NOMURA HOME EQUITY LOAN, INC., Depositor NOMURA CREDIT & CAPITAL, INC., Sponsor OCWEN LOAN SERVICING, LLC, Servicer WELLS FARGO BANK, NATIONAL ASSOCIATION, Master Servicer and Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION Trustee
NOMURA
HOME EQUITY LOAN, INC.,
Depositor
NOMURA
CREDIT & CAPITAL, INC.,
Sponsor
OCWEN
LOAN SERVICING, LLC,
Servicer
XXXXX
FARGO BANK, NATIONAL ASSOCIATION,
Master
Servicer and Securities Administrator
and
HSBC
BANK
USA, NATIONAL ASSOCIATION
Trustee
Dated
as
of February 1, 2006
NOMURA
HOME EQUITY LOAN, INC.
ASSET-BACKED
CERTIFICATES, SERIES 2006-HE1
TABLE
OF CONTENTS
| Page | ||
|
ARTICLE
I
DEFINITIONS
|
7
|
|
|
Section
1.01
|
Defined
Terms.
|
7
|
|
Section
1.02
|
Allocation
of Certain Interest Shortfalls.
|
60
|
|
ARTICLE
II
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
|
61
|
|
|
Section
2.01
|
Conveyance
of Trust Fund.
|
61
|
|
Section
2.02
|
Acceptance
of the Mortgage Loans.
|
62
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Servicer and the Sponsor.
|
64
|
|
Section
2.04
|
Representations
and Warranties of the Depositor.
|
71
|
|
Section
2.05
|
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
72
|
|
Section
2.06
|
Issuance
of the REMIC I Regular Interests and the Class R
Certificates.
|
73
|
|
Section
2.07
|
Conveyance
of the REMIC I Regular Interests; Issuance and Conveyance of the
REMIC II
Regular Interests.
|
73
|
|
Section
2.08
|
Issuance
of Class R Certificates.
|
74
|
|
Section
2.09
|
Establishment
of Trust.
|
74
|
|
Section
2.10
|
Purpose
and Powers of the Trust.
|
74
|
|
ARTICLE
III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS;
ACCOUNTS
|
76
|
|
|
Section
3.01
|
The
Servicer to act as Servicer.
|
76
|
|
Section
3.02
|
Due-on-Sale
Clauses; Assumption Agreements.
|
77
|
|
Section
3.03
|
Subservicers.
|
79
|
|
Section
3.04
|
Documents,
Records and Funds in Possession of the Servicer To Be Held for
Trustee.
|
81
|
|
Section
3.05
|
Maintenance
of Hazard Insurance.
|
81
|
|
Section
3.06
|
Presentment
of Claims and Collection of Proceeds.
|
82
|
|
Section
3.07
|
Maintenance
of Insurance Policies.
|
83
|
|
Section
3.08
|
Reserved.
|
83
|
|
Section
3.09
|
Realization
Upon Defaulted Mortgage Loans; Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans.
|
83
|
|
Section
3.10
|
Servicing
Compensation.
|
85
|
|
Section
3.11
|
REO
Property.
|
86
|
|
Section
3.12
|
Liquidation
Reports.
|
86
|
|
Section
3.13
|
Annual
Statement as to Compliance.
|
86
|
|
Section
3.14
|
Assessments
of Compliance and Attestation Reports.
|
87
|
|
Section
3.15
|
Books
and Records.
|
90
|
|
Section
3.16
|
The
Trustee.
|
90
|
|
Section
3.17
|
REMIC-Related
Covenants.
|
91
|
|
Section
3.18
|
Annual
Xxxxxxxx-Xxxxx Certification; Additional Information.
|
91
|
-
i
-
|
Section
3.19
|
Release
of Mortgage Files.
|
93
|
|
Section
3.20
|
Documents,
Records and Funds in Possession of the Servicer to be held for
Trustee.
|
93
|
|
Section
3.21
|
Possession
of Certain Insurance Policies and Documents.
|
94
|
|
Section
3.22
|
[Reserved].
|
94
|
|
Section
3.23
|
UCC.
|
94
|
|
Section
3.24
|
Optional
Purchase of Defaulted Mortgage Loans.
|
94
|
|
Section
3.25
|
Obligations
of the Servicer Under Credit Risk Management Agreement.
|
95
|
|
Section
3.26
|
Collection
of Mortgage Loan Payments; Custodial Account.
|
95
|
|
Section
3.27
|
Permitted
Withdrawals From the Custodial Account.
|
97
|
|
Section
3.28
|
Reports
to Master Servicer.
|
99
|
|
Section
3.29
|
Collection
of Taxes; Assessments and Similar Items; Escrow Accounts.
|
100
|
|
Section
3.30
|
Adjustments
to Mortgage Rate and Scheduled Payment.
|
100
|
|
Section
3.31
|
Distribution
Account.
|
101
|
|
Section
3.32
|
Permitted
Withdrawals and Transfers from the Distribution Account.
|
102
|
|
Section
3.33
|
Duties
of the Credit Risk Manager; Termination.
|
103
|
|
Section
3.34
|
Limitation
Upon Liability of the Credit Risk Manager.
|
104
|
|
ARTICLE
IV
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
|
106
|
|
|
Section
4.01
|
The
Master Servicer.
|
106
|
|
Section
4.02
|
Monitoring
of the Servicer.
|
107
|
|
Section
4.03
|
Fidelity
Bond.
|
108
|
|
Section
4.04
|
Power
to Act; Procedures.
|
108
|
|
Section
4.05
|
Due-on-Sale
Clauses; Assumption Agreements.
|
109
|
|
Section
4.06
|
Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
|
109
|
|
Section
4.07
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
110
|
|
Section
4.08
|
Presentment
of Claims and Collection of Proceeds.
|
110
|
|
Section
4.09
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
111
|
|
Section
4.10
|
Trustee
to Retain Possession of Certain Insurance Policies and
Documents.
|
111
|
|
Section
4.11
|
Realization
Upon Defaulted Loans.
|
111
|
|
Section
4.12
|
Compensation
for the Master Servicer.
|
112
|
|
Section
4.13
|
REO
Property.
|
112
|
|
Section
4.14
|
Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
|
113
|
|
ARTICLE
V
ADVANCES AND DISTRIBUTIONS
|
114
|
|
|
Section
5.01
|
Advances;
Advance Facility.
|
114
|
|
Section
5.02
|
Compensating
Interest Payments.
|
118
|
|
Section
5.03
|
REMIC
Distributions.
|
118
|
|
Section
5.04
|
Distributions.
|
118
|
|
Section
5.05
|
Allocation
of Realized Losses.
|
128
|
|
Section
5.06
|
Monthly
Statements to Certificateholders.
|
130
|
|
Section
5.07
|
REMIC
Designations, REMIC I and REMIC II Allocations.
|
134
|
-
ii
-
|
Section
5.08
|
Prepayment
Charges.
|
136
|
|
Section
5.09
|
Class
P Certificate Account.
|
136
|
|
Section
5.10
|
Basis
Risk Shortfall Reserve Fund.
|
136
|
|
Section
5.11
|
Supplemental
Interest Trust.
|
137
|
|
Section
5.12
|
Tax
Treatment of Swap Payments and Swap Termination Payments.
|
140
|
|
Section
5.13
|
Reports
Filed with Securities and Exchange Commission.
|
140
|
|
ARTICLE
VI
THE CERTIFICATES
|
146
|
|
|
Section
6.01
|
The
Certificates.
|
146
|
|
Section
6.02
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
147
|
|
Section
6.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
154
|
|
Section
6.04
|
Persons
Deemed Owners.
|
154
|
|
Section
6.05
|
Access
to List of Certificateholders’ Names and Addresses.
|
155
|
|
Section
6.06
|
Book-Entry
Certificates.
|
155
|
|
Section
6.07
|
Notices
to Depository.
|
156
|
|
Section
6.08
|
Definitive
Certificates.
|
156
|
|
Section
6.09
|
Maintenance
of Office or Agency.
|
157
|
|
ARTICLE
VII
THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
|
158
|
|
|
Section
7.01
|
Liabilities
of the Depositor, the Servicer and the Master Servicer.
|
158
|
|
Section
7.02
|
Merger
or Consolidation of the Depositor, the Servicer or the Master
Servicer.
|
158
|
|
Section
7.03
|
Indemnification
of Depositor and the Servicer.
|
158
|
|
Section
7.04
|
Limitations
on Liability of the Depositor, the Securities Administrator, the
Master
Servicer, the Servicer and Others.
|
160
|
|
Section
7.05
|
Servicer
Not to Resign.
|
161
|
|
Section
7.06
|
Appointment
of Special Servicer; Termination of the Servicer.
|
162
|
|
Section
7.07
|
Limitation
on Resignation of the Master Servicer.
|
163
|
|
Section
7.08
|
Assignment
of Master Servicing.
|
163
|
|
Section
7.09
|
Rights
of the Depositor in Respect of the Servicer and the Master
Servicer.
|
163
|
|
ARTICLE
VIII
DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER
|
165
|
|
|
Section
8.01
|
Events
of Default.
|
165
|
|
Section
8.02
|
Master
Servicer to Act; Appointment of Successor.
|
169
|
|
Section
8.03
|
Notification
to Certificateholders.
|
171
|
|
Section
8.04
|
Waiver
of Servicer Defaults and Master Servicer Defaults.
|
171
|
|
ARTICLE
IX
CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
|
172
|
|
|
Section
9.01
|
Duties
of Trustee and Securities Administrator.
|
172
|
|
Section
9.02
|
Certain
Matters Affecting the Trustee and Securities
Administrator.
|
174
|
|
Section
9.03
|
Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
|
176
|
|
Section
9.04
|
Trustee
and Securities Administrator May Own Certificates.
|
176
|
|
Section
9.05
|
Fees
and Expenses of Trustee and Securities Administrator.
|
176
|
|
Section
9.06
|
Eligibility
Requirements for Trustee and Securities Administrator.
|
177
|
-
iii
-
|
Section
9.07
|
Resignation
and Removal of Trustee and Securities Administrator.
|
178
|
|
Section
9.08
|
Successor
Trustee or Securities Administrator.
|
179
|
|
Section
9.09
|
Merger
or Consolidation of Trustee or Securities Administrator.
|
180
|
|
Section
9.10
|
Appointment
of Co-Trustee or Separate Trustee.
|
180
|
|
Section
9.11
|
Appointment
of Office or Agency.
|
181
|
|
Section
9.12
|
Representations
and Warranties.
|
181
|
|
Section
9.13
|
Tax
Matters.
|
182
|
|
ARTICLE
X
TERMINATION
|
185
|
|
|
Section
10.01
|
Termination
upon Liquidation or Repurchase of all Mortgage Loans.
|
185
|
|
Section
10.02
|
Final
Distribution on the Certificates.
|
186
|
|
Section
10.03
|
Additional
Termination Requirements.
|
187
|
|
ARTICLE
XI
MISCELLANEOUS PROVISIONS
|
189
|
|
|
Section
11.01
|
Amendment.
|
189
|
|
Section
11.02
|
Recordation
of Agreement; Counterparts.
|
190
|
|
Section
11.03
|
Governing
Law.
|
190
|
|
Section
11.04
|
Intention
of Parties.
|
191
|
|
Section
11.05
|
Notices.
|
191
|
|
Section
11.06
|
Severability
of Provisions.
|
192
|
|
Section
11.07
|
Assignment.
|
193
|
|
Section
11.08
|
Limitation
on Rights of Certificateholders.
|
193
|
|
Section
11.09
|
Certificates
Nonassessable and Fully Paid.
|
193
|
|
Section
11.10
|
Third
Party Beneficiaries.
|
194
|
|
Section
11.11
|
Intention
of the Parties and Interpretation.
|
194
|
|
Section
11.12
|
Early
Termination of Swap Agreement.
|
194
|
-
iv
-
|
Exhibits
|
|
|
Exhibit
A-1
|
Form
of Class A-[1][2][3][4] Certificates
|
|
Exhibit
A-2
|
Form
of Class M-[1][2][3][4][5][6][7][8][9] Certificates
|
|
Exhibit
A-3
|
Form
of Class B-[1][2] Certificates
|
|
Exhibit
A-4
|
Form
of Class X Certificates
|
|
Exhibit
A-5
|
Form
of Class P Certificates
|
|
Exhibit
A-6
|
Form
of Class R Certificates
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C
|
Mortgage
Loan Purchase AGreement
|
|
Exhibit
D
|
Form
of Transfer Affidavit
|
|
Exhibit
E
|
Form
of Transferor Certificate
|
|
Exhibit
F
|
Form
of Investment Letter (Non-Rule 144A)
|
|
Exhibit
G
|
Form
of Rule 144A Investment Letter
|
|
Exhibit
H
|
Form
of Additional Disclosure Notification
|
|
Exhibit
I
|
DTC
Letter of Representations
|
|
Exhibit
J
|
Schedule
of Mortgage Loans with Lost Notes
|
|
Exhibit
K
|
Prepayment
Charge Schedule
|
|
Exhibit
L
|
Relevant
Servicing Criteria
|
|
Exhibit
M
|
Form
of Back-up Certification
|
|
Exhibit
N
|
Reporting
Responsibility
|
|
Exhibit
O
|
Appendix
E of the Standard & Poor's Glossary For File Format For LEVELS®
Version 5.6 Revised
|
|
Exhibit
P
|
Interest
Rate Swap Agreement
|
|
Exhibit
Q
|
Form
of Power of Attorney
|
|
Exhibit
X-1
|
Form
of Schedule of Default Loan Data
|
|
Exhibit
X-2
|
Form
of Schedule of Realized
Losses/Gains
|
-
v -
POOLING
AND SERVICING AGREEMENT, dated as of February 1, 2006, among NOMURA HOME EQUITY
LOAN, INC., a Delaware corporation, as depositor (the “Depositor”), NOMURA
CREDIT & CAPITAL, INC., a Delaware corporation, as seller (in such capacity,
the “Sponsor”), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”), OCWEN LOAN SERVICING, LLC, a
Delaware limited liability company, as servicer (the “Servicer”) and HSBC BANK,
USA, NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, but solely as trustee (the “Trustee”).
PRELIMINARY
STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
in return for the Certificates.
REMIC
I
As
provided herein, the Trustee will make an election to treat the segregated
pool
of assets consisting of the Trust Fund (exclusive of the Basis Risk Shortfall
Reserve Fund and, for the avoidance of doubt, the Supplemental Interest Trust
and the Swap Agreement) as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC I”. The Class R-I
Interest will represent the sole class of “residual interests” in REMIC I for
purposes of the REMIC Provisions.
The
following table irrevocably sets forth the designation, the Uncertificated
REMIC
I Pass-Through Rate, the initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC I Regular Interests. None
of the REMIC I Regular Interests will be certificated.
|
Designation
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Initial
Certificate
Principal Balance |
Assumed
Final
Maturity
Date(1)
|
||||
|
I
|
(2)
|
$
|
26,473,809.37
|
February
25, 2036
|
|||
|
I-1-A
|
(2)
|
$
|
7,813,000.00
|
February
25, 2036
|
|||
|
I-1-B
|
(2)
|
$
|
7,813,000.00
|
February
25, 2036
|
|||
|
I-2-A
|
(2)
|
$
|
8,568,000.00
|
February
25, 2036
|
|||
|
I-2-B
|
(2)
|
$
|
8,568,000.00
|
February
25, 2036
|
|||
|
I-3-A
|
(2)
|
$
|
9,294,500.00
|
February
25, 2036
|
|||
|
I-3-B
|
(2)
|
$
|
9,294,500.00
|
February
25, 2036
|
|||
|
I-4-A
|
(2)
|
$
|
9,991,000.00
|
February
25, 2036
|
|||
|
I-4-B
|
(2)
|
$
|
9,991,000.00
|
February
25, 2036
|
|||
|
I-5-A
|
(2)
|
$
|
10,655,000.00
|
February
25, 2036
|
|||
|
I-5-B
|
(2)
|
$
|
10,655,000.00
|
February
25, 2036
|
|||
|
I-6-A
|
(2)
|
$
|
11,273,500.00
|
February
25, 2036
|
|||
|
I-6-B
|
(2)
|
$
|
11,273,500.00
|
February
25, 2036
|
|||
|
I-7-A
|
(2)
|
$
|
11,840,500.00
|
February
25, 2036
|
|||
|
I-7-B
|
(2)
|
$
|
11,840,500.00
|
February
25, 2036
|
|||
|
I-8-A
|
(2)
|
$
|
12,089,500.00
|
February
25, 2036
|
|||
|
I-8-B
|
(2)
|
$
|
12,089,500.00
|
February
25, 2036
|
|||
|
I-9-A
|
(2)
|
$
|
11,775,000.00
|
February
25, 2036
|
|||
-
1 -
|
Designation
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Initial
Certificate
Principal Balance |
Assumed
Final
Maturity
Date(1)
|
||||
|
I-9-B
|
(2)
|
$
|
11,775,000.00
|
February
25, 2036
|
|||
|
I-10-A
|
(2)
|
$
|
11,435,000.00
|
|
February
25, 2036
|
||
|
I-10-B
|
(2)
|
$
|
11,435,000.00
|
February
25, 2036
|
|||
|
I-11-A
|
(2)
|
$
|
11,105,500.00
|
February
25, 2036
|
|||
|
I-11-B
|
(2)
|
$
|
11,105,500.00
|
February
25, 2036
|
|||
|
I-12-A
|
(2)
|
$
|
10,785,000.00
|
February
25, 2036
|
|||
|
I-12-B
|
(2)
|
$
|
10,785,000.00
|
February
25, 2036
|
|||
|
I-13-A
|
(2)
|
$
|
10,474,000.00
|
February
25, 2036
|
|||
|
I-13-B
|
(2)
|
$
|
10,474,000.00
|
February
25, 2036
|
|||
|
I-14-A
|
(2)
|
$
|
10,172,000.00
|
February
25, 2036
|
|||
|
I-14-B
|
(2)
|
$
|
10,172,000.00
|
February
25, 2036
|
|||
|
I-15-A
|
(2)
|
$
|
9,879,000.00
|
February
25, 2036
|
|||
|
I-15-B
|
(2)
|
$
|
9,879,000.00
|
February
25, 2036
|
|||
|
I-16-A
|
(2)
|
$
|
9,596,500.00
|
February
25, 2036
|
|||
|
I-16-B
|
(2)
|
$
|
9,596,500.00
|
February
25, 2036
|
|||
|
I-17-A
|
(2)
|
$
|
9,420,500.00
|
February
25, 2036
|
|||
|
I-17-B
|
(2)
|
$
|
9,420,500.00
|
February
25, 2036
|
|||
|
I-18-A
|
(2)
|
$
|
9,292,500.00
|
February
25, 2036
|
|||
|
I-18-B
|
(2)
|
$
|
9,292,500.00
|
February
25, 2036
|
|||
|
I-19-A
|
(2)
|
$
|
11,718,500.00
|
February
25, 2036
|
|||
|
I-19-B
|
(2)
|
$
|
11,718,500.00
|
February
25, 2036
|
|||
|
I-20-A
|
(2)
|
$
|
16,548,000.00
|
February
25, 2036
|
|||
|
I-20-B
|
(2)
|
$
|
16,548,000.00
|
February
25, 2036
|
|||
|
I-21-A
|
(2)
|
$
|
15,818,500.00
|
February
25, 2036
|
|||
|
I-21-B
|
(2)
|
$
|
15,818,500.00
|
February
25, 2036
|
|||
|
I-22-A
|
(2)
|
$
|
14,785,000.00
|
February
25, 2036
|
|||
|
I-22-B
|
(2)
|
$
|
14,785,000.00
|
February
25, 2036
|
|||
|
I-23-A
|
(2)
|
$
|
13,792,000.00
|
February
25, 2036
|
|||
|
I-23-B
|
(2)
|
$
|
13,792,000.00
|
February
25, 2036
|
|||
|
I-24-A
|
(2)
|
$
|
11,342,500.00
|
February
25, 2036
|
|||
|
I-24-B
|
(2)
|
$
|
11,342,500.00
|
February
25, 2036
|
|||
|
I-25-A
|
(2)
|
$
|
7,536,500.00
|
February
25, 2036
|
|||
|
I-25-B
|
(2)
|
$
|
7,536,500.00
|
February
25, 2036
|
|||
|
I-26-A
|
(2)
|
$
|
7,075,500.00
|
February
25, 2036
|
|||
|
I-26-B
|
(2)
|
$
|
7,075,500.00
|
February
25, 2036
|
|||
|
I-27-A
|
(2)
|
$
|
6,834,500.00
|
February
25, 2036
|
|||
|
I-27-B
|
(2)
|
$
|
6,834,500.00
|
February
25, 2036
|
|||
|
I-28-A
|
(2)
|
$
|
6,603,500.00
|
February
25, 2036
|
|||
|
I-28-B
|
(2)
|
$
|
6,603,500.00
|
February
25, 2036
|
|||
|
I-29-A
|
(2)
|
$
|
6,381,000.00
|
February
25, 2036
|
|||
|
I-29-B
|
(2)
|
$
|
6,381,000.00
|
February
25, 2036
|
|||
|
I-30-A
|
(2)
|
$
|
6,166,500.00
|
February
25, 2036
|
|||
|
I-30-B
|
(2)
|
$
|
6,166,500.00
|
February
25, 2036
|
|||
|
I-31-A
|
(2)
|
$
|
5,959,000.00
|
February
25, 2036
|
|||
|
I-31-B
|
(2)
|
$
|
5,959,000.00
|
February
25, 2036
|
|||
|
I-32-A
|
(2)
|
$
|
5,759,000.00
|
February
25, 2036
|
|||
|
I-32-B
|
(2)
|
$
|
5,759,000.00
|
February
25, 2036
|
|||
-
2 -
|
Designation
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Initial
Certificate
Principal Balance |
Assumed
Final
Maturity
Date(1)
|
||||
|
I-33-A
|
(2)
|
$
|
5,564,500.00
|
February
25, 2036
|
|||
|
I-33-B
|
(2)
|
$
|
5,564,500.00
|
|
February
25, 2036
|
||
|
I-34-A
|
(2)
|
$
|
5,377,500.00
|
February
25, 2036
|
|||
|
I-34-B
|
(2)
|
$
|
5,377,500.00
|
February
25, 2036
|
|||
|
I-35-A
|
(2)
|
$
|
5,196,500.00
|
February
25, 2036
|
|||
|
I-35-B
|
(2)
|
$
|
5,196,500.00
|
February
25, 2036
|
|||
|
I-36-A
|
(2)
|
$
|
5,022,500.00
|
February
25, 2036
|
|||
|
I-36-B
|
(2)
|
$
|
5,022,500.00
|
February
25, 2036
|
|||
|
I-37-A
|
(2)
|
$
|
3,743,500.00
|
February
25, 2036
|
|||
|
I-37-B
|
(2)
|
$
|
3,743,500.00
|
February
25, 2036
|
|||
|
I-38-A
|
(2)
|
$
|
4,288,500.00
|
February
25, 2036
|
|||
|
I-38-B
|
(2)
|
$
|
4,288,500.00
|
February
25, 2036
|
|||
|
I-39-A
|
(2)
|
$
|
4,145,000.00
|
February
25, 2036
|
|||
|
I-39-B
|
(2)
|
$
|
4,145,000.00
|
February
25, 2036
|
|||
|
I-40-A
|
(2)
|
$
|
4,006,500.00
|
February
25, 2036
|
|||
|
I-40-B
|
(2)
|
$
|
4,006,500.00
|
February
25, 2036
|
|||
|
I-41-A
|
(2)
|
$
|
3,872,000.00
|
February
25, 2036
|
|||
|
I-41-B
|
(2)
|
$
|
3,872,000.00
|
February
25, 2036
|
|||
|
I-42-A
|
(2)
|
$
|
3,742,500.00
|
February
25, 2036
|
|||
|
I-42-B
|
(2)
|
$
|
3,742,500.00
|
February
25, 2036
|
|||
|
I-43-A
|
(2)
|
$
|
3,617,500.00
|
February
25, 2036
|
|||
|
I-43-B
|
(2)
|
$
|
3,617,500.00
|
February
25, 2036
|
|||
|
I-44-A
|
(2)
|
$
|
3,496,500.00
|
February
25, 2036
|
|||
|
I-44-B
|
(2)
|
$
|
3,496,500.00
|
February
25, 2036
|
|||
|
I-45-A
|
(2)
|
$
|
3,380,000.00
|
February
25, 2036
|
|||
|
I-45-B
|
(2)
|
$
|
3,380,000.00
|
February
25, 2036
|
|||
|
I-46-A
|
(2)
|
$
|
3,266,500.00
|
February
25, 2036
|
|||
|
I-46-B
|
(2)
|
$
|
3,266,500.00
|
February
25, 2036
|
|||
|
I-47-A
|
(2)
|
$
|
3,158,000.00
|
February
25, 2036
|
|||
|
I-47-B
|
(2)
|
$
|
3,158,000.00
|
February
25, 2036
|
|||
|
I-48-A
|
(2)
|
$
|
3,052,500.00
|
February
25, 2036
|
|||
|
I-48-B
|
(2)
|
$
|
3,052,500.00
|
February
25, 2036
|
|||
|
I-49-A
|
(2)
|
$
|
2,951,000.00
|
February
25, 2036
|
|||
|
I-49-B
|
(2)
|
$
|
2,951,000.00
|
February
25, 2036
|
|||
|
I-50-A
|
(2)
|
$
|
2,852,500.00
|
February
25, 2036
|
|||
|
I-50-B
|
(2)
|
$
|
2,852,500.00
|
February
25, 2036
|
|||
|
I-51-A
|
(2)
|
$
|
2,757,500.00
|
February
25, 2036
|
|||
|
I-51-B
|
(2)
|
$
|
2,757,500.00
|
February
25, 2036
|
|||
|
I-52-A
|
(2)
|
$
|
2,665,500.00
|
February
25, 2036
|
|||
|
I-52-B
|
(2)
|
$
|
2,665,500.00
|
February
25, 2036
|
|||
|
I-53-A
|
(2)
|
$
|
2,577,500.00
|
February
25, 2036
|
|||
|
I-53-B
|
(2)
|
$
|
2,577,500.00
|
February
25, 2036
|
|||
|
I-54-A
|
(2)
|
$
|
2,491,000.00
|
February
25, 2036
|
|||
|
I-54-B
|
(2)
|
$
|
2,491,000.00
|
February
25, 2036
|
|||
|
I-55-A
|
(2)
|
$
|
2,418,500.00
|
February
25, 2036
|
|||
|
I-55-B
|
(2)
|
$
|
2,418,500.00
|
February
25, 2036
|
|||
|
I-56-A
|
(2)
|
$
|
2,340,000.00
|
February
25, 2036
|
|||
-
3 -
|
Designation
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Initial
Certificate
Principal Balance |
Assumed
Final
Maturity
Date(1)
|
||||
|
I-56-B
|
(2)
|
$
|
2,340,000.00
|
February
25, 2036
|
|||
|
I-57-A
|
(2)
|
$
|
2,262,000.00
|
February
25, 2036
|
|||
|
I-57-B
|
(2)
|
$
|
2,262,000.00
|
February
25, 2036
|
|||
|
I-58-A
|
(2)
|
$
|
2,187,000.00
|
February
25, 2036
|
|||
|
I-58-B
|
(2)
|
$
|
2,187,000.00
|
February
25, 2036
|
|||
|
I-59-A
|
(2)
|
$
|
64,662,500.00
|
February
25, 2036
|
|||
|
I-59-B
|
(2)
|
$
|
64,662,500.00
|
February
25, 2036
|
|||
|
P
|
(3)
|
$
|
100.00
|
February
25, 2036
|
|||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC I Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC I Pass-Through
Rate” herein.
|
|
(3)
|
The
REMIC I Regular Interest LT-P will not be entitled to distributions
of
interest.
|
-
4 -
REMIC
II
As
provided herein, the Trustee will make an election to treat the segregated
pool
of assets consisting of the REMIC I Regular Interest) for federal income tax
purposes, and such segregated pool of assets will be designated as “REMIC II.”
The R-II Interest will represent the sole class of “residual interests” in REMIC
II for purposes of the REMIC Provisions. The following table irrevocably sets
forth the designation, the Uncertificated REMIC II Pass-Through Rate, the
Initial Uncertificated Principal Balance, and for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for each of the REMIC II Regular Interests. None of the REMIC II
Regular Interests will be certificated.
|
Designation
|
Initial
Uncertificated
Principal
Balance
|
Uncertificated
REMIC
II
Pass-Through
Rate
|
Assumed
Final
Distribution Date(1) |
|||||||
|
LT-AA
|
$
|
960,619,333.18
|
(2)
|
February
25, 2036
|
||||||
|
LT-A1
|
$
|
5,004,270.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-A2
|
$
|
693,230.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-A3
|
$
|
1,341,080.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-A4
|
$
|
136,650.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M1
|
$
|
431,290.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M2
|
$
|
392,080.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M3
|
$
|
245,050.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M4
|
$
|
220,550.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M5
|
$
|
210,740.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M6
|
$
|
191,140.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M7
|
$
|
171,530.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M8
|
$
|
147,030.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-M9
|
$
|
117,620.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-B1
|
$
|
127,420.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-B2
|
$
|
107,820.00
|
(2)
|
February
25, 2036
|
||||||
|
LT-ZZ
|
$
|
10,066,976.19
|
(2)
|
February
25, 2036
|
||||||
|
LT-IO
|
(4)
|
(2)
|
February
25, 0000
|
|||||||
|
XX-X
|
$
|
100.00
|
(3)
|
February
25, 2036
|
||||||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC II Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC II Pass-Through
Rate” herein.
|
|
(3)
|
The
REMIC II Regular Interest LT-P will not be entitled to distributions
of
interest.
|
|
(4)
|
REMIC
II Regular Interest LT-IO will not have an Uncertificated Principal
Balance, but will accrue interest on its Uncertificated Notional
Amount,
as defined herein.
|
REMIC
III
As
provided herein, the Trustee will make an election to treat the segregated
pool
of assets consisting of the REMIC II Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC III”. The R-III Interest will represent the sole class of “residual
interests” in REMIC III for purposes of the REMIC Provisions. The following
table irrevocably sets forth the Class designation, Pass-Through Rate and
Initial Certificate Principal Balance for each Class of Certificates that
represents one or more of the “regular interests” in REMIC III created
hereunder:
-
5 -
|
Class
Designation
|
Initial
Certificate
Principal
Balance
|
Pass-Through
Rate
|
Assumed
Final
Distribution Date(1) |
|||||||
|
Class
A-1
|
$
|
500,427,000.00
|
Class
A-1 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
A-2
|
$
|
69,323,000.00
|
Class
A-2 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
A-3
|
$
|
134,108,000.00
|
Class
A-3 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
A-4
|
$
|
13,665,000.00
|
Class
A-4 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-1
|
$
|
43,129,000.00
|
Class
M-1 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-2
|
$
|
39,208,000.00
|
Class
M-2 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-3
|
$
|
24,505,000.00
|
Class
M-3 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-4
|
$
|
22,055,000.00
|
Class
M-4 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-5
|
$
|
21,074,000.00
|
Class
M-5 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-6
|
$
|
19,114,000.00
|
Class
M-6 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-7
|
$
|
17,153,000.00
|
Class
M-7 Pass-Through Rate
|
February
25, 2036
|
||||||
|
Class
M-8
|
$
|
14,703,000.00
|
Class
M-8 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
M-9
|
$
|
11,762,000.00
|
Class
M-9 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
B-1
|
$
|
12,742,000.00
|
Class
B-1 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
B-2
|
$
|
10,782,000.00
|
Class
B-2 Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
X(2)
|
$
|
26,473,809.37
|
Class
X Pass Through Rate
|
February
25, 2036
|
||||||
|
Class
P
|
$
|
100.00
|
N/A(3)
|
February
25, 2036
|
||||||
|
Class
IO Interest
|
(4)
|
(5)
|
February
25, 2036
|
|||||||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the second month following the maturity
date for
the Mortgage Loan with the latest maturity date has been designated
as the
“latest possible maturity date” for each Class of
Certificates.
|
|
(2)
|
The
Class X Certificates will not accrue interest on their Certificate
Principal Balance, but will accrue interest at the Class X Pass-Through
Rate on the Certificate Notional Balance of the Class X Certificates
outstanding from time to time which shall equal the aggregate of
the
Uncertificated Principal Balances of the REMIC II Regular Interests
(other
than REMIC II Regular Interest LT-P).
|
|
(3)
|
The
Class P Certificates will not be entitled to distributions of
interest.
|
|
(4)
|
For
federal income tax purposes, the Class IO Interest will not have
a
Pass-Through Rate, but will be entitled to 100% of the amounts distributed
on REMIC II Regular Interest LT-IO.
|
|
(5)
|
For
federal income tax purposes, the Class IO Interest will not have
an
Uncertificated Principal Balance, but will have a notional amount
equal to
the Uncertificated Notional Amount of REMIC II Regular Interest
IO.
|
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6 -
In
consideration of the mutual agreements herein contained, the Depositor, the
Servicer, the Master Servicer, the Securities Administrator, the Sponsor and
the
Trustee agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
In
addition to those terms defined in Section 1.02, whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted
Master Servicing Practices:
With
respect to any Mortgage Loan, as applicable, either (x) those customary mortgage
master servicing practices of prudent mortgage servicing institutions that
master service mortgage loans of the same type and quality as such Mortgage
Loan
in the jurisdiction where the related Mortgaged Property is located, to the
extent applicable to the Master Servicer (except in its capacity as successor
to
the Servicer), or (y) as provided in Section 3.01 hereof, but in no event
below the standard set forth in clause (x).
Accepted
Servicing Practices:
As
defined in Section 3.01.
Account:
Either
the Distribution Account or the Custodial Account.
Accrual
Period:
With
respect to the Senior Certificates, the Subordinate Certificates and the Class
X
Certificates and any Distribution Date, the period commencing on the immediately
preceding Distribution Date (or with respect to the first Accrual Period, the
Closing Date) and ending on the day immediately preceding the related
Distribution Date. All calculations of interest on the Senior Certificates
and
Subordinate Certificates will be based on a 360-day year and the actual number
of days elapsed in the related Accrual Period. All calculations of interest
on
the Class X Certificates, REMIC I Regular Interests and REMIC II Regular
Interests will be based on a 360-day year consisting of twelve 30-day
months.
Additional
Form 10-D Disclosure:
Has the
meaning set forth in Section 5.13(a) of this Agreement.
Additional
Form 10-K Disclosure:
Has the
meaning set forth in Section 5.13(d) of this Agreement.
Additional
Servicer:
Shall
mean each affiliate of each Servicer that Services any of the Mortgage Loans
and
each Person who is not an affiliate of any Servicer, who services 10% or more
of
the Mortgage Loans. For clarification purposes, the Master Servicer and the
Securities Administrator are Additional Servicers.
Adjustment
Date:
With
respect to each adjustable rate Mortgage Loan, the first day of the month in
which the Mortgage Rate of such Mortgage Loan changes pursuant to the related
Mortgage Note. The first Adjustment Date following the Cut-Off Date as to each
adjustable rate Mortgage Loan is set forth in the Loan Schedule.
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7 -
Advance:
An
advance of delinquent payments of principal or interest in respect of a Mortgage
Loan required to be made by the Servicer or by the Master Servicer pursuant
to
Section 5.01.
Advance
Facility:
As
defined in Section 5.01(b)(i).
Advance
Facility Notice:
As
defined in Section 5.01(b)(ii).
Advance
Financing Person:
As
defined in Section 5.01(b)(i).
Advance
Reimbursement Amount:
As
defined in Section 5.01(b)(ii).
Affected
Party:
As
defined in the Swap Agreement.
Aggregate
Loan Balance:
With
respect to the Mortgage Loans and any Distribution Date, the aggregate of the
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Due Period.
Agreement:
This
Pooling and Servicing Agreement and any and all amendments or supplements hereto
made in accordance with the terms herein.
Amounts
Held for Future Distribution:
As to
any Distribution Date, the aggregate amount held in the Servicer’s Custodial
Account at the close of business on the immediately preceding Determination
Date
on account of (i) all Scheduled Payments or portions thereof received in respect
of the Mortgage Loans due after the related Due Period and (ii) Principal
Prepayments and Liquidation Proceeds received in respect of the Mortgage Loans
after the last day of the related Prepayment Period.
Applied
Loss Amount:
With
respect to the Publicly Offered Certificates and the Class B Certificates and
any Distribution Date, the excess of the aggregate Certificate Principal Balance
of the Publicly Offered Certificates and the Class B Certificates over the
Aggregate Loan Balance of the Mortgage Loans after giving effect to all Realized
Losses incurred with respect to the Mortgage Loans during the related Due Period
and payments of principal to the Publicly Offered Certificates and Class B
Certificates on such Distribution Date.
Appraised
Value:
With
respect to any Mortgage Loan originated in connection with a refinancing, the
appraised value of the Mortgaged Property based upon the appraisal made at
the
time of such refinancing or, with respect to any other Mortgage Loan, the lesser
of (x) the appraised value of the Mortgaged Property based upon the appraisal
made by a fee appraiser at the time of the origination of the Mortgage Loan,
and
(y) the sales price of the Mortgaged Property at the time of such
origination.
Assumed
Final Distribution Date:
The
Distribution Date in February 2036.
Authorized
Servicer Representative:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name and facsimile signature appear on
a
list of servicing officers furnished to the Trustee and the Master Servicer
by
the Servicer on the Closing Date, as such list may from time to time be
amended.
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8 -
Available
Distribution Amount:
The sum
of the Interest Remittance Amount and Principal Remittance Amount, exclusive
of
amounts pursuant to Section 5.04.
Balloon
Mortgage Loan:
A
Mortgage Loan that provides for the payment of the unamortized principal balance
of such Mortgage Loan in a single payment, that is substantially greater than
the preceding monthly payment at the maturity of such Mortgage
Loan.
Balloon
Payment:
A
payment of the unamortized principal balance of a Mortgage Loan in a single
payment, that is substantially greater than the preceding Monthly Payment at
the
maturity of such Mortgage Loan.
Bankruptcy
Code:
Title
11 of the United States Code.
Basis
Risk Shortfall Reserve Fund:
The
segregated non-interest bearing trust account created and maintained by the
Securities Administrator pursuant to Section 5.10 hereof.
Basis
Risk Shortfall:
With
respect to any Class of Senior Certificates or Subordinate Certificates and
any
Distribution Date, the sum of (i) the excess, if any, of the related Current
Interest (calculated without regard to the Net Funds Cap) over the related
Current Interest (as it may have been limited by the Net Funds Cap) for the
applicable Distribution Date; (ii) any amount described in clause (i) remaining
unpaid from prior Distribution Dates; and (iii) interest on the amount in clause
(ii) for the related Accrual Period calculated on the basis of the lesser of
(x)
One Month LIBOR plus the applicable Certificate Margin and (y) the applicable
Maximum Interest Rate.
Book-Entry
Certificates:
Any of
the Certificates that shall be registered in the name of the Depository or
its
nominee, the ownership of which is reflected on the books of the Depository
or
on the books of a person maintaining an account with the Depository (directly,
as a “Depository Participant”, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in
Section 6.06). As of the Closing Date, each Class of Publicly Offered
Certificates constitutes a Class of Book-Entry Certificates.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a day on which banking
institutions in the State of New York, the State of Delaware, the State of
Maryland, the State of Minnesota, the State of Florida, the city in which any
Corporate Trust Office of the Securities Administrator is located or the States
in which the Servicer’s servicing operations are located are authorized or
obligated by law or executive order to be closed.
