
FHA Part B Claim Amount Currency 8
FHA Part B Claim Paid Date Date/Time 8
FHA Part B Claim Paid Amount Currency 8
VA Claim Filed Date Date/Time 8
VA Claim Paid Date Date/Time 8
VA Claim Paid Amount Currency 8
The Loss Mit Type field should show the approved Loss Mitigation
arrangement. The following are acceptable:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
[Master Servicer and Trust Administrator] will accept alternative Loss
Mitigation Types to those above, provided that they are consistent with industry
standards. If Loss Mitigation Types other than those above are used, the
Servicer must supply [Master Servicer and Trust Administrator] with a
description of each of the Loss Mitigation Types prior to sending the file.
The Occupant Code field should show the current status of the property.
The acceptable codes are:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of
the property. The acceptable codes are:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
The FNMA Delinquent Reason Code field should show the Reason for Default.
The following FNMA Delinquency Reason Codes to be used are below.
Delinquency Code Delinquency Description
---------------- -----------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
The FNMA Delinquent Status Code field should show the Status of Default.
The following FNMA Delinquency Status Codes to be used are below.
Status Code Status Description
----------- ------------------
09. Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
EXHIBIT N-3
FORM 332 REALIZED LOSS REPORT
XXXXX FARGO BANK, N.A.
Purpose
To provide the Servicer with a form for the calculation of any Realized
Loss (or gain) as a result of a Mortgage Loan having been foreclosed and
Liquidated.
Distribution
The Servicer will prepare the form in duplicate and send the original
together with evidence of conveyance of title and appropriate supporting
documentation to the Master Servicer with the Monthly Accounting Reports which
supports the Mortgage Loan's removal from the Mortgage Loan Activity Report. The
Servicer will retain the duplicate for its own records.
Due Date
With respect to any liquidated Mortgage Loan, the form will be submitted
to the Master Servicer no later than the date on which statements are due to the
Master Servicer under Section 4.02 of this Agreement (the "Statement Date") in
the month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation Instructions
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed.
3-7. Complete as necessary. All line entries must be supported by copies
of appropriate statements, vouchers, receipts, canceled checks,
etc., to document the expense. Entries not properly documented will
not be reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Stated Principal Balance of
the Mortgage Loan as calculated on a monthly basis.
9. The total of lines 1 through 8.