Carryforward
Interest:
With
respect to any Class of Publicly Offered Certificates and any Class of Class
B
Certificates and any Distribution Date, the sum of (i) the amount, if any,
by
which (x) the sum of (A) Current Interest for that Class of Certificates for
the
immediately preceding Distribution Date and (B) any unpaid Carryforward Interest
for such Class from previous Distribution Dates exceeds (y) the actual amount
distributed on such Class in respect of interest on the immediately preceding
Distribution Date and (ii) interest on such amount for the related Accrual
Period at the applicable Pass-Through Rate.
Certificate:
Any one
of the certificates of any Class executed and authenticated by the Securities
Administrator in substantially the forms attached hereto as Exhibits A-1 through
A-6.
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9 -
Certificate
Margin:
With
respect to each Distribution Date on or prior to the first possible Optional
Termination Date with respect to the Mortgage Loans, the Certificate Margins
for
the Class A-1, Class A-2, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class B-1
and
Class B-2 Certificates are 0.080%, 0.150%, 0.210%, 0.290%, 0.410%, 0.420%,
0.430%, 0.540%, 0.580%, 0.670%, 1.330%, 1.500%, 2.500%, 2.500%, and 2.500%,
respectively. With respect to each Distribution Date following the first
possible optional termination date with respect to the Mortgage Loans, the
Certificate Margins for the Class A-1, Class A-2, Class X-0, Xxxxx X-0, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class B-1 and Class B-2 Certificates are 0.160%, 0.300%, 0.420%,
0.580%, 0.615%, 0.630%, 0.645%, 0.810%, 0.870%, 1.005%, 1.995%, 2.250%, 3.750%,
3.750%, and 3.750%, respectively.
Certificate
Notional Balance:
With
respect to the Class X Certificates and any Distribution Date, the
Uncertificated Principal Balance of the REMIC II Regular Interests (other than
REMIC II Regular Interest LT-P) for such Distribution Date. As of the Closing
Date, the Certificate Notional Balance of the Class X Certificates is equal
to
$980,223,809.37.
Certificate
Owner:
With
respect to a Book-Entry Certificate, the Person that is the beneficial owner
of
such Book-Entry Certificate.
Certificate
Principal Balance:
As to
any Publicly Offered Certificate, Class B Certificate or Class P Certificate
and
as of any Distribution Date, the Initial Certificate Principal Balance of such
Certificate plus any Subsequent Recoveries added to the Certificate Principal
Balance pursuant to Section 5.05(f) less (i) the sum of (a) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to
Section 5.04 and (b) with respect to any Class of Subordinate Certificates,
any reductions in the Certificate Principal Balance of such Certificate deemed
to have occurred in connection with the allocations of Realized Losses, if
any,
plus (ii) with respect to the Subordinate Certificates, any Subsequent
Recoveries added to the Certificate Principal Balance of any such Certificate
pursuant to Section 5.05(d), in each case up to the amount of Applied Loss
Amounts but only to the extent that any such Applied Loss Amount has not been
paid to any Class of Certificates as a Deferred Amount. With respect to the
Class X Certificates and any date of determination, the excess, if any, of
(i)
the then Aggregate Loan Balance over (ii) the then aggregate Certificate
Principal Balance of the Publicly Offered Certificates and the Class B
Certificates. References herein to the Certificate Principal Balance of a Class
of Certificates shall mean the Certificate Principal Balances of all
Certificates in such Class.
Certificate
Register:
The
register maintained pursuant to Section 6.02.
Certificateholder
or Holder:
The
person in whose name a Certificate is registered in the Certificate Register
(initially, Cede & Co., as nominee for the Depository, in the case of any
Book-Entry Certificates).
Certification
Parties:
Has the
meaning set forth in Section 3.18 of this Agreement.
Certifying
Person:
Has the
meaning set forth in Section 3.18 of this Agreement.
Class:
All
Certificates bearing the same Class designation as set forth in
Section 6.01.
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Class
B Certificates:
The
Class B-1 Certificates and Class B-2 Certificates.
Class
B-1 Certificate:
Any
Certificate designated as a “Class B-1 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class B-1 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
B-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 2.500% or (B) after the first
possible Optional Termination Date, 3.750% and (ii) the Net Funds
Cap.
Class
B-1 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, will
be
the amount, if any, by which (x) the sum of (i) the Certificate Principal
Balances of the Senior Certificates and the Mezzanine Certificates, in each
case, after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class B-1 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i)
approximately 92.40% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as
of
the Cut-off Date.
Class
B-2 Certificate:
Any
Certificate designated as a “Class B-2 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class B-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
B-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 2.500% or (B) after the first
possible Optional Termination Date, 3.750% and (ii) the Net Funds
Cap.
Class
B-2 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, will
be
the amount, if any, by which (x) the sum of (i) the Certificate Principal
Balances of the Senior Certificates, the Mezzanine Certificates and the Class
B-1 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) approximately 94.60% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
Class
A-1 Certificate:
Any
Certificate designated as a “Class A-1 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-1 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
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11 -
Class
A-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.080% or (B) after the first
possible Optional Termination Date, 0.160% and (ii) the Net Funds
Cap.
Class
A-2 Certificate:
Any
Certificate designated as a “Class A-2 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.150% or (B) after the first
possible Optional Termination Date, 0.300% and (ii) the Net Funds
Cap.
Class
A-3 Certificate:
Any
Certificate designated as a “Class A-3 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-3 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-3 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.210% or (B) after the first
possible Optional Termination Date, 0.420% and (ii) the Net Funds
Cap.
Class
A-4 Certificate:
Any
Certificate designated as a “Class A-4 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-4 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-4 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.290% or (B) after the first
possible Optional Termination Date, 0.580% and (ii) the Net Funds
Cap.
Class
IO Distribution Amount:
As defined in Section 5.11 hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution
Date
shall equal the amount payable to the Supplemental Interest Trust on such
Distribution Date in excess of the amount payable on the Class IO Interest
on
such Distribution Date, all as further provided in Section 5.11
hereof.
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12 -
Class
IO Interest:
An
uncertificated interest in the Trust Fund held by the Trustee, evidencing a
REMIC Regular Interest in REMIC III for purposes of the REMIC
Provisions.
Class
M-1 Certificate:
Any
Certificate designated as a “Class M-1 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-1 Certificates as set forth herein and
(i) a REMIC Regular Interest in REMIC III, (ii) the right to receive the related
Basis Risk Shortfall and (iii) the obligation to pay any Class IO Distribution
Amount.
Class
M-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.410% or (B) after the first
possible Optional Termination Date, 0.615% and (ii) the Net Funds
Cap.
Class
M-1 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the Class
M-1 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 55.20% and (ii) the Aggregate Loan Balance
for
such Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate
Loan
Balance as of the Cut-off Date.
Class
M-2 Certificate:
Any
Certificate designated as a “Class M-2 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.420% or (B) after the first
possible Optional Termination Date, 0.630% and (ii) the Net Funds
Cap.
Class
M-2 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior Certificates and the Class M-1 Certificates, in each case, after
giving effect to payments on such Distribution Date and (ii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 63.20% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-3 Certificate:
Any
Certificate designated as a “Class M-3 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-3 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
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13 -
Class
M-3 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.430% or (B) after the first
possible Optional Termination Date, 0.645% and (ii) the Net Funds
Cap.
Class
M-3 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1 Certificates and Class M-2 Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 68.20%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-4 Certificate:
Any
Certificate designated as a “Class M-4 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-4 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-4 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.540% or (B) after the first
possible Optional Termination Date, 0.810% and (ii) the Net Funds
Cap.
Class
M-4 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2 and Class M-3 Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 72.70%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-5 Certificate:
Any
Certificate designated as a “Class M-5 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-5 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
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Class
M-5 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.580% or (B) after the first
possible Optional Termination Date, 0.870% and (ii) the Net Funds
Cap.
Class
M-5 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class X-0, Xxxxx X-0, Class M-3 and Class M-4 Certificates,
in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class M-5 Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of
(i)
77.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B)
the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the
Cut-off Date.
Class
M-6 Certificate:
Any
Certificate designated as a “Class M-6 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-6 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-6 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.670% or (B) after the first
possible Optional Termination Date, 1.005% and (ii) the Net Funds
Cap.
Class
M-6 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 80.90% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as
of
the Cut-off Date.
Class
M-7 Certificate:
Any
Certificate designated as a “Class M-7 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-7 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-7 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 1.330% or (B) after the first
possible Optional Termination Date, 1.995% and (ii) the Net Funds
Cap.
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15 -
Class
M-7 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class
M-6 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 84.40% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of the Cut-off Date.
Class
M-8 Certificate:
Any
Certificate designated as a “Class M-8 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-8 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-8 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 1.500% or (B) after the first
possible Optional Termination Date, 2.250% and (ii) the Net Funds
Cap.
Class
M-8 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6
and Class M-7 Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the Class
M-8 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 87.40% and (ii) the Aggregate Loan Balance
for
such Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate
Loan
Balance as of the Cut-off Date.
Class
M-9 Certificate:
Any
Certificate designated as a “Class M-9 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-9 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-9 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 2.500% or (B) after the first
possible Optional Termination Date, 3.750% and (ii) the Net Funds
Cap.
Class
M-9 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6,
Class M-7 and Class M-8 Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Certificate Principal Balance
of
the Class M-9 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) 93.50% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
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16 -
Class
P Certificate:
Any
Certificate designated as a “Class P Certificate” on the face thereof, in the
form of Exhibit A-5 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class P Certificates as set forth herein and
evidencing (i)
a
REMIC Regular Interest in REMIC III, (ii) the right to receive the related
Basis
Risk Shortfall and (iii) the obligation to pay any Class IO Distribution
Amount.
Class
P Certificate Account:
The
Eligible Account established and maintained by the Securities Administrator
pursuant to Section 5.09.
Class
R Certificate:
Any
Certificate designated as a “Class R” Certificate on the face thereof in the
form of Exhibit A-6 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class R Certificates as set forth herein and
evidencing the Class R-I Interest, Class R-II Interest and Class R-III
Interest.
Class
R-I Interest:
The
uncertificated residual interest in REMIC I.
Class
R-II Interest:
The
uncertificated residual interest in REMIC II.
Class
R-III Interest:
The
uncertificated residual interest in REMIC III.
Class
X Certificate:
Any
Certificate designated as a “Class X Certificate” on the face thereof, in the
form of Exhibit A-4 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class X Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
X Distribution Amount:
With
respect to any Distribution Date and the Class X Certificates, the sum of (i)
the Current Interest and Carryforward Interest and (ii) any
Overcollateralization Release Amount for such Distribution Date remaining after
payments pursuant to items 1 through 25 of Section 5.04(iii); provided,
however that on and after the Distribution Date on which the Certificate
Principal Balances of the Publicly Offered Certificates and the Class B
Certificates have been reduced to zero, the Class X Distribution Amount shall
include the Overcollateralization Amount.
Class
X Pass-Through Rate:
On any
Distribution Date, a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated pursuant
to clauses (A) through (Q) below, and the denominator of which is the aggregate
of the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA,
REMIC II Regular Interest LT-A1, REMIC II Regular Interest LT-A2, REMIC II
Regular Interest LT-A3, REMIC II Regular Interest LT-A4, REMIC II Regular
Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest
LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC
II Regular Interest LT-M6, REMIC II Regular Interest LT-M7, REMIC II Regular
Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC II Regular Interest
LT-B1, REMIC II Regular Interest LT-B2 and REMIC II Regular Interest LT-ZZ.
For
purposes of calculating the Pass-Through Rate for the Class X Certificates,
the numerator is equal to the sum of the following components:
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17 -
(A) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-AA
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-AA;
(B) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-A1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A1;
(C) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-A2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A2;
(D) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Xxxxxxxx XX-X0,
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A3;
(E) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Xxxxxxxx XX-X0,
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A4;
(F) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M1;
(G) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M2;
(H) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M3;
(I) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M4
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M4;
(J) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M5
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M5; and
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18 -
(K) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M6
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M6;
(L) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M7
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M7;
(M) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M8
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M8;
(N) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M9
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M9;
(O) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-B1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-B1;
(P) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-B2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-B2; and
(Q) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-ZZ
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-ZZ.
Cleanup
Call:
As
defined in Section 10.01.
Closing
Date:
March
9, 2006.
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Combined
Loan-to-Value Ratio:
With
respect to any Mortgage Loan as of any Determination Date, the ratio on such
Determination Date of the Stated Principal Balance of the Mortgage Loan and
any
other mortgage loan which is secured by a lien on the related Mortgaged Property
to the Appraised Value of the Mortgaged Property.
Commission:
Shall
mean the United States Securities and Exchange Commission.
Compensating
Interest:
With
respect to any Distribution Date, an amount to be deposited in the Distribution
Account by the Servicer or the Master Servicer to offset a Prepayment Interest
Shortfall on a Mortgage Loan in accordance with this Agreement; provided,
however that the amount of Compensating Interest required to be paid in respect
of the Mortgage Loans shall not exceed the Servicing Fee payable to the Servicer
on such Distribution Date or, in the case of the Master Servicer, shall not
exceed the Master Servicing Compensation payable to the Master Servicer with
respect to the related Prepayment Period.
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19 -
Corporate
Trust Office:
The
principal corporate trust office of the Trustee which office at the date of
the
execution of this instrument is located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx
00000, Attention: Nomura Home Equity Loan, Inc., 2006-HE1 or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Servicer. The office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at Xxxxx
Fargo Bank, N.A., Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Corporate Trust Services - Client Manager (NHEL 2006-HE1),
and
for all other purposes is located at Xxxxx Xxxxx Xxxx, X.X., X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services - Client Manager
(NHEL 2006-HE1) (or for overnight deliveries, at 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services - Client Manager
(NHEL 2006-HE1)).
Corresponding
Certificate:
With
respect to:
|
(i)
|
REMIC
II Regular Xxxxxxxx XX-X0, the Class A-1 Certificates;
|
|
|
(ii)
|
REMIC
II Regular Interest LT-A2, the Class A-2 Certificates;
|
|
|
(iii)
|
REMIC
II Regular Xxxxxxxx XX-X0, the Class A-3 Certificates;
|
|
|
(iv)
|
REMIC
II Regular Interest LT-A4, the Class A-4 Certificates;
|
|
|
(v)
|
REMIC
II Regular Interest LT-M1, the Class M-1 Certificates;
|
|
|
(vi)
|
REMIC
II Regular Interest LT-M2, the Class M-2 Certificates;
|
|
|
(vii)
|
REMIC
II Regular Interest LT-M3, the Class M-3 Certificates;
|
|
|
(viii)
|
REMIC
II Regular Interest LT-M4, the Class M-4 Certificates;
|
|
|
(ix)
|
REMIC
II Regular Interest LT-M5, the Class M-5 Certificates;
|
|
|
(x)
|
REMIC
II Regular Interest LT-M6, the Class M-6 Certificates;
|
|
|
(xi)
|
REMIC
II Regular Interest LT-M7, the Class M-7 Certificates;
|
|
|
(xii)
|
REMIC
II Regular Interest LT-M8, the Class M-8 Certificates;
|
|
|
(xiii)
|
REMIC
II Regular Interest LT-M9, the Class M-9 Certificates;
|
|
|
(xiv)
|
REMIC
II Regular Interest LT-B1, the Class B-1 Certificates;
|
|
|
(xv)
|
REMIC
II Regular Interest LT-B2, the Class B-2 Certificates;
|
|
|
(xvi)
|
REMIC
II Regular Interest LT-P, the Class P
Certificates.
|
Credit
Risk Management Agreement:
Each of
the agreements between the Credit Risk Manager and the Servicer and/or Master
Servicer, dated as of March 9, 2006.
Credit
Risk Management Fee:
As to
each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of
the
Credit Risk Management Fee Rate multiplied by the Stated Principal Balance
of
such Mortgage Loan as of the last day of the related Due Period. The Credit
Risk
Management Fee shall be payable to the Credit Risk Manager and/or the Sponsor
pursuant to Section 3.32(a)(vii) and 3.33(b).
Credit
Risk Management Fee Rate:
0.005%
per annum.
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20 -
Credit
Risk Manager:
Portfolio Surveillance Analytics, LLC, a New York limited liability company,
and
its successors and assigns..
Current
Interest:
With
respect to any Class of Publicly Offered Certificates and Class B Certificates
and any Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Certificate Principal Balance during the
related Accrual Period; provided, that as to each Class of Publicly Offered
Certificates and Class B Certificates, the Current Interest will be reduced
by a
pro rata portion of any Net Interest Shortfalls to the extent not covered by
excess interest. No Current Interest will be payable with respect to any Class
of Publicly Offered Certificates or Class B certificate after the Distribution
Date on which the outstanding Certificate Principal Balance of such Certificate
has been reduced to zero.
Custodial
Account:
The
account established and maintained by the Servicer with respect to receipts
on
the Mortgage Loans and related REO Properties in accordance with
Section 3.26(b).
Custodial
Agreement:
The
Custodial Agreement dated as of February 1, 2006 among Xxxxx Fargo, in its
capacity as Custodian, the Servicer and the Trustee.
Custodian:
Xxxxx
Fargo Bank, N.A.
Cut-off
Date:
February 1, 2006.
Cut-off
Date Principal Balance:
As to
any Mortgage Loan, the unpaid principal balance thereof as of the close of
business on the Cut-off Date after application of all Principal Prepayments
received prior to the Cut-off Date and scheduled payments of principal due
on or
before the Cut-off Date, whether or not received, but without giving effect
to
any installments of principal received in respect of Due Dates after the Cut-off
Date.
DBRS:
Dominion Bond Rating Services.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a reduction
resulting from a Deficient Valuation or any other reduction that results in
a
permanent forgiveness of principal.
Defaulting
Party:
As
defined in the Swap Agreement.
Deferred
Amount:
With
respect to any Class of Subordinate Certificates and any Distribution Date,
the
amount by which (x) the aggregate of the Applied Loss Amounts previously applied
in reduction of the Certificate Principal Balance thereof exceeds (y) the
aggregate of amounts previously paid in reimbursement thereof and the amount
by
which the Certificate Principal Balance of any such Class has been increased
due
to the collection of Subsequent Recoveries.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation by a court of competent jurisdiction
of the Mortgaged Property in an amount less than the then outstanding
indebtedness under such Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that results
in a
permanent forgiveness of principal, which valuation or reduction results from
an
order of such court that is final and non-appealable in a proceeding under
the
Bankruptcy Code.
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21 -
Definitive
Certificates:
As
defined in Section 6.06.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by a Replacement Mortgage
Loan.
Delinquency
Rate:
With
respect to the Mortgage Loans and any calendar month will be, generally, the
fraction, expressed as a percentage, the numerator of which is the Aggregate
Loan Balance of all Mortgage Loans sixty (60) or more days delinquent (including
all Mortgage Loans in bankruptcy or foreclosure and all REO Properties) as
of
the close of business on the last day of such month, and the denominator of
which is the Aggregate Loan Balance of all Mortgage Loans as of the close of
the
last day of the related Due Period.
Delinquent:
A
Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to
the terms of such Mortgage Loan by the close of business on the day such payment
is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment
has not been received by the close of business on the corresponding day of
the
month immediately succeeding the month in which such payment was due, or, if
there is no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st day of such month), then
on
the last day of such immediately succeeding month. Similarly for “60 days
delinquent,” “90 days delinquent” and so on.
Denomination:
With
respect to each Certificate, the amount set forth on the face thereof as the
“Initial Certificate Principal Balance of this Certificate”.
Depositor:
Nomura
Home Equity Loan, Inc., a Delaware corporation, or its successor in
interest.
Depository:
The
initial Depository shall be The Depository Trust Company (“DTC”), the nominee of
which is Cede & Co., or any other organization registered as a “clearing
agency” pursuant to Section 17A of the Exchange Act. The Depository shall
initially be 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
Agreement:
With
respect to the Class of Book-Entry Certificates, the agreement among the
Depositor, the Trustee and the initial Depository, dated as of the Closing
Date,
substantially in the form of Exhibit I.
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.
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22 -
Determination
Date:
With
respect to any Distribution Date, the fifteenth (15th)
day of
the month of such Distribution Date or, if such day is not a Business Day,
the
immediately preceding Business Day.
Distribution
Account:
The
separate Eligible Account created and maintained by the Securities Administrator
pursuant to Section 3.31 in the name of the Trustee for the benefit of the
Certificateholders and designated “HSBC Bank USA, National Association, in trust
for registered holders of Nomura Home Equity Loan, Inc., Asset-Backed
Certificates, Series 2006-HE1”. Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this
Agreement.
Distribution
Date:
The
twenty-fifth (25th)
day of
each calendar month after the initial issuance of the Certificates, or if such
twenty-fifth (25th)
day is
not a Business Day, the next succeeding Business Day, commencing in March
2006.
Due
Date:
As to
any Mortgage Loan, the date in each month on which the related Scheduled Payment
is due, as set forth in the related Mortgage Note.
Due
Period:
With
respect to any Distribution Date, the period from the second day of the calendar
month preceding the calendar month in which such Distribution Date occurs
through the close of business on the first day of the calendar month in which
such Distribution Date occurs.
Eligible
Account:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company, the long-term unsecured debt
obligations and short-term unsecured debt obligations of which are rated by
each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to
the Trustee and to each Rating Agency, the Certificateholders have a claim
with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced in writing
by
the Rating Agencies. Eligible Accounts may bear interest, and may include,
if
otherwise qualified under this definition, accounts maintained with the Trustee
or Securities Administrator.
Escrow
Account:
Shall
mean the account or accounts maintained by the Servicer pursuant to
Section 3.29. Each Escrow Account shall be an Eligible
Account.
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA
Restricted Certificate:
Each of
the Class X, Class P and Residual Certificates.
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23 -
Excess
Liquidation Proceeds:
To the
extent not required by law to be paid to the related Mortgagor, the excess,
if
any, of any Liquidation Proceeds with respect to a Mortgage Loan over the Stated
Principal Balance of such Mortgage Loan and accrued and unpaid interest at
the
related Mortgage Rate through the last day of the month in which the Mortgage
Loan has been liquidated.
Exchange
Act:
Securities and Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Exemption:
Prohibited Transaction Exemption 93-32, as amended from time to
time.
Expense
Fee Rate:
The sum
of the Credit Risk Management Fee Rate and Servicing Fee Rate attributable
to
the Mortgage Loans.
Extra
Principal Distribution Amount:
With
respect to any Distribution Date, is the lesser of (x) the Overcollateralization
Deficiency Amount for such Distribution Date and (y) the sum of (i) the Monthly
Excess Cashflow for such Distribution Date and (ii) amounts available from
the
Supplemental Interest Trust to pay principal as provided in Section
5.04(b)(ii).
Xxxxxx
Xxx:
Xxxxxx
Xxx (formerly, 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 Sponsor or the Master Servicer
pursuant to or as contemplated by Section 2.03(c) or Section 10.01), a
determination made by the Servicer pursuant to this Agreement that all Insurance
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 of each Final Recovery Determination made thereby.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended.
Fitch:
Fitch
Ratings.
Form
8-K Disclosure Information:
Has the
meaning set forth in Section 5.13(b) of this Agreement.
Xxxxxxx
Mac:
Federal
Home Loan Mortgage Corporation, or any successor thereto.
Gross
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage set forth
in
the related Mortgage Note that is added to the Index on each Adjustment Date
in
accordance with the terms of the related Mortgage Note used to determine the
Mortgage Rate for such Mortgage Loan.
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24 -
Indemnified
Persons:
The
Trustee, the Servicer (including any successor to the Servicer), the Master
Servicer, the Securities Administrator, the Custodian, the Trust Fund and their
officers, directors, agents and employees and, with respect to the Trustee,
any
separate co-trustee and its officers, directors, agents and
employees.
Independent:
When
used with respect to any specified Person, any such Person who (a) is in fact
independent of the Depositor, the Master Servicer, the Securities Administrator,
the Servicer, the Sponsor, any originator and their respective Affiliates,
(b)
does not have any direct financial interest in or any material indirect
financial interest in the Depositor, the Master Servicer, the Securities
Administrator, the Servicer, the Sponsor, any originator or any Affiliate
thereof, and (c) is not connected with the Depositor, the Master Servicer,
the
Securities Administrator, the Servicer, the Sponsor, any originator or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicer, the Sponsor, any
originator or any Affiliate thereof merely because such Person is the beneficial
owner of one percent (1%) or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicer,
the
Sponsor, any originator or any Affiliate thereof, as the case may be. When
used
with respect to any accountants, a Person who is “independent” within the
meaning of Rule 2-01(B) of the Securities and Exchange Commission’s Regulation
S-X. Independent means, when used with respect to any other Person, a Person
who
(A) is in fact independent of another specified Person and any affiliate of
such
other Person, (B) does not have any material direct or indirect financial
interest in such other Person or any affiliate of such other Person, (C) is
not
connected with such other Person or any affiliate of such other Person as an
officer, employee, promoter, underwriter, Securities Administrator, partner,
director or Person performing similar functions and (D) is not a member of
the
immediate family of a Person defined in clause (B) or (C) above.
Index:
As of
any Adjustment Date, the index applicable to the determination of the Mortgage
Rate on each adjustable rate Mortgage Loan which will generally be based on
Six-Month LIBOR.
Initial
Certificate Principal Balance:
With
respect to any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing Date.
Insurance
Policy:
With
respect to any Mortgage Loan included in the Trust Fund, any insurance policy,
including all riders and endorsements thereto in effect with respect to such
Mortgage Loan, including any replacement policy or policies for any Insurance
Policies.
Insurance
Proceeds:
Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy
or any other insurance policy covering a Mortgage Loan, including the LPMI
Policy, if applicable, to the extent such proceeds are payable to the mortgagee
under the Mortgage, the Servicer or the trustee under the deed of trust and
are
not applied to the restoration of the related Mortgaged Property or released
to
the Mortgagor in accordance with the servicing standard set forth in
Section 3.01 hereof, other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
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25 -
Insured
Expenses:
Expenses covered by any Insurance Policy with respect to the Mortgage
Loans.
Interest
Determination Date:
Shall
mean the second LIBOR Business Day preceding the commencement of each Accrual
Period.
Interest
Remittance Amount:
With
respect to any Distribution Date, an amount generally equal to (i) the sum,
without duplication, of (a) all scheduled interest received during the related
Due Period with respect to the Mortgage Loans less the Servicing Fee, the Credit
Risk Management Fee, the LPMI Fee, if applicable, and the fee payable to any
provider of lender-paid mortgage insurance, if any, (b) all Advances relating
to
interest with respect to the related Mortgage Loans made on or prior to the
related Remittance Date, (c) all Compensating Interest with respect to the
related Mortgage Loans and required to be remitted by the Servicer or the Master
Servicer pursuant to this Agreement with respect to such Distribution Date,
(d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the related Prepayment Period (to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to interest), (e)
all
amounts relating to interest with respect to each related Mortgage Loan
repurchased by the Sponsor pursuant to Sections 2.02 and 2.03 and (f) all
amounts in respect of interest paid by the Master Servicer pursuant to
Section 10.01 to the extent remitted by the Master Servicer to the
Distribution Account pursuant to this Agreement, minus (ii) all amounts required
to be reimbursed by the Trust pursuant to Section 3.32 or as otherwise set
forth in this Agreement or the Custodial Agreement.
Interest
Shortfall:
With
respect to any Distribution Date, the aggregate shortfall, if any, in
collections of interest (adjusted to the related Net Mortgage Rates) on Mortgage
Loans resulting from (a) Principal Prepayments in full received during the
portion of the related Prepayment Period occurring in the month prior to the
month in which Distribution Date occurs, (b) partial Principal Prepayments
received during the related Prepayment Period to the extent applied prior to
the
Due Date in the month of the Distribution Date and (c) interest payments on
certain of the Mortgage Loans being limited pursuant to the provisions of the
Relief Act.
ISDA
Master Agreement:
The
ISDA Master Agreement dated as of March 9, 2006, as amended and supplemented
from time to time, between the Swap Provider and the Trustee, as trustee on
behalf of the Supplemental Interest Trust.
Last
Scheduled Distribution Date:
With
respect to the Certificates, the Distribution Date in February
2036.
Latest
Possible Maturity Date:
The
second Distribution Date following the final scheduled maturity date of the
Mortgage Loan in the Trust Fund having the latest scheduled maturity date as
of
the Cut-off Date. For purposes of the Treasury Regulations under Code
Section 860A through 860G, the latest possible maturity date of each
regular interest issued by each REMIC shall be the Latest Possible Maturity
Date.
LIBOR
Business Day:
Shall
mean any day other than a Saturday or a Sunday or a day on which banking
institutions in the State of New York or in the city of London, England are
required or authorized by law to be closed.
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26 -
LIBOR
Determination Date:
The
second LIBOR Business Day before the first day of the related Accrual
Period.
Liquidated
Loan:
With
respect to any Distribution Date, a defaulted Mortgage Loan that has been
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which
the
Servicer has certified in the related Prepayment Period in writing to the
Securities Administrator that it has made a Final Recovery
Determination.
Liquidation
Proceeds:
Amounts, other than Insurance Proceeds, received in connection with the partial
or complete liquidation of a Mortgage Loan, whether through trustee’s sale,
foreclosure sale or otherwise, or in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received with respect
to
an REO Property, less the sum of related unreimbursed Advances, Servicing Fees
and Servicing Advances and all expenses of liquidation, including property
protection expenses and foreclosure and sale costs, including court and
reasonable attorneys fees.
Loan-to-Value
Ratio:
The
fraction, expressed as a percentage, the numerator of which is the original
principal balance of the Mortgage Loan and the denominator of which is the
Appraised Value of the related Mortgaged Property.
LPMI
Fee:
The
amount payable to any lender paid mortgage insurer on each Distribution Date
pursuant to Section 3.18, which amount shall equal one twelfth of the product
of
(i) the LPMI Fee Rate, multiplied by (ii) the aggregate Stated Principal Balance
of any LPMI Mortgage Loan and any related REO Property as of the first day
of
the related Due Period (after giving effect to scheduled payments of principal
due during the Due Period relating to the previous Distribution Date, to the
extent received or advanced).
LPMI
Fee Rate:
2.39%
per annum.
LPMI
Mortgage Loan:
Each
Mortgage Loan insured under an LPMI Policy, which schedule will be listed on
the
mortgage loan schedule attached hereto.
LPMI
Policy:
The
lender paid mortgage insurance policy with respect to any LPMI Mortgage
Loan.
Majority
Class X Certificateholder:
The
Holder of a 50.01% or greater Percentage Interest in the Class X
Certificates.
Marker
Rate:
With
respect to the Publicly Offered Certificates and the Class B Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular
Interest LT-A1, REMIC II Regular Interest LT-A2, REMIC II Regular Interest
LT-A3, REMIC II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC
II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular
Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest
LT-M6, REMIC II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC
II Regular Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular
Interest LT-B2 and REMIC II Regular Interest LT-ZZ, with the per annum rate
on
each such REMIC II Regular Interest (other than REMIC II Regular Interest LT-ZZ)
subject to a cap equal to the Pass-Through Rate on the Corresponding Certificate
for the purpose of this calculation; and with the per annum rate on REMIC II
Regular Interest LT-ZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that for this purpose, the calculation of the
Uncertificated REMIC II Pass-Through Rate and the related cap with respect
to
each such REMIC II Regular Interest (other than REMIC II Regular Interest LT-ZZ)
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Accrual Period and the denominator of which is thirty
(30).
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27 -
Master
Servicer:
As of
the Closing Date, Xxxxx Fargo Bank, N.A. and thereafter, its respective
successors in interest who meet the qualifications of this Agreement. The Master
Servicer and the Securities Administrator shall at all times be the same Person
or Affiliates.
Master
Servicing Compensation:
As
defined in Section 4.12.
Master
Servicer Default:
One or
more of the events described in Section 8.01(b).
Maximum
Interest Rate:
With
respect to any Distribution Date and the related Accrual Period, an annual
rate
equal to the weighted average of the Maximum Mortgage Interest Rates of the
Mortgage Loans as stated on the Mortgage Loan Schedule minus the weighted
average Expense Fee Rate of the Mortgage Loans. The calculation of the Maximum
Interest Rate will be based on a 360-day year and the actual number of days
elapsed during the related Accrual Period.
Maximum
Mortgage Interest Rate:
With
respect to each adjustable rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the maximum interest rate.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
Mezzanine
Certificates:
The
Class M-1, Class X-0, Xxxxx, X-0, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates.
MIN:
The
Mortgage Identification Number for Mortgage Loans registered with MERS on the
MERS® System.
Minimum
Mortgage Interest Rate:
With
respect to each adjustable rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the minimum Mortgage Rate thereunder.
Minimum
Servicing Requirements:
With
respect to a successor Servicer appointed pursuant to Section 7.06(b)
hereunder:
(i) the
proposed Successor Servicer is (1) an affiliate of the Master Servicer that
services mortgage loans similar to the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located or (2) the proposed Successor
Servicer has a rating of at least “Above Average” by S&P and either a rating
of at least “RPS2” by Fitch or a rating of at least “SQ2” by Moody’s;
and
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28 -
(ii) the
proposed Successor Servicer has a net worth of at least
$25,000,000.
MOM
Loan:
Any
Mortgage Loan as to which MERS is acting as the mortgagee of such Mortgage
Loan,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns, at the origination thereof.
Monthly
Excess Cashflow:
With
respect to any Distribution Date, means the sum of (a) the Monthly Excess
Interest, (b) the Overcollateralization Release Amount, if any, for such
Distribution Date, and (c) the Principal Remittance Amount remaining following
payments of the Principal Payment Amount to the Senior Certificates and
Subordinate Certificates.
Monthly
Excess Interest:
With
respect to any Distribution Date, the excess of (x) the Interest Remittance
Amount for such Distribution Date over (y) the sum of Current Interest and
Carryforward Interest on the Senior Certificates and Subordinate Certificates
for such Distribution Date.
Monthly
Statement:
The
statement delivered to the Certificateholders pursuant to
Section 5.06.
Moody’s:
Xxxxx’x
Investors Service, Inc. or its successor in interest.
Mortgage:
The
mortgage, deed of trust or other instrument creating a first or second lien
on,
or first or second priority security interest in, a Mortgaged Property securing
a Mortgage Note.
Mortgage
File:
The
Mortgage Loan Documents pertaining to a particular Mortgage Loan and any
additional documents delivered to the Trustee to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Loan Documents:
As
defined in Section 2.01.
Mortgage
Loans:
Each of
the Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof, as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in
the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property.
Mortgage
Loan Purchase Agreement:
The
Mortgage Loan Purchase Agreement dated as of March 9, 2006, between the Sponsor,
as seller and the Depositor, as purchaser, a form of which is attached hereto
as
Exhibit
C.
Mortgage
Loan Purchase Price:
The
price, calculated as set forth in Section 10.01, to be paid in connection
with the purchase of the Mortgage Loans pursuant to
Section 10.01.
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29 -
Mortgage
Loan Schedule:
The
list of Mortgage Loans (as from time to time amended by the Servicer to reflect
the deletion of Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant to the provisions of this Agreement) transferred to the Trustee
as part of the Trust Fund and from time to time subject to this Agreement,
setting forth the following information with respect to each Mortgage
Loan:
(i) the
Mortgage Loan identifying number;
(ii) a
code
indicating whether the Mortgaged Property is owner-occupied;
(iii) the
type
of Residential Dwelling constituting the Mortgaged Property;
(iv) the
original months to maturity;
(v) the
original date of the Mortgage Loan and the remaining months to maturity from
the
Cut-off Date, based on the original amortization schedule;
(vi) the
Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable, at
origination;
(vii) the
Mortgage Rate in effect immediately following the Cut-off Date;
(viii) the
date
on which the first Monthly Payment was due on the Mortgage Loan;
(ix) the
stated maturity date;
(x) the
amount of the Monthly Payment at origination;
(xi) the
amount of the Monthly Payment as of the Cut-off Date;
(xii) the
last
Due Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance;
(xiii) the
original principal amount of the Mortgage Loan;
(xiv) the
Stated Principal Balance of the Mortgage Loan as of the close of business on
the
Cut-off Date;
(xv) with
respect to each adjustable rate Mortgage Loan, the first Adjustment
Date;
(xvi) with
respect to each adjustable rate Mortgage Loan, the Gross Margin;
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30 -
(xvii) a
code
indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing);
(xviii) with
respect to each adjustable rate Mortgage Loan, the Maximum Mortgage Rate under
the terms of the Mortgage Note;
(xix) with
respect to each adjustable rate Mortgage Loan, the Minimum Mortgage Rate under
the terms of the Mortgage Note;
(xx) the
Mortgage Rate at origination;
(xxi) with
respect to each adjustable rate Mortgage Loan, the Periodic Rate
Cap;
(xxii) with
respect to each adjustable rate Mortgage Loan, the first Adjustment Date
immediately following the Cut-off Date;
(xxiii) with
respect to each adjustable rate Mortgage Loan, the Index;
(xxiv) the
date
on which the first Monthly Payment was due on the Mortgage Loan and, if such
date is not consistent with the Due Date currently in effect, such Due
Date;
(xxv) a
code
indicating whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or
a
fixed rate Mortgage Loan;
(xxvi) a
code
indicating the documentation style (i.e., full, stated or limited);
(xxvii) a
code
indicating if the Mortgage Loan is subject to a primary insurance policy or
lender paid mortgage insurance policy and the name of the insurer;
(xxviii) the
Appraised Value of the Mortgaged Property;
(xxix) the
sale
price of the Mortgaged Property, if applicable;
(xxx) a
code
indicating whether the Mortgage Loan is subject to a Prepayment Charge, the
term
of such Prepayment Charge and the amount of such Prepayment Charge;
(xxxi) the
product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
(xxxii) the
Mortgagor’s debt to income ratio;
(xxxiii) the
FICO
score at origination; and
(xxxiv) the
initial seller who sold such Mortgage Loan to the Sponsor.
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31 -
Such
schedule shall also set forth the aggregate Cut-off Date Principal Balance
for
all of the Mortgage Loans.
Mortgage
Note:
The
original executed note or other evidence of indebtedness of a Mortgagor under
a
Mortgage Loan.
Mortgage
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate with respect to each adjustable rate Mortgage Loan
(A)
as of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of
any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as
of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such
adjustable rate Mortgage Loan on any Adjustment Date shall never be more than
the lesser of (i) the sum of the Mortgage Rate in effect immediately prior
to
the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of
(i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date
of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO
Property.
Mortgaged
Property:
The
underlying property securing a Mortgage Loan.
Mortgagor:
The
obligor on a Mortgage Note.
Net
Funds Cap:
With
respect to any Distribution Date, a per annum rate equal to the product of
(I)(a) a fraction, expressed as a percentage, the numerator of which is the
Optimal Interest Remittance Amount for such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans for the immediately preceding Distribution Date, minus (b) the sum of
(1)
any Net Swap Payment payable to the Swap Provider on such Distribution Date,
divided by the outstanding Stated Principal Balance of the Mortgage Loans for
the immediately preceding Distribution Date, and (2) any Swap Termination
Payment (unless such payment is the result of a Swap Provider Trigger Event
and
to the extent not paid by the securities administrator from any upfront payment
received pursuant to any replacement swap agreement that may be entered into
by
the Supplemental Interest Trust Trustee) payable to the Swap Provider on such
Distribution Date, divided by the outstanding aggregate Stated Principal Balance
of the Mortgage Loans for the immediately preceding Distribution Date and (II)
12.
The Net
Funds Cap will be adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis.
Net
Interest Shortfalls:
Shall
mean Interest Shortfalls net of payments by the Servicer or the Master Servicer
in respect of Compensating Interest.
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32 -
Net
Mortgage Rate:
As to
each Mortgage Loan, and at any time, the per annum rate equal to the related
Mortgage Rate less the sum of (i) the Servicing Fee Rate, (ii) the Credit Risk
Management Fee Rate and (iii) the rate at which the fee payable to any provider
of lender-paid mortgage insurance is calculated, if applicable.
Net
Swap Trust Payment:
With
respect to each Distribution Date, the net payment required to be made pursuant
to the terms of the Swap Agreement by either the Swap Provider or the
Supplemental Interest Trust, which net payment shall not take into account
any
Swap Termination Payment.
Non-Book-Entry
Certificate:
Any
Certificate other than a Book-Entry Certificate.
Nonrecoverable
Advance:
With
respect any Mortgage Loan, any portion of an Advance or Servicing Advance
previously made or proposed to be made by the Servicer pursuant to this
Agreement or the Master Servicer as Successor Servicer, that, in the good faith
judgment of the Servicer or the Master Servicer as Successor Servicer, will
not
or, in the case of a proposed Advance or Servicing Advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or otherwise.
Notional
Amount:
For
each Distribution Date shall be equal to the lesser of (a) the Aggregate Loan
Balance of the Mortgage Loans on the Business Day immediately preceding such
Distribution Date and (b) the Swap Notional Amount for such Distribution Date
as
set forth in the Swap Agreement.
Officer’s
Certificate:
A
certificate (i) signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Vice President (however denominated), an Assistant
Vice
President, the Treasurer, the Secretary, or one of the assistant treasurers
or
assistant secretaries of the Depositor or the Trustee (or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter,
such
matter is referred because of such officer’s knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement, signed by an
Authorized Servicer Representative, as the case may be, and delivered to the
Depositor, the Sponsor, the Master Servicer, the Securities Administrator and/or
the Trustee, as the case may be, as required by this Agreement.
One-Month
LIBOR:
With
respect to any Accrual Period (other than the first Accrual Period), the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest Determination Date. If such rate does not appear on such page (or
such
other page as may replace that page on that service, or if such service is
no
longer offered, such other service for displaying One-Month LIBOR or comparable
rates as may be reasonably selected by the Securities Administrator), One-Month
LIBOR for the applicable Accrual Period will be the Reference Bank Rate. If
no
such quotations can be obtained by the Securities Administrator and no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable
to
the preceding Accrual Period. The establishment of One-Month LIBOR on each
Interest Determination Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest applicable to the Senior
Certificates and the Subordinate Certificates for the related Accrual Period
shall, in the absence of manifest error, be final and binding. With respect
to
the first Accrual period, One-Month LIBOR shall equal 4.69125 % per
annum.
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Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Sponsor, the Master
Servicer, the Depositor or the Servicer, reasonably acceptable to each addressee
of such opinion; provided that with respect to Section 2.05, 7.05 or 11.01,
or the interpretation or application of the REMIC Provisions, such counsel
must
(i) in fact be independent of the Sponsor, the Master Servicer Depositor and
the
Servicer, (ii) not have any direct financial interest in the Sponsor, the
Depositor, the Master Servicer or the Servicer or in any affiliate of any of
them, and (iii) not be connected with the Sponsor, the Depositor, the Master
Servicer or the Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Optimal
Interest Remittance Amount:
With
respect to any Distribution Date, will be equal to the excess of (i) the product
of (1)(x) the weighted average Net Mortgage Rates of the Mortgage Loans as
of
the first day of the related Due Period divided by (y) 12 and (2) the Aggregate
Loan Balance of the Mortgage Loans for the immediately preceding Distribution
Date, over (ii) any expenses that reduce the Interest Remittance Amount that
did
not arise as a result of a default or delinquency of the Mortgage Loans or
were
not taken into account in computing the expense fee rate.
Optional
Termination:
The
termination of the Trust Fund created hereunder as a result of the purchase
of
all of the Mortgage Loans and any related REO Property pursuant to
Section 10.01.
Optional
Termination Date:
The
first Distribution Date on which the Master Servicer or Ocwen Loan Servicing,
LLC, as applicable, may purchase, at its option, the Mortgage Loans and related
REO Properties as described in Section 10.01.
OTS:
The
Office of Thrift Supervision or 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:
(a) Certificates
theretofore canceled by the Securities Administrator or delivered to the
Securities Administrator for cancellation; and
(b) 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 date of determination, a Mortgage Loan with a Stated Principal Balance
greater than zero that was not the subject of a Principal Prepayment in full,
and that did not become a Liquidated Loan, prior to the end of the related
Prepayment Period.
Overcollateralization
Amount:
With
respect to any Distribution Date, the excess, if any, of (a) the Aggregate
Loan
Balance for such Distribution Date over (b) the aggregate Certificate Principal
Balance of the Publicly Offered Certificates and the Class B Certificates on
such Distribution Date (after taking into account the payment of 100% of the
Principal Remittance Amount (without regard to any payments made pursuant to
the
Swap Agreement with respect to Realized Losses) on such Distribution
Date).
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34 -
Overcollateralization
Deficiency Amount:
With
respect to any Distribution Date, the amount, if any, by which (x) the Targeted
Overcollateralization Amount for such Distribution Date exceeds (y) the
Overcollateralization Amount for such Distribution Date, calculated for this
purpose after giving effect to the reduction on such Distribution Date of the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
and
the Class B Certificates resulting from the payment of the Principal Remittance
Amount (without regard to any payments made pursuant to the Swap Agreement
with
respect to Realized Losses) on such Distribution Date, but prior to allocation
of any Applied Loss Amount on such Distribution Date.
Overcollateralization
Release Amount:
With
respect to any Distribution Date, the lesser of (x) the Principal Remittance
Amount (without regard to any payments made pursuant to the Swap Agreement
with
respect to Realized Losses) for such Distribution Date and (y) the amount,
if
any, by which (1) the Overcollateralization Amount for such date exceeds (2)
the
Targeted Overcollateralization Amount for such Distribution Date.
Ownership
Interest:
As to
any 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.
Pass-Through
Rate:
The
Class A-1, Class A-2, Class X-0, Xxxxx X-0, 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 B-1,
Class B-2 and Class X Pass-Through Rate, as applicable.
Payahead:
Any
Scheduled Payment intended by the related Mortgagor to be applied in a Due
Period subsequent to the Due Period in which such payment was
received.
PCAOB:
Shall
mean the Public Company Accounting Oversight Board.
Percentage
Interest:
With
respect to any Certificate of a specified Class, the Percentage Interest set
forth on the face thereof or the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of such Class.
Periodic
Rate Cap:
With
respect to the Adjustment Date for any adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note, which is the maximum amount
by which the Mortgage Rate for such adjustable rate Mortgage Loan may increase
or decrease (without regard to the Maximum Mortgage Interest Rate or the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Rate in effect
immediately prior to such Adjustment Date.
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Permitted
Investments:
At any
time, any one or more of the following obligations and securities:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency thereof, provided
such obligations are unconditionally backed by the full faith and credit of
the
United States;
(ii) general
obligations of or obligations guaranteed by any state of the United States
or
the District of Columbia receiving the highest long-term debt rating of each
Rating Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each Rating
Agency, as evidenced by a signed writing delivered by each Rating
Agency;
(iii) commercial
or finance company paper which is then receiving the highest commercial or
finance company paper rating of each Rating Agency that rates such securities,
or such lower rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency, as evidenced
by
a signed writing delivered by each Rating Agency;
(iv) certificates
of deposit, demand or time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities (including the Trustee or the Master
Servicer in its commercial banking capacity), provided that the commercial
paper
and/or long term unsecured debt obligations of such depository institution
or
trust company are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such securities, or such
lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(v) demand
or
time deposits or certificates of deposit issued by any bank or trust company
or
savings institution to the extent that such deposits are fully insured by the
FDIC;
(vi) guaranteed
reinvestment agreements issued by any bank, insurance company or other
corporation containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by any such Rating Agency, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase
obligations with respect to any security described in clauses (i) and (ii)
above, in either case entered into with a depository institution or trust
company (acting as principal) described in clause (iv) above;
(viii) securities
(other than stripped bonds, stripped coupons or instruments sold at a purchase
price in excess of 115% of the face amount thereof) bearing interest or sold
at
a discount issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment, have one
of
the two highest long term ratings of each Rating Agency, or such lower rating
as
will not result in the downgrading or withdrawal of the rating then assigned
to
the Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
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36 -
(ix) units
of
money market funds registered under the Investment Company Act of 1940 including
funds managed or advised by the Trustee, the Master Servicer or an affiliate
of
either, having a rating by S&P of AAAm-G, AAA-m, or AA-m, and if rated by
Moody’s, rated Aaa, Aa1 or Aa2, and if rated by Fitch, F1, F2 or
F3;
(x) short
term investment funds sponsored by any trust company or banking association
incorporated under the laws of the United States or any state thereof (including
any such fund managed or advised by the Trustee, the Master Servicer or any
affiliate thereof) which on the date of acquisition has been rated by each
Rating Agency in their respective highest applicable rating category or such
lower rating as will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency; and
(xi) such
other investments having a specified stated maturity and bearing interest or
sold at a discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency, as evidenced by a signed writing delivered by each Rating Agency,
as evidenced by a signed writing delivered by each Rating Agency;
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, any possession of the United States 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)
that is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on
any excess inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to any Residual Certificate, (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a Person
that is not a citizen or resident of the United States, a corporation,
partnership (other than a partnership that has any direct or indirect foreign
partners) or other entity (treated as a corporation or a partnership for federal
income tax purposes), created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, an estate whose income
from sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States, or 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 United States persons have authority
to control all substantial decisions of the trustor and (vi) any other Person
based upon an Opinion of Counsel (which shall not be an expense of the Trustee)
that states that the Transfer of an Ownership Interest in a Residual Certificate
to such Person may cause any REMIC to fail to qualify as a REMIC at any time
that any 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.
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37 -
Person:
Any
individual, corporation, partnership, joint venture, association,
joint-stock
company, limited liability company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Prepayment
Assumption:
The
assumed rate of prepayment, as described in the Prospectus Supplement relating
to each Class of Publicly Offered Certificates.
Prepayment
Charge:
With
respect to any Principal Prepayment, any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note (other than any Servicer
Prepayment Charge Payment Amount) as shown on the Prepayment Charge
Schedule.
Prepayment
Charge Schedule:
As of
any date, the list of Mortgage Loans providing for a Prepayment Charge included
in the Trust Fund on such date, attached hereto as Exhibit K (including the
prepayment charge summary attached thereto). The Depositor shall deliver or
cause the delivery of the Prepayment Charge Schedule to the Servicer, the Master
Servicer and the Trustee on the Closing Date. The Prepayment Charge Schedule
shall set forth the following information with respect to each Prepayment
Charge:
|
(i)
|
the
Mortgage Loan identifying number;
|
|
(ii)
|
a
code indicating the type of Prepayment Charge;
|
|
(iii)
|
the
date on which the first Monthly Payment was due on the related Mortgage
Loan;
|
|
(iv)
|
the
term of the related Prepayment Charge;
|
|
(v)
|
the
original Stated Principal Balance of the related Mortgage Loan;
and
|
|
(vi)
|
the
Stated Principal Balance of the related Mortgage Loan as of the Cut-off
Date.
|
Prepayment
Interest Excess:
With
respect to each Mortgage Loan serviced that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the calendar month in which such Distribution Date
occurs and the Determination Date of the calendar month in which such
Distribution Date occurs, an amount equal to interest (to the extent received)
at the applicable Net Mortgage Rate on the amount of such Principal Prepayment
for the number of days commencing on the first day of the calendar month in
which such Distribution Date occurs and ending on the last date through which
interest is collected from the related Mortgagor. The Servicer may withdraw
such
Prepayment Interest Excess from the Custodial Account in accordance with Section
3.27(a)(i).
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Prepayment
Interest Shortfall:
With
respect to any Distribution Date, for each Mortgage Loan that was the subject
of
a Principal Prepayment in full during the portion of the related Prepayment
Period occurring in the month prior to the month in which such Distribution
Date
occurs, (other than a Principal Prepayment in full resulting from the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.24 or 10.01 hereof),
the amount, if any, by which (i) one month’s interest at the applicable Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan immediately
prior to such prepayment exceeds (ii) the amount of interest paid or collected
in connection with such Principal Prepayment less the sum of (a) the related
Servicing Fee, (b) the Credit Risk Management Fee and (c) the fee payable to
any
provider of lender-paid mortgage insurance, if any..
Prepayment
Period:
With
respect to any Distribution Date the sixteenth (16th)
day of
the immediately preceding calendar month (or with respect to the first
Prepayment Period, the Closing Date) through the fifteenth (15th)
day of
the month in which the Distribution Date occurs.
Principal
Payment Amount:
With
respect to each Distribution Date, the Principal Remittance Amount for such
date
minus the Overcollateralization Release Amount, if any, for such Distribution
Date.
Principal
Prepayment:
Any
Mortgagor payment or other recovery of (or proceeds with respect to) principal
on a Mortgage Loan (including loans purchased or repurchased under Sections
2.02, 2.03, 3.26 and 10.01 hereof) that is received in advance of its scheduled
Due Date and is not accompanied by an amount as to interest representing
scheduled interest due on any Due Date in any month or months subsequent to
the
month of prepayment. Partial Principal Prepayments shall be applied by the
Servicer in accordance with the terms of the related Mortgage Note.
Principal
Remittance Amount:
With
respect to any Distribution Date, the sum, without duplication, of (a) the
principal portion of all Scheduled Payments on the Mortgage Loans due during
the
related Due Period whether or not received on or prior to the related
Determination Date, (b) the principal portion of all unscheduled collections
(other than Payaheads) including Insurance Proceeds, Condemnation Proceeds,
Subsequent Recoveries and all full and partial Principal Prepayments exclusive
of prepayment charges or penalties collected during the related Prepayment
Period, to the extent applied as recoveries of principal on the Mortgage Loans,
(c) the Stated Principal Balance of each Mortgage Loan that was repurchased
by
the Sponsor during the related Prepayment Period pursuant to Sections 2.02,
2.03 and 3.24, (d) the aggregate of all Substitution Adjustment Amounts received
during the related Prepayment Period for the related Determination Date in
connection with the substitution of Mortgage Loans pursuant to
Section 2.03(b), (e) amounts in respect of principal on the Mortgage Loans
paid by the Master Servicer pursuant to Section 10.01, (f) all Liquidation
Proceeds and Subsequent Recoveries with respect to the Mortgage Loans collected
during the related Prepayment Period (to the extent such Liquidation Proceeds
and Subsequent Recoveries relate to principal), in each case to the extent
remitted by the Servicer to the Distribution Account pursuant to this Agreement,
(g) the principal portion of Payaheads previously received on the Mortgage
Loans
and intended for application in the related Due Period and (h) any payments
made
pursuant to the Swap Agreement with respect to Realized Losses, minus (ii)
all
amounts required to be reimbursed by the Trust pursuant to Sections 4.02,
4.05, 4.07, 5.10 and 9.05 or as otherwise set forth in this Agreement or the
Custodial Agreement and to the extent not reimbursed from the Interest
Remittance Amount for
such
Distribution Date.
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Private
Certificate:
Each of
the Class B-1, Class B-2, Class X, Class P and Class R
Certificates.
Prospectus
Supplement:
The
Prospectus Supplement dated March 8, 2006 relating to the offering of the
Publicly Offered Certificates.
Publicly
Offered Certificates:
Any
Certificates other than the Private Certificates.
PUD:
A
planned unit development.
Purchase
Price:
With
respect to any Mortgage Loan required to be repurchased by the Sponsor pursuant
to Section 2.02, 2.03 or 3,24 hereof and as confirmed by an Officer’s
Certificate from the Sponsor to the Trustee, an amount equal to the sum of
(i)
100% of the outstanding principal balance of the Mortgage Loan as of the date
of
such purchase plus, (ii) 30 days’ accrued interest thereon at the applicable Net
Mortgage Rate, plus any portion of the Servicing Fee, Servicing Advances and
Advances payable to the Servicer or Master Servicer, as applicable, with respect
to such Mortgage Loan plus (iii) any costs and damages of the Trust Fund in
connection with any violation by such Mortgage Loan of any abusive or predatory
lending law, including any expenses incurred by the Trustee with respect to
such
Mortgage Loan prior to the purchase thereof.
Rating
Agency:
Each of
Xxxxx’x, S&P, Fitch and DBRS. If any such organization or its successor is
no longer in existence, “Rating Agency” shall be a nationally recognized
statistical rating organization, or other comparable Person, designated by
the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized
Loss:
With
respect to each Mortgage Loan as to which a Final Recovery Determination has
been made, an amount (not less than zero) equal to (i) the Stated Principal
Balance of such Mortgage Loan as of the commencement of the calendar month
in
which the Final Recovery Determination was made, plus (ii) accrued interest
from
the Due Date as to which interest was last paid by the Mortgagor through the
end
of the calendar month in which such Final Recovery Determination was made,
calculated in the case of each calendar month during such period (A) at an
annual rate equal to the annual rate at which interest was then accruing on
such
Mortgage Loan and (B) on a principal amount equal to the Stated Principal
Balance of such Mortgage Loan as of the close of business on the Distribution
Date during such calendar month, minus (iii) the proceeds, if any, received
in
respect of such Mortgage Loan during the calendar month in which such Final
Recovery Determination was made, net of amounts that are payable therefrom
to
the Servicer pursuant to this Agreement. To the extent the Servicer receives
Subsequent Recoveries with respect to any Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced to the extent
that Subsequent Recoveries are applied to reduce the Certificate Principal
Balance of any Class of Certificates on any Distribution Date.
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40 -
With
respect to any REO Property as to which a Final Recovery Determination has
been
made, an amount (not less than zero) equal to (i) the Stated Principal Balance
of the related Mortgage Loan as of the date of acquisition of such REO Property
on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to which
interest was last paid by the Mortgagor in respect of the related Mortgage
Loan
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at
which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan as
of
the close of business on the Distribution Date during such calendar month,
minus
(iii) the aggregate of all unreimbursed Advances and Servicing
Advances.
With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation.
With
respect to each Mortgage Loan which has become the subject of a Debt Service
Reduction, the portion, if any, of the reduction in each affected Monthly
Payment attributable to a reduction in the Mortgage Rate imposed by a court
of
competent jurisdiction. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
In
addition, to the extent the Servicer receives Subsequent Recoveries with respect
to any Mortgage Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be reduced to the extent such Subsequent Recoveries are
applied to reduce the Certificate Principal Balance of any Class of Certificates
on any Distribution Date.
Record
Date:
With
respect to the Publicly Offered Certificates and Class B Certificates and any
Distribution Date, so long as such Certificates are Book-Entry Certificates,
the
Business Day preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month in which
such
Distribution Date occurs. With respect to the Class X, Class P and Class R
Certificates and any Distribution Date, the close of business on the last
Business Day of the month preceding the month in which such Distribution Date
occurs.
Reference
Banks:
Shall
mean leading banks selected by the Securities Administrator and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
(i)
with an established place of business in London, (ii) which have been designated
as such by the Securities Administrator and (iii) which are not controlling,
controlled by, or under common control with, the Depositor, the Sponsor or
the
Servicer.
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41 -
Reference
Bank Rate:
With
respect to any Accrual Period shall mean the arithmetic mean, rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%, of the offered rates
for United States dollar deposits for one month that are quoted by the Reference
Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period
of
one month in an amount approximately equal to the aggregate Certificate
Principal Balance of the Publicly Offered Certificates and Class B Certificates
for such Accrual Period, provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference Bank Rate
will
be the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, of the rates quoted by one or more major banks in New
York
City, selected by the Securities Administrator, as of 11:00 a.m., New York
City
time, on such date for loans in United States dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Publicly Offered Certificates and Class
B
Certificates for such Accrual Period.
Regular
Certificate:
Any
Certificate other than a Residual Certificate.
Regulation
AB:
Means
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Relevant
Servicing Criteria:
Means
with respect to any Servicing Function Participant, the Servicing Criteria
applicable to such party, as set forth on Exhibit
L
attached
hereto. For clarification purposes, multiple parties can have responsibility
for
the same Relevant Servicing Criteria. With respect to a Servicing Function
Participant engaged by the Master Servicer, the Securities Administrator or
the
Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the
Relevant Servicing Criteria applicable to such party.
Relief
Act:
The
Servicemembers Civil Relief Act of 2003, as amended from time to time or similar
state or local laws.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
I:
The
segregated pool of assets subject hereto, constituting the primary trust created
hereby and to be administered hereunder, with respect to which a REMIC election
is to be made, consisting of (i) the Mortgage Loans and all interest accruing
and principal due with respect thereto after the Cut-off Date to the extent
not
applied in computing the Cut-off Date Principal Balance thereof and all related
Prepayment Charges; (ii) the related Mortgage Files, (iii) the
Custodial Account (other than any amounts representing any Servicer Prepayment
Charge Payment Amount), the Distribution Account, the Class P Certificate
Account and such assets that are deposited therein from time to time, together
with any and all income, proceeds and payments with respect thereto; (iv)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed
in lieu of foreclosure or otherwise; (v) the mortgagee’s rights under the
Insurance Policies with respect to the Mortgage Loans; (vi) the rights under
the
Mortgage Loan Purchase Agreement, and (vii) all proceeds of the foregoing,
including proceeds of conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property. Notwithstanding
the foregoing, however, REMIC I specifically excludes (i) all payments and
other
collections of principal and interest due on the Mortgage Loans on or before
the
Cut-off Date, (ii) all Prepayment Charges payable in connection with Principal
Prepayments on the Mortgage Loans made before the Cut-off Date, (iii) the Basis
Risk Shortfall Reserve Fund, (iv) the Swap Agreement and (v) the Supplemental
Interest Trust.
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42 -
REMIC
I Regular Interest:
Any of
the separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a “regular interest” in REMIC I. Each REMIC I
Regular Interest shall accrue interest at the related Uncertificated REMIC
I
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto. The designations for the respective
REMIC I Regular Interests are set forth in the Preliminary Statement
hereto.
REMIC
II:
The
segregated pool of assets consisting of all of the REMIC I Regular Interests
conveyed in trust to the Trustee, for the benefit of the Holders of the REMIC
II
Regular Interests and the Holders of the Class R (as holders of the Class R-II
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
REMIC
II Interest Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) the Uncertificated REMIC II Pass-Through Rate for REMIC
II
Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.
REMIC
II Overcollateralization Amount:
With
respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
Principal Balances of the REMIC II Regular Interests minus (ii) the aggregate
of
the Uncertificated Principal Balances of REMIC II Regular Interest LT-A1, REMIC
II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest LT-B2 and
REMIC II Regular Interest LT-P, in each case as of such date of
determination.
REMIC
II Principal Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times
the
aggregate of the Uncertificated Principal Balances of REMIC II Regular Interest
LT-A1, REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC
II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest
LT-B2
and the denominator of which is the aggregate of the Uncertificated Principal
Balances of REMIC II Regular Interest LT-A1, REMIC II Regular Interest LT-A2,
REMIC II Regular Interest LT-A3, REMIC II Regular Interest LT-A4, REMIC II
Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular
Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest
LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest LT-M7, REMIC
II Regular Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC II Regular
Interest LT-B1, REMIC II Regular Interest LT-B2 and REMIC II Regular Interest
LT-ZZ.
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REMIC
II Regular Interests:
REMIC
II Regular Interest LT-AA, REMIC II Regular Interest LT-A1, REMIC II Regular
Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular Interest
LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC
II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular
Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest
LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC
II Regular Interest LT-B1, REMIC II Regular Interest LT-B2, REMIC II Regular
Interest LT-ZZ and REMIC II Regular Interest LT-X.
XXXXX
XX Regular Interest LT-AA:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-AA shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Xxxxxxxx XX-X0 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Xxxxxxxx XX-X0 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A3:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Xxxxxxxx XX-X0 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
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REMIC
II Regular Interest LT-A4:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Xxxxxxxx XX-X0 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-IO:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-IO shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, subject to the terms and
conditions hereof.
REMIC
II Regular Interest LT-M1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M1 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M2 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M3:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M3 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M4:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M4 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M5:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M5 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
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REMIC
II Regular Interest LT-M6:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M6 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M7:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M7 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M8:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M8 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M9:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M9 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-B1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-B1 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-B2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-B2 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-P:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-P shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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REMIC
II Regular Interest LT-ZZ:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-ZZ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-ZZ Maximum Interest Deferral Amount:
With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
Interest LT-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-ZZ minus the
REMIC II Overcollateralization Amount, in each case for such Distribution Date,
over (ii) the Uncertificated Accrued Interest on REMIC II Regular Xxxxxxxx
XX-X0, REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC
II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest
LT-B2 for such Distribution Date, with the rate on each such REMIC II Regular
Interest subject to a cap equal to the related Pass-Through Rate.
REMIC
II Targeted Overcollateralization Amount:
1.00%
of the Targeted Overcollateralization Amount.
REMIC
III:
The
segregated pool of assets consisting of all of the REMIC II Regular Interests
conveyed in trust to the Trustee, for the benefit of the REMIC III
Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be
made.
REMIC
III Certificate:
Any
Regular Certificate or Class R Certificate.
REMIC
III Certificateholder:
The
Holder of any REMIC III Certificate.
REMIC
Opinion:
Shall
mean an Opinion of Counsel to the effect that the proposed action will not
have
an adverse affect on any REMIC created hereunder.
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 proposed, temporary and
final regulations and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time as well as
provisions of applicable state laws.
REMIC
Regular Interest:
Any
REMIC I Regular Interest, REMIC II Regular Interest, Regular Certificate or
Class IO Interest.
Remittance
Date:
Shall
mean (i) with respect to Ocwen Loan Servicing, LLC, not later than 3:00 p.m.
Eastern Time on the twenty-third (23rd) day of the month and if such day is
not
a Business Day, the immediately preceding Business Day, and (ii) with respect
to
any Successor Servicer, not later than 3:00 p.m. Eastern Time on the eighteenth
(18th)
day of
each month, and if such day is not a Business Day, the immediately preceding
Business Day.
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REO
Property:
A
Mortgaged Property acquired by the Servicer through foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan.
Replacement
Mortgage Loan:
A
Mortgage Loan or Mortgage Loans in the aggregate substituted by the Sponsor
for
a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a request for release in accordance with the terms of the Custodial
Agreement, (i) have a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution, not in excess
of, and not less than 90% of, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have an adjustable Mortgage Rate not less than or more
than
1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan; (iii)
have the same or higher credit quality characteristics than that of the Deleted
Mortgage Loan; (iv) have a Loan-to-Value Ratio or Combined Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (v) have a remaining term
to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vi) have the same lien priority as the Deleted Mortgage
Loan; (vii) constitute the same occupancy type as the Deleted Mortgage Loan
or
be owner occupied; (viii) have a Maximum Mortgage Interest Rate not less than
the Maximum Mortgage Interest Rate on the Deleted Loan; (ix) have a Minimum
Mortgage Interest Rate not less than the Minimum Mortgage Interest Rate of
the
Deleted Loan, if applicable; (x) have a Gross Margin equal to the Gross Margin
of the Deleted Loan; (xi) have a next Adjustment Date not more than two months
later than the next Adjustment Date on the Deleted Loan, if applicable; and
(xii) comply with each representation and warranty set forth in the Mortgage
Loan Purchase Agreement.
Reportable
Event:
Has the
meaning set forth in Section 5.13(b) of this Agreement.
Required
Insurance Policy:
With
respect to any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement.
Residual
Certificates:
The
Class R Certificates.
Responsible
Officer:
With
respect to the Trustee and the Securities Administrator, any Vice President,
any
Assistant Vice President, the Secretary, any Assistant Secretary, any Trust
Officer, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee or the Securities Administrator specified by the Trustee or the
Securities Administrator, as the case may be, having direct responsibility
over
this Agreement and customarily performing functions similar to those performed
by any one of the designated officers, as 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.
Responsible
Party:
The
party indicated on Exhibit N as the entity primarily responsible for reporting
the information set forth therein to the Securities Administrator pursuant
to
Section 5.13.
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S&P:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. or its
successor in interest.
Xxxxxxxx-Xxxxx
Act:
Means
the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations thereof by the
Commission’s staff).
Xxxxxxxx-Xxxxx
Certification:
A
written certification signed by an officer of the Master Servicer that complies
with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and
(ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002
is
amended, (b) the Rules referred to in clause (ii) are modified or superseded
by
any subsequent statement, rule or regulation of the Commission or any statement
of a division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the Xxxxxxxx-Xxxxx
Act
of 2002, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous than the form of the
required certification as of the Closing Date, the Xxxxxxxx-Xxxxx Certification
shall be as agreed to by the Master Servicer, the Depositor and the Seller
following a negotiation in good faith to determine how to comply with any such
new requirements.
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.
Securities
Act:
The
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Securities
Administrator:
As of
the Closing Date, Xxxxx Fargo Bank, N.A. and thereafter, its respective
successors in interest that meet the qualifications of this Agreement. The
Securities Administrator and the Master Servicer shall at all times be the
same
Person or Affiliates.
Senior
Certificates:
The
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates.
Senior
Enhancement Percentage:
With
respect to any Distribution Date will be the fraction, expressed as a
percentage, the numerator of which is the sum of the aggregate Certificate
Principal Balance of the Subordinate Certificates and the Overcollateralization
Amount, in each case after giving effect to payments on such Distribution Date
(assuming no Trigger Event is in effect), and the denominator of which is the
Aggregate Loan Balance for such Distribution Date.
Senior
Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the Certificate Principal Balances of the Senior
Certificates, in each case, immediately prior to such Distribution Date exceed
(y) the lesser of (A) the product of (i) 46.40% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
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Service(s)(ing):
Means,
in accordance with Regulation AB, the act of servicing and administering the
Mortgage Loans or any other assets of the Trust Fund by an entity that meets
the
definition of “servicer’ set forth in Item 1101 of Regulation AB and is subject
to the disclosure requirements set forth in 1108 of Regulation AB. For
clarification purposes, any uncapitalized occurrence of this term shall have
the
meaning commonly understood by participants in the residential mortgage-backed
securitization market.
Servicer:
Shall
mean Ocwen Loan Servicing, LLC, or any successor thereto appointed hereunder
in
connection with the servicing and administration of the Mortgage
Loans.
Servicer
Default:
As
defined in Section 8.01.
Servicer
Prepayment Charge Payment Amount:
The
amount payable by a Servicer in respect of any waived Prepayment Charges
pursuant to Section 3.01.
Servicer’s
Assignee:
As
defined in Section 5.01(b)(ii)
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable legal fees) incurred prior to, on or after the Cut-off
Date in the performance by the Servicer of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection, valuation and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, and including
any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered in the MERS® System, (iii) the management and
liquidation of any REO Property (including, without limitation, realtor’s
commissions), (iv) compliance with any obligations under Section 3.07
hereof to cause insurance to be maintained, (v) payment of taxes, (vi) obtaining
broker price opinions and (vii) obtaining any legal documentation required
to be
included in the Mortgage File and/or correcting any outstanding title issues
(i.e., any lien or encumbrance on the Mortgaged Property that prevents the
effective enforcement of the intended lien position) reasonably necessary for
the Servicer to perform its obligations under this Agreement. Servicing Advances
also include any reasonable “out-of-pocket” cost and expenses (including legal
fees) incurred by the Servicer in connection with executing and recording
instruments of satisfaction, deeds of reconveyance or Assignments to the extent
not recovered from the Mortgagor or otherwise payable under this Agreement.
The
Servicer shall not be required to make any Servicing Advances that would
constitute a Nonrecoverable Advance, provided that the Servicer delivers an
Officer’s Certificate to the Master Servicer and the Trustee certifying that
such Servicing Advance would constitute a Nonrecoverable Advance.
Servicing
Criteria:
Means
the criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such
may be amended from time to time.
Servicing
Fee:
As to
each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of
the
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the last day of the related Due Period or, in the event of any
payment of interest that accompanies a Principal Prepayment in full during
the
related Due Period made by the Mortgagor immediately prior to such prepayment,
interest at the Servicing Fee Rate on the same Stated Principal Balance of
such
Mortgage Loan used to calculate the payment of interest on such Mortgage
Loan.
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Servicing
Fee Rate:
0.50%
per annum.
Servicing
Function Participant:
Means
the Servicer, the Master Servicer and the Securities Administrator, the
Custodian, any Subservicer, Subcontractor, or any other Person, that is
participating in the servicing function within the meaning of Item 1122 of
Regulation AB performing activities addressed by the Servicing Criteria, unless
such Person’s activities relate only to five percent (5%) or less of the
Mortgage Loans.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
the servicing of Mortgage Loans, whose name and specimen signature appear on
a
list of Servicing Officers furnished to the Master Servicer, the Securities
Administrator the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
Six-Month
LIBOR:
The per
annum rate equal to the average of interbank offered rates for Six-Month U.S.
dollar-denominated deposits in the London market based on quotations of major
banks as published in The Wall Street Journal and most recently available as
of
the time specified in the related Mortgage Note.
Sponsor:
Nomura
Credit & Capital, Inc., a Delaware corporation, and its successors and
assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Startup
Day:
The
Startup Day for each REMIC formed hereunder shall be the Closing
Date.
Stated
Principal Balance:
With
respect to any Mortgage Loan or related REO Property and any Distribution Date,
the Cut-off Date Principal Balance thereof minus the sum of (i) the principal
portion of the Scheduled Payments due with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date (and irrespective of
any
delinquency in their payment), (ii) all Principal Prepayments with respect
to
such Mortgage Loan received prior to or during the related Prepayment Period,
and all Liquidation Proceeds to the extent applied by the Servicer as recoveries
of principal in accordance with Section 3.09 of this Agreement with respect
to such Mortgage Loan, that were received by the Servicer as of the close of
business on the last day of the Prepayment Period related to such Distribution
Date and (iii) any Realized Losses on such Mortgage Loan incurred during the
related Prepayment Period. The Stated Principal Balance of a Liquidated Loan
equals zero.
Stepdown
Date:
The
later to occur of (x) the Distribution Date in March 2009 and (y) the first
Distribution Date on which the Senior Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans, but prior to any distributions to the holders of the Publicly
Offered Certificates and the Class B Certificates on such Distribution Date)
is
greater than or equal to 53.60%.
Subordinate
Certificates:
Shall
mean, collectively, the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class B-1 and Class B-2
Certificates.
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Subcontractor:
As
defined in Section 3.03 of this Agreement.
Subsequent
Recoveries:
Shall
mean all amounts in respect of principal received by a Servicer (net of
reimbursable expenses) on a Mortgage Loan for which a Realized Loss was
previously incurred.
Subservicer:
Means
any Person that services Mortgage Loans on behalf of the Servicer.
Subservicing
Agreement:
Any
agreement entered into between the Servicer and a Subservicer with respect
to
the subservicing of any Mortgage Loan subject to Section 3.03 of this Agreement
by such Subservicer.
Substitution
Adjustment Amount:
The
meaning ascribed to such term pursuant to Section 2.03(d).
Successor
Servicer:
The
Master Servicer or any successor to the Servicer appointed pursuant to
Section 8.02 of this Agreement after the occurrence of a Servicer Default
or upon the resignation of the Servicer pursuant to this Agreement.
Supplemental
Interest Trust:
The
corpus of a trust created pursuant to Section 5.11 of this Agreement and
designated as the “Supplemental Interest Trust,” consisting of the Swap
Agreement, the Class IO Interest and the right to receive payments in respect
of
the Class IO Distribution Amount. For the avoidance of doubt, the Supplemental
Interest Trust does not constitute a part of the Trust Fund.
Swap
Agreement:
The
interest rate swap agreement, dated March 9, 2006, between HSBC Bank USA,
National Association, as trustee on behalf of the Supplemental Interest Trust,
and the Swap Provider, which agreement provides for Net Swap Trust Payments
and
Swap Termination Payments to be paid, as provided therein, together with any
schedules, confirmations or other agreements relating thereto, attached hereto
as Exhibit
P.
Swap
Counterparty:
Bear
Xxxxxxx Financial Products, Inc..
Swap
LIBOR:
LIBOR
as determined pursuant to the Swap Agreement.
Swap
Provider:
The
swap provider under the Swap Agreement either (a) entitled to receive payments
from the Supplemental Interest Trust or (b) required to make payments to the
Supplemental Interest Trust, in either case pursuant to the terms of the Swap
Agreement, and any successor in interest or assign. Initially, the Swap Provider
shall be Swiss Re Financial Products Corporation.
Swap
Provider Trigger Event:
A Swap
Provider Trigger Event shall have occurred if any of an Event of Default (under
the Swap Agreement) with respect to which the Swap Provider is a Defaulting
Party, a Termination Event (under the Swap Agreement) with respect to which
the
Swap Provider is the sole Affected Party or an Additional Termination Event
(under the Swap Agreement) with respect to which the Swap Provider is the sole
Affected Party has occurred.
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Swap
Termination Payment:
Upon
the designation of an “Early Termination Date” as defined in the Swap Agreement,
the payment to be made by the Supplemental Interest Trust to the Swap Provider,
or by the Swap Provider to the Supplemental Interest Trust, as applicable,
pursuant to the terms of the Swap Agreement.
Targeted
Overcollateralization Amount:
With
respect to any Distribution Date prior to the Stepdown Date, 2.70% of the
Aggregate Loan Balance as of the Cut-off Date; with respect to any Distribution
Date on or after the Stepdown Date and with respect to which a Trigger Event
is
not in effect, the greater of (a) 5.40% of the Aggregate Loan Balance for such
Distribution Date, or (b) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date; with respect to any Distribution Date on or after the Stepdown Date with
respect to which a Trigger Event is in effect, the Targeted
Overcollateralization Amount for such Distribution Date will be equal to the
Targeted Overcollateralization Amount for the Distribution Date immediately
preceding such Distribution Date. Notwithstanding the foregoing, on and after
any Distribution Date following the reduction of the aggregate Certificate
Principal Balance of the Publicly Offered Certificates and the Class B
Certificates to zero, the Targeted Overcollateralization Amount shall be
zero.
Tax
Matters Person:
The
person designated as “tax matters person” in the manner provided under Treasury
regulation § 1.860F-4(d) and temporary Treasury regulation
§ 301.6231(a)(7)-1T. The holder of the greatest Percentage Interest in a
Class of Residual Certificates shall be the Tax Matters Person for the related
REMIC. The Securities Administrator, or any successor thereto or assignee
thereof shall serve as tax administrator hereunder and as agent for the related
Tax Matters Person.
Termination
Price:
The
price, calculated as set forth in Section 10.01, to be paid in connection
with the purchase of the Mortgage Loans pursuant to
Section 10.01.
Transaction
Party:
Shall
mean the Depositor, the Sponsor, the Trustee, the Servicer, the Master Servicer,
the Securities Administrator, the Custodian and the Swap Provider.
Transfer
Affidavit:
As
defined in Section 6.02(c).
Transfer:
Any
direct or indirect transfer or sale of any Ownership Interest in a
Certificate.
Trigger
Event:
With
respect to any Distribution Date, a Trigger Event is in effect if either (i)
the
Delinquency Rate as of the last day of the related Due Period exceeds 34.00%
of
the Senior Enhancement Percentage for such Distribution Date or (ii) the
cumulative Realized Losses as a percentage of the original Aggregate Loan
Balance on the Closing Date for such Distribution Date is greater than the
percentage set forth in the following table:
|
Distribution
Date
|
Percentage
|
|||
|
March
2009 - February 2010
|
3.50
|
%
|
||
|
March
2010 - February 2011
|
5.25
|
%
|
||
|
March
2011 - February 2012
|
6.50
|
%
|
||
|
March
2012 - February 2013
|
7.25
|
%
|
||
|
March
2013 and thereafter
|
7.50
|
%
|
||
-
53 -
*The
cumulative loss percentages set forth above are applicable to the first
Distribution Date in the corresponding range of Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between the
percentage applicable
to the first Distribution Date in that range and the percentage applicable
to
the first Distribution
Date in the succeeding range.
Trust
Fund:
Collectively, the assets of REMIC I, REMIC II, REMIC III and the Basis Risk
Shortfall Reserve Fund. For the avoidance of doubt, the Trust Fund does not
include the Supplemental Interest Trust.
Trustee:
HSBC
Bank USA, National Association, a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit
of
the Certificateholders under this Agreement, and any successor thereto, and
any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Uncertificated
Accrued Interest:
With
respect to each Uncertificated REMIC Regular Interest on each Distribution
Date,
an amount equal to one month’s interest at the related Uncertificated
Pass-Through Rate on the Uncertificated Principal Balance of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by
any
Prepayment Interest Shortfalls and shortfalls resulting from application of
the
Relief Act (allocated to such REMIC Regular Interests as set forth in Sections
1.02 and 5.07).
Uncertificated
Notional Amount:
With
respect to the Class X Interest and any Distribution Date, an amount equal
to
the aggregate Uncertificated Principal Balance of the REMIC II Regular Interests
(other than REMIC II Regular Interest P) for such Distribution Date.
With
respect to REMIC II Regular Interest LT-IO and each Distribution Date listed
below, the aggregate Uncertificated Principal Balance of the REMIC 1 Regular
Interests ending with the designation “A” listed below:
|
Distribution
Date
|
REMIC
1 Regular Interests
|
|||
|
1
|
I-1-A
through X-00-X
|
|||
|
0
|
X-0-X
xxxxxxx X-00-X
|
|||
|
0
|
X-0-X
through X-00-X
|
|||
|
0
|
X-0-X
xxxxxxx X-00-X
|
|||
|
0
|
X-0-X
through X-00-X
|
|||
|
0
|
X-0-X
xxxxxxx X-00-X
|
|||
|
0
|
X-0-X
through X-00-X
|
|||
|
0
|
X-0-X
xxxxxxx X-00-X
|
|||
|
0
|
X-0-X
through I-59-A
|
|||
|
10
|
I-10-A
through I-59-A
|
|||
|
11
|
I-11-A
through I-59-A
|
|||
|
12
|
I-12-A
through I-59-A
|
|||
|
13
|
I-13-A
through I-59-A
|
|||
|
14
|
I-14-A
through I-59-A
|
|||
|
15
|
I-15-A
through I-59-A
|
|||
|
16
|
I-16-A
through I-59-A
|
|||
-
54 -
|
Distribution
Date
|
REMIC
1 Regular Interests
|
|||
|
17
|
|
|
I-17-A
through I-59-A
|
|
|
18
|
|
|
I-18-A
through I-59-A
|
|
|
19
|
|
|
I-19-A
through I-59-A
|
|
|
20
|
|
|
I-20-A
through I-59-A
|
|
|
21
|
|
|
I-21-A
through I-59-A
|
|
|
22
|
|
|
I-22-A
through I-59-A
|
|
|
23
|
|
|
I-23-A
through I-59-A
|
|
|
24
|
|
|
I-24-A
through I-59-A
|
|
|
25
|
|
|
I-25-A
through I-59-A
|
|
|
26
|
|
|
I-26-A
through I-59-A
|
|
|
27
|
|
|
I-27-A
through I-59-A
|
|
|
28
|
|
|
I-28-A
through I-59-A
|
|
|
29
|
|
|
I-29-A
through I-59-A
|
|
|
30
|
|
|
I-30-A
through I-59-A
|
|
|
31
|
|
|
I-31-A
through I-59-A
|
|
|
32
|
|
|
I-32-A
through I-59-A
|
|
|
33
|
|
|
I-33-A
through I-59-A
|
|
|
34
|
|
|
I-34-A
through I-59-A
|
|
|
35
|
|
|
I-35-A
through I-59-A
|
|
|
36
|
|
|
I-36-A
through I-59-A
|
|
|
37
and 38
|
|
|
I-37-A
through I-59-A
|
|
|
39
|
|
|
I-38-A
through I-59-A
|
|
|
40
|
|
|
I-39-A
through I-59-A
|
|
|
41
|
|
|
I-40-A
through I-59-A
|
|
|
42
|
|
|
I-41-A
through I-59-A
|
|
|
43
|
|
|
I-42-A
through I-59-A
|
|
|
44
|
|
|
I-43-A
through I-59-A
|
|
|
45
|
|
|
I-44-A
through I-59-A
|
|
|
46
|
|
|
I-45-A
through I-59-A
|
|
|
47
|
|
|
I-46-A
through I-59-A
|
|
|
48
|
|
|
I-47-A
through I-59-A
|
|
|
49
|
|
|
I-48-A
through I-59-A
|
|
|
50
|
|
|
I-49-A
through I-59-A
|
|
|
51
|
|
|
I-50-A
through I-59-A
|
|
|
52
|
|
|
I-51-A
through I-59-A
|
|
|
53
|
|
|
I-52-A
through I-59-A
|
|
|
54
|
|
|
I-53-A
through I-59-A
|
|
|
55
|
|
|
I-54-A
through I-59-A
|
|
|
56
|
|
|
I-55-A
through I-59-A
|
|
|
57
|
|
|
I-56-A
through I-59-A
|
|
|
58
|
|
|
I-57-A
through I-59-A
|
|
|
59
|
|
|
I-58-A
and I-59-A
|
|
|
60
|
|
|
I-59-A
|
|
|
thereafter
|
|
$
|
0.00
|
|
With
respect to the Class IO Interest and any Distribution Date, an amount equal
to
the Uncertificated Notional Amount of the REMIC II Regular Interest
IO.
Uncertificated
Principal Balance:
With
respect to each REMIC Regular Interest (other than REMIC II Regular Interest
LT-IO), the principal amount of such REMIC Regular Interest outstanding as
of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each such REMIC Regular Interest shall equal the amount set forth
in
the Preliminary Statement hereto as its initial Uncertificated Principal
Balance. On each Distribution Date, the Uncertificated Principal Balance of
each
REMIC Regular Interest shall be reduced by all distributions of principal made
on such REMIC Regular Interest on such Distribution Date pursuant to Section
5.07 and, if and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Section
5.07. The Uncertificated Principal Balance of each REMIC Regular Interest shall
never be less than zero.
-
55 -
Uncertificated
Pass-Through Rate:
The
Uncertificated REMIC I Pass-Through Rate or Uncertificated REMIC II Pass-Through
Rate.
Uncertificated
REMIC I Pass-Through Rate:
With
respect to REMIC I Regular Interest I, a per annum rate equal to the weighted
average Net Mortgage Rate of Mortgage Loans. With respect to each REMIC I
Regular Interest ending with the designation “A”, a per annum rate equal to the
weighted average Net Mortgage Rate of the Mortgage Loans multiplied by 2,
subject to a maximum rate of 10.4030%. With respect to each REMIC I Regular
Interest ending with the designation “B”, the greater of (x) a per annum rate
equal to the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) 10.4030% and (y)
0.00%.
Uncertificated
REMIC II Pass-Through Rate:
With
respect to REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-A1,
REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II
Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest
LT-B2
and REMIC II Regular Interest LT-ZZ, a
per
annum rate (but not less than zero) equal to the weighted average of (w) with
respect to REMIC I Regular Interest I, the Uncertificated REMIC I Pass-Through
Rate for such REMIC I Regular Interest for each such Distribution Date, (x)
with
respect to REMIC I Regular Interests ending with the designation “B”, the
weighted average of the Uncertificated REMIC I Pass-Through Rates for such
REMIC
I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interests for each such Distribution Date and
(y) with respect to REMIC I Regular Interests ending with the designation “A”,
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted
on
the basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest for each such Distribution Date:
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
|
1
|
I-1-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
2
|
I-2-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
3
|
I-3-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
and I-2-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
4
|
I-4-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-3-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
5
|
I-5-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
-
56 -
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
|
I-1-A
through I-4-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
6
|
I-6-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-5-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
7
|
I-7-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-6-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
8
|
I-8-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-7-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
9
|
I-9-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-8-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
10
|
I-10-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-9-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
11
|
I-11-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-10-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
12
|
I-12-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-11-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
13
|
I-13-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-12-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
14
|
I-14-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-13-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
15
|
I-15-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-14-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
16
|
I-16-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-15-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
17
|
I-17-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-16-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
18
|
I-18-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-17-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
19
|
I-19-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-18-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
20
|
I-20-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-19-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
21
|
I-21-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-20-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
22
|
I-22-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-21-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
23
|
I-23-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-22-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
24
|
I-24-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-23-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
25
|
I-25-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-24-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
26
|
I-26-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-25-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
27
|
I-27-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-26-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
-
57 -
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
|
28
|
I-28-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-27-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
29
|
I-29-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-28-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
30
|
I-30-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-29-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
31
|
I-31-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-30-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
32
|
I-32-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-31-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
33
|
I-33-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-32-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
34
|
I-34-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-33-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
35
|
I-35-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-34-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
36
|
I-36-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-35-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
37
and 38
|
I-37-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-36-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
39
|
I-38-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-37-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
40
|
I-39-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-38-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
41
|
I-40-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-39-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
42
|
I-41-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-40-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
43
|
I-42-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-41-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
44
|
I-43-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-42-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
45
|
I-44-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-43-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
46
|
I-45-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-44-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
47
|
I-46-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-45-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
48
|
I-47-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-46-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
49
|
I-48-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-47-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
50
|
I-49-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-48-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
51
|
I-50-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-49-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
-
58 -
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
|
52
|
I-51-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-50-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
53
|
I-52-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-51-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
54
|
I-53-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-52-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
55
|
I-54-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-53-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
56
|
I-55-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-54-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
57
|
I-56-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-55-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
58
|
I-57-A
through I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-56-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
59
|
I-58-A
and I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-57-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
60
|
I-59-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
|
I-1-A
through I-58-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|
|
thereafter
|
I-1-A
through I-59-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
With
respect to REMIC II Regular Interest LT-IO, the excess of (i) the Uncertificated
REMIC I Pass-Through Rates for REMIC I Regular Interests ending with the
designation “A”, over (ii) 2 multiplied by Swap LIBOR.
Uncertificated
REMIC Regular Interest:
The
REMIC I Regular Interests, the REMIC II Regular Interests and the Class IO
Interest.
Voting
Rights:
The
portion of the voting rights of all the Certificates that is allocated to any
Certificate for purposes of the voting provisions hereunder. Voting Rights
shall
be allocated (i) 98% to the Certificates (other than the Class X, Class P
and the Residual Certificates) and (ii) 1% to each of the Class X
Certificates and Class P Certificates. Voting rights will be allocated among
the
Certificates of each such Class in accordance with their respective Percentage
Interests. The Residual Certificates will not be allocated any voting
rights.
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59 -
Section
1.02 Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of the Interest Remittance Amount for any
Distribution Date, (1) the aggregate amount of any Net Interest Shortfalls
in
respect of the Mortgage Loans for any Distribution Date shall reduce the
Interest Remittance Amount on a pro
rata
basis
based on, and to the extent of, one month’s interest at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance
of
each class of Publicly Offered Certificates and (2) the aggregate amount of
any
Realized Losses allocated to the Subordinate Certificates and Basis Risk
Shortfalls allocated to the Publicly Offered Certificates and the Class B
Certificates for any Distribution Date shall be allocated to the Class X
Certificates based on, and to the extent of, one month’s interest at the then
applicable respective Pass-Through Rate on the Certificate Principal Balance
thereof on any Distribution Date.
For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date the aggregate amount of
any
Net Interest Shortfalls for any Distribution Date shall be allocated first,
to
REMIC I Regular Interest I and to the REMIC I Regular Interests ending with
the
designation “B”, pro
rata
based
on, and to the extent of, one month’s interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rates on the respective Uncertificated
Principal Balances of each such REMIC I Regular Interest, and then, to REMIC
I
Regular Interests ending with the designation “A”, pro rata based on, and to the
extent of, one month’s interest at the then applicable respective Uncertificated
REMIC I Pass-Through Rates on the respective Uncertificated Principal Balances
of each such REMIC I Regular Interest.
For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC II Regular Interests for any Distribution Date:
The
aggregate amount of any Net Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated among
REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-A1, REMIC II
Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest LT-B2 and
REMIC I Regular Interest LT-ZZ, pro
rata
based
on, and to the extent of, one month’s interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest.
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60 -
ARTICLE
II
CONVEYANCE
OF TRUST FUND
REPRESENTATIONS
AND WARRANTIES
Section
2.01 Conveyance
of Trust Fund.
The
Sponsor hereby sells, transfers, assigns, sets over and otherwise conveys to
the
Depositor, without recourse, all the right, title and interest of the Sponsor
in
and to the assets in the Trust Fund.
The
Sponsor has entered into this Agreement in consideration for the purchase of
the
Mortgage Loans by the Depositor and has agreed to take the actions specified
herein.
The
Depositor, concurrently with the execution and delivery hereof, hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trustee for the
use
and benefit of the Certificateholders, without recourse, all the right, title
and interest of the Depositor in and to the Trust Fund.
Concurrently
with the execution and delivery of this Agreement, the Depositor does hereby
assign to the Trustee all of its rights and interest under the Mortgage Loan
Purchase Agreement, to the extent of the Mortgage Loans sold under the Mortgage
Loan Purchase Agreement. The Trustee hereby accepts such assignment, and shall
be entitled to exercise all rights of the Depositor under the Mortgage Loan
Purchase Agreement as if, for such purpose, it were the Depositor. The foregoing
sale, transfer, assignment, set-over, deposit and conveyance does not and is
not
intended to result in creation or assumption by the Trustee of any obligation
of
the Depositor, the Sponsor or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto except as
specifically set forth herein.
In
connection with such sale, the Depositor does hereby deliver to, and deposit
with the Custodian pursuant to the Custodial Agreement the documents with
respect to each Mortgage Loan as described under Section 2 of the Custodial
Agreement (the “Mortgage Loan Documents”). In connection with such delivery and
as further described in the Custodial Agreement, the Custodian will be required
to review such Mortgage Loan Documents and deliver to the Trustee, the
Depositor, the Servicer and the Sponsor certifications (in the forms attached
to
the Custodial Agreement) with respect to such review with exceptions noted
thereon. In addition, under the Custodial Agreement the Depositor will be
required to cure certain defects with respect to the Mortgage Loan Documents
for
the related Mortgage Loans after the delivery thereof by the Depositor to the
Custodian as more particularly set forth therein.
Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge that
the functions of the Trustee with respect to the custody, acceptance, inspection
and release of the Mortgage Files and preparation and delivery of the
certifications shall be performed by the Custodian pursuant to the terms and
conditions of the Custodial Agreement.
The
Depositor shall deliver or cause to be delivered to the Servicer copies of
all
trailing documents required to be included in the related Mortgage File at
the
same time the originals or certified copies thereof are delivered to the
Custodian, such documents including the mortgagee policy of title insurance
and
any Mortgage Loan Documents upon return from the recording office. The Servicer
shall not be responsible for any custodial fees or other costs incurred in
obtaining such documents and the Depositor shall cause the Servicer to be
reimbursed for any such costs the Servicer may incur in connection with
performing its obligations under this Agreement.
-
61 -
The
Mortgage Loans permitted by the terms of this Agreement to be included in the
Trust are limited to (i) Mortgage Loans (which the Depositor acquired pursuant
to the Mortgage Loan Purchase Agreement, which contains, among other
representations and warranties, a representation and warranty of the Sponsor
that no Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act effective November 27, 2003, as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004) as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act,
effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9) and
(ii) Qualified Substitute Mortgage Loans (which, by definition as set forth
herein and referred to in the Mortgage Loan Purchase Agreement, are required
to
conform to, among other representations and warranties, the representation
and
warranty of the Sponsor that no Qualified Substitute Mortgage Loan is a
“High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective
November 27, 2003, as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. Xxx. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind.
Code Xxx. Sections 24-9-1 through 24-9-9). The Depositor and the Trustee on
behalf of the Trust understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a “High-Cost Home Loan” as
defined in the New Jersey Home Ownership Act effective November 27, 2003, as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004,
as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1
through 24-9-9).
Section
2.02 Acceptance
of the Mortgage Loans.
(a) Based
on
the initial trust receipt received by it from the Custodian pursuant to the
Custodial Agreement, the Trustee acknowledges receipt, subject to the provisions
of Section 2.01 hereof and Section 2 of the Custodial Agreement, of
the Mortgage Loan Documents and all other assets included in the definition
of
“REMIC I” under clauses (i), (ii) (iii), (v) and (vi) (to the extent of amounts
deposited into the Distribution Account) and declares that it holds (or the
Custodian on its behalf holds) and will hold such documents and the other
documents delivered to it constituting a Mortgage Loan Document, and that it
holds (or the Custodian on its behalf holds) or will hold all such assets and
such other assets included in the definition of “REMIC I” in trust for the
exclusive use and benefit of all present and future
Certificateholders.
(b) In
conducting the review of the Mortgage Files in accordance with the Custodial
Agreement, the Custodian on the Trustee’s behalf will ascertain whether all
required documents have been executed and received and whether those documents
relate to the Mortgage Loans identified in Exhibit B to this Agreement, as
supplemented. If the Custodian finds any document constituting part of the
Mortgage File not to have been executed or received, or to be unrelated to
the
Mortgage Loans identified in Exhibit B, the Sponsor shall correct or cure any
such defect or, if prior to the end of the second anniversary of the Closing
Date, the Sponsor may substitute for the related Mortgage Loan a Replacement
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03 or shall deliver to the
Trustee an Opinion of Counsel to the effect that such defect does not materially
or adversely affect the interests of the Certificateholders in such Mortgage
Loan within sixty (60) days from the date of notice from the Custodian of the
defect and if the Sponsor fails to correct or cure the defect or deliver such
opinion within such period, the Sponsor will, subject to Section 2.03,
within ninety (90) days from the notification of the Custodian purchase such
Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Sponsor to deliver the Mortgage,
assignment thereof to the Custodian, or intervening assignments thereof with
evidence of recording thereon because such documents have been submitted for
recording and have not been returned by the applicable jurisdiction, the Sponsor
shall not be required to purchase such Mortgage Loan if the Sponsor delivers
such documents promptly upon receipt, but in no event later than 360 days after
the Closing Date.
-
62 -
(c) No
later
than 180 days after the Closing Date, the Custodian on the Trustee’s behalf will
review, for the benefit of the Certificateholders, the Mortgage Files and will
execute and deliver or cause to be executed and delivered to the Sponsor, the
Servicer and the Trustee, a final trust receipt substantially in the form
annexed to the Custodial Agreement. In conducting such review, the Custodian
on
the Trustee’s behalf and in accordance with the terms of the Custodial Agreement
will ascertain whether each document required to be recorded has been returned
from the recording office with evidence of recording thereon and the Custodian
on the Trustee’s behalf has received either an original or a copy thereof, as
required in the Custodial Agreement. If the Custodian finds that any document
with respect to a Mortgage Loan has not been received, or is unrelated to the
Mortgage Loans identified in Exhibit B or appears to be defective on its face,
the Custodian shall note such defect in the exception report attached the final
trust receipt issued pursuant to the Custodial Agreement and the Sponsor shall
correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Sponsor may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in
Section 2.03 or shall deliver to the Trustee an Opinion of Counsel to the
effect that such defect does not materially or adversely affect the interests
of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Sponsor is unable within such period
to correct or cure such defect, or to substitute the related Mortgage Loan
with
a Replacement Mortgage Loan or to deliver such opinion, the Sponsor shall,
subject to Section 2.03, within 90 days from the notification of the
Trustee, purchase such Mortgage Loan at the Purchase Price; provided, however,
that if such defect relates solely to the inability of the Sponsor to deliver
the Mortgage, assignment thereof to the Trustee or intervening assignments
thereof with evidence of recording thereon, because such documents have not
been
returned by the applicable jurisdiction, the Sponsor shall not be required
to
purchase such Mortgage Loan, if the Sponsor delivers such documents promptly
upon receipt, but in no event later than 360 days after the Closing
Date.
(d) In
the
event that a Mortgage Loan is purchased by the Sponsor in accordance with
subsections 2.02(a) or (b) above or Section 2.03, the Sponsor shall remit
the applicable Purchase Price to the Servicer for deposit in the Custodial
Account and shall provide written notice to the Securities Administrator
detailing the components of the Purchase Price, signed by an authorized officer.
Upon deposit of the Purchase Price in the Custodial Account and upon receipt
of
a request for release (in the form attached to the Custodial Agreement) with
respect to such Mortgage Loan, the Custodian, on behalf of the Trustee, will
release to the Sponsor the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
furnished to it by the Sponsor, as are necessary to vest in the Sponsor title
to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the deposit into the Custodial Account was made.
The Securities Administrator shall promptly notify the Rating Agencies of such
repurchase. The obligation of the Sponsor to cure, repurchase or substitute
for
any Mortgage Loan as to which a defect in a constituent document exists shall
be
the sole remedies respecting such defect available to the Certificateholders
or
to the Securities Administrator on their behalf. The Sponsor shall promptly
reimburse the Securities Administrator for any expenses incurred by the
Securities Administrator in respect of enforcing the remedies for such
breach.
-
63 -
(e) The
Sponsor shall deliver to the Custodian the Mortgage Note and other documents
constituting the Mortgage File with respect to any Replacement Mortgage Loan,
which the Custodian will review as provided in the Custodial Agreement,
provided, that the Closing Date referred to therein shall instead be the date
of
delivery of the Mortgage File with respect to each Replacement Mortgage
Loan.
Section
2.03 Representations,
Warranties and Covenants of the Servicer and the Sponsor.
(a) The
Servicer hereby represents and warrants to, and covenants with, the Sponsor,
the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
as
follows, as of the Closing Date:
(i) It
is
duly organized and is validly existing and in good standing under the laws
of
the state of its formation and is duly authorized and qualified to transact
any
and all business contemplated by this Agreement to be conducted by it in any
state in which a Mortgaged Property related to 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 service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms
hereof.
(ii) It
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
corporate action on its part the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
that (a) the enforceability hereof 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 equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought
and
further subject to public policy with respect to indemnity and contribution
under applicable securities law.
-
64 -
(iii) The
execution and delivery of this Agreement by it, the servicing of the Mortgage
Loans by it under this Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in its ordinary course of business and
will
not (A) result in a material breach of any term or provision of its charter
or
by-laws or (B) materially conflict with, result in a material breach, violation
or acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which it is a party or by which it
may
be bound, or (C) constitute a material violation of any statute, order or
regulation applicable to it of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or instrument,
or in violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform or meet
any of its obligations under this Agreement.
(iv) It
is an
approved servicer of conventional mortgage loans for Xxxxxx Xxx or Xxxxxxx
Mac
and is a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(v) No
litigation is pending or, to the best of its knowledge, threatened in writing,
against it that would materially and adversely affect the execution, delivery
or
enforceability of this Agreement or its ability to service the Mortgage Loans
or
to perform any of its other obligations under this Agreement in accordance
with
the terms hereof.
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for its execution, delivery and performance of, or compliance
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is required,
it
has obtained the same.
(vii) The
Servicer has accurately and fully reported, and will continue to accurately
and
fully report its borrower credit files to each of the credit repositories in
a
timely manner materially in accordance with the Fair Credit Reporting Act and
its implementing legislation.
(viii) The
Servicer is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS.
(ix) The
Servicer will not waive any Prepayment Charge with respect to a Mortgage Loan
unless it is waived in accordance with the standard set forth in
Section 3.01.
-
65 -
If
the
covenant set forth in Section 2.03(a)(ix) above is breached by the
Servicer, the Servicer will 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 Custodial Account within ninety (90) days of the earlier of
discovery by the Servicer or receipt of notice by the Servicer of such breach.
Notwithstanding the foregoing, or anything to the contrary contained in this
Agreement, the Servicer shall have no liability for a waiver of any Prepayment
Charge in the event that the Servicer’s determination to make such a waiver was
made by the Servicer in reliance on information properly received by the
Servicer from any Person in accordance with the terms of this
Agreement.
(b) The
Sponsor hereby represents and warrants to and covenants with, the Depositor,
the
Servicer, the Master Servicer, the Securities Administrator and the Trustee
as
follows, as of the Closing Date:
(i) The
Sponsor is duly organized, validly existing and in good standing under the
laws
of the State of Delaware and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the Sponsor
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, to sell the
Mortgage Loans in accordance with the terms of this Agreement and to perform
any
of its other obligations under this Agreement in accordance with the terms
hereof.
(ii) The
Sponsor has the full corporate power and authority to sell 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 corporate action on the part of the Sponsor the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Sponsor, enforceable
against the Sponsor in accordance with its terms, except that (a) the
enforceability hereof 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 equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought and further
subject to public policy with respect to indemnity and contribution under
applicable securities law.
(iii) The
execution and delivery of this Agreement by the Sponsor, the sale of the
Mortgage Loans by the Sponsor under this Agreement, the consummation of any
other of the transactions contemplated by this Agreement, and the fulfillment
of
or compliance with the terms hereof are in the ordinary course of business
of
the Sponsor and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Sponsor or (B) materially conflict
with, result in a material breach, violation or acceleration of, or result
in a
material default under, the terms of any other material agreement or instrument
to which the Sponsor is a party or by which it may be bound, or (C) constitute
a
material violation of any statute, order or regulation applicable to the Sponsor
of any court, regulatory body, administrative agency or governmental body having
jurisdiction over the Sponsor; and the Sponsor is not in breach or violation
of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair the Sponsor’s ability to perform or
meet any of its obligations under this Agreement.
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(iv) The
Sponsor is an approved seller of conventional mortgage loans for Xxxxxx Mae
or
Xxxxxxx Mac and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the National Housing
Act.
(v) No
litigation is pending or, to the best of the Sponsor’s knowledge, threatened,
against the Sponsor that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Sponsor
to
sell the Mortgage Loans or to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Sponsor
of,
or compliance by the Sponsor with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Sponsor has obtained the
same.
(vii) The
representations and warranties set forth in Section 8 of the Mortgage Loan
Purchase Agreement are true and correct as of the Closing Date.
(viii) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994
or any comparable law and no Mortgage Loan is classified and/or defined as
a
“high cost”, “covered”, “high risk home” or “predatory” loan under any other
state, federal or local law or regulation or ordinance (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees).
(ix) No
loan
is a High Cost Loan or Covered Loan, as applicable (as such terms are defined
in
Appendix E of the Standard & Poor's Glossary For File Format For LEVELS®
Version 5.6 Revised (attached hereto as Exhibit O) and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed by
the
Georgia Fair Lending Act.
(x) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing, predatory, abusive
lending or disclosure laws applicable to the origination and servicing of the
Mortgage Loans have been complied with in all material respects.
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(c) Upon
discovery by any of the parties hereto of a breach of a representation or
warranty set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt written notice thereof
to
the other parties. The Sponsor hereby covenants with respect to the
representations and warranties set forth in Section 2.03(b)(viii), (ix) and
(x) and Section 8 of the Mortgage Loan Purchase Agreement, that within
ninety (90) days of the discovery of a breach of any representation or warranty
set forth therein that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, (i) 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 Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section;
or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee
at
the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of an Opinion of Counsel
if
required by Section 2.05 and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Custodian of
a
request for release in accordance with the Custodial Agreement. The Sponsor
shall promptly reimburse the Trustee for any expenses reasonably incurred by
the
Trustee in respect of enforcing the remedies for such breach. To enable the
Servicer to amend the Mortgage Loan Schedule, the Sponsor shall, unless it
cures
such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Trustee whether it intends either to repurchase, or to substitute
for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties in Section 8 of the Mortgage Loan Purchase
Agreement that are made to the best of the Sponsor’s knowledge, if it is
discovered by any of the Depositor, the Sponsor or the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan,
notwithstanding the Sponsor’s lack of knowledge with respect to the substance of
such representation or warranty, the Sponsor shall nevertheless be required
to
cure, substitute for or repurchase the affected Mortgage Loan in accordance
with
the foregoing. Notwithstanding the foregoing, any breach of a representation
or
warranty contained in clauses (xxxiii), (xxxvii), (xxxviii), (xl), (xlv) and/or
(lii) of Section 8 of the Mortgage Loan Purchase Agreement shall be
automatically deemed to materially and adversely affect the interests of the
Certificateholders.
With
respect to any Replacement Mortgage Loan or Loans, the Sponsor shall deliver
to
the Custodian for the benefit of the Certificateholders such documents and
agreements as are required by Section 2 of the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date
for
such month. Scheduled Payments due with respect to Replacement Mortgage Loans
in
the Due Period related to the Distribution Date on which such proceeds are
to be
distributed shall not be part of the Trust Fund and will be retained by the
Sponsor. For the month of substitution, distributions to Certificateholders
will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the Sponsor shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. 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 Replacement
Mortgage Loan or Loans and shall deliver the amended Mortgage Loan Schedule
to
the Trustee, the Master Servicer and the Securities Administrator. Upon such
substitution, the Replacement Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Sponsor shall be deemed to
have
made with respect to such Replacement Mortgage Loan or Loans, as of the date
of
substitution, the representations and warranties set forth in Section 8 of
the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon
any such substitution and the deposit into the Custodial Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Custodian of a request
for release for such Mortgage Loan in accordance with the Custodial Agreement,
the Custodian on behalf of the Trustee shall release to the Sponsor the Mortgage
File relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the Trustee shall execute and deliver at the Sponsor’s
direction such instruments of transfer or assignment as have been prepared
by
the Sponsor, in each case without recourse, as shall be necessary to vest in
the
Sponsor, or its respective designee, title to the Trustee’s interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
Neither the Trustee nor the Custodian shall have any further responsibility
with
regard to such Mortgage File.
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For
any
month in which the Sponsor substitutes one or more Replacement Mortgage Loans
for a Deleted Mortgage Loan, the Securities Administrator will determine the
amount (if any) by which the aggregate principal balance of all the Replacement
Mortgage Loans as of the date of substitution is less than the Stated Principal
Balance (after application of the principal portion of the Scheduled Payment
due
in the month of substitution) of such Deleted Mortgage Loan. An amount equal
to
the aggregate of such deficiencies, described in the preceding sentence for
any
Distribution Date (such amount, the “Substitution Adjustment Amount”) shall be
remitted to the Servicer for deposit in the Custodial Account by the Sponsor
delivering such Replacement Mortgage Loan on or before the Determination Date
for the Distribution Date relating to the Prepayment Period during which the
related Mortgage Loan was required to be purchased or replaced
hereunder.
In
the
event that the Sponsor shall be required to repurchase a Mortgage Loan, the
Purchase Price therefor shall be remitted to the Servicer for deposit in the
Custodial Account, on or before the Determination Date immediately following
the
date on which the Sponsor was required to repurchase such Mortgage Loan. The
Purchase Price shall be remitted by the Servicer to the Securities Administrator
on the Remittance Date occurring in the month immediately following the month
in
which the Purchase Price was deposited in the Custodial Account. In addition,
upon such deposit of the Purchase Price, the delivery of an Officer’s
Certificate by the Servicer to the Trustee certifying that the Purchase Price
has been deposited in the Custodial Account, the delivery of an Opinion of
Counsel if required by Section 2.05 and the receipt of a Request for
Release, the Trustee shall release the related Mortgage File held for the
benefit of the related Certificateholders to the Sponsor, and the Trustee shall
execute and deliver at such Person’s direction the related instruments of
transfer or assignment prepared by the Sponsor, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of
the
Certificateholders and transfer the Trustee’s interest to the Sponsor to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Sponsor to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred or
is
continuing shall constitute the sole remedies against the Sponsor respecting
such breach available to Certificateholder, the Depositor or the
Trustee.
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(d) The
Master Servicer hereby represents, warrants and covenants with the Servicer,
the
Depositor and the Trustee as follows, as of the Closing Date:
(i) The
Master Servicer is a national banking association duly formed, validly existing
and in good standing under the 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 the Master Servicer;
(ii) The
Master Servicer has the full power and authority to conduct its business as
presently conducted by it and to execute, deliver and perform, and to enter
into
and consummate, all transactions contemplated by this Agreement. The Master
Servicer has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity;
(iii) The
execution and delivery of this Agreement by the Master Servicer, the
consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are
in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of charter and by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration
of,
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement
or
instrument, or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or
assets of the Master Servicer taken as a whole;
(iv) The
Master Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by it and contained
in this Agreement;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to perform any of its other obligations
hereunder in accordance with the terms hereof,
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(vi) There
are
no actions or proceedings against, or investigations known to it of, the Master
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Master
Servicer of its obligations under, or validity or enforceability of, this
Agreement; and
(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 by it 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.
(e) The
representations and warranties set forth in Section 2.03 shall survive
delivery of the respective Mortgage Loans and Mortgage Files to the Trustee
or
the Custodian for the benefit of the Certificateholders.
Section
2.04 Representations
and Warranties of the Depositor.
The
Depositor hereby represents and warrants to, and covenants, with the Servicer,
the Sponsor, the Master Servicer, the Securities Administrator and the Trustee
as follows, as of the date hereof and as of the Closing Date:
(i) The
Depositor is duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full power and
authority (corporate and other) necessary to own or hold its properties and
to
conduct its business as now conducted by it and to enter into and perform its
obligations under this Agreement.
(ii) The
Depositor has the full corporate power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by,
this
Agreement and has duly authorized, by all necessary corporate action on its
part, the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof by
the
other parties hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency, moratorium
receivership and other similar laws relating to creditors’ rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought and further
subject to public policy with respect to indemnity and contribution under
applicable securities law.
(iii) The
execution and delivery of this Agreement by the Depositor, the consummation
of
the transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Depositor and will not (A) result in a material breach of any term or provision
of the charter or by-laws of the Depositor or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or instrument
to which the Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable to the
Depositor of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Depositor; and the Depositor is not in breach
or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Depositor’s ability
to perform or meet any of its obligations under this Agreement.
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(iv) No
litigation is pending, or, to the best of the Depositor’s knowledge, threatened,
against the Depositor that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Depositor
of, or compliance by the Depositor with, this Agreement or the consummation
of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the
same.
The
Depositor hereby represents and warrants to the Trustee as of the Closing Date,
following the transfer of the Mortgage Loans to it by the Sponsor, the Depositor
had good title to the Mortgage Loans and the related Mortgage Notes were subject
to no offsets, claims, defenses or counterclaims.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 2.04 shall survive delivery of the Mortgage Files to the Trustee or
the Custodian for the benefit of the Certificateholders. Upon discovery by
the
Depositor, the Servicer, the Master Servicer or the Trustee of a breach of
such
representations and warranties, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency.
Section
2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
(a) Notwithstanding
any contrary provision of this Agreement, with respect to any Mortgage Loan
that
is not in default or as to which default is not imminent, no repurchase or
substitution pursuant to Sections 2.02 or 2.03 shall be made unless the Sponsor
delivers to the Trustee an Opinion of Counsel, addressed to the Trustee, to
the
effect that such repurchase or substitution would not (i) result in the
imposition of the tax on “prohibited transactions” of REMIC I, REMIC II or REMIC
III or contributions after the Closing Date, as defined in sections 860F(a)(2)
and 860G(d) of the Code, respectively or (ii) cause any of REMIC I, REMIC II
or
REMIC III to fail to qualify as a REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to which repurchase or substitution was
delayed pursuant to this paragraph shall be repurchased or the substitution
therefor shall occur (subject to compliance with Sections 2.02 or 2.03) upon
the
earlier of (a) the occurrence of a default or imminent default with respect
to
such Mortgage Loan and (b) receipt by the Trustee of an Opinion of Counsel
to
the effect that such repurchase or substitution, as applicable, will not result
in the events described in clause (i) or clause (ii) of the preceding
sentence.
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(b) Upon
discovery by the Depositor or the Sponsor that any Mortgage Loan does not
constitute a “qualified mortgage” within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within five (5) Business Days of discovery) give written notice thereof to
the
other parties and the Trustee. In connection therewith, the Sponsor, at its
option, shall either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Replacement Mortgage Loan for
the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
ninety (90) days of such discovery in the same manner as it would a Mortgage
Loan for a breach of representation or warranty contained in Section 2.03.
The Trustee shall reconvey to the Sponsor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as
it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
Section
2.06 Issuance
of the REMIC I Regular Interests and the Class R Certificates.
The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to the Custodian on its behalf of the related Mortgage Files, subject to the
provisions of Section 2.01 and Section 2.02, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-I
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I Regular
Interests, shall be as set forth in this Agreement.
Section
2.07 Conveyance
of the REMIC I Regular Interests; Issuance and Conveyance of the REMIC II
Regular Interests.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC I Regular
Interests for the benefit of the Class R-II Interest and REMIC II (as holder
of
the REMIC I Regular Interests). The Trustee acknowledges receipt of the REMIC
I
Regular Interests and declares that it holds and will hold the same in trust
for
the exclusive use and benefit of all present and future Holders of the Class
R-II Interest and REMIC II (as holder of the REMIC I Regular Interests). The
rights of the Holder of the Class R-II Interest and REMIC II (as holder of
the
REMIC I Regular Interests) to receive distributions from the proceeds of REMIC
II in respect of the Class R-II Interest and the REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-II Interest and the REMIC II Regular Interests, shall be as set forth in
this
Agreement. The Class R-II Interest and the REMIC II Regular Interests shall
constitute the entire beneficial ownership interest in REMIC II.
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The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC II
Regular Interests for the benefit of the Class R-III Interest and REMIC III
(as
holder of the REMIC II Regular Interests). The Trustee acknowledges receipt
of
the REMIC II Regular Interests and declares that it holds and will hold the
same
in trust for the exclusive use and benefit of all present and future Holders
of
the Class R-III Interest and REMIC III (as holder of the REMIC II Regular
Interests). The rights of the Holder of the Class R-III Interest and REMIC
III
(as holder of the REMIC II Regular Interests) to receive distributions from
the
proceeds of REMIC III in respect of the Class R-III Interest and the Regular
Certificates and the Class IO Interest, respectively, and all ownership
interests evidenced or constituted by the Class R-III Interest and the Regular
Certificates and the Class IO Interest, shall be as set forth in this Agreement.
The Class R-III Interest, the Regular Certificates and the Class IO Interest
shall constitute the entire beneficial ownership interest in REMIC
III.
Section
2.08 Issuance
of Class R Certificates.
The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests
and
the REMIC II Regular Interests and, concurrently therewith and in exchange
therefor, pursuant to the written request of the Depositor executed by an
officer of the Depositor, the Securities Administrator has executed,
authenticated and delivered to or upon the order of the Depositor, the Class
R
Certificates in authorized denominations.
Section
2.09 Establishment
of Trust.
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 to be known,
for convenience, as “Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
Series 2006-HE1” and does hereby appoint HSBC Bank USA, National Association, as
Trustee in accordance with the provisions of this Agreement.
Section
2.10 Purpose
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
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The
trust
is hereby authorized to engage in the foregoing activities. The Trustee shall
not cause the trust to engage in any activity other than in connection with
the
foregoing or other than as required or authorized by the terms of this Agreement
while any Certificate is outstanding, and this Section 2.10 may not be amended,
without the consent of the Certificateholders evidencing 51% or more of the
aggregate voting rights of the Certificates.
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ARTICLE
III
ADMINISTRATION
AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section
3.01 The
Servicer to act as Servicer.
The
Servicer shall service and administer the Mortgage Loans on behalf of the Trust
and in the best interest of and for the benefit of the Certificateholders (as
determined by the Servicer in its reasonable judgment) in accordance with the
terms of this Agreement and the Mortgage Loans and to the extent consistent
with
such terms and in accordance with and exercising the same care in performing
those practices that the Servicer customarily employs and exercises in servicing
and administering mortgage loans for its own account and of the same type as
such Mortgage Loans in the jurisdiction where the related Mortgaged Property
is
located (including, compliance with all applicable federal, state and local
laws).
To
the
extent consistent with the foregoing, the Servicer shall seek the timely and
complete recovery of principal and interest on the Mortgage Notes related to
the
Mortgage Loans and shall waive a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
mortgage loans and (ii) either (A) such waiver is related to a default or
reasonably foreseeable default and would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value
of
such Prepayment Charge and the related Mortgage Loan and, if such waiver is
made
in connection with a refinancing of the related Mortgage Loan, such refinancing
is related to a default or a reasonably foreseeable default or (B) such waiver
is made in connection with a refinancing of the related Mortgage Loan unrelated
to a default or a reasonably foreseeable default where (x) the related Mortgagor
has stated to the Servicer an intention to refinance the related Mortgage Loan
and (y) the Servicer has concluded in its reasonable judgment that the waiver
of
such Prepayment Charge would induce such Mortgagor to refinance with the
Servicer, (iii) the Servicer reasonably believes such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law or (iv) the
Servicer has not been provided with information sufficient to enable it to
collect the Prepayment Charge. If a Prepayment Charge is waived as permitted
by
meeting both of the standards described in clauses (i) and (ii)(B) above, then
the Servicer is required to pay the amount of such waived Prepayment Charge
(the
“Servicer Prepayment Charge Payment Amount”), for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the Custodial Account
within ninety (90) days of notice or discovery of such waiver meeting the
standard set forth in both clauses (i) and (ii)(B) above; provided, however,
that the Servicer shall not waive more than five-percent (5%) of the Prepayment
Charges (by number of Prepayment Charges) set forth on the Prepayment Charge
Schedule in accordance with clauses (i) and (ii)(B) above. Notwithstanding
any
other provisions of this Agreement, any payments made by the Servicer in respect
of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B) above
and
the preceding sentence shall be deemed to be paid outside of the Trust
Fund.
Subject
only to the above-described applicable servicing standards (the “Accepted
Servicing Practices”) and the terms of this Agreement and of the respective
Mortgage Loans, the Servicer shall have full power and authority, acting alone
and/or through subservicers as provided in Section 3.03, to do or cause to
be done any and all things that it may deem necessary or desirable in connection
with such servicing and administration, including but not limited to, the power
and authority, subject to the terms hereof (i) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any related
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages
(but only in the manner provided herein), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.09,
to effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan.
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Without
limiting the generality of the foregoing, the Servicer, in its own name or
in
the name of the Trust, the Depositor or the Trustee, is hereby authorized and
empowered by the Trust, the Depositor and the Trustee, when the Servicer
believes it appropriate in its reasonable judgment, to execute and deliver,
on
behalf of the Trustee, the Depositor, the Certificateholders or any of them,
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 with respect to the related Mortgaged Properties held for
the benefit of the Certificateholders. The Servicer shall prepare and deliver
to
the Depositor and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Servicer
to
service and administer the Mortgage Loans. Upon receipt of such documents,
the
Depositor and/or the Trustee shall execute such documents and deliver them
to
the Servicer. In addition, the Trustee shall execute, at the written request
of
the Servicer, and furnish to it any special or limited powers of attorney in
the
form of Exhibit
Q
hereto
for each county in which a Mortgaged Property is located and other documents
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties hereunder, provided such limited powers of attorney or
other documents shall be prepared by the Servicer and submitted to the Trustee
for review prior to execution. Notwithstanding anything to the contrary herein,
the Trustee shall in no way be liable or responsible for the willful malfeasance
of the Servicer, or for the wrongful or negligent actions taken by the Servicer,
while the Servicer is acting pursuant to the powers granted to it in this
paragraph.
In
accordance with the standards of the first paragraph of this Section 3.01,
the Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans in order to preserve the lien on
the
Mortgaged Property, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3.27, and
further as provided in Section 3.32. All costs incurred by the Servicer, if
any, in effecting the payments of such taxes and assessments on the related
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to
the
Stated Principal Balance under the related Mortgage Loans, notwithstanding
that
the terms of such Mortgage Loans so permit.
Section
3.02 Due-on-Sale
Clauses; Assumption Agreements.
.
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(a) Except
as
otherwise provided in this Section 3.02, when any Mortgaged Property has
been or is about to be conveyed by the Mortgagor, the Servicer shall to the
extent that it has knowledge of such conveyance, enforce any due-on-sale clause
contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any Required
Insurance Policy. Notwithstanding the foregoing, the Servicer shall not be
required to exercise such rights with respect to a Mortgage Loan if the Person
to whom the related Mortgaged Property has been conveyed or is proposed to
be
conveyed satisfies the terms and conditions contained in the Mortgage Note
and
Mortgage related thereto and the consent of the mortgagee under such Mortgage
Note or Mortgage is not otherwise so required under such Mortgage Note or
Mortgage as a condition to such transfer. In the event that the Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.02(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been
or
is about to be conveyed, pursuant to which such person becomes liable under
the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the related Mortgage Loan shall continue
to be covered (if so covered before the Servicer enters into such an agreement)
by the applicable Required Insurance Policies. The Servicer, subject to
Section 3.02(b), is also authorized with the prior approval of the insurers
under any Required Insurance Policies 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 Mortgagor and becomes liable
under the Mortgage Note. Notwithstanding the foregoing, the Servicer shall
not
be deemed to be in default under this Section 3.02(a) by reason of any
transfer or assumption that it reasonably believes it is restricted by law
from
preventing
(b) Subject
to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth
in Section 3.02(a), in any case in which a Mortgaged Property has been
conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the related Mortgage Loan, the Servicer shall prepare and deliver
or cause to be prepared and delivered to the Trustee for signature and shall
direct, in writing, the Trustee to execute the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments
as
are reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any
such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, the Index,
Gross Margin, Periodic Rate Cap, Adjustment Date, Maximum Interest Rate or
Minimum Mortgage Interest Rate, and any other term affecting the amount or
timing of payment on the related Mortgage Loan) may be changed. In addition,
the
substitute Mortgagor and the Mortgaged Property must be acceptable to the
Servicer in accordance with the servicing standard set forth in
Section 3.01. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Custodian the original of such substitution or assumption agreement, which
in
the case of the original 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. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
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Section
3.03 Subservicers.
The
Servicer shall perform all of its servicing responsibilities hereunder or may
cause a Subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Servicer of a Subservicer shall not release the
Servicer from any of its obligations hereunder with respect to the related
Mortgage Loans. Any subservicing arrangement and the terms of the related
Subservicing Agreement must provide for the servicing of such Mortgage Loans
in
a manner consistent with the servicing arrangements contemplated hereunder
and
the Servicer shall cause any Subservicer to comply with the provisions of this
Agreement (including, without limitation, to provide the information required
to
be delivered under Sections 3.13, 3.14 and 3.18 hereof), to the same extent
as
if such Subservicer were the related Servicer. Each Subservicer shall be (i)
authorized to transact business in the state or states where 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 and (ii) a Xxxxxxx Mac or Xxxxxx
Mae approved mortgage servicer. The Servicer shall promptly, upon request,
provide to the Master Servicer, the Trustee and the Depositor a written
description (in form and substance satisfactory to the Master Servicer, the
Trustee and the Depositor) of the role and function of each Subservicer utilized
by the Servicer, specifying (i) the identity of each such Subservicer, (ii)
which (if any) of such Subservicer are “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, and (iii) which elements
of
the Servicing Criteria will be addressed in assessments of compliance provided
by each Subservicer identified pursuant to clause (ii) of this subsection.
The
related Servicer shall be responsible for obtaining from each Subservicer and
delivering to the Master Servicer any annual statement of compliance, assessment
of compliance, attestation report and Xxxxxxxx-Xxxxx related certification
as
and when required to be delivered. The Servicer shall pay all fees of each
of
its Subservicers from its own funds.
Notwithstanding
the foregoing, with respect to the Mortgage Loans, the Servicer shall be
entitled to outsource one or more separate servicing functions to any person
that does not meet the eligibility requirements for a Subservicer (each such
person, a “Subcontractor”), so long as such outsourcing does not constitute the
delegation of the Servicer’s obligation to perform all or substantially all of
the servicing of the related Mortgage Loans to such Subcontractor. The Servicer
shall promptly, upon request, provide to the Master Servicer, the Trustee and
the Depositor a written description (in form and substance satisfactory to
the
Master Servicer, the Trustee and the Depositor) of the role and function of
each
Subcontractor utilized by the Servicer, specifying (i) the identity of each
such
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB and (ii) which elements of the Servicing Criteria
will be addressed in assessments of compliance provided by each such
Subcontractor identified pursuant to clause (i) of this subsection; provided,
however, that the Servicer shall not be required to provide the information
in
clause (i) or (ii) of this subsection until such time that the applicable
assessment of compliance is due in accordance with Section 3.14 of this
Agreement. In such event, the use by the Servicer of any such Subcontractor
shall not release the Servicer from any of its obligations hereunder and the
Servicer shall remain responsible hereunder for all acts and omissions of such
Subcontractor as fully as if such acts and omissions were those of the Servicer,
and the Servicer shall pay all fees and expenses of the Subcontractor from
the
Servicer’s own funds.
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As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by it for
the benefit of the Master Servicer, the Trustee and the Depositor to comply
with
the provisions of Sections 3.13, 3.14 and 3.18 of this Agreement to the same
extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each Subcontractor and delivering to the Master
Servicer, the Trustee and any Depositor any compliance statement, assessment
of
compliance, attestation report and Xxxxxxxx-Xxxxx related certification required
to be delivered by such Subcontractor under Section 3.13, 3.14 and 3.18, in
each
case as and when required to be delivered.
At
the
cost and expense of the Servicer, without any right of reimbursement from its
Custodial Account, the Servicer shall be entitled to terminate the rights and
responsibilities of a Subservicer or Subcontractor and arrange for any servicing
responsibilities to be performed by a successor Subservicer or Subcontractor;
provided, however, that nothing contained herein shall be deemed to prevent
or
prohibit the Servicer, at its option, from electing to service the Mortgage
Loans itself. In the event that the Servicer’s responsibilities and duties under
this Agreement are terminated pursuant to Section 8.01, the Servicer shall
at its own cost and expense terminate the rights and responsibilities of each
Subservicer and Subcontractor with respect to the Mortgage Loans effective
as of
the date of the Servicer’s termination. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of each Subservicer and Subcontractor from the Servicer’s own
funds without reimbursement from the Trust Fund.
Notwithstanding
the foregoing, the Servicer shall not be relieved of its obligations hereunder
with respect to the Mortgage Loans and shall be obligated to the same extent
and
under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
an agreement with a Subservicer or Subcontractor, as applicable, for
indemnification of the Servicer by the Subservicer or Subcontractor, as
applicable, and nothing contained in this Agreement shall be deemed to limit
or
modify such indemnification.
Any
Subservicing Agreement and any other transactions or services relating to the
Mortgage Loans involving a Subservicer or Subcontractor shall be deemed to
be
between such Subservicer or Subcontractor and the Servicer alone, and neither
the Master Servicer nor the Trustee shall have any obligations, duties or
liabilities with respect to such Subservicer or Subcontractor including any
obligation, duty or liability of Master Servicer or the Trustee to pay such
Subservicer’s or Subcontractor’s fees and expenses or any differential in the
amount of the servicing fee paid hereunder and the amount necessary to induce
any successor servicer to act as successor servicer under this Agreement and
the
transactions provided for in this Agreement. For purposes of remittances to
the
Securities Administrator pursuant to this Agreement, the Servicer shall be
deemed to have received a payment on a Mortgage Loan when a Subservicer or
Subcontractor has received such payment.
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Section
3.04 Documents,
Records and Funds in Possession of the Servicer To Be Held for
Trustee.
Notwithstanding
any other provisions of this Agreement, the Servicer shall transmit to the
Trustee as required by this Agreement all documents and instruments in respect
of a Mortgage Loan coming into the possession of the Servicer from time to
time
and shall account fully to the Securities Administrator for any funds received
by the Servicer or that otherwise are collected by the Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any such Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but
not
limited to, any funds on deposit in the Custodial Account, shall be held by
the
Servicer for and on behalf of the Trustee and shall be and remain the sole
and
exclusive property of the Trustee, subject to the applicable provisions of
this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in the Custodial Account,
the
Distribution Account or in any Escrow Account, or any funds that otherwise
are
or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy,
writ
of attachment or other encumbrance, or assert by legal action or otherwise
any
claim or right of set off against any Mortgage File or any funds collected
on,
or in connection with, a Mortgage Loan, except, however, that the Servicer
shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to it under this Agreement.
Section
3.05 Maintenance
of Hazard Insurance.
(a) The
Servicer shall cause to be maintained for each Mortgage Loan hazard insurance
with extended coverage on the Mortgaged Property in an amount which is at least
equal to the lesser of (i) the Stated Principal Balance of such Mortgage Loan
and (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,
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 hazard 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 REO Property and (ii) the Stated Principal Balance of the related
Mortgage Loan at the time it became an REO Property. 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 collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing loans held for its own account, subject
to
the terms and conditions of the related Mortgage and Mortgage Note and in
accordance with the servicing standard set forth in Section 3.01) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.27. Any cost incurred by the Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the Stated 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 a 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 shall 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 Stated 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).
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In
the
event that the Servicer shall obtain and maintain a blanket policy with an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac, or having a General Policy
Rating of B:VI or better in Best’s Key Rating Guide (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 3.05,
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 3.05, and there shall have
been one or more losses which would have been covered by such policy, deposit
to
the Custodial Account maintained by the Servicer from its own funds the amount
not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of
the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, 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 its obligations under this Agreement, which policy or policies
shall be in such form and amount that would meet the requirements of Xxxxxx
Mae
or Xxxxxxx Mac if it were the purchaser of the Mortgage Loans, unless the
Servicer has obtained a waiver of such requirements from Xxxxxx Mae or Xxxxxxx
Mac. The Servicer shall provide the Master Servicer, upon request, with copies
of such insurance policies and fidelity bond (or waiver thereof). 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
be deemed to have complied with this provision if one of its Affiliates 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 (30) days’ prior written notice to
the Master Servicer. The Servicer shall also cause its subservicers to maintain
a policy of insurance covering errors and omissions and a fidelity bond which
would meet such requirements.
Section
3.06 Presentment
of Claims and Collection of Proceeds.
The
Servicer shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the applicable Insurance Policies and take
such reasonable actions (including the negotiation, settlement, compromise
or
enforcement of the insured’s claim) as shall be necessary to permit recovery
under such Insurance Policies. Any proceeds disbursed to the Servicer in respect
of such Insurance Policies shall, within two Business Days of its receipt,
be
deposited in the Custodial Account, except that any amounts realized that are
to
be applied to the repair or restoration of the related Mortgaged Property as
a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted). Notwithstanding any provision to the contrary, the Servicer
shall
have no responsibility to a primary mortgage insurance policy unless it has
been
made aware of such policy, as reflected on the Mortgage Loan Schedule or
otherwise and has been provided with adequate information to administer such
policy.
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Section
3.07 Maintenance
of Insurance Policies.
Except
as
required by applicable law or the related Mortgage Loan documents, the Servicer
shall not take any action that would result in noncoverage under any applicable
Insurance Policy of any loss which, but for the actions of the Servicer would
have been covered thereunder. The Servicer shall use its best efforts to keep
in
force and effect (to the extent that the related Mortgage Loan requires the
Mortgagor to maintain such insurance), any applicable Insurance Policy. The
Servicer shall not cancel or refuse to renew any Insurance Policy that is in
effect at the date of the initial issuance of a Mortgage Note and is required
to
be kept in force hereunder.
Section
3.08 Reserved.
Section
3.09 Realization
Upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds
and
Realized Losses; Repurchases of Certain Mortgage Loans.
(a) The
Servicer shall use reasonable efforts to foreclose upon or otherwise comparably
convert 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. In connection with such foreclosure
or other conversion, the Servicer shall follow such practices and procedures
as
it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and the requirements of the insurer under
any Required Insurance Policy; provided that the Servicer shall not be required
to expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it shall determine (i) that such restoration
and/or foreclosure will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such
expenses will be recoverable to it through Liquidation Proceeds (respecting
which it shall have priority for purposes of withdrawals from the Custodial
Account). If the Servicer reasonably believes that Liquidation Proceeds with
respect to any such Mortgage Loan would not be increased as a result of such
foreclosure or other action, such Mortgage Loan will be charged-off and will
become a Liquidated Loan. The Servicer will give notice of any such charge-off
to the Securities Administrator. The Servicer shall be responsible for all
other
costs and expenses incurred by it in any such proceedings; provided that such
costs and expenses shall be Servicing Advances and that it shall be entitled
to
reimbursement thereof from the proceeds of liquidation of the related Mortgaged
Property, as contemplated in Section 3.27. If the Servicer has knowledge
that a Mortgaged Property that it is contemplating acquiring in foreclosure
or
by deed-in-lieu of foreclosure is located within a one-mile radius of any site
with environmental or hazardous waste risks known to it, the Servicer shall,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with its established environmental review
procedures.
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With
respect to any REO Property, the deed or certificate of sale shall be taken
in
the name of the Trustee for the benefit of the Certificateholders (or the
Trustee’s nominee on behalf of the Certificateholders). The Trustee’s name shall
be placed on the title to such REO Property solely as the Trustee hereunder
and
not in its individual capacity. The Servicer shall ensure that the title to
such
REO Property references this Agreement and the Trustee’s capacity hereunder.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself, or through an agent selected by it, 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 Certificateholders, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of the Servicer
and the Certificateholders for the period prior to the sale of such REO
Property. The Servicer shall prepare for and deliver to the Securities
Administrator a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Securities Administrator to comply with
the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Custodial Account
no
later than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 6050H, 6050J
and 6050P of the Code by preparing and filing such tax and information returns,
as may be required.
In
the
event that the Trust Fund acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property prior to three years
after
its acquisition by the Trust Fund or, at the expense of the Trust Fund, request
from the Internal Revenue Service more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period. The Trustee and the Securities Administrator shall be supplied
with an Opinion of Counsel (such opinion not to be an expense of the Trustee,
the Securities Administrator or the Trust Fund) to the effect that the holding
by the Trust Fund of such Mortgaged Property subsequent to such three-year
period will not result in the imposition of taxes on “prohibited transactions”
of REMIC I, REMIC II or REMIC III as defined in section 860F of the Code or
cause either REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at
any
time that any Certificates are outstanding, in which case the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained
in
such Opinion of Counsel). Notwithstanding any other provision of this Agreement,
no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed
to
continue to be rented) or otherwise used for the production of income by or
on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as “foreclosure property”
within the meaning of section 860G(a)(8) of the Code or (ii) subject either
REMIC I, REMIC II or REMIC III to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Servicer has agreed to indemnify
and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
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The
decision of the Servicer to foreclose on a defaulted Mortgage Loan shall be
subject to a determination by the Servicer that the proceeds of such foreclosure
would exceed the costs and expenses of bringing such a proceeding. The income
earned from the management of any Mortgaged Properties acquired through
foreclosure or other judicial proceeding, net of reimbursement to the Servicer
for expenses incurred (including any property or other taxes) in connection
with
such management and net of unreimbursed Servicing Fees, unreimbursed master
servicing fees, Advances, Servicing Advances and any management fee paid or
to
be paid with respect to the management of such Mortgaged Property, shall be
applied to the payment of principal of, and interest on, the defaulted Mortgage
Loans (with interest accruing as though such Mortgage Loans were still current)
and all such income shall be deemed, for all purposes in the Agreement, to
be
payments on account of principal and interest on the related Mortgage Notes
and
shall be deposited into the Custodial Account. To the extent the income received
during a Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the Mortgage
Loan, such excess shall be considered to be a partial Principal Prepayment
for
all purposes hereof.
The
Liquidation Proceeds from any liquidation of a Mortgage Loan, net of any payment
to the Servicer as provided above, shall be deposited in the Custodial Account
on the next succeeding Determination Date following receipt thereof for
distribution on the related Distribution Date, except that any Excess
Liquidation Proceeds shall be retained by the Servicer as additional servicing
compensation.
The
proceeds of any Liquidated Loan, as well as any recovery resulting from a
partial collection of Liquidation Proceeds or any income from an REO Property,
shall be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and Servicing Fees,
pursuant to Section 3.27 or this Section 3.09; second, to reimburse
the Servicer for any unreimbursed Advances, pursuant to Section 3.27 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.
(b) On
each
Determination Date, the Servicer shall determine the respective aggregate
amounts of Excess Liquidation Proceeds and Realized Losses, if any, with respect
to any Mortgage Loan for the related Prepayment Period and report the same
to
the Securities Administrator pursuant to Section 3.28.
(c) The
Servicer has no intent to foreclose on any Mortgage Loan based on the
delinquency characteristics as of the Closing Date; provided, however, that
the
foregoing does not prevent the Servicer from initiating foreclosure proceedings
on any date hereafter if the facts and circumstances of such Mortgage Loans,
including delinquency characteristics, in the Servicer’s discretion so warrant
such action.
Section
3.10 Servicing
Compensation.
As
compensation for its activities hereunder, the Servicer shall be entitled to
retain or withdraw from the Custodial Account out of each payment of interest
on
each Mortgage Loan included in the Trust Fund an amount equal to the Servicing
Fee. In addition, the Servicer shall be entitled to recover any unpaid Servicing
Fees payable to it out of Liquidation Proceeds, Insurance Proceeds or
condemnation proceeds related to the Mortgage Loans to the extent permitted
by
Section 3.27.
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Additional
servicing compensation with respect to Mortgage Loans in the form of any Excess
Liquidation Proceeds, Prepayment Interest Excess, if applicable, assumption
fees, late payment charges, insufficient funds charges and ancillary income
to
the extent such fees or charges are received by the Servicer, all income and
gain net of any losses realized from Permitted Investments with respect to
funds
in or credited to the Custodial Account shall be retained by the Servicer to
the
extent not required to be deposited in the Custodial Account pursuant to
Section 3.27. The Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including payment
of any premiums for hazard insurance, as required by Section 3.05 and
maintenance of the other forms of insurance coverage required by
Section 3.07 and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section
3.11 REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
related Mortgage Loan, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the related Certificateholders. The
Servicer shall sell any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement. Pursuant to its efforts to
sell such REO Property, the Servicer shall protect and conserve such REO
Property in the manner and to the extent required herein, in accordance with
the
REMIC Provisions.
(b) The
Servicer shall deposit all funds collected and received in connection with
the
operation of any REO Property into the Custodial Account.
(c) The
Servicer, upon the final disposition of any REO Property, shall be entitled
to
reimbursement for any related unreimbursed Advances, unreimbursed Servicing
Advances or Servicing Fees from Liquidation Proceeds received in connection
with
the final disposition of such REO Property; provided, that any such unreimbursed
Advances or Servicing Fees as well as any unpaid Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of
any
net rental income or other net amounts derived from such REO
Property.
Section
3.12 Liquidation
Reports.
Upon
the
foreclosure of any Mortgaged Property or the acquisition thereof by the Trust
Fund pursuant to a deed-in-lieu of foreclosure, the Servicer shall submit a
liquidation report to the Trustee containing such information as shall be
mutually acceptable to it and the Trustee with respect to such Mortgaged
Property.
Section
3.13 Annual
Statement as to Compliance.
(a) The
Servicer, the Master Servicer and the Securities Administrator shall deliver
or
otherwise make available (and shall cause each Additional Servicer engaged
by it
to deliver) to the Depositor and the Securities Administrator on or before
March
15 of each year, commencing in March 2007, an Officer’s Certificate stating, as
to the signer thereof, that (A) a review of such party’s activities during the
preceding calendar year or portion thereof and of such Additional Servicer’s
performance under this Agreement, or such other applicable agreement in the
case
of an Additional Servicer, has been made under such officer’s supervision and
(B) to the best of such officer’s knowledge, based on such review, such party
has fulfilled all its obligations under this Agreement, or such other applicable
agreement in the case of an Additional Servicer (other than the Servicer, the
Master Servicer or the Securities Administrator), in all material respects
throughout such year or portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof.
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(b) (i) For
so
long as the Trust Fund is subject to Exchange Act reporting requirements,
failure of the Servicer to comply timely with this Section 3.13 shall be deemed
a Servicer Default as to the Servicer, without any cure period, and the Master
Servicer may, in addition to whatever rights the Master Servicer may have under
this Agreement and at law or in equity or to damages, including injunctive
relief and specific performance, terminate all the rights and obligations of
the
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof without compensating the Servicer for the same. The Master Servicer
shall so terminate the Servicer by delivery of notice thereof via first class
mail, facsimile or electronic mail. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
(ii) After
the
Trust Fund ceases to be subject to Exchange Act reporting requirements, failure
of the Servicer to comply timely with this Section 3.13 shall be deemed a
Servicer Default as provided for in Section 8.01(a)(x). The Master Servicer
may
terminate the Servicer by delivery of notice thereof via first class mail,
facsimile or electronic mail.
(c) The
Master Servicer shall include all annual statements of compliance received
by it
from the Servicer and any Additional Servicer with its own annual statement
of
compliance to be submitted to the Securities Administrator pursuant to this
Section 3.13.
(d) Copies
of
any Master Servicer annual statements of compliance required to be delivered
hereunder shall be provided to any Certificateholder upon request at the Master
Servicer’s expense.
(e) In
the
event the Servicer, the Master Servicer, the Securities Administrator or any
Additional Servicer is terminated or resigns pursuant to the terms of this
Agreement, or any applicable agreement in the case of such Additional Servicer,
as the case may be, such party shall provide or cause such Additional Servicer
to provide an Officer’s Certificate pursuant to this Section 3.13 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be.
Section
3.14 Assessments
of Compliance and Attestation Reports.
(a) By
March
15 of
each
year, commencing in March 2007,
the
Servicer, the Master Servicer and the Securities Administrator, each at its
own
expense and pursuant to Item 1122(a) of Regulation AB, shall furnish or
otherwise make available, and shall cause any Servicing Function Participant
engaged by it to furnish, which in each case shall not be an expense of the
Trust Fund, to the Securities Administrator and the Depositor, a report on
an
assessment of compliance with the Relevant Servicing Criteria that contains
(A)
a statement by such party of its responsibility for assessing compliance with
the Relevant Servicing Criteria, (B) a statement that such party used the
Relevant Servicing Criteria to assess compliance with the Relevant Servicing
Criteria, (C) such party’s assessment of compliance with the Relevant Servicing
Criteria for the period consisting of the prior calendar year, including, if
there has been any material instance of noncompliance with the Relevant
Servicing Criteria, a discussion of each such failure and the nature and status
thereof, and (D) a statement that a registered public accounting firm has issued
an attestation report on such party’s assessment of compliance with the Relevant
Servicing Criteria for the period consisting of the prior calendar year;
however, notwithstanding anything herein to the contrary, no Subcontractor
will
be required to deliver any assessment of compliance in any such given year
in
which a Form 10-K is not required to be filed.
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(b) No
later
than February 1 of each year, commencing in February 2007, the Servicer and
the
Master Servicer shall forward to the Securities Administrator and the Depositor
the name of each Servicing Function Participant engaged by it and what Relevant
Servicing Criteria will be addressed in the report on assessment of compliance
prepared by such Servicing Function Participant; provided, however, that the
Master Servicer need not provide such information to the Securities
Administrator so long as the Master Servicer and the Securiites Administrator
are the same entity. When the Servicer and the Master Servicer (or any Servicing
Function Participant engaged by them) submit their assessments to the Securities
Administrator, such parties will also at such time include the assessment (and
attestation pursuant to paragraph (c) below) of each Servicing Function
Participant engaged by it.
Promptly
after receipt of each such report on assessment of compliance, (i) the Depositor
shall review each such report and, if applicable, consult with the Servicer,
the
Master Servicer, the Securities Administrator and any Servicing Function
Participant engaged by such parties as to the nature of any material instance
of
noncompliance with the Relevant Servicing Criteria by each such party, and
(ii)
the Securities Administrator shall confirm that the assessments, taken as a
whole, address all of the Servicing Criteria and taken individually address
the
Relevant Servicing Criteria for each party as set forth on Exhibit L and on
any
similar exhibit set forth in each Servicing Agreement in respect of each
Servicer and notify the Depositor of any exceptions.
In
the
event a Servicing Function Participant is terminated, assigns its rights and
obligations under or resigns pursuant to the terms of this Agreement, or any
other applicable agreement, as the case may be, such party shall provide, or
cause a Servicing Function Participant engaged by it to provide, a report on
assessment of compliance pursuant to this Section 3.14 with respect to the
period of time it was subject to this Agreement or any other applicable
agreement, as the case may be, notwithstanding any such termination, assignment
or resignation.
The
Master Servicer shall include all annual reports on assessment of compliance
received by it from each Servicer with its own assessment of compliance to
be
submitted to the Securities Administrator pursuant to this Section.
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(c) By
March
15 of each year, commencing in March 2007, the Servicer, the Master Servicer
and
the Securities Administrator, each at its own expense, shall cause, and shall
cause any Servicing Function Participant engaged by such party to cause, which
in each case shall not be an expense of the trust, a registered public
accounting firm (which may also render other services to such Servicing Function
Participants) and that is a member of the American Institute of Certified Public
Accountants to furnish an attestation report to the Master Servicer and
Securities Administrator to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes
an
assertion that such party has complied with the Relevant Servicing Criteria,
and
(ii) on the basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the PCAOB, it is
expressing an opinion as to whether such party’s compliance with the Relevant
Servicing Criteria was fairly stated in all material respects, or it cannot
express an overall opinion regarding such party’s assessment of compliance with
the Relevant Servicing Criteria; however, notwithstanding anything herein to
the
contrary, no Subcontractor will be required to deliver any attestation in any
such given year in which a Form 10-K is not required to be filed. In the event
that an overall opinion cannot be expressed, such registered public accounting
firm shall state in such report why it was unable to express such an opinion.
Such report must be available for general use and not contain restricted use
language.
Promptly
after receipt of each such report on assessment of compliance and attestation
report from a Servicing Function Participant, the Securities Administrator
shall
confirm that each assessment submitted pursuant to paragraph (a) above is
coupled with an attestation meeting the requirements of this Section and notify
the Depositor of any exceptions.
The
Master Servicer shall include each such attestation report furnished to it
by
each Servicer with its own attestation to be submitted to the Securities
Administrator pursuant to this Section.
In
the
event any Servicing Function Participant is terminated, assigns its rights
and
obligations under or resigns pursuant to the terms of this Agreement, or any
other applicable agreement, as the case may be, such party shall cause a
registered public accounting firm to provide an attestation pursuant to this
Section 3.14 or such other agreement with respect to the period of time it
was
subject to this Agreement or sucyh other agreement, as the case may be,
notwithstanding any such termination, assignment or resignation.
(d) (i) For
so
long as the Trust Fund is subject to Exchange Act reporting requirements,
failure of the Servicer to comply timely with this Section 3.14 shall be deemed
a Servicer Default as to the Servicer, automatically, without notice and without
any cure period, and the Master Servicer may, in addition to whatever rights
the
Master Servicer may have under this Agreement and at law or in equity or to
damages, including injunctive relief and specific performance, terminate all
the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Servicer for
the same. The Master Servicer shall so terminate the Servicer by delivery of
notice thereof via first class mail, facsimile or electronic mail. This
paragraph shall supersede any other provision in this Agreement or any other
agreement to the contrary.
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(ii) After
the
Trust Fund ceases to be subject to Exchange Act reporting requirements, failure
of the Servicer to comply timely with this Section 3.14 shall be deemed a
Servicer Default as provided for in Section 8.01(a)(ix). The Master Servicer
may
terminate the Servicer by delivery of notice thereof via first class mail,
facsimile or electronic mail.
Section
3.15 Books
and Records.
The
Servicer shall be responsible for maintaining, and shall maintain, a complete
set of books and records for the Mortgage Loans which shall be appropriately
identified in the Servicer’s computer system to clearly reflect the ownership of
the Mortgage Loans by the Trust. In particular, the Servicer shall maintain
in
its possession, available for inspection by the Trustee and the Master Servicer
and shall deliver to the Trustee or the Master Servicer upon reasonable prior
request and during normal business hours, evidence of compliance with all
federal, state and local laws, rules and regulations. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Servicer may be
in
the form of microfilm or microfiche or such other reliable means of recreating
original documents, including, but not limited to, optical imagery techniques
so
long as the Servicer complies with the requirements of Accepted Servicing
Practices.
The
Servicer shall maintain with respect to each Mortgage Loan and shall upon
reasonable prior request and during normal business hours make available for
inspection by the Trustee and the Master Servicer the related servicing file
during the time such Mortgage Loan is subject to this Agreement and thereafter
in accordance with applicable law.
Section
3.16 The
Trustee.
The
Trustee shall furnish the Servicer with any powers of attorney and other
documents prepared and submitted by the Servicer to the Trustee in a form
agreeable to the Trustee and necessary or appropriate to enable the Servicer
to
service and administer the related Mortgage Loans and REO
Properties.
The
Trustee shall provide access to the records and documentation in possession
of
the Trustee regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee; provided, however, that, unless otherwise required by law,
the
Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee’s actual
costs.
The
Trustee shall execute and deliver as directed in writing by the Servicer any
court pleadings, requests for trustee’s sale or other documents necessary or
desirable to (i) the foreclosure or trustee’s sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note
or
otherwise available at law or equity.
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Section
3.17 REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee and the Securities Administrator
shall act in accordance herewith to treat each REMIC as a REMIC, and the Trustee
and the Securities Administrator shall comply with any directions of the
Sponsor, the Servicer or the Master Servicer with respect to such treatment.
In
particular, the Trustee shall not (a) knowingly sell or permit the sale of
all
or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, accept any contribution to
any REMIC after the Startup Day without receipt of a REMIC Opinion.
Section
3.18 Annual
Xxxxxxxx-Xxxxx Certification; Additional Information.
(a) The
Servicer, the Master Servicer and the Securities Administrator shall and shall
cause any Servicing Function Participant engaged by such party to, provide
to
the Certifying Person, by March 15 of each year in which the Trust Fund is
subject to the reporting requirements of the Exchange Act and otherwise within
a
reasonable period of time upon request, a certification (each, a “Back-Up
Certification”),
in
the form attached hereto as Exhibit
M,
upon
which the Certifying Person, the entity for which the Certifying Person acts
as
an officer, and such entity’s officers, directors and Affiliates (collectively
with the Certifying Person, “Certification
Parties”)
can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall prepare a Xxxxxxxx-Xxxxx Certification and
sign
the same on behalf of the Trust Fund serving as the “Certifying Person”. Such
officer of the Certifying Person can be contacted by e-mail at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
or by
facsimile at (000) 000-0000. In the event the Servicer, the Master Servicer
or
the Securities Administrator, or any Servicing Function Participant engaged
by
such party, is terminated or resigns pursuant to the terms of this Agreement,
or
any other applicable agreement, as the case may be, such party shall provide
a
Back-Up Certification to the Certifying Person pursuant to this Section 3.18
with respect to the period of time it was subject to this Agreement or any
other
applicable agreement, as the case may be.
Notwithstanding
the foregoing, (i) the Master Servicer and the Securities Administrator shall
not be required to deliver a Back-Up Certification to each other if each is
the
same Person and the Master Servicer is the Certifying Person and (ii) the Master
Servicer shall not be obligated to execute any Xxxxxxxx-Xxxxx Certification
in
the event that it does not receive a Back-Up Certification from any party
required to deliver such Back-Up Certification pursuant to this Section or
the
Custodial Agreement; provided, however, in the event the Master Servicer shall
not be required to execute a Xxxxxxxx-Xxxxx Certification pursuant to clause
(ii), the Master Servicer shall prepare such Xxxxxxxx-Xxxxx Certification and
deliver it to the Depositor for execution.
(b) The
Servicer shall provide (or shall cause each Subservicer or Subcontractor to
provide) to the Master Servicer, the Securities Administrator and the Depositor
prompt notice and a description of the occurrence of any of the following:
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(i) any
Servicer Default under the terms of this Agreement, any merger, consolidation
or
sale of substantially all of the assets of the Servicer, the Servicer’s
engagement of any Subservicer to perform or assist in the performance of any
of
the Servicer’s obligations under this Agreement, any material litigation or
governmental proceedings involving the Servicer (or its Subservicer or
Subcontractor, as applicable) that is material to any REMIC III
Certificateholder, and any affiliation or other significant relationship between
the Servicer (or its Subservicer or Subcontractor, as applicable) and any other
Transaction Parties.
(ii) any
merger, consolidation or sale of substantially all of the assets of the
Servicer, the appointment of a Subservicer or a Successor Servicer by the
Servicer or its designee; provided, such notice and description required under
this clause (ii) shall be delivered at least fifteen (15) calendar days prior
to
the effective date of such event and shall be in writing and in form and
substance reasonably satisfactory to the Sponsor, Depositor, Master Servicer
and
Securities Administrator in order to comply with the reporting obligations
under
Item 6.02 of Form 8-K.
(iii) If
the
Servicer or any Servicing Function Participant engaged by the Servicer has
knowledge of the occurrence of any of the events described in this clause (iii),
then no later than ten days prior to the deadline for the filing of any
Distribution Report on Form 10-D in respect of any Trust Fund that includes
any
of the Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer
shall provide (or cause such Subservicer to provide) to the Master Servicer
and
Securities Administrator notice of the occurrence of any of the following events
along with all information, data, and materials related thereto as may be
required to be included in the related Distribution Report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(A) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a)(11) of Regulation AB);
(B) material
breaches of pool asset representations or warranties or transaction covenants
of
the Servicer (Item 1121(a)(12) of Regulation AB); and
(C) information
regarding any material pool asset changes (such as additions, substitutions
or
repurchases).
(c) The
Servicer shall provide to the Master Servicer and the Securities Administrator
such additional information as the Master Servicer may reasonably request,
including evidence of the authorization of the person signing any certification
or statement, financial information and reports and of the fidelity bond and
errors and omissions insurance policy required to be maintained by the Servicer
pursuant to this Agreement, and such other information related to the Servicer
or any Servicing Function Participant engaged by the Servicer or its performance
hereunder or other applicable agreement.
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Section
3.19 Release
of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
the Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the
next
Distribution Date, the Servicer will (or if the Servicer does not, the Master
Servicer may) promptly furnish to the Trustee and the Custodian, on behalf
of
the Trustee, two copies of a request for release substantially in the form
attached to the Custodial Agreement signed by an Authorized Servicer
Representative or in a mutually agreeable electronic format which will, in
lieu
of a signature on its face, originate from an Authorized Servicer Representative
(which certification shall include a statement to the effect that all amounts
received in connection with such payment that are required to be deposited
in
the Custodial Account pursuant to Article V have been or will be so deposited)
and shall request that the Custodian, on behalf of the Trustee, deliver to
the
Servicer the related Mortgage File. Within three (3) Business Days of receipt
of
such certification and request, the Custodian, on behalf of the Trustee, shall
release the related Mortgage File to the Servicer and the Trustee and the
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Servicer is authorized, to give, as
agent for the Trustee, as the mortgagee under the Mortgage that secured the
related Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor
of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case
may
be, shall be chargeable to the Custodial Account unless determined to be a
Servicing Advance.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan
and in accordance with this Agreement, the Trustee shall execute such documents
as shall be prepared and furnished to the Trustee by the Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution
of
any such proceedings. The Custodian, on behalf of the Trustee, shall, within
three (3) Business Days following written request of the Servicer, and delivery
to the Custodian, on behalf of the Trustee, of two copies of a request for
release signed by an Authorized Servicer Representative substantially in the
form attached to the Custodial Agreement (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from an
Authorized Servicer Representative), release the related Mortgage File held
in
its possession or control to the Servicer. Such request for release shall
obligate the Servicer to return the Mortgage File to the Custodian on behalf
of
the Trustee, when the need therefor by such Person no longer exists unless
the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of an Authorized Servicer Representative similar to that hereinabove specified,
the Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to the Servicer.
Section
3.20 Documents,
Records and Funds in Possession of the Servicer to be held for
Trustee.
(a)
The
Servicer (to the extent required by this Agreement) shall transmit to the
Trustee or the Custodian such documents and instruments coming into the
possession of the Servicer from time to time as are required by the terms hereof
to be delivered to the Trustee or the Custodian. Any funds received by a
Servicer in respect of any Mortgage Loan or which otherwise are collected by
the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the right of the Servicer to retain its Servicing
Fee and other amounts as provided in this Agreement.
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Section
3.21 Possession
of Certain Insurance Policies and Documents.
The
Servicer shall retain possession and custody of the originals (to the extent
available) of any Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time that comes into the possession of the Servicer, as contemplated by
this
Agreement. Until all amounts distributable in respect of the Certificates have
been distributed in full, the Trustee (or the Custodian, as directed by the
Trustee) shall retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement.
Section
3.22 [Reserved].
Section
3.23 UCC.
The
Sponsor agrees to execute and file continuation statements for any Uniform
Commercial Code financing statements which the Sponsor has informed the Trustee
were filed on the Closing Date in connection with the Trust. The Sponsor shall
file any financing statements or amendments and continuation statements thereto
required by any change in the Uniform Commercial Code.
Section
3.24 Optional
Purchase of Defaulted Mortgage Loans.
With
respect to any Mortgage Loan which is delinquent in payment by ninety-one (91)
days or more or is an REO Property, the Sponsor shall have the right to purchase
such Mortgage Loan or REO Property from the Trust at a price equal to the
Purchase Price. The Purchase Price shall be remitted to the Servicer for deposit
in the Custodial Account and remitted by the Servicer to the Securities
Administrator on the Remittance Date in the month immediately following the
month in which the Purchase Price was deposited in the Custodial
Account.
If
at any
time the Sponsor remits to the Servicer a payment for deposit in the Custodial
Account covering the amount of the Purchase Price for such a Mortgage Loan
and
the Servicer delivers an Officer’s Certificate to the Trustee certifying that
the Purchase Price has been deposited in the Custodial Account, the Trustee
shall execute the assignment of such Mortgage Loan at the request of the Sponsor
without recourse to the Sponsor which shall succeed to all the Trustee’s, right,
title and interest in and to such Mortgage Loan, and all security and documents
relative thereto. Such assignment shall be an assignment outright and not for
security. The Sponsor will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. The Sponsor shall be responsible for
any transfer costs incurred with respect to a Mortgage Loan purchased pursuant
to this Section 3.24.
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If
the
Sponsor is required to repurchase a Mortgage Loan pursuant to this Section
3.24,
the Servicer shall continue to service such Mortgage Loan unless the Sponsor
shall repurchase the servicing rights thereon on terms mutually agreed to by
the
Sponsor and the Servicer. Notwithstanding the foregoing, the Master Servicer
shall have no obligation to master service any Mortgage Loan that has been
so
repurchased.
Section
3.25 Obligations
of the Servicer Under Credit Risk Management Agreement.
Notwithstanding
anything in this Agreement or the Credit Risk Management Agreements to the
contrary, the Trustee shall not have any duty or obligation to enforce any
Credit Risk Management Agreement or to supervise, monitor or oversee the
activities of the Credit Risk Manager or the Servicer under the Credit Risk
Management Agreements or this Agreement with respect to any action taken or
not
taken by the Servicer pursuant to a recommendation of the Credit Risk Manager
or
otherwise in connection with obligations of the Servicer under the related
Credit Risk Management Agreement.
Section
3.26 Collection
of Mortgage Loan Payments; Custodial Account.
(a) The
Servicer shall make reasonable efforts in accordance with Accepted Servicing
Practices to collect all payments called for under the terms and provisions
of
the Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Servicer may in its discretion (i) waive
any
late payment charge and (ii) extend the due dates for payments due on a Mortgage
Note for a Mortgage Loan for a period not greater than 180 days; provided,
however no such extension shall be materially adverse to the Certificateholders.
In the event of any such arrangement, the Servicer shall make Advances on the
Mortgage Loan during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, and shall be entitled to reimbursement therefor in accordance
with
Section 5.01. The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority
with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law. In addition, if (x) a Mortgage
Loan
is in default or default is imminent or (y) the Servicer delivers to the Trustee
and the Securities Administrator a REMIC Opinion, the Servicer may, (A) amend
the related Mortgage Note to reduce the Mortgage Rate applicable thereto and
(B)
amend any Mortgage Note for a Mortgage Loan to extend the maturity
thereof.
(b) The
Servicer shall establish and maintain a segregated Custodial Account (which
shall at all times be an Eligible Account) with a depository institution in
the
name of the Servicer for the benefit of the Trustee on behalf of the
Certificateholders and designated “HSBC USA, National Association, as trustee
for registered holders of Nomura Home Equity Loan, Inc., Asset-Backed
Certificates, Series 2006-HE1.” On behalf of the Trust Fund, the Servicer shall
deposit or cause to be deposited in the clearing account in which it customarily
deposits payments and collection on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis and in no event more than
one Business Day after the Servicer’s receipt thereof, and shall thereafter
deposit in the Custodial Account, in no event more than two Business Days after
the Servicer’s receipt thereof, except as otherwise specifically provided
herein, the following payments and collections remitted by subservicers or
received by it in respect of the Mortgage Loans subsequent to the Cut-off Date
(other than in respect of principal and interest due on the Mortgage Loans
on or
before the Cut-off Date) and the following amounts required to be deposited
hereunder:
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(i) all
payments on account of principal, including Principal Prepayments and Subsequent
Recoveries, on the Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans net of the Servicing
Fee
permitted under Section 3.10 and any Prepayment Interest
Excess;
(iii) all
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds with respect
to the Mortgage Loans, other than proceeds to be applied to the restoration
or
repair of the related Mortgaged Properties or released to the Mortgagor in
accordance with the Servicer’s normal servicing procedures;
(iv) any
amount required to be deposited by the Servicer pursuant to Section 3.26(c)
in connection with any losses on Permitted Investments;
(v) any
amounts required to be deposited by the Servicer pursuant to
Section 3.05;
(vi) any
amounts paid by an Advance Financing Person in respect of Advances or Servicing
Advances;
(vii) any
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge
Payment Amounts;
(viii) the
Purchase Price with respect to any Mortgage Loans purchased by the Sponsor
pursuant to Section 2.02 or 2.03, any amounts which are to be treated
pursuant to Section 2.04 of this Agreement as the payment of such a
Purchase Price and the Purchase Price with respect to any Mortgage Loans
purchased by the Sponsor pursuant to Section 3.24;
(ix) without
duplication, all payments of claims under any LPMI Policy; and
(x) any
other
amounts required to be deposited hereunder.
The
foregoing requirements for deposit by the Servicer into the Custodial 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
or
assumption fees, if collected, and any Prepayment Interest Excess need not
be
deposited by the Servicer. In the event that the Servicer shall deposit any
amount not required to be deposited and not otherwise subject to withdrawal
pursuant to Section 3.27, it may at any time withdraw or direct the
institution maintaining the Custodial Account, to withdraw such amount from
the
Custodial Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice thereof
to the institution maintaining the Custodial Account, that describes the amounts
deposited in error in the Custodial Account. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Custodial Account shall be held in trust for the
Certificateholders until withdrawn in accordance with
Section 3.27.
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(c) The
institution that maintains the Custodial Account, or other authorized entity
shall invest the funds in the Custodial Account, in the manner directed by
the
Servicer, in Permitted Investments which shall mature not later than the next
succeeding Remittance Date and shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. All income and gain net
of
any losses realized from any such investment shall be for the benefit of the
Servicer as servicing compensation and shall be remitted to it monthly as
provided herein. The amount of any losses incurred in the Servicer’s Custodial
Account in respect of any such investments shall be deposited by the Servicer
into the Custodial Account immediately as realized, out of its own
funds.
(d) The
Servicer shall give at least thirty (30) days’ advance notice to the Trustee,
the Securities Administrator, the Master Servicer the Sponsor, each Rating
Agency and the Depositor of any proposed change of location of the Custodial
Account prior to any change thereof.
Section
3.27 Permitted
Withdrawals From the Custodial Account.
(a) The
Servicer may from time to time make withdrawals from the Custodial Account
for
the following purposes:
(i) to
pay
itself (to the extent not previously paid to or withheld by it), as servicing
compensation in accordance with Section 3.10, that portion of any payment
of interest that equals the Servicing Fee for the period with respect to which
such interest payment was made, and, as additional servicing compensation,
those
other amounts set forth in Section 3.10;
(ii) to
reimburse itself or an Advance Financing Person for (A) any unreimbursed
Advances to the extent of amounts received which represent late recoveries
of
payments of principal and/or interest (net of the related Servicing Fees),
Liquidation Proceeds and Insurance Proceeds on the Mortgage Loans with respect
to which such Advances were made in accordance with the provisions of
Section 5.01; and (B) any unreimbursed Advances with respect to the final
liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only to
the
extent that late recoveries of payments of principal and/or interest,
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan are insufficient to reimburse the Servicer or an Advance Financing
Person for such unreimbursed Advances or (C) subject to Section 3.27(b),
any unreimbursed Advances to the extent of Amounts Held For Future Distribution
funds held in the Custodial Account relating to the Mortgage Loans that were
not
included in the Available Distribution Amount for the preceding Distribution
Date;
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(iii) to
reimburse itself or an Advance Financing Person for any Nonrecoverable
Advances;
(iv) to
reimburse itself from Insurance Proceeds for Insured Expenses covered by the
related Insurance Policy;
(v) to
pay
itself any unpaid Servicing Fees, including any unpaid Servicing Fees to the
extent not recoverable from Liquidation Proceeds, Insurance Proceeds or other
amounts received with respect to any Liquidated Loan, and to reimburse itself
or
any Advance Financing Person for any unreimbursed Servicing Advances, provided,
however, that the Servicer’s or such Advance Financing Person’s right to
reimbursement for Servicing Advances pursuant to this subclause (v) with respect
to any Mortgage Loan shall be limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, late recoveries of payments of principal
and/or interest, Liquidation Proceeds, Insurance Proceeds, condemnation proceeds
and purchase and repurchase proceeds) that represent late recoveries of the
payments for which such Servicing Advances were made;
(vi) to
pay to
the Sponsor or the Depositor with respect to each Mortgage Loan or property
acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03 or 3.24, all amounts received thereon and not taken into
account in determining the related Stated Principal Balance of such repurchased
Mortgage Loan;
(vii) to
pay
any expenses reimbursable pursuant to Section 7.04;
(viii) to
withdraw any amount deposited in the Custodial Account and not required to
be
deposited therein; and
(ix) to
clear
and terminate the Custodial Account upon termination of this Agreement pursuant
to Section 10.01 hereof.
In
addition, no later than 3:00 p.m. Eastern time on the Remittance Date, the
Servicer shall withdraw from the Custodial Account and remit to the Securities
Administrator (a) all amounts deposited in the Custodial Account as of the
close
of business on the last day of the related Due Period (net of charges against
or
withdrawals from the Custodial Account pursuant to this Section 3.27(a)),
plus (b) all Advances, if any, which the Servicer is obligated to make pursuant
to Section 5.01, minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds or condemnation proceeds
received after the applicable Prepayment Period, which amounts shall be remitted
on the following Remittance Date, together with any Compensating Interest
required to be deposited in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 5.02, and minus (d) any
amounts attributable to Scheduled Payments collected but due on a Due Date
or
Due Dates subsequent to the first day of the month in which such Remittance
Date
occurs, which amounts shall be remitted on the Remittance Date next succeeding
the Due Date related to such Scheduled Payment.
With
respect to any remittance received by the Securities Administrator after the
Business Day on which such payment was due, the Securities Administrator shall
send written notice thereof to the Servicer. The Servicer shall pay to the
Securities Administrator interest on any such late payment by the Servicer
at an
annual rate equal to Prime Rate (as defined in The Wall Street Journal) plus
one
percentage point, but in no event greater than the maximum amount permitted
by
applicable law. Such interest shall be paid by the Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following the Business Day on which such payment was
due
and ending with the Business Day on which such payment is made, both inclusive.
The payment by the Servicer of any such interest, or the failure of the
Securities Administrator to notify the Servicer of such interest, shall not
be
deemed an extension of time for payment or a waiver of any Servicer Default
by
the Servicer.
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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
Custodial Account pursuant to subclauses (i), (ii), (iv), (v) and (vi) above.
Prior to making any withdrawal from the Custodial Account pursuant to subclause
(iii), the Servicer shall deliver to the Master Servicer an Officer’s
Certificate of an Authorized Servicer Representative indicating the amount
of
any previous Advance or Servicing Advance determined by the Servicer to be
a
Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their
respective portions of such Nonrecoverable Advance.
(b) Notwithstanding
the foregoing, any Amounts Held For Future Distribution withdrawn by the
Servicer as permitted in Section 3.27(a)(ii) in reimbursement of Advances
previously made by the Servicer shall be appropriately reflected in the
Servicer’s records and replaced by the Servicer by deposit in the Custodial
Account, no later than the close of business on the Remittance Date immediately
following the Due Period or Prepayment Period for which such amounts relate.
The
Securities Administrator will notify the Servicer and the Master Servicer by
the
close of business on the Business Day prior to the Distribution Date in the
event that the amount remitted by the Servicer to the Securities Administrator
on such date is less than the Advances required to be made by the Servicer
for
the related Distribution Date.
Section
3.28 Reports
to Master Servicer.
(a) Not
later
than 3:00 p.m. Eastern time on the eighteenth (18th) calendar day of each month
(or if such eighteenth calendar day is not a Business Day, the immediately
following Business Day), the Servicer shall furnish to the Master Servicer
(i)
(a) monthly loan data in a mutually agreed-upon format, (b) default loan data
in
the format set forth in Exhibit X-1 hereto (or in such other format mutually
agreed-upon between the Servicer and the Master Servicer) and (c) information
regarding realized losses and gains in the format set forth in Exhibit X-2
hereto (or in such other format mutually agreed between the Servicer and the
Master Servicer), in each case relating to the period ending on the last day
of
the preceding calendar month, (ii) all such information reasonably required
pursuant to clause (i)(a) above on a magnetic tape, electronic mail, or other
similar media reasonably acceptable to the Master Servicer and (iii) all
supporting documentation with respect to the information required pursuant
to
clause (i)(c) above.
(b) In
addition, each month the Servicer shall provide to the Depositor, or the
Depositor’s designee, which may include NovaStar Mortgage, Inc. (“NovaStar”),
loan-level performance data of each Mortgage Loan listed on the Mortgage Loan
Schedule as having been originated by NovaStar. For purpses of this subsection,
loan level performance data shall be limited to the following: (i) date (as
of
end of the month); (ii) loan id; (iii) current interest rate; (iv) actual
beginning principal balance; (v) actual ending principal balance; (vi) scheduled
principal and interest; (vii) scheduled principal; (viii) actual principal
collected account; (ix) actual gross interest collected amount; (x) next payment
due date; (xi) loan modification flag (Y/N); (xii) in foreclosure (Y/N); (xiii)
in REO (Y/N); (xiv) bankruptcy type (7, 11, 13 or blank); (xv) post-petition
due
date (for bankruptcy chapter 13 loans only); (xvi) paid-in-full
date;
(xvii) paid-in-full principal; (xviii) prepay penalty collected amount; (xix)
foreclosure completed date; (xx) liquidation date; (xxi) liquidation type (REO
sale, short sale, third party sale, write off, other); (xxii) loss amount before
any mortgage insurance claim; (xxiii) mortgage insurance company name; (xxiv)
mortgage insurance claim received amount.
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Section
3.29 Collection
of Taxes; Assessments and Similar Items; Escrow Accounts.
To
the
extent required by the Mortgage Note related to a Mortgage Loan, the Servicer
shall establish and maintain one or more accounts (each, an “Escrow Account”)
and deposit, promptly upon receipt, and retain therein all collections from
the
Mortgagors (or advances by the Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Servicer to compel a Mortgagor to establish
an
Escrow Account in violation of applicable law.
Withdrawals
of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium
or
PUD association dues, or comparable items, to reimburse the Servicer out of
related collections for any payments made with respect to each Mortgage Loan
pursuant to Section 3.01 (with respect to taxes and assessments and
insurance premiums) and Section 3.05 (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to such Mortgagors on balances in the Escrow Account, to remove amounts
deposited in error or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 10.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
Section
3.30 Adjustments
to Mortgage Rate and Scheduled Payment.
On
each
applicable Adjustment Date, the Mortgage Rate with respect to each adjustable
rate Mortgage Loan shall be adjusted, in compliance with the requirements of
the
related Mortgage and Mortgage Note, to equal the sum of the Index plus the
Gross
Margin (rounded in accordance with the related Mortgage Note) subject to the
applicable Periodic Rate Cap, Maximum Mortgage Interest Rate and Minimum
Mortgage Interest Rate, as set forth in the Mortgage Note. The Servicer shall
execute and deliver the notices required by each Mortgage and Mortgage Note,
applicable laws and regulations regarding interest rate adjustments. The
Servicer shall also provide timely notification to the Master Servicer of all
applicable data and information regarding such interest rate adjustments and
the
Servicer’s methods of implementing such interest rate adjustments. Upon the
discovery by the Servicer or the Master Servicer that the Servicer has failed
to
adjust a Mortgage Rate or a Scheduled Payment pursuant to the terms of the
related Mortgage Note and Mortgage, the Servicer shall immediately deposit
in
the Custodial Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor.
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Section
3.31 Distribution
Account.
(a) The
Securities Administrator shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account
as
a segregated non-interest bearing trust account or accounts. The Securities
Administrator will deposit in the Distribution Account as identified by the
Securities Administrator and as received by the Securities Administrator, the
following amounts:
(i) All
payments and recoveries in respect of principal on the Mortgage Loans,
including, without limitation, Principal Prepayments, Subsequent Recoveries,
Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and all payments
and recoveries in respect of interest on the Mortgage Loans withdrawn by the
Servicer from the Custodial Account and remitted by the Servicer to the
Securities Administrator;
(ii) Any
Advance and any Compensating Interest Payments;
(iii) Any
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans (including any Servicer Prepayment
Charge Payment Amounts);
(iv) Any
Insurance Proceeds or Liquidation Proceeds received by or on behalf of the
Securities Administrator or which were not deposited in a Custodial
Account;
(v) The
Purchase Price with respect to any Mortgage Loans purchased by the Sponsor
or
Section 2.02 or 2.03, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of such a Purchase Price, the
Purchase Price with respect to any Mortgage Loans purchased by the Depositor
pursuant to Section 3.24, and all proceeds of any Mortgage Loans or
property acquired with respect thereto repurchased by the Master Servicer
pursuant to Section 10.01;
(vi) Any
amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(vii) Any
other
amounts received by or on behalf of the Securities Administrator and required
to
be deposited in the Distribution Account pursuant to this
Agreement.
(b) All
amounts deposited to the Distribution Account shall be held by the Securities
Administrator in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution 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 or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Securities
Administrator to the Distribution Account.
(c) The
amount at any time credited to the Distribution Account may be invested by
the
Securities Administrator in Permitted Investments that mature no later than
the
Business Day prior to the next succeeding Distribution Date as directed by
the
Master Servicer, unless the investment is managed by the Securities
Administrator or an affiliate of the Securities Administartor, in which case
such Permitted Investments may mature on the Distribution Date. All such
investment income shall be for the benefit of the Master Servicer, and any
losses incurred shall be deposited by the Master Servicer in the Distribution
Account immediately as realized.
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Section
3.32 Permitted
Withdrawals and Transfers from the Distribution Account.
(a) The
Securities Administrator will from time to time make or cause to be made such
withdrawals or transfers from the Distribution Account pursuant to this
Agreement for the following purposes:
(i) to
pay to
the Trustee any expenses recoverable by the Trustee pursuant to this
Agreement.
(ii) to
reimburse the Master Servicer as Successor Servicer or the Servicer for any
Advance or Servicing Advance of its own funds, the right of the Master Servicer
as Successor Servicer or the Servicer to reimbursement pursuant to this
subclause (ii) being limited to amounts received on a particular Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds,
Liquidation Proceeds and condemnation proceeds) which represent late payments
or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Advance or Servicing Advance was made;
(iii) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended
by the Master Servicer as Successor Servicer or the Servicer in good faith
in
connection with the restoration of the related Mortgaged Property which was
damaged by an uninsured cause or in connection with the liquidation of such
Mortgage Loan;
(iv) to
reimburse the Master Servicer as Successor Servicer or the Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
as Successor Servicer or the Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect to
such
Mortgage Loan;
(v) to
reimburse the Master Servicer as Successor Servicer or the Servicer for advances
of funds pursuant to this Agreement, and the right to reimbursement pursuant
to
this subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds,
Liquidation Proceeds and condemnation proceeds) which represent late recoveries
of the payments for which such advances were made;
(vi) to
reimburse the Master Servicer as Successor Servicer or the Servicer for any
Advance or advance, after a Realized Loss has been allocated with respect to
the
related Mortgage Loan if the Advance or advance has not been reimbursed pursuant
to clauses (ii) and (v);
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(vii) to
pay
the Credit Risk Management Fee to the Credit Risk Manager; provided, however,
that upon the termination of the Credit Risk Manager pursuant to
Section 3.33 hereof, the amount of the Credit Risk Management Fee (or any
portion thereof) previously payable to the Credit Risk Manager as described
herein shall be paid to the Sponsor;
(viii) to
reimburse the Trustee or the Securities Administrator for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement
(including the expenses of the Securities Administrator in connection with
a tax
audit in connection with the performance of its obligations pursuant to
Section 9.13);
(ix) to
pay to
the Trust Fund, as additional servicing compensation, any Excess Liquidation
Proceeds to the extent not retained by the Servicer;
(x) to
reimburse or pay the Servicer any such amounts as are due thereto under this
Agreement and have not been retained by or paid to the Servicer, to the extent
provided herein or therein;
(xi) to
reimburse the Trustee for expenses incurred in the transfer of servicing
responsibilities of the terminated Servicer after the occurrence and continuance
of a Servicer Default to the extent not paid by the terminated
servicer;
(xii) to
reimburse the Master Servicer for any costs and expenses reimbursable to the
Master Servicer pursuant to this Agreement;
(xiii) to
reimburse the Custodian for expenses, costs and liabilities incurred or
reimbursable to it pursuant to this Agreement or the Custodial
Agreement;
(xiv) to
remove
amounts deposited in error; and
(xv) to
clear
and terminate the Distribution Account pursuant to
Section 10.01.
(b) The
Securities Administrator shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (ii) through
(v), inclusive, and (vii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the
Securities Administrator without being deposited in the Distribution Account
under Section 3.31.
(c) On
each
Distribution Date, the Securities Administrator shall distribute the Available
Distribution Amount, to the extent of funds on deposit in the Distribution
Account to the holders of the Certificates in accordance with
Section 5.04.
Section
3.33 Duties
of the Credit Risk Manager; Termination.
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(a) The
Depositor appoints Portfolio Surveillance Analytics, LLC, a wholly owned
subsidiary of InformationLogix, Inc., as Credit Risk Manager. For and on
behalf
of the Depositor, the Credit Risk Manager will provide reports and
recommendations concerning the Mortgage Loans that are past due, as to which
there has been commencement of foreclosure, as to which there has been
forbearance in exercise of remedies which are in default, as to which a
Mortgagor is the subject of bankruptcy, receivership, or an arrangement of
creditors, or as to which have become REO Properties. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the related Credit Risk Management Agreement and the
Credit
Risk Manager shall look solely to the Servicer and/or Master Servicer for
all
information and data (including loss and delinquency information and data)
and
loan level information and data relating to the servicing of the related
Mortgage Loans. If the Credit Risk Manager is no longer able to perform its
duties hereunder, the Credit Risk Manager may be terminated by the Depositor
at
the direction of Certificateholders evidencing not less than 66 2/3% of the
Voting Rights. The Depositor may, at its option, cause the appointment of
a
successor Credit Risk Manager. Upon any termination of the Credit Risk Manager
or the appointment of a successor Credit Risk Manager, the Depositor shall
give
written notice thereof to the Servicer, the Trustee, each Rating Agency and
the
Credit Risk Manager. Notwithstanding the foregoing, the termination of the
Credit Risk Manager pursuant to Section 3.33(b) shall not become effective
until the appointment of a successor Credit Risk Manager.
(b) Within
six months of the Closing Date, the Sponsor may, at its option, terminate the
Credit Risk Manager if, in its reasonable judgment, (i) the value of the
servicing rights with respect to the Mortgage Loans is adversely affected as
a
result of the presence of the Credit Risk Manager or (ii) the presence of the
Credit Risk Manager impairs the ability of the Sponsor to transfer the servicing
rights with respect to the Mortgage Loans as permitted by this Agreement. Upon
the termination of the Credit Risk Manager, the Sponsor may, at its option,
cause the Depositor to appoint a successor Credit Risk Manager. Notice of such
termination shall be provided by the Sponsor to the Rating Agencies, the
Trustee, the Securities Administrator, the Depositor, the Servicer and the
Credit Risk Manager. Upon the appointment of a successor Credit Risk Manager,
the Depositor shall provide written notice thereof to each Rating Agency, the
Trustee, the Servicer, the Securities Administrator and the Credit Risk
Manager.
If
the
Credit Risk Manager is terminated pursuant to this Section 3.33(b), the
Credit Risk Manager shall only be entitled to a fee equal to 0.0050% with
respect to each Mortgage Loan for the one year period following such
termination. After the expiration of such one year period, the Credit Risk
Manager shall not be entitled to the Credit Risk Management Fee or any portion
thereof with respect to any Mortgage Loan. The excess of the Credit Risk
Management Fee with respect to each Mortgage Loan over the amount payable to
the
Credit Risk Manager as described in this paragraph shall be paid to the Sponsor
pursuant to Section 5.04(a).
Section
3.34 Limitation
Upon Liability of the Credit Risk Manager.
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Neither
the Credit Risk Manager, nor any of the directors, officers, employees or agents
of the Credit Risk Manager, shall be under any liability to the Servicer, the
Master Servicer, the Securities Administrator, the Trustee, the
Certificateholders or the Depositor for any action taken or for refraining
from
the taking of any action in good faith pursuant to this Agreement, in reliance
upon information provided by the Servicer and/or Master Servicer under the
related Credit Risk Management Agreement or of errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, bad faith or gross negligence in its performance of its
duties under this Agreement or the applicable Credit Risk Management Agreement.
The Credit Risk Manager and any director, officer, employee or agent of the
Credit Risk Manager 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, and may rely in good faith upon the accuracy of information
furnished by the Servicer and/or Master Servicer pursuant to the related Credit
Risk Management Agreement in the performance of its duties thereunder and
hereunder.
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ARTICLE
IV
ADMINISTRATION
AND MASTER SERVICING OF THE MORTGAGE LOANS
Section
4.01 The
Master Servicer.
The
Master Servicer shall supervise, monitor and oversee the obligation of the
Servicer to
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and shall have full power and authority to do any and all things
which
it may deem necessary or desirable in connection with such master servicing
and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicer
as
necessary from time-to-time to carry out the Master Servicer’s obligations
hereunder, shall receive, review and evaluate all reports, information and
other
data provided to the Master Servicer by the Servicer and shall cause the
Servicer to perform and observe the covenants, obligations and conditions to
be
performed or observed by the Servicer under this Agreement. The Master Servicer
shall independently and separately monitor the Servicer’s servicing activities
with respect to each Mortgage Loan, reconcile the results of such monitoring
with such information provided in the previous sentence on a monthly basis
and
coordinate corrective adjustments to the Servicer’s and Master Servicer’s
records, and based on such reconciled and corrected information, provide such
information relating to the Mortgage Loans to the Securities Administrator
as
shall be necessary to enable it to prepare the statements specified in
Section 5.06 and any other information and statements required to be
provided by the Securities Administrator hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer to the Distribution Account.
Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not have
any duty or obligation to enforce any Credit Risk Management Agreement that
the
Servicer is a party to (the “Servicer Credit Risk Management Agreement”) or to
supervise, monitor or oversee the activities of the Credit Risk Manager under
the Servicer Credit Risk Management Agreement with respect to any action taken
or not taken by the Servicer pursuant to a recommendation of the Credit Risk
Manager.
The
Trustee shall furnish the Servicer and the Master Servicer with any limited
powers of attorney and other documents in form agreeable to the Trustee
necessary or appropriate to enable the Servicer and the Master Servicer to
service or master service and administer the Mortgage Loans and REO Property.
The Trustee shall have no responsibility for any action of the Master Servicer
or the Servicer pursuant to any such limited power of attorney or any other
executed document delivered by the Trustee pursuant to this paragraph and shall
be indemnified by the Master Servicer and the Servicer for any cost, liability
or expense arising from the misuse thereof by the Master Servicer or the
Servicer.
The
Trustee, the Custodian and the Securities Administrator shall provide access
to
the records and documentation in possession of the Trustee, the Custodian or
the
Securities Administrator regarding the Mortgage Loans and REO Property and
the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee, the Custodian or the Securities Administrator; provided,
however, that, unless otherwise required by law, none of the Trustee, the
Custodian or the Securities Administrator shall be required to provide access
to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee, the Custodian and the Securities
Administrator shall allow representatives of the above entities to photocopy
any
of the records and documentation and shall provide equipment for that purpose
at
a charge that covers the Trustee’s, the Custodian’s or the Securities
Administrator’s actual costs.
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The
Trustee shall execute and deliver to the Servicer or the Master Servicer upon
request any court pleadings, requests for trustee’s sale or other documents
necessary or desirable and, in each case, provided to the Trustee by the
Servicer or the Master Servicer to (i) the foreclosure or trustee’s sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Loan Document;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or any other Mortgage
Loan Document or otherwise available at law or equity.
Section
4.02 Monitoring
of the Servicer.
The
Master Servicer shall be responsible for monitoring the compliance by the
Servicer with its duties under this Agreement. In the review of the Servicer’s
activities, the Master Servicer may rely upon an officer’s certificate of the
Servicer with regard to its compliance with the terms of this Agreement. In
the
event that the Master Servicer, in its judgment, determines that the Servicer
should be terminated in accordance with this Agreement, or that a notice should
be sent pursuant to this Agreement with respect to the occurrence of an event
that, unless cured, would constitute grounds for such termination, the Master
Servicer shall notify the Sponsor and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.
The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of the Servicer under this Agreement, and shall,
in the event that the Servicer fails to perform its obligations in accordance
with this Agreement, subject to this Section and Article VIII, shall
terminate the rights and obligations of the Servicer hereunder in accordance
with the provisions of Article VIII. The Master Servicer shall act as the
Successor Servicer of the Mortgage Loans or enter in to a new servicing
agreement with a Successor Servicer selected by the Master Servicer; provided,
however, it is understood and acknowledged by the parties hereto that there
will
be a period of transition (not to exceed ninety (90) days) before the actual
servicing functions can be fully transferred to the Master Servicer or such
Successor Servicer. Such enforcement, including, without limitation, the legal
prosecution of claims 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 Master
Servicer, in its good faith business judgment, would require were it the owner
of the Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not
be
required to prosecute or defend any legal action except to the extent that
the
Master Servicer shall have received indemnity reasonably acceptable to it for
its costs and expenses in pursuing such action.
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To
the
extent that the costs and expenses related to the termination of the Servicer,
appointment of a Successor Servicer or the transfer and assumption of servicing
by the Master Servicer (including, without limitation, (i) all legal costs
and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by the Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data
and
the completion, correction or manipulation of such servicing data as may be
required by the Successor Servicer to correct any errors or insufficiencies
in
the servicing data or otherwise to enable the Successor Servicer to service
the
Mortgage Loans in accordance with this Agreement) are not fully and timely
reimbursed by the terminated Servicer, the Master Servicer shall be entitled
to
reimbursement of such costs and expenses from the Distribution
Account.
The
Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in this Agreement.
If
the
Master Servicer acts as Successor Servicer, it shall not assume liability for
the representations and warranties of the Servicer, if any, that it
replaces.
Section
4.03 Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy that shall be in such form
and
amount generally acceptable for entities serving as master servicers or
trustees, affording coverage with respect to all directors, officers, 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.
Any such errors and omissions policy and fidelity bond may not be cancelable
without thirty (30) days’ prior written notice to the Trustee.
Section
4.04 Power
to Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Section 9.13 hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of
the ownership of the Mortgaged Property securing any Loan, in each case, in
accordance with the provisions of this Agreement; provided, however, that the
Master Servicer shall not (and, consistent with its responsibilities under
Section 4.02, shall not permit the Servicer to) knowingly or intentionally
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, would cause any REMIC to fail to qualify as a REMIC or result
in
the imposition of a tax upon 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) unless the Master Servicer has received an Opinion of Counsel (but not
at
the expense of the Master Servicer) to the effect that the contemplated action
will not cause any REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer or an Authorized
Servicer Representative, with any powers of attorney, in form agreeable to
the
Trustee, empowering the Master Servicer, or the Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release
or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property,
and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
or the Servicer may request, to enable the Master Servicer to master service
and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for the misuse of any such powers of attorney by the Master
Servicer or the Servicer and shall be indemnified by the Master Servicer and
the
Servicer, as applicable, for any costs, liabilities or expenses incurred by
the
Trustee in connection with such misuse). If the Master Servicer or the Trustee
has been advised that it is likely that the laws of the state in which action
is
to be taken prohibit such action if taken in the name of the Trustee or that
the
Trustee would be adversely affected under the “doing business” or tax laws of
such state if such action is taken in its name, the Master Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to
Section 9.10 hereof. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action authorized pursuant to this Agreement to
be
taken by it in the name of the Trustee, be deemed to be the agent of the
Trustee.
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Section
4.05 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicer to enforce such clauses in accordance with
this Agreement. If applicable law prohibits the enforcement of a due-on-sale
clause or such clause is otherwise not enforced in accordance with this
Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this
Agreement.
Section
4.06 Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
The
Master Servicer shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of the Master Servicer from time to
time
as are required by the terms hereof to be delivered to the Trustee or the
Custodian. Any funds received by the Master Servicer in respect of any Mortgage
Loan or which otherwise are collected by the Master Servicer as Liquidation
Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of any Mortgage
Loan shall be held for the benefit of the Trustee and the Certificateholders
subject to the Master Servicer’s right to retain or withdraw from the
Distribution Account the Master Servicing Compensation and other amounts
provided in this Agreement. The Master Servicer, to the extent required by
Article III, shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the OTS, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal
or
state banking or insurance regulatory authority if so required by applicable
regulations of the OTS or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
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All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee
and the Certificateholders and shall be and remain the sole and exclusive
property of the Trustee; provided, however, that the Master Servicer and the
Servicer shall be entitled to setoff against, and deduct from, any such funds
any amounts that are properly due and payable to the Master Servicer or the
Servicer under this Agreement.
Section
4.07 Standard
Hazard Insurance and Flood Insurance Policies.
For
each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer
under this Agreement to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set forth
in this Agreement and that no earthquake or other additional insurance is to
be
required of any Mortgagor or to be maintained on property acquired in respect
of
a defaulted loan, other than pursuant to such applicable laws and regulations
as
shall at any time be in force and as shall require such additional
insurance.
Pursuant
to Section 3.31, any amounts collected by the Master Servicer, under any
insurance policies (other than amounts to be applied to the restoration or
repair of the property subject to the related Mortgage or released to the
Mortgagor in accordance with this Agreement) shall be deposited into the
Distribution Account, subject to withdrawal pursuant to
Section 3.32.
Section
4.08 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall enforce the Servicer’s obligation to, prepare and present
on behalf of the Trustee and the Certificateholders all claims under any
insurance policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured’s claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Servicer and remitted to the Master Servicer)
in
respect of such policies, bonds or contracts shall be promptly deposited in
the
Distribution Account upon receipt, except that any amounts realized that are
to
be applied to the repair or restoration of the related Mortgaged Property as
a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable insurance policy need not be so deposited
(or remitted).
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Section
4.09 Maintenance
of the Primary Mortgage Insurance Policies.
The
Master Servicer shall not take, or (to the extent within its control) permit
the
Servicer (to the extent such action is prohibited under this Agreement) to
take,
any action that would result in noncoverage under any primary mortgage insurance
policy or any loss which, but for the actions of the Master Servicer or the
Servicer, would have been covered thereunder. The Master Servicer shall use
its
best reasonable efforts to cause the Servicer to keep in force and effect (to
the extent that the related Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan
in
accordance with the provisions of this Agreement. The Master Servicer shall
not,
and (to the extent within its control) shall not permit the Servicer to, cancel
or refuse to renew any primary mortgage insurance policy that is in effect
at
the date of the initial issuance of the Mortgage Note and is required to be
kept
in force hereunder except in accordance with the provisions of this
Agreement.
The
Master Servicer agrees to cause the Servicer to present, on behalf of the
Trustee and the Certificateholders, claims to the insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.31, any
amounts collected by the Master Servicer or the Servicer under any primary
mortgage insurance policies shall be deposited by the Servicer or by the Master
Servicer in the Distribution Account, subject to withdrawal pursuant to
Section 3.32.
Section
4.10 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee or the Custodian, shall retain possession and custody of the originals
(to the extent available) of any primary mortgage insurance policies, or
certificate of insurance if applicable, and any certificates of renewal as
to
the foregoing as may be issued from time to time as contemplated by this
Agreement. Until all amounts distributable in respect of the Certificates have
been distributed in full and the Master Servicer and the Servicer otherwise
has
fulfilled its obligations under this Agreement, the Trustee or the Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement and the Custodial
Agreement. The Master Servicer shall promptly deliver or cause to be delivered
to the Trustee or the Custodian, upon the execution or receipt thereof the
originals of any primary mortgage insurance policies, any certificates of
renewal, and such other documents or instruments that constitute Mortgage Loan
Documents that come into the possession of the Master Servicer from time to
time.
Section
4.11 Realization
Upon Defaulted Loans.
The
Master Servicer shall cause the Servicer to foreclose upon, repossess or
otherwise comparably convert the ownership of Mortgaged 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,
all
in accordance with this Agreement.
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Section
4.12 Compensation
for the Master Servicer.
As
compensation for its services hereunder, the Master Servicer shall be entitled
to receive all income and gain realized from any investment of funds in the
Distribution Account (the “Master Servicing Compensation”). The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor except
as provided in this Agreement.
The
amount of the Master Servicing Compensation payable to the Master Servicer
in
respect of any Distribution Date shall be reduced in accordance with
Section 4.14.
Section
4.13 REO
Property.
In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee,
or to its nominee, on behalf of the Certificateholders. The Master Servicer
shall cause the Servicer to sell, and the Servicer agrees to sell, any REO
Property as expeditiously as possible and in accordance with the provisions
of
this Agreement. Further, the Master Servicer shall cause the Servicer to sell
any REO Property prior to three (3) years after the end of the calendar year
of
its acquisition by REMIC I, unless (i) the Trustee and the Securities
Administrator shall have been supplied with an Opinion of Counsel to the effect
that the holding by the Trust Fund of such REO Property subsequent to such
three-year period will not result in the imposition of taxes on “prohibited
transactions” of any REMIC hereunder as defined in Section 860F of the Code
or cause any REMIC hereunder to fail to qualify as a REMIC at any time that
any
Certificates are outstanding, in which case the Trust Fund may continue to
hold
such Mortgaged Property (subject to any conditions contained in such Opinion
of
Counsel) or (ii) the Servicer shall have applied for, prior to the expiration
of
such three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the Servicer to protect and conserve, such REO Property in the
manner and to the extent required by this Agreement, in accordance with the
REMIC Provisions and in a manner that does not result in a tax on “net income
from foreclosure property” or cause such REO Property to fail to qualify as
“foreclosure property” within the meaning of Section 860G(a)(8) of the
Code.
The
Master Servicer shall cause the Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Custodial
Account maintained by the Servicer.
The
Master Servicer and the Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Advances and other unreimbursed advances as well as any unpaid Servicing Fees
and master servicing fees from Liquidation Proceeds received in connection
with
the final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid master servicing fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income
or
other net amounts derived from such REO Property.
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Section
4.14 Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
The
Master Servicer shall deposit in the Distribution Account not later than each
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer under this Agreement with respect to
Prepayment Interest Shortfalls on the Mortgage Loans for the related
Distribution Date, and not so paid by the Servicer and (ii) the Master Servicing
Compensation for such Distribution Date without reimbursement
therefor.
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ARTICLE
V
ADVANCES
AND DISTRIBUTIONS
Section
5.01 Advances;
Advance Facility.
(a) The
Servicer shall make an Advance with respect to any Mortgage Loan and deposit
such Advance in the Distribution Account no later than noon Eastern time on
the
Remittance Date in immediately available funds. The amount of any Advances
to be
made by the Servicer on any Distribution Date shall equal (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fees), due during
the
related Due Period in respect of the Mortgage Loans, which Monthly Payments
were
delinquent as of the close of business on the related Determination Date and
(ii) with respect to each REO Property, which was acquired during or prior
to
the related Prepayment Period and as to which an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any,
of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property deposited in the
Custodial Account pursuant to Section 3.26 of this Agreement for distribution
on
such Distribution Date; provided, however, the Servicer shall not be required
to
make P&I Advances with respect to Relief Act Interest Shortfalls, or with
respect to Prepayment Interest Shortfalls in excess of its obligations under
Section 5.02. For purposes of the preceding sentence, the Monthly Payment on
each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for such Balloon Mortgage Loan.
The Servicer shall be obligated to make any such Advance only to the extent
that
such advance would not be a Nonrecoverable Advance. If a Servicer shall have
determined that it has made a Nonrecoverable Advance or that a proposed Advance
or a lesser portion of such Advance would constitute a Nonrecoverable Advance,
the Servicer shall deliver (i) to the Securities Administrator for the benefit
of the Certificateholders funds constituting the remaining portion of such
Advance, if applicable, and (ii) to Master Servicer an Officer’s Certificate
setting forth the basis for such determination.
In
lieu
of making all or a portion of such Advance from its own funds, the Servicer
may
(i) cause to be made an appropriate entry in its records relating to its
Custodial Account that any Amounts Held for Future Distribution has been used
by
it in discharge of its obligation to make any such Advance and (ii) transfer
such funds from its Custodial Account to the Distribution Account. Any funds
so
applied and transferred shall be replaced by the Servicer by deposit in the
Distribution Account, no later than the close of business on any future
Remittance Date on which the funds on deposit in its Custodial Account shall
be
less than the amount required to be remitted to the Securities Administrator
on
such Remittance Date. The Securities Administrator will notify the Servicer
and
the Master Servicer by the close of business on the Business Day prior to the
Distribution Date in the event that the amount remitted by the Servicer to
the
Securities Administrator on such date is less than the Advances required to
be
made by the Servicer for the related Distribution Date.
The
Servicer shall be entitled to be reimbursed from its Custodial Account for
all
Advances of its own funds made pursuant to this Section as provided in
Section 3.27. The obligation to make Advances with respect to any Mortgage
Loan shall continue until such Mortgage Loan is paid in full or the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Trust Fund
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 5.01.
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Subject
to and in accordance with the provisions of Article VIII hereof, in the event
that the Servicer fails to make such Advance, then the Master Servicer, as
a
Successor Servicer, shall be obligated to make such Advance only to the extent
such Advance, if made, would not constitute a Nonrecoverable Advance, subject
to
the provisions of this Section 5.01 and Section 8.02.
(b) i)
The
Servicer is hereby authorized to enter into a financing or other facility (any
such arrangement, an “Advance Facility”), the documentation for which complies
with Section 5.01(b)(v) below, under which (1) the Servicer assigns or
pledges its rights under this Agreement to be reimbursed for any or all Advances
and/or Servicing Advances to (i) a Person, which may be a special-purpose
bankruptcy-remote entity (an “SPV”), (ii) a Person, which may simultaneously
assign or pledge such rights to an SPV or (iii) a lender (a “Lender”), which, in
the case of any Person or SPV of the type described in either of the preceding
clauses (i) or (ii), may directly or through other assignees and/or pledgees,
assign or pledge such rights to a Person, which may include a trustee acting
on
behalf of holders of debt instruments (any such Person or any such Lender,
an
“Advance Financing Person”), and/or (2) an Advance Financing Person agrees to
fund all the Advances and/or Servicing Advances required to be made by the
Servicer pursuant to this Agreement. No consent of the Trustee, the Securities
Administrator, the Master Servicer, the Certificateholders or any other party
shall be required before the Servicer may enter into an Advance Facility nor
shall the Trustee, the Securities Administrator, the Master Servicer, or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to
this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.
(ii) If
the
Servicer enters into an Advance Facility, the Servicer and the related Advance
Financing Person shall deliver to the Master Servicer and the Securities
Administrator at the address set forth in Section 11.05 hereof no later
than the Remittance Date immediately following the effective date of such
Advance Facility a written notice (an “Advance Facility Notice”), stating (a)
the identity of the Advance Financing Person and (b) the identity of the Person
(the “Servicer’s Assignee”) that will, subject to Section 5.01(b)(iii)
hereof, have the right to make withdrawals from the Custodial Account pursuant
to Section 3.27 hereof to reimburse previously unreimbursed Advances and/or
Servicing Advances (“Advance Reimbursement Amounts”). Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse itself
in accordance with Section 3.27 hereof, assuming the Servicer had made the
related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a Successor Servicer in accordance with Section 3.27
hereof to the extent permitted under Section 5.01(b)(v) below.
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(iii) Notwithstanding
the existence of an Advance Facility, the Servicer, on behalf of the Advance
Financing Person and the Servicer’s Assignee, shall be entitled to receive
reimbursements of Advances and/or Servicing Advances in accordance with
Section 3.27 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Master Servicer and the
Securities Administrator in the manner set forth in Section 11.05 hereof.
Upon receipt of such written notice, the Servicer shall no longer be entitled
to
receive reimbursement for any Advance Reimbursement Amounts and the Servicer’s
Assignee shall immediately have the right to receive from the Custodial Account
all Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer’s Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Custodial Account pursuant to Section 3.27 of this
Agreement and shall not otherwise be entitled to make withdrawals or receive
amounts that shall be deposited in the Distribution Account pursuant to
Section 3.31 hereof, and (ii) none of the Trustee or the Certificateholders
shall have any right to, or otherwise be entitled to, receive any Advance
Reimbursement Amounts to which the Servicer or the Servicer’s Assignee, as
applicable, shall be entitled pursuant to Section 3.27 hereof. An Advance
Facility may be terminated by the joint written direction of the Servicer and
the related Advance Financing Person. Written notice of such termination shall
be delivered to the Trustee in the manner set forth in Section 11.05
hereof. None of the Depositor, Master Servicer, the Securities Administrator
or
the Trustee shall, as a result of the existence of any Advance Facility, have
any additional duty or liability with respect to the calculation or payment
of
any Advance Reimbursement Amount, nor, as a result of the existence of any
Advance Facility, shall the Depositor, Master Servicer, the Securities
Administrator or the Trustee have any additional responsibility to track or
monitor the administration of the Advance Facility or the payment of Advance
Reimbursement Amounts to the Servicer’s Assignee. The Servicer shall indemnify
the Master Servicer, the Securities Administrator, the Depositor, the Trustee,
any Successor Servicer and the Trust Fund for any claim, loss, liability or
damage resulting from any claim by the related Advancing Financing Person,
except to the extent that such claim, loss, liability or damage resulted from
or
arose out of gross negligence, recklessness or willful misconduct on the part
of
the Master Servicer, the Securities Administrator, the Depositor, the Trustee
or
any Successor Servicer, as the case may be. The Servicer shall maintain and
provide to any Successor Servicer and, upon request, the Trustee a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advancing Financing Person. The Successor
Servicer shall be entitled to rely on any such information provided by the
Servicer, and the Successor Servicer shall not be liable for any errors in
such
information.
(iv) An
Advance Financing Person who receives an assignment or pledge of rights to
receive Advance Reimbursement Amounts and/or whose obligations are limited
to
the funding of Advances and/or Servicing Advances pursuant to an Advance
Facility shall not be required to meet the criteria for qualification as a
Servicer.
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(v) As
between the Servicer and its Advance Financing Person, on the one hand, and
a
Successor Servicer and its Advance Financing Person, if any, on the other hand,
Advance Reimbursement Amounts on a loan-by-loan basis with respect to each
Mortgage Loan as to which an Advance and/or Servicing Advance shall have been
made and be outstanding shall be allocated on a “first-in, first out” basis. In
the event a Servicer’s Assignee shall have received some or all of an Advance
Reimbursement Amount related to Advances and/or Servicing Advances that were
made by a Person other than the Servicer or its related Advance Financing Person
in error, then the Servicer’s Assignee shall be required to remit any portion of
such Advance Reimbursement Amount to each Person entitled to such portion of
such Advance Reimbursement Amount. Without limiting the generality of the
foregoing, the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances and/or Servicing Advances funded by the
Servicer to the extent the related Advance Reimbursement Amounts have not been
assigned or pledged to such Advance Financing Person or the Servicer’s
Assignee.
(vi) For
purposes of any Officer’s Certificate of the Servicer delivered pursuant to
Section 5.01(a), any Nonrecoverable Advance referred to therein may have
been made by the Servicer. In making its determination that any Advance or
Servicing Advance theretofore made has become a Nonrecoverable Advance, the
Servicer shall apply the same criteria in making such determination regardless
of whether such Advance or Servicing Advance shall have been made by the
Servicer.
(vii) Any
amendment to this Section 5.01(b) 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 5.01(b), including
amendments to add provisions relating to a Successor Servicer, may be entered
into by the Master Servicer, the Securities Administrator, the Trustee, the
Depositor and the Servicer without the consent of any Certificateholder,
provided such amendment complies with Section 11.01 hereof. All reasonable
costs and expenses (including attorneys’ fees) of each party hereto of any such
amendment shall be borne solely by the Servicer. The parties hereto hereby
acknowledge and agree that: (a) the Advances and/or Servicing Advances financed
by and/or pledged to an Advance Financing Person under any Advance Facility
are
obligations owed to the Servicer payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances and/or Servicing
Advances only to the extent provided herein, and none of the Master Servicer,
the Securities Administrator, the Trustee or the Trust are, as a result of
the
existence of any Advance Facility, obligated or liable to repay any Advances
and/or Servicing Advances financed by the Advance Financing Person; (b) the
Servicer will be responsible for remitting to the related Advance Financing
Person the applicable amounts collected by it as reimbursement for Advances
and/or Servicing Advances funded by such Advance Financing Person, subject
to
the provisions of this Agreement; and (c) none of the Master Servicer, the
Securities Administrator or the Trustee shall have any responsibility to track
or monitor the administration of the financing arrangement between the Servicer
and any Advance Financing Person.
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Section
5.02 Compensating
Interest Payments.
In
the
event that there is a Prepayment Interest Shortfall arising from a voluntary
Principal Prepayment in full by the Mortgagor with respect to any Mortgage
Loan,
the Servicer shall, to the extent of the Servicing Fee for such Distribution
Date, deposit into its Custodial Account, as a reduction of and to the extent
of, the Servicing Fee for such Distribution Date, no later than the close of
business on the Remittance Date immediately preceding such Distribution Date,
an
amount equal to the Prepayment Interest Shortfall; and in case of such deposit,
the Servicer shall not be entitled to any recovery or reimbursement from the
Depositor, the Trustee, the Sponsor, the Trust Fund, the Master Servicer or
the
Certificateholders.
Section
5.03 REMIC
Distributions.
On
each
Distribution Date the Securities Administrator, shall be deemed to allocate
distributions to the REMIC I Regular Interests and REMIC II Regular Interests
in
accordance with Section 5.07 hereof.
Section
5.04 Distributions.
(a) On
each
Distribution Date, the Securities Administrator will withdraw funds on deposit
in the Distribution Account and make distributions to the Certificateholders
in
accordance with the Remittance Report for such Distribution Date, in the
following order of priority:
(i) On
each
Distribution Date, the Interest Remittance Amount for such Distribution Date
will be paid in the following order of priority:
(1) from
the
Interest Remittance Amount, any Net Swap Payment or Swap Termination Payment
paid to the Supplemental Interest Trust and owed to the Swap Provider (unless
the Swap Provider is the sole Defaulting Party or the sole Affected Party (as
defined in the ISDA Master Agreement) and to the extent not paid by the
securities administrator from any upfront payment received pursuant to any
replacement swap agreement that may be entered into by the Supplemental Interest
Trust Trustee);
(2) from
the
Interest Remittance Amount, to the Senior Certificates, pro rata based on
amounts due, Current Interest and any Carryforward Interest for each such Class
and such Distribution Date, applied in accordance with the last paragraph of
this Section 5.04;
(3) to
the
Class M-1 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(4) to
the
Class M-2 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
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(5) to
the
Class M-3 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(6) to
the
Class M-4 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(7) to
the
Class M-5 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(8) to
the
Class M-6 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(9) to
the
Class M-7 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(10) to
the
Class M-8 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(11) to
the
Class M-9 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(12) to
the
Class B-1 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date; and
(13) to
the
Class B-2 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date.
The
Interest Remittance Amount distributed pursuant to Section 5.04(i)(1) above
will be applied to the Senior Certificates, concurrently, to the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, Current Interest and any
Carryforward Interest for each such Class for such Distribution Date, on a
pro
rata basis based on the entitlement of each such Class.
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(ii) The
Principal Payment Amount will be paid on each Distribution Date as
follows:
I. On
each
Distribution Date (a) prior to the Stepdown Date or (b) with respect to which
a
Trigger Event is in effect, the Principal Payment Amount will be paid in the
following order of priority:
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(i)
|
to
the Supplemental Interest Trust from the Principal Payment Amount,
any Net
Swap Payment or Swap Termination Payment owed to the Swap Provider
(unless
the Swap Provider is the sole Defaulting Party or the sole Affected
Party
(as defined in the ISDA Master Agreement and to the extent not paid
by the
securities administrator from any upfront payment received pursuant
to any
replacement swap agreement that may be entered into by the Supplemental
Interest Trust Trustee)) to the extent not paid from the Interest
Remittance Amount on such Distribution Date;
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|
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(ii)
|
(a)
from the Principal Payment Amount remaining after payments pursuant
to
clause (i) above, sequentially, to the Class A-1, Class A-2, Class
A-3 and
Class A-4 Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero;
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(iii)
|
to
the Class M-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(iv)
|
to
the Class M-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(v)
|
to
the Class M-3 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
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(vi)
|
to
the Class M-4 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
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(vii)
|
to
the Class M-5 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(viii)
|
to
the Class M-6 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
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(ix)
|
to
the Class M-7 Certificates, until its Certificate Principal Balance
is
reduced to zero;
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(x)
|
to
the Class M-8 Certificates, until its Certificate Principal Balance
is
reduced to zero;
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(xi)
|
to
the Class M-9 Certificates, until its Certificate Principal Balance
is
reduced to zero;
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(xii)
|
to
the Class B-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(xiii)
|
to
the Class B-2 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
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(xiv)
|
for
application as part of Monthly Excess Cashflow for such Distribution
Date
pursuant to subclause (iii) below, any such Principal Payment Amount
remaining after application pursuant to clauses I(i) through (xiii)
above.
|
II. On
each
Distribution Date (a) on or after the Stepdown Date and (b) with respect to
which a Trigger Event is not in effect, the Principal Payment Amount will be
paid in the following order of priority:
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(i)
|
to
the Supplemental Interest Trust from the Principal Payment Amount,
any Net
Swap
Payment or Swap Termination Payment owed to the Swap Provider (unless
the
Swap Provider is the sole Defaulting Party or the sole Affected Party
(as
defined in the ISDA Master Agreement and to the extent not paid by
the
securities administrator from any upfront payment received pursuant
to any
replacement swap agreement that may be entered into by the Supplemental
Interest Trust Trustee)) remaining unpaid after the distribution
of the
Interest Remittance Amount on such Distribution
Date;
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(ii)
|
(a)
from
the Senior Principal Payment Amount, sequentially, to the Class A-1,
Class
A-2, Class A-3 and Class A-4 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced
to
zero;
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(iii)
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to
the Class M-1 Certificates, the Class M-1 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(iv)
|
to
the Class M-2 Certificates, the Class M-2 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(v)
|
to
the Class M-3 Certificates, the Class M-3 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(vi)
|
to
the Class M-4 Certificates, the Class M-4 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(vii)
|
to
the Class M-5 Certificates, the Class M-5 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(viii)
|
to
the Class M-6 Certificates, the Class M-6 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(ix)
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to
the Class M-7 Certificates, the Class M-7 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
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(x)
|
to
the Class M-8 Certificates, the Class M-8 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
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|
(xi)
|
to
the Class M-9 Certificates, the Class M-9 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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|
(xii)
|
to
the Class B-1 Certificates, the Class B-1 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
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(xiii)
|
to
the Class B-2 Certificates, the Class B-2 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero; and
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|
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(xiv)
|
for
application as part of Monthly Excess Cashflow for such Distribution
Date
pursuant to clause (iii) below, any such Principal Payment Amount
remaining after application pursuant to clauses II(i) through (xiii)
above.
|
|
The
foregoing notwithstanding, on and after the Distribution Date on which the
aggregate Certificate Principal Balance of each class of Subordinate
Certificates has been reduced to zero, distributions to the Senior Certificates
will be allocated to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, on a pro rata basis based on the Certificate Principal Balance
of
each such class, until the Certificate Principal Balance of each such class
has
been reduced to zero.
(iii) On
each
Distribution Date, the Monthly Excess Cashflow will be distributed in the
following order of priority:
(1)(A) until
the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
and
Class B Certificates equals the Aggregate Loan Balance for such Distribution
Date minus the Targeted Overcollateralization Amount for such Distribution
Date,
on each Distribution Date (a) prior to the Stepdown Date or (b) with respect
to
which a Trigger Event is in effect, to the extent of Monthly Excess Interest
for
such Distribution Date, to the Publicly Offered Certificates and Class B
Certificates, in the following order of priority:
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(a)
|
sequentially,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates,
in that
order, until the Certificate Principal Balance of each such class
has been
reduced to zero;
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|
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(b)
|
to
the Class M-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(c)
|
to
the Class M-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
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(d)
|
to
the Class M-3 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
|
(e)
|
to
the Class M-4 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
|
|
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(f)
|
to
the Class M-5 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(g)
|
to
the Class M-6 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
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(h)
|
to
the Class M-7 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
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(i)
|
to
the Class M-8 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
|
(j)
|
to
the Class M-9 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
|
(k)
|
to
the Class B-1 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
|
|
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(l)
|
to
the Class B-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
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(B) on
each
Distribution Date on or after the Stepdown Date and with respect to which a
Trigger Event is not in effect, to fund any principal distributions required
to
be made on such Distribution Date set forth in Section 5.04(ii)II after
giving effect to the distribution of the Principal Payment Amount for such
date,
in accordance with the priorities set forth therein;
(2) to
the
Class M-1 Certificates, any Deferred Amount for such Class;
(3) to
the
Class M-2 Certificates, any Deferred Amount for such Class;
(4) to
the
Class M-3 Certificates, any Deferred Amount for such Class;
(5) to
the
Class M-4 Certificates, any Deferred Amount for such Class;
(6) to
the
Class M-5 Certificates, any Deferred Amount for such Class;
(7) to
the
Class M-6 Certificates, any Deferred Amount for such Class;
(8) to
the
Class M-7 Certificates, any Deferred Amount for such Class;
(9) to
the
Class M-8 Certificates, any Deferred Amount for such Class;
(10) to
the
Class M-9 Certificates, any Deferred Amount for such Class;
(11) to
the
Class B-1 Certificates, any Deferred Amount for such Class;
(12) to
the
Class B-2 Certificates, any Deferred Amount for such Class;
(13) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates,
concurrently, any Basis Risk Shortfall for each such class, on a pro rata basis
based on the entitlement of each such class;
(14) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-1 Certificates, any Basis Risk Shortfall for such Class;
(15) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-2 Certificates, any Basis Risk Shortfall for such Class;
(16) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-3 Certificates, any Basis Risk Shortfall for such Class;
(17) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-4 Certificates, any Basis Risk Shortfall for such
Class;
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(18) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-5 Certificates, any Basis Risk Shortfall for such
Class;
(19) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-6 Certificates, any Basis Risk Shortfall for such
Class;
(20) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-7 Certificates, any Basis Risk Shortfall for such
Class;
(21) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-8 Certificates, any Basis Risk Shortfall for such
Class;
(22) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-9 Certificates, any Basis Risk Shortfall for such
Class;
(23) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class B-1 Certificates, any Basis Risk Shortfall for such
Class;
(24) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class B-2 Certificates, any Basis Risk Shortfall for such
Class;
(25) to
the
Supplemental Interest Trust, any Swap Termination Payment owed to the Swap
Provider in the event of a Swap Provider Trigger Event not paid on prior
Distribution Dates and to the extent not paid by the Securities Administrator
from any upfront payment received pursuant to any replacement swap agreement
that may be entered into by the Supplemental Interest Trust
Trustee;
(26) to
the
Class X Certificates, the Class X Distribution Amount; and
(27) to
the
Class R Certificates, any remaining amount. It is not anticipated that any
amounts will be distributed to the Class R Certificates under this clause
(27).
Notwithstanding
the foregoing, distributions pursuant to clauses (8) through (24) above on
any
Distribution Date will be made after giving effect to payments received pursuant
to the Swap Agreement. On each Distribution Date, the Securities Administrator,
after making the required distributions of interest and principal to the
Certificates as described in clauses (i) and (ii) above and after the
distribution of the Monthly Excess Cashflow as described in clause (iii) above,
will withdraw from the Basis Risk Shortfall Reserve Fund the amounts on deposit
therein and distribute such amounts to the Publicly Offered Certificates and
Class B Certificates in respect of any Basis Risk Shortfalls in the following
manner and order of priority: first, concurrently to the Senior Certificates,
on
a pro rata basis, based on the entitlement of each such Class, the amount of
any
Basis Risk Shortfalls allocated to such Class for such Distribution Date;
second, to the Class M-1 Certificates, the amount of any Basis Risk Shortfall
allocated to such Class for such Distribution Date for such Class; third, to
the
Class M-2 Certificates, the amount of any Basis Risk Shortfall allocated to
such
Class for such Distribution Date for such Class; fourth, to the Class M-3
Certificates, the amount of any Basis Risk Shortfalls allocated to such Class
for such Distribution Date for such Class; fifth, to the Class M-4 Certificates,
the amount of any Basis Risk Shortfalls allocated to such Class for such
Distribution Date; sixth, to the Class M-5 Certificates, the amount of any
Basis
Risk Shortfalls allocated to such Class for such Distribution Date; seventh,
to
the Class M-6 Certificates, the amount of any Basis Risk Shortfall allocated
to
such Class for such Distribution Date for such Class; eighth, to the Class
M-7
Certificates, the amount of any Basis Risk Shortfall allocated to such Class
for
such Distribution Date for such Class; ninth, to the Class M-8 Certificates,
the
amount of any Basis Risk Shortfall allocated to such Class for such Distribution
Date for such Class; tenth, to the Class M-9 Certificates, the amount of any
Basis Risk Shortfall allocated to such Class for such Distribution Date for
such
Class; eleventh, to the Class B-1 Certificates, the amount of any Basis Risk
Shortfall allocated to such Class for such Distribution Date for such Class;
and
twelfth, to the Class B-2 Certificates, the amount of any Basis Risk Shortfall
allocated to such Class for such Distribution Date for such Class.
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(iv) Subject
to Section 10.02 hereof respecting the final distribution on a Class of
Publicly Offered Certificates or a Class of Class B Certificates, on each
Distribution Date the Securities Administrator shall make distributions to
each
Holder of a Publicly Offered Certificate or Class B certificate of record on
the
preceding Record Date either by wire transfer in immediately available funds
to
the account of such holder at a bank or other entity having appropriate
facilities therefor, if (i) such Holder has so notified the Securities
Administrator at least five (5) Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating ten percent (10%) or more with respect to such Class or, if not,
by
check mailed by first class mail to such Certificateholder at the address of
such holder appearing in the Certificate Register. Notwithstanding the
foregoing, but subject to Section 10.02 hereof respecting the final
distribution, distributions with respect to Publicly Offered Certificates and
Class B Certificates registered in the name of a Depository shall be made to
such Depository in immediately available funds.
(v) Net
Swap
Trust Payments and Swap Termination Payments (other than Swap Termination
Payments resulting from a Swap Provider Trigger Event) payable by the
Supplemental Interest Trust to the Swap Provider pursuant to the Swap Agreement
shall be deducted from Interest Remittance Amount, and to the extent of any
such
remaining amounts due, from Principal Remittance Amount, prior to any
distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted to the Supplemental Interest Trust, first to make any Net
Swap
Trust Payment owed to the Swap Provider pursuant to the Swap Agreement for
such
Distribution Date, and second to make any Swap Termination Payment (not due
to a
Swap Provider Trigger Event) owed to the Swap Provider pursuant to the Swap
Agreement for such Distribution Date. Any Swap Termination Payment triggered
by
a Swap Provider Trigger Event owed to the Swap Provider pursuant to the Swap
Agreement will be subordinated to distributions to the Holders of the Publicly
Offered Certificates and Class B Certificates and shall be paid as set forth
in
Section 5.04(a)(iii)(25).
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(b) On
each
Distribution Date, the Securities Administrator shall distribute from the
amounts received from the Swap Provider in respect of any Net Swap Trust Payment
then on deposit in the Supplemental Interest Trust in the following order of
priority:
(i) concurrently
to the Senior Certificates, on a pro rata basis based on the entitlement of
each
such Class, in an amount equal to any Carryforward Interest for such Class
or
Classes to the extent not covered by the Interest Remittance Amount on that
Distribution Date and solely to the extent the amount of any Carryforward
Interest is a result of the allocation of the interest portion of Realized
Losses;
(ii) concurrently
to the Senior Certificates and Subordinate Certificates, on a pro rata basis
based on the entitlement of each such Class, an amount equal to any Principal
Payment Amount, to the extent not covered by the Monthly Excess Cashflow on
that
Distribution Date and solely to the extent the payment of the Extra Principal
Distribution Amount is as a result of current or prior period Realized Losses,
to be included in the Principal Payment Amount for that Distribution Date and
payable as provided under Section 5.04(a)(ii) above;
(iii) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1 and Class B-2 Certificates, in that order,
in an amount equal to any Carryforward Interest for such Class or Classes to
the
extent not covered by the Monthly Excess Cashflow on that Distribution Date
and
solely to the extent the amount of any Carryforward Interest is as a result
of
the allocation of the interest portion of Realized Losses;
(iv) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1 and Class B-2 Certificates, in an amount
equal to any Applied Loss Amount for such Class or Classes, to the extent not
covered by the Monthly Excess Cashflow on that Distribution Date;
and
(v) to
the
Basis Risk Shortfall Reserve Fund, to pay the Senior Certificates and
Subordinate Certificates as follows: first, to the Senior Certificates, on
a pro
rata basis based on the entitlement of each such Class, based on the aggregate
amount of Basis Risk Shortfall Amounts for each such Class of Senior
Certificates remaining unpaid, and second, sequentially, to the to the Class
X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class B-1 and Class B-2 Certificates, in that order, any related
Basis Risk Shortfall Amount for such Class or Classes remaining unpaid on such
Distribution Date, in each case to the extent not covered by the Monthly Excess
Cashflow on that Distribution Date.
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Section
5.05 Allocation
of Realized Losses.
(a) On
or
prior to each Determination Date, the Securities Administrator shall determine
the amount of any Realized Loss in respect of each Mortgage Loan that occurred
during the immediately preceding calendar month, based solely on the reports
delivered by the Servicer pursuant to this Agreement.
(b) The
interest portion of Realized Losses on the Mortgage Loans shall be allocated
to
the Certificates as described in Section 1.02 hereof.
(c) The
principal portion of all Realized Losses on the Mortgage Loans shall be
allocated on each Distribution Date as follows: first, in reduction of the
Monthly Excess Cashflow; second, to the Class X Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class B-2 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; fourth, to the Class B-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-9
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; sixth, to the Class M-8 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; seventh, to the Class M-7
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; eighth, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; ninth, to the Class M-5 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; tenth,
to the Class M-4 certificates, until the Certificate Principal Balance thereof
has been reduced to zero; eleventh, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; thirteenth,
to
the Class M-2 Certificates, until the Certificate Principal Balance thereof
has
been reduced to zero; and fourteenth, to the Class M-1 Certificates, until
the
Certificate Principal Balance thereof has been reduced to zero. All such
Realized Losses to be allocated to the Certificate Principal Balances of the
Classes of Subordinate Certificates on any Distribution Date shall be so
allocated after the actual distributions to be made on such date as provided
above. All references above to the Certificate Principal Balance of any Class
of
Subordinate Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class
of
Certificates, on such Distribution Date.
Any
allocation of the principal portion of Realized Losses to a Class of Subordinate
Certificates on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated; any allocation of Realized
Losses to a Class X Certificate shall be made by reducing the amount otherwise
payable in respect thereof pursuant to Section 5.04(iii)(29). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Senior Certificates or Class P Certificates.
All
such
Realized Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated among the Certificates of such Class in proportion
to the Percentage Interests evidenced thereby.
(d) Notwithstanding
anything to the contrary contained herein, if on any Distribution Date the
Securities Administrator discovers, based solely on the reports delivered by
the
Servicer under this Agreement that any Subsequent Recoveries have been collected
by a Servicer with respect to the Mortgage Loans, the amount of such Subsequent
Recoveries will be applied to increase the Certificate Principal Balance of
the
Class of Subordinate Certificates with the highest payment priority to which
Realized Losses on the Mortgage Loans have been allocated, but not by more
than
the amount of Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 5.05. After the Certificate Principal
Balances of any class of Subordinate Certificates have been increased up to
the
amount of Realized Losses allocated thereto pursuant to this Section 5.05
to the extent that such Applied Loss Amounts have not been paid to such
certificates as a Deferred Amount, any additional Subsequent Recoveries with
respect to the Mortgage Loans will be applied to increase the Certificate
Principal Balance of the remaining Subordinate Certificates, beginning with
the
Class of Subordinate Certificates with the next highest payment priority, up
to
the amount of such Realized Losses previously allocated to such Class of
Certificates pursuant to this Section 5.05 but only to the extent that any
such Applied Loss Amount has not been paid to any Class of Certificates as
a
Deferred Amount. Holders of such Certificates will not be entitled to any
payment in respect of current interest on the amount of such increases for
any
Accrual Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Certificate Principal Balance of
each
class of Subordinate Certificate in accordance with its respective Percentage
Interest.
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(e) With
respect to the REMIC I Regular Interests, all Realized Losses on the Mortgage
Loans shall be allocated on each Distribution Date first, to REMIC I Regular
Interest I until the Uncertificated Principal Balance has been reduced to zero,
and second, to REMIC I Regular Interest I-1-A through REMIC I Regular Interest
I-59-B, starting with the lowest numerical denomination until such REMIC I
Regular Interest has been reduced to zero, provided that, for REMIC I Regular
Interests with the same numerical denomination, such Realized Losses shall
be
allocated pro rata between such REMIC I Regular Interests.
(f) All
Realized Losses on the Mortgage Loans shall be allocated on each Distribution
Date to the following REMIC II Regular Interests in the specified percentages,
as follows: first, to Uncertificated Accrued Interest payable to the REMIC
II
Regular Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC II Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-B2 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-B2 has been reduced to zero; fourth,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-B1 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-B1 has been reduced to zero; fifth, to the Uncertificated Principal
Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-M9
and
REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC II Regular Interest LT-M9 has been
reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-M8 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M8 has been reduced to zero; seventh,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-M7 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-M7 has been reduced to zero; eighth, to the Uncertificated Principal
Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-M6
and
REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC II Regular Interest LT-M6 has been
reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-M5 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M5 has been reduced to zero; tenth,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-M4 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-M4 has been reduced to zero; eleventh, to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-M3 and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC II Regular Interest LT-M3 has
been
reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC
II
Regular Interest LT-AA, REMIC II Regular Interest LT-M2 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M2 has been reduced to zero; and
thirteenth, to the Uncertificated Principal Balances of REMIC II Regular
Interest LT-AA, REMIC II Regular Interest LT-M1 and REMIC II Regular Interest
LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest LT-M1 has been reduced to zero.
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Section
5.06 Monthly
Statements to Certificateholders.
(a) Not
later
than each Distribution Date, the Securities Administrator shall prepare and
make
available to each Holder of Certificates, the Depositor and the Credit Risk
Manager via its website a statement setting forth the following information
for
the Certificates:
(i) the
Interest Accrual Period and general Distribution Dates for each Class of
Certificates;
(ii) the
Pass-Through Rate for each Class of Certificates with respect to the current
Accrual Period;
(iii) with
respect to each loan group, the total cash flows received and the general
sources thereof;
(iv) the
amount of the related distribution to Holders of each Class allocable to
principal, separately identifying (A) the aggregate amount of any Principal
Prepayments included therein, (B) the aggregate of all scheduled payments of
principal included therein, (C) the Monthly Excess Interest with respect to
the
Certificates (if any) and (D) the amount of Prepayment Charges distributed
to
the Class P Certificates;
(v) the
amount distributed to Holders of each Class on such Distribution Date allocable
to interest;
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(vi) the
Certificate Principal Balance of each Class of Certificates, if applicable,
after giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Realized Losses for such
Distribution Date;
(vii) the
aggregate amount of P&I Advances included in the distributions on the
Distribution Date;
(viii) the
aggregate amount of Relief Act Interest Shortfalls for such Distribution
Date;
(ix) the
aggregate amount of any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by payments by the Servicer pursuant to
Section 3.27 of this Agreement or the Master Servicer pursuant to
Section 4.14 of this Agreement;
(x) the
cumulative amount of Realized Losses to date and, in addition, if the
Certificate Principal Balance of any Class of Certificates have been reduced
to
zero, the cumulative amount of any Realized Losses that have not been allocated
to any Class of Certificates;
(xi) the
Overcollateralization Amount and the Senior Enhancement Percentage, any
Overcollateralization Deficiency Amount and any Overcollateralization Release
Amount for such Distribution Date
(xii) with
respect to each loan group, the amount of any Prepayment Charges remitted by
the
Servicer;
(xiii) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date;
(xiv) with
respect to each loan group, the number and Scheduled Principal Balance of all
the Mortgage Loans for the following Distribution Date;
(xv) the
number and aggregate principal balance of any Mortgage Loans that were (A)
delinquent (exclusive of Mortgage Loans in foreclosure) using the “OTS” method
(1) one scheduled payment is delinquent, (2) two scheduled payments are
delinquent, (3) three scheduled payments are delinquent and (4) foreclosure
proceedings have been commenced, and loss information for the period; the number
and aggregate principal balance of any Mortgage Loans in respect of which (A)
one scheduled payment is delinquent, (B) two scheduled payments are delinquent,
(C) three or more scheduled payments are delinquent and (D) foreclosure
proceedings have been commenced, and loss information for the
period;
(xvi) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the loan number and the Stated Principal Balance of, and Realized Loss
on, such Mortgage Loan as of the close of business on the Determination Date
preceding such Distribution Date;
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(xvii) the
total
number and principal balance of any real estate owned or REO Properties in
each
Loan Group and the Mortgage Loans in the aggregate as of the close of business
on the Determination Date preceding such Distribution Date;
(xviii) the
three
month rolling average of the percent equivalent of a fraction, the numerator
of
which is the Aggregate Loan Group Balance of the Mortgage Loans in a Loan Group
that are sixty (60) days or more delinquent or are in bankruptcy or foreclosure
or are REO Properties, and the denominator of which is the Aggregate Loan Group
Balance of all of the Mortgage Loans in such Loan Group as of the last day
of
such Distribution Date;
(xix) the
aggregate Servicing Fee received by the Servicer, and the master servicing
fees,
if any, received by the Master Servicer during the related Due
Period;
(xx) the
amount of the Credit Risk Management Fees paid to the Credit Risk Manager and/or
the Sponsor for such Distribution Date;
(xxi) the
amount, if any, of other fees or expenses accrued and paid, with an
identification of the payee and the general purpose of such fees;
(xxii) the
amount of any Basis Risk Shortfalls and the amount in the Basis Risk Shortfall
Reserve Fund after all deposits and withdrawals on such Distribution Date;
(xxiii) amounts
payable in respect of the Swap Agreement;
(xxiv) with
respect to each loan group, whether the Stepdown Date has occurred and whether
any Trigger Event is in effect; and
(xxv) any
legal
proceedings pending against the Sponsor, the Depositor or the Trustee, or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental authorities.
The
Securities Administrator may make the foregoing monthly statement (and, at
its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders via the Securities
Administrator’s internet website. The Securities Administrator’s internet
website shall initially be located at “xxx.xxxxxxx.xxx”. 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 options 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 may change the way monthly statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
The
Securities Administrator shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing such statement and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
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(b) The
Securities Administrator’s responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information provided by the Servicer and the Swap Provider.
The Securities Administrator will make available a copy of each statement
provided pursuant to this Section 5.06 to each Rating Agency.
(c) Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall cause to be furnished upon written request to each Person
who at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.06 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 be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time
in
effect.
(d) Upon
filing with the Internal Revenue Service, the Securities Administrator shall
furnish to the Holders of the Residual Certificates the applicable Form 1066
and
each applicable Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of a Residual Certificate
with
respect to the following matters:
(i) The
original projected principal and interest cash flows on the Closing Date on
each
Class of regular and residual interests created hereunder and on the Mortgage
Loans, based on the Prepayment Assumption;
(ii) The
projected remaining principal and interest cash flows as of the end of any
calendar quarter with respect to each Class of regular and residual interests
created hereunder and the Mortgage Loans, based on the Prepayment
Assumption;
(iii) The
applicable Prepayment Assumption and any interest rate assumptions used in
determining the projected principal and interest cash flows described
above;
(iv) The
original issue discount (or, in the case of the Mortgage Loans, market discount)
or premium accrued or amortized through the end of such calendar quarter with
respect to each Class of regular or residual interests created hereunder and
to
the Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(v) The
treatment of losses realized with respect to the Mortgage Loans or the regular
interests created hereunder, including the timing and amount of any cancellation
of indebtedness income of a REMIC with respect to such regular interests or
bad
debt deductions claimed with respect to the Mortgage Loans;
(vi) The
amount and timing of any non-interest expenses of a REMIC; and
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(vii) Any
taxes
(including penalties and interest) imposed on the REMIC, including, without
limitation, taxes on “prohibited transactions,” “contributions” or “net income
from foreclosure property” or state or local income or franchise
taxes.
The
information pursuant to clauses (i), (ii), (iii) and (iv) above shall be
provided by the Depositor pursuant to Section 9.13.
Section
5.07 REMIC
Designations, REMIC I and REMIC II Allocations.
(a) The
Trustee shall elect that each of REMIC I, REMIC II and REMIC III shall be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of this Agreement shall
be resolved in a manner that preserves the validity of such REMIC elections.
The
REMIC I Regular Interests shall constitute the assets of REMIC II. The REMIC
II
Regular Interests shall constitute the assets of REMIC III.
(b) On
each
Distribution Date, the following amounts, in the following order of priority
and
in accordance with the Remittance Report, shall be distributed by REMIC I to
REMIC II on account of the REMIC I Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R-I Interest,
as the case may be:
(i) to
Holders of each of REMIC I Regular Interest I and REMIC I Regular Interest
I-1-A
through I-59-B, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for such REMIC I Regular Interests for such Distribution Date, plus
(B)
any amounts payable in respect thereof remaining unpaid from previous
Distribution Dates;
(ii) to
the
extent of amounts remaining after the distributions made pursuant to clause
(i)
above, payments of principal shall be allocated to REMIC I Regular Interest
I,
then to REMIC I Regular Interests I-1-A through I-59-B starting with the lowest
numerical denomination until the Uncertificated Principal Balance of each such
REMIC I Regular Interest is reduced to zero, provided that, for REMIC I Regular
Interests with the same numerical denomination, such payments of principal
shall
be allocated pro rata between such REMIC I Regular Interests; and
(iii) to
the
Holders of REMIC I Regular Interest P, (A) on each Distribution Date, 100%
of
the amount paid in respect of Prepayment Charges and (B) on the Distribution
Date in March 2011 until $100 has been distributed pursuant to this
clause.
(c) On
each
Distribution Date, the following amounts, in the following order of priority
and
in accordance with the Remittance Report, shall be distributed by REMIC II
to
REMIC III on account of the REMIC II Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R-II Interest,
as the case may be:
(i) first,
to
the Holders of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-A1,
REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II
Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest
LT-B2
and REMIC II Regular Interest LT-ZZ, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for each such REMIC II Regular Interest for
such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC II Regular Interest LT-ZZ shall be reduced and deferred
when
the REMIC II Overcollateralization Amount is less than the REMIC II Targeted
Overcollateralization Amount, by the lesser of (x) the amount of such difference
and (y) the REMIC II Regular Interest LT-ZZ Maximum Interest Deferral Amount
and
such amount will be payable to the Holders of REMIC II Regular Interest LT-A1,
REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II
Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest
LT-B2 in the same proportion as the Overcollateralization Deficiency is
allocated to the Corresponding Certificates and the Uncertificated Principal
Balance of REMIC II Regular Interest LT-ZZ shall be increased by such
amount;
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(ii) second,
to the Holders of REMIC II Regular Interests, in an amount equal to the
remainder of the Interest Remittance Amount and the Principal Payment Amount
for
such Distribution Date after the distributions made pursuant to clause (i)
above, allocated as follows:
(A) 98.00%
of
such remainder (other than amounts payable under clause (C) below) to the
Holders of REMIC II Regular Interest LT-AA and REMIC II Regular Interest LT-P,
until the Uncertificated Principal Balance of such REMIC II Regular Interest
is
reduced to zero, provided, however, that the Uncertificated Principal Balance
of
REMIC II Regular Interest LT-P shall not be reduced until the Distribution
Date
in March 2011 or any Distribution Date thereafter, at which point such amount
shall be distributed to REMIC II Regular Interest LT-P, until $100 has been
distributed pursuant to this clause;
(B) 2.00%
of
such remainder, first, to the Holders REMIC II Regular Interest LT-A1, REMIC
II
Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest LT-B2,
1%
in the same proportion as principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Principal Balances of such REMIC II
Regular Interests are reduced to zero and second, to the Holders of REMIC II
Regular Interest LT-ZZ (other than amounts payable under the proviso below),
until the Uncertificated Principal Balance of such REMIC II Regular Interest
is
reduced to zero; and
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(C) any
remaining amount to the Holders of the Class R Certificates (in respect of
the
Class R-II Interest).
provided,
however, that (i) 98.00% and (ii) 2.00% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated
to
Holders of (i) REMIC II Regular Interest LT-AA and REMIC II Regular Interest
LT-P, in that order and (ii) REMIC II Regular Interest LT-ZZ, respectively;
provided that REMIC II Regular Interest LT-P shall not be reduced until the
Distribution Date in March 2011, at which point such amount shall be distributed
to REMIC II Regular Interest LT-P, until $100 has been distributed pursuant
to
this clause.
Section
5.08 Prepayment
Charges.
On
each
Distribution Date, all amounts representing Prepayment Charges in respect of
the
Mortgage Loans received during the related Prepayment Period and deposited
in
the Distribution Account will be withdrawn from the Distribution Account and
distributed by the Securities Administrator in accordance with the Remittance
Report to the Class P Certificates and shall not be available for distribution
to the holders of any other Class of Certificates. The payment of such
Prepayment Charges shall not reduce the Certificate Principal Balance of the
Class P Certificates.
Section
5.09 Class
P Certificate Account.
The
Securities Administrator shall establish and maintain with itself a separate,
segregated trust account titled “HSBC Bank USA, National Association, for the
benefit of Nomura Home Equity Loan, Inc., Home Equity Loan Trust 2006-HE1 Class
P Certificate Account”. On the Closing Date, the Depositor will deposit, or
cause to be deposited in the Class P Certificate Account $100.00. The amount
on
deposit in the Class P Certificate Account shall be held uninvested. On the
March 2011 Distribution Date, the Securities Administrator shall withdraw the
amount on deposit in the Class P Certificate Account and remit such amount
to
the Holders of the Class P Certificates, in reduction of the Certificate
Principal Balance thereof.
Section
5.10 Basis
Risk Shortfall Reserve Fund.
(a) The
Securities Administrator shall establish a Basis Risk Shortfall Reserve Fund
on
behalf of the holders of the Publicly Offered Certificates and the Class B
Certificates. The Basic Risk Shortfall Reserve Fund must be an Eligible Account.
The Basis Risk Shortfall Reserve Fund shall be entitled “Basis Risk Shortfall
Reserve Fund, HSBC Bank USA, National Association, as Trustee for the benefit
of
holders of Nomura Home Equity Loan, Inc., Asset-Backed Certificates, Series
2006-HE1, Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
Class B-1 and Class B-2 Certificates. On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Basis Risk Shortfall Reserve Fund
$5,000. On each Distribution Date as to which there is a Basis Risk Shortfall
payable to any Class of Certificates, the Securities Administrator shall deposit
the amounts pursuant to paragraphs (13) through (24) of
Section 5.04(a)(iii) into the Basis Risk Shortfall Reserve Fund and the
Securities Administrator has been directed by the Class X Certificateholder
to
distribute such amounts to the Holders of the Publicly Offered Certificates
and
Class B Certificates in the amounts and priorities set forth in
Section 5.04(a)(iii).
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(b) The
Basis
Risk Shortfall Reserve Fund is an “outside reserve fund” within the meaning of
Treasury Regulation §1.860G-2(h) and shall be an asset of the Trust Fund but not
an asset of any REMIC. The Securities Administrator on behalf of the Trust
shall
be the nominal owner of the Basis Risk Shortfall Reserve Fund. The Class X
Certificateholders shall be the beneficial owners of the Basis Risk Shortfall
Reserve Fund, subject to the power of the Securities Administrator to transfer
amounts under Section 5.04(a)(iii). Amounts in the Basis Risk Shortfall
Reserve Fund shall be held either uninvested in a trust or deposit account
of
the Securities Administrator with no liability for interest or other
compensation thereof or, at the written direction of the Majority Class X
Certificateholder, be invested in Permitted Investments that mature no later
than the Business Day prior to the next succeeding Distribution Date. All net
income and gain from such investments shall be distributed to the Majority
Class
X Certificateholder, not as a distribution in respect of any interest in any
REMIC, on such Distribution Date. All amounts earned on amounts on deposit
in
the Basis Risk Shortfall Reserve Fund shall be taxable to the Majority Class
X
Certificateholder. Any losses on such investments shall be deposited in the
Basis Risk Shortfall Reserve Fund by the Majority Class X Certificateholder
out
of its own funds immediately as realized. In the event that the Majority Class
X
Certificateholder shall fail to provide investment instructions to the
Securities Administrator, the amounts on deposit in the Basis Risk Shortfall
Reserve Fund shall be held uninvested.
(c) For
federal tax return and information reporting, the value of the right of the
holders of the Senior and Subordinate Certificates
to
receive payments from the Basis Risk Shortfall Reserve Fund in respect of any
Basis Risk Shortfall shall
be
zero dollars ($0.00).
Section
5.11 Supplemental
Interest Trust.
(a) On
the
Closing Date, the Securities Administrator shall establish and maintain in
the
name of the Trustee a separate account for the benefit of the holders of the
Publicly Offered Certificates and Class B Certificates (the “Supplemental
Interest Trust”). The Supplemental Interest Trust shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee or of the Securities Administrator held pursuant to this
Agreement.
(b) On
each
Distribution Date, the Securities Administrator shall deposit into the
Supplemental Interest Trust amounts distributable to the Swap Provider by the
Supplemental Interest Trust pursuant to Sections 5.04(a)(i)(1) and
5.04(a)(iii)(25) of this Agreement. On each Distribution Date, the Securities
Administrator shall distribute any such amounts to the Swap Provider pursuant
to
the Swap Agreement, first to pay any Net Swap Trust Payment owed to the Swap
Provider for such Distribution Date, and second to pay any Swap Termination
Payment owed to the Swap Provider.
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(c) On
each
Distribution Date, the Securities Administrator shall deposit into the
Supplemental Interest Trust amounts received by it from the Swap Provider.
On
each Distribution Date, the Securities Administrator shall distribute from
the
Supplemental Interest Trust an amount equal to the amount of any Net Swap Trust
Payment received from the Swap Provider under the Swap Agreement, in the
following order of priority:
(i) first,
to the
Senior Certificates, pro rata based on amounts due, Current Interest and any
Carryforward Interest for each such Class and Distribution Date, after giving
effect to distributions of such amounts distributed pursuant to Section
5.04(a)(i) herein;
(ii) second,
to the
Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7,
Class
M-8, Class M-9, Class
B-1
and Class B-2 Certificates, in that order, Current Interest and any Carryforward
Interest for each such Class and Distribution Date, after giving effect to
distributions of such amounts distributed pursuant to Section 5.04(a)(i)
herein;
(iii) third,
to the
Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class B-1 and Class B-2 Certificates, in that order,
any
applicable Deferred Amounts, with interest thereon at the applicable
Pass-Through Rate, prior to giving effect to amounts available to be paid in
respect of Deferred Amounts distributed in accordance with Section 5.05(d)
herein;
(iv) fourth,
to the
Principal Remittance Amount, up to the amount of Realized Losses on the Mortgage
Loans incurred during the related Due Period;
(v) fifth,
to the
Publicly Offered Certificates and the Class B Certificates, any applicable
Basis
Risk Shortfalls, prior to giving effect to any withdrawals from the Basis Risk
Shortfall Reserve Fund or from amounts available to be paid in respect of Basis
Risk Shortfalls, distributable in accordance with Section 5.04(a)(iii) herein;
and
(vi) sixth,
any
amounts remaining to the Class X Certificates.
(d) The
Supplemental Interest Trust constitutes an “outside reserve fund” within the
meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC.
The Holders of the Class X Certificates shall be the beneficial owner of the
Supplemental Interest Trust, subject to the power of the Securities
Administrator to transfer amounts under this Agreement. The Securities
Administrator shall keep records that accurately reflect the funds on deposit
in
the Supplemental Interest Trust. The Securities Administrator shall, at the
written direction of the holder of the Majority Class X Certificateholder,
invest amounts on deposit in the Supplemental Interest Trust in Permitted
Investments. In the absence of written direction to the Securities Administrator
from the Majority Class X Certificateholder, all funds in the Supplemental
Interest Trust shall remain uninvested. On each Distribution Date, the
Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Supplemental Interest Trust to the Holders of the Class
X
Certificates.
(e) For
federal income tax purposes, amounts paid to the Supplemental Interest Trust
on
each Distribution Date pursuant to Sections 5.04(a)(i)(1) and 5.04(a)(iii)(25)
shall first be deemed paid to the Supplemental Interest Trust in respect of
the
Class IO Interest to the extent of the amount distributable on such Class IO
Interest on such Distribution Date, and any remaining amount shall be deemed
paid to the Supplemental Interest Trust in respect of a Class IO Distribution
Amount. For federal income tax purposes, the Supplemental Interest Trust will
be
a disregarded entity.
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(f) The
Securities Administrator shall treat the Holders of Certificates (other than
the
Class P, Class X and Class R Certificates) as having entered into a notional
principal contract with respect to the Holders of the Class X Certificates.
Pursuant to each such notional principal contract, all Holders of Certificates
(other than the Class P, Class X and Class R Certificates) shall be treated
as
having agreed to pay, on each Distribution Date, to the Holder of the Class
X
Certificates an aggregate amount equal to the excess, if any, of (i) the amount
payable on such Distribution Date on the REMIC III Regular Interest ownership
of
which is represented by such Class of Certificates over (ii) the amount payable
on such Class of Certificates on such Distribution Date (such excess, a “Class
IO Distribution Amount”). A Class IO Distribution Amount payable from interest
collections shall be allocated pro rata among such Certificates based on the
amount of interest otherwise payable to such Certificates, and a Class IO
Distribution Amount payable from principal collections shall be allocated to
the
most subordinate Class of such Certificates with an outstanding principal
balance to the extent of such balance. In addition, pursuant to such notional
principal contract, the Holder of the Class X Certificates shall be treated
as
having agreed to pay Basis Risk Shortfalls to the Holders of the Certificates
(other than the Class X, Class P and Class R Certificates) in accordance with
the terms of this Agreement. Any payments to such Certificates from amounts
deemed received in respect of this notional principal contract shall not be
payments with respect to a Regular Interest in a REMIC within the meaning of
Code Section 860G(a)(1). However, any payment from the Certificates (other
than
the Class X, Class P and Class R Certificates) of a Class IO Distribution Amount
shall be treated for tax purposes as having been received by the Holders of
such
Certificates in respect of the REMIC III Regular Interest ownership of which
is
represented by such Certificates, and as having been paid by such Holders to
the
Supplemental Interest Trust pursuant to the notional principal contract. Thus,
each Certificate (other than the Class P Certificates and Class R Certificates)
shall be treated as representing not only ownership of a Regular Interest in
REMIC III, but also ownership of an interest in, and obligations with respect
to, a notional principal contract.
(g) The
Sponsor shall provide to the Securities Administrator the value of the right
of
the holders of the Senior and Subordinate Certificates to receive payments
from
the Supplemental Interest Trust for federal tax return and information reporting
not later than the December 31, 2006.
(h) In
the
event that the Swap Agreement is terminated prior to the Distribution Date
in
February 2011, the Sponsor shall use reasonable efforts to appoint a successor
swap provider using any Swap Termination Payments paid by the Swap Provider.
If
the Sponsor is unable to locate a qualified successor swap provider, any such
Swap Termination Payments will be remitted to the Securities Administrator
for
payment to the holders of the Publicly Offered Certificates and Class B
Certificates of amounts described in Section 5.11(c).
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Section
5.12 Tax
Treatment of Swap Payments and Swap Termination Payments.
For
federal income tax purposes, each holder of a Senior Certificate or Subordinate
Certificate is deemed to own an undivided beneficial ownership interest in
a
REMIC regular interest and the right to receive payments from either the Basis
Risk Shortfall Reserve Fund or the Supplemental Interest Trust in respect of
any
Basis Risk Shortfall Carry-Forward Amounts or the obligation to make payments
to
the Supplemental Interest Trust. For federal income tax purposes, the Securities
Administrator will account for payments to each Senior Certificate and
Subordinate Certificate as follows: each Senior Certificate and Subordinate
Certificate will be treated as receiving their entire payment from REMIC III
(regardless of any Swap Termination Payment or obligation under the Swap
Agreement) and subsequently paying their portion of any Swap Termination Payment
in respect of each such Class’ obligation under the Swap Agreement. In the event
that any such Class is resecuritized in a REMIC, the obligation under the Swap
Agreement to pay any such Swap Termination Payment (or any shortfall in Net
Swap
Trust Payment), will be made by one or more of the REMIC Regular Interests
issued by the resecuritization REMIC subsequent to such REMIC Regular Interest
receiving its full payment from any such Senior Certificate and Subordinate
Certificate. Resecuritization of any Senior Certificate and Subordinate
Certificate in a REMIC will be permissible only if the Securities Administrator
hereunder is the trustee/securities administrator in such
resecuritization.
The
REMIC
Regular Interest corresponding to a Senior Certificate and Subordinate
Certificate will be entitled to receive interest and principal payments at
the
times and in the amounts equal to those made on the certificate to which it
corresponds, except that (i) the maximum interest rate of that REMIC regular
interest will equal the Net Funds Cap computed for this purpose by limiting
the
Notional Amount of the Swap Agreement to the aggregate Stated Principal Balance
of the Mortgage Loans and (ii) any Swap Termination Payment will be treated
as
being payable solely from amounts otherwise payable to the Class X Certificates.
As a result of the foregoing, the amount of distributions and taxable income
on
the REMIC Regular Interest corresponding to a Senior Certificate and Subordinate
Certificate may exceed the actual amount of distributions on the Senior
Certificate and Subordinate Certificate.
Section
5.13 Reports
Filed with Securities and Exchange Commission.
(a) (i) For
so
long as the Trust Fund is subject to Exchange Act reporting requirements, within
fifteen (15) days after each Distribution Date (subject to permitted extensions
under the Exchange Act), the Securities Administrator shall prepare and file
on
behalf of the Trust Fund any Form 10-D required by the Exchange Act, in form
and
substance as required by the Exchange Act. The Securities Administrator shall
file each Form 10-D with a copy of the related Monthly Statement attached
thereto. The Securities Administrator shall also include with each Form 10-D
any
disclosure required by the Exchange Act in addition to the Monthly Statement
that is required to be included on Form 10-D (“Additional Form 10-D Disclosure”)
subject to the receipt of such information by the Securities Administrator
from
the entity indicated on Exhibit N as the party responsible for providing that
information. The Securities Administrator will have no duty or liability for
any
failure hereunder to determine or prepare any Additional Form 10-D Disclosure,
except as set forth in the next paragraph.
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(i) The
Servicer, the Master Servicer, the Securities Administrator, the Custodian,
the
Trustee, the Depositor and the Sponsor agree to notify and to provide to the
Securities Administrator and the Depositor, within five (5) calendar days after
each Distribution Date, and to the extent known by a responsible officer
thereof, in XXXXX-compatible form, or in such other form as otherwise agreed
upon by the Securities Administrator and such party, the form and substance
of
any Additional Form 10-D Disclosure for which such party is responsible as
set
forth on Exhibit N hereto, together with an additional Disclosure Notification
in the form of Exhibit H hereto (an “Additional Disclosure Notification”). The
Depositor will be responsible for any reasonable fees and expenses assessed
or
incurred by the Securities Administrator in connection with including any
Additional Form 10-D Disclosure on Form 10-D pursuant to this paragraph.
(ii) After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a draft copy of the Form 10-D to the Depositor (provided such
Form 10-D includes any Additional Form 10-D Disclosure) for review. No later
than the twelfth (12th)
calendar day after the related Distribution Date, the Depositor shall notify
the
Securities Administrator in writing of any changes to or approval of such Form
10-D. In the absence of receipt of any written changes or approval, the
Securities Administrator shall be entitled to assume that such Form 10-D is
in
final form and the Securities Administrator may proceed with the filing of
such
Form 10-D. A duly authorized representative of the Master Servicer in charge
of
the master servicing function shall sign each final Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
5.13(c)(ii). Promptly (but no later than one (1) Business Day) after filing
with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D filed by the Securities
Administrator. Each party to this Agreement acknowledges that the performance
by
the Master Servicer and the Securities Administrator of its duties under this
Section 5.13(a) related to the timely preparation, execution and filing of
Form
10-D is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties as set forth in this Agreement. Neither
the
Master Servicer or the Securities Administrator shall have any liability for
any
loss, expense, damage, claim arising out of or with respect to any failure
to
properly prepare, execute and/or timely file such Form 10-D, where such failure
results from the Securities Administrator’s inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-D, not resulting from
its
own negligence, bad faith or willful misconduct.
(b) (i) For
so
long as the Trust Fund is subject to Exchange Act reporting requirements, within
four (4) Business Days after the occurrence of an event set forth on Exhibit
N
hereto or such other event requiring disclosure on Form 8-K (each such event,
a
“Reportable
Event”),
and
subject to receipt of such information by the Securities Administrator from
the
entity indicated on Exhibit N as the responsible party for providing that
information, the Securities Administrator shall prepare and file on behalf
of
the Trust Fund any Form 8-K, as required by the Exchange Act, provided
that the
Depositor shall file the initial Form 8-K in connection with the issuance of
the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K other than the initial
Form 8-K (“Form
8-K Disclosure Information”)
shall
be determined and prepared by and at the direction of the Depositor pursuant
to
the following paragraph and the Securities Administrator will have no duty
or
liability for any failure hereunder to determine or prepare any Form 8-K
Disclosure Information or any Form 8-K, except as set forth in the next
paragraph.
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(ii) The
Servicer, the Master Servicer, the Securities Administrator, the Custodian,
the
Trustee, the Depositor and the Sponsor agree to notify and provide to the
Securities Administrator, no later than the close of business (New York City
time) on the second (2nd)
Business Day after the occurrence of a Reportable Event for which such party
is
responsible for as set forth on Exhibit N hereto to the extent known by a
responsible officer thereof, in XXXXX-compatible form, or in such other form
as
otherwise agreed upon by the Securities Administrator and such party, the form
and substance of any Form 8-K Disclosure Information, for which such party
is
responsible for as set forth on Exhibit N hereto, together with an Additional
Disclosure Notification. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
(iii) After
preparing the Form 8-K, the Securities Administrator shall forward
electronically a draft copy of the Form 8-K to the Depositor for review.
Promptly, but no later than the close of business on the third Business Day
after the reportable event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 8-K. In the absence of receipt of any written
changes or approval, the Securities Administrator shall be entitled to assume
that such Form 8-K is in final form and the Securities Administrator may proceed
with the execution and filing of such Form 8-K. No later than 12:00 p.m. New
York City time on the fourth (4th)
Business Day after the reportable event, a duly authorized representative of
the
Master Servicer in charge of the master servicing function shall sign the Form
8-K and return an electronic or fax copy of such signed Form 8-K (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 5.13(c)(ii). Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website a final executed copy of each
Form
8-K. The parties to this Agreement acknowledge that the performance by the
Master Servicer and the Securities Administrator of its duties under this
Section 5.13(b) related to the timely preparation, execution and filing of
Form
8-K is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties under this Agreement. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file such Form 8-K, where such failure results
from the Securities Administrator’s inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its
own
negligence, bad faith or willful misconduct.
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(c) (i) On
or
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 prepare
and file a Form 15 Suspension Notification relating to the automatic suspension
of reporting in respect of the Trust Fund under the Exchange Act. The Securities
Administrator shall notify the Servicer, the Master Servicer, the Securities
Administrator, the Custodian, the Trustee, the Depositor and the Sponsor that
a
Form 15 has been filed and that the Trust Fund shall no longer be subject to
Exchange Act reporting requirements and that each such party need no longer
comply with this Section 5.13 unless otherwise notified by the
Depositor.
(ii) In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator will
promptly notify the Depositor, which notice may be made electronically. In
the
case of Form 10-D and 10-K, the parties to this Agreement and each Servicer
will
cooperate to prepare and file a Form 12b-25 and a 10-D/A and 10-K/A as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Securities Administrator will, upon receipt of all required Form 8-K
Disclosure Information and upon the approval and direction of the Depositor,
include such disclosure information on the next Form 10-D. In the event that
any
previously filed Form 8-K, 10-D or 10-K needs to be amended in connection with
any Additional Form 10-D Disclosure (other than for the purpose of restating
a
monthly distribution report), Additional Form 10-K Disclosure Information or
Form 8-K Disclosure Information, the Securities Administrator will notify the
Depositor and each Servicer, which notice may be provided electronically, and
such parties will cooperate to prepare any necessary 8-K/A, 10-D/A or 10-K/A.
Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be
signed by a duly authorized representative or a senior officer in charge of
the
master servicing function, as applicable, of the Master Servicer. The parties
to
this Agreement acknowledge that the performance by the Master Servicer and
the
Securities Administrator of its duties under this Section 5.13(c) related to
the
timely preparation, execution and filing of Form 15, a Form 12b-25 or any
amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Agreement. Neither the Master Servicer nor
the
Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms
8-K,
10-D or 10-K, where such failure results from the Securities Administrator’s
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
(d) (i) For
so
long as the Trust Fund is subject to Exchange Act reporting requirements, within
90 days after the end of each calendar year or such earlier date as may be
required by the Exchange Act (the “10-K
Filing Deadline”),
commencing in March 2007, the Securities Administrator shall prepare and file
on
behalf of the Trust Fund a Form 10-K, in form and substance as required by
the
Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (i) an annual
compliance statement each Servicing Function Participant, as described under
Section 3.13, (ii)(A) the annual reports on assessment of compliance with
servicing criteria for each Servicing Function Participant, as described under
Section 3.14 or in such other agreement, and (B) if any Servicing Function
Participant’s report on assessment of compliance with servicing criteria
described under Section 3.14 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any Servicing
Function Participant’s report on assessment of compliance with servicing
criteria described under Section 3.14 is not included as an exhibit to such
Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, (iii)(A) the registered public accounting firm
attestation report for each Servicing Function Participant, as described under
Section 3.14, and (B) if any registered public accounting firm attestation
report described under Section 3.14 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any
such registered public accounting firm attestation report is not included as
an
exhibit to such Form 10-K, disclosure that such report is not included and
an
explanation why such report is not included, and (iv) a Xxxxxxxx-Xxxxx
Certification as described in Section 3.18 (provided, however, that the
Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement, assessment of compliance or attestation report
that
is not required to be filed with such Form 10-K pursuant to Regulation AB).
The
Securities Administrator shall also include with each Form 10-K any disclosure
or information in addition to (i) through (iv) above that is required to be
included on Form 10-K as set forth on Exhibit N under Form 10-K (“Additional
Form 10-K Disclosure”)
subject to receipt of such information by the Securities Administrator from
the
entity indicated on Exhibit N as the responsible party for providing that
information. The Securities Administrator will have no duty or liability for
any
failure hereunder to determine or prepare any Additional Form 10-K Disclosure,
except as set forth in the next paragraph.
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(ii) The
Servicer, the Master Servicer, the Securities Administrator, the Custodian,
the
Trustee, the Depositor and the Sponsor agree to notify and provide the
Securities Administrator, no later than March 15 of each year that the Trust
Fund is subject to the Exchange Act reporting requirements, commencing in 2007,
and to the extent known by a responsible officer thereof, in XXXXX-compatible
form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form
10-K
Disclosure for which such party is responsible for, together with an Additional
Disclosure Notification. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Additional Form 10-K Disclosure on Form 10-K
pursuant to this paragraph and the next paragraph.
(iii) The
Securities Administrator shall prepare the Form 10-K and shall forward
electronically a draft copy of the Form 10-K to the Master Servicer and the
Depositor for review. Within three (3) Business Days after receipt of such
copy,
but no later than March 25, the Depositor shall notify the Securities
Administrator in writing of any changes to or approval of such Form 10-K. In
the
absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 10-K is in final form
and the Securities Administrator may proceed with the filing of such Form 10-K.
No later than close of business on the fourth (4th)
Business Day following receipt of the final Form 10-K to be filed, a senior
officer of the Master Servicer in charge of the master servicing function shall
sign the Form 10-K and return an electronic or fax copy of such signed Form
10-K
(with an original executed hard copy to follow by overnight mail) to the
Securities Administrator. If a Form 10-K cannot be filed on time or if a
previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 5.13(c)(ii). Promptly (but
no
later than one (1) Business Day) after filing with the Commission, the
Securities Administrator will make available on its internet website a final
executed copy of each Form 10-K to be filed by the Securities Administrator.
The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section
5.13(d) related to the timely preparation, execution and filing of Form 10-K
is
contingent upon such parties (and any Servicing Function Participant) strictly
observing all applicable deadlines in the performance of their duties under
this
Section 5.13(d), Section 3.13, Section 3.14 and Section 3.18. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss,
expense, damage or claim arising out of or with respect to any failure to
properly prepare and/or timely file such Form 10-K, where such failure results
from the Securities Administrator’s inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto needed to
prepare, arrange for execution or file such Form 10-K, not resulting from its
own negligence, bad faith or willful misconduct.
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(e) The
Servicer, the Master Servicer, the Depositor and the Securities Administrator
shall indemnify and hold harmless the Depositor, the Trustee and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of such party’s obligations under this Section 5.13 or the such
party’s negligence, bad faith or willful misconduct in connection therewith.
Notwithstanding
the provisions of Section 11.01, this Section 5.13 may be amended without the
consent of the Certificateholders.
(f) Any
notice required to be delivered by the Securities Administrator to the Depositor
pursuant to this Sections 3.13, 3.14, 3.18 or 5.13 may be delivered by the
Securities Administrator by facsimile and electronic mail to Xxxxxx Xxxx, Esq.
at (000) 000-0000 and xxxxx@xx.xxxxxx.xxx,
with a
copy to Xxxx Xxxxxx at (000) 000-0000 and xxxxxxx@xx.xxxxxx.xxx
and a
copy to N. Xxxxx XxXxxxx at (000) 000-0000 and xxxxxxxx@xx.xxxxxx.xxx.
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ARTICLE
VI
THE
CERTIFICATES
Section
6.01 The
Certificates.
(a) The
Certificates shall be substantially in the forms attached hereto as Exhibits
A-1
through A-6. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
|
Class
|
Minimum
Denomination |
Integral
Multiple in Excess of Minimum
|
Original
Certificate Principal Balance
|
Pass-Through
Rate
|
|||||||||
|
A-1
|
$
|
100,000
|
$
|
1
|
$
|
500,427,000.00
|
Class
A-1 Pass-Through Rate
|
||||||
|
A-2
|
$
|
100,000
|
$
|
1
|
$
|
69,323,000.00
|
Class
A-2 Pass-Through Rate
|
||||||
|
A-3
|
$
|
100,000
|
$
|
1
|
$
|
134,108,000.00
|
Class
A-3 Pass-Through Rate
|
||||||
|
A-4
|
$
|
100,000
|
$
|
1
|
$
|
13,665,000.00
|
Class
A-4 Pass-Through Rate
|
||||||
|
M-1
|
$
|
100,000
|
$
|
1
|
$
|
43,129,000.00
|
Class
M-1 Pass-Through Rate
|
||||||
|
M-2
|
$
|
100,000
|
$
|
1
|
$
|
39,208,000.00
|
Class
M-2 Pass-Through Rate
|
||||||
|
M-3
|
$
|
100,000
|
$
|
1
|
$
|
24,505,000.00
|
Class
M-3 Pass-Through Rate
|
||||||
|
M-4
|
$
|
100,000
|
$
|
1
|
$
|
22,055,000.00
|
Class
M-4 Pass-Through Rate
|
||||||
|
M-5
|
$
|
100,000
|
$
|
1
|
$
|
21,074,000.00
|
Class
M-5 Pass-Through Rate
|
||||||
|
M-6
|
$
|
100,000
|
$
|
1
|
$
|
19,114,000.00
|
Class
M-6 Pass-Through Rate
|
||||||
|
M-7
|
$
|
100,000
|
$
|
1
|
$
|
17,153,000.00
|
Class
M-7 Pass-Through Rate
|
||||||
|
M-8
|
$
|
100,000
|
$
|
1
|
$
|
14,703,000.00
|
Class
M-8 Pass-Through Rate
|
||||||
|
M-9
|
$
|
100,000
|
$
|
1
|
$
|
11,762,000.00
|
Class
M-9 Pass-Through Rate
|
||||||
|
B-1
|
$
|
100,000
|
$
|
1
|
$
|
12,742,000.00
|
Class
B-1 Pass-Through Rate
|
||||||
|
B-2
|
$
|
100,000
|
$
|
1
|
$
|
10,782,000.00
|
Class
B-2 Pass-Through Rate
|
||||||
|
X
|
$
|
1
|
$
|
1
|
$
|
26,473,809.37
|
Class
X Pass-Through Rate
|
||||||
|
P
|
$
|
1
|
$
|
1
|
$
|
100.00
|
N/A
|
||||||
|
R
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Upon
original issue, the Certificates shall be executed and authenticated by the
Securities Administrator and delivered by the Trustee to and upon the written
order of the Depositor. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trust by the Securities Administrator
by an
authorized signatory. Certificates bearing the manual or facsimile signatures
of
individuals who were at any time the proper officers of the Securities
Administrator shall bind the Trust, notwithstanding that such individuals or
any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided herein
executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
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146
-
The
Depositor shall provide, or cause to be provided, to the Securities
Administrator on a continuous basis, an adequate inventory of Certificates
to
facilitate transfers.
(b) The
Class
X Certificates and Class P Certificates offered and sold to Qualified
Institutional Buyers in reliance on Rule 144A under the Securities Act (“Rule
144A”) will be issued in the form of Definitive Certificates.
Section
6.02 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 6.09, a Certificate Register for the
Certificates 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
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
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 that 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
canceled 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 the Securities Act and such state securities laws. In the event that
a
Transfer 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 and such
Certificateholder’s prospective transferee shall each certify to the Securities
Administrator in writing the facts surrounding the Transfer in substantially
the
forms set forth in Exhibit E (the “Transferor Certificate”) and (x) deliver a
letter in substantially the form of either Exhibit F (the “Investment Letter”)
or Exhibit G (the “Rule 144A Letter”) or (y) there shall be delivered to the
Securities Administrator an Opinion of Counsel, at the expense of the
transferor, that such Transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Sponsor, the Securities Administrator, the Trustee or the Trust
Fund. The Depositor 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 Securities Administrator shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund
as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect
such
Transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Depositor and the Sponsor 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.
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147
-
If
any
such transfer of a Class B-1 Certificate or Class B-2 Certificate held by the
related transferor and also to be held by the related transferee in the form
of
a Book-Entry Certificate is to be made without registration under the Securities
Act, the transferor will be deemed to have made as of the transfer date each
of
the representations and warranties set forth on Exhibit J hereto in respect
of
such Class B-1 Certificate or Class B-2 Certificate and the transferee will
be
deemed to have made as of the transfer date each of the representations and
warranties set forth on Exhibit G or Exhibit F hereto in respect of such Class
B-1 Certificate or Class B-2 Certificate.
No
transfer of any Class B-1 Certificate or Class B-2 Certificate that is a
Book-Entry Certificate or interest therein shall be made by any related
Certificate Owner except (A) in the manner set forth in the preceding paragraph
and in reliance on Rule 144A under the 1933 Act to a “qualified institutional
buyer” that is acquiring such Book-Entry Certificate for its own account or for
the account of another “qualified institutional buyer” or (B) in the manner set
forth in the second preceding paragraph and in the form of a Definitive
Certificate.
If
any
Certificate Owner that is required under this Section 6.02(b) to transfer its
Book-Entry Certificates in the form of Definitive Certificates, (i) notifies
the
Trustee of such transfer or exchange and (ii) transfers such Book-Entry
Certificates to the Trustee, in its capacity as such, through the book-entry
facilities of the Depository, then the Trustee shall decrease the balance of
such Book-Entry Certificates or, the Trustee shall use reasonable efforts to
cause the surrender to the Certificate Registrar of such Book-Entry Certificates
by the Depository, and thereupon, the Trustee shall execute, authenticate and
deliver to such Certificate Owner or its designee one or more Definitive
Certificates in authorized denominations and with a like aggregate principal
amount.
Subject
to the provisions of this Section 6.02(b) governing registration of transfer
and
exchange, Class B-1 Certificates or Class B-2 Certificates (i) held as
Definitive Certificates may be transferred in the form of Book-Entry
Certificates in reliance on Rule 144A under the 1933 Act to one or more
“qualified institutional buyers” that are acquiring such Definitive Certificates
for their own accounts or for the accounts of other “qualified institutional
buyers” and (ii) held as Definitive Certificates by a “qualified institutional
buyer” for its own account or for the account of another “qualified
institutional buyer” may be exchanged for Book-Entry Certificates, in each case
upon surrender of such Class B-1 Certificates or Class B-2 Certificates for
registration of transfer or exchange at the offices of the Trustee maintained
for such purpose. Whenever any such Class B-1 Certificates are so surrendered
for transfer or exchange, either the Trustee shall increase the balance of
the
related Book-Entry Certificates or the Trustee shall execute, authenticate
and
deliver the Book-Entry Certificates for which such Class B-1 Certificates or
Class B-2 Certificates were transferred or exchanged, as necessary and
appropriate. No Holder of Definitive Certificates other than a “qualified
institutional buyer” holding such Certificates for its own account or for the
account of another “qualified institutional buyer” may exchange such Class B-1
Certificates or Class B-2 Certificates for Book-Entry Certificates. Further,
any
Certificate Owner of a Book-Entry Certificate other than any such “qualified
institutional buyers” shall notify the Trustee of its status as such and shall
transfer such Book-Entry Certificate to the Trustee, through the book-entry
facilities of the Depository, whereupon, and also upon surrender to the Trustee
of such Book-Entry Certificate by the Depository, (which surrender the Trustee
shall use reasonable efforts to cause to occur), the Trustee shall execute,
authenticate and deliver to such Certificate Owner or such Certificate Owner’s
nominee one or more Definitive Certificates in authorized denominations and
with
a like aggregate principal amount.
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148
-
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 to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA and/or a
plan subject to Section 4975 of the Code, or a Person acting on behalf of
any such plan or using the assets of any such plan, or (ii) in the case of
any
such ERISA Restricted Certificate presented for registration in the name of
an
employee benefit plan subject to ERISA, or a plan subject to Section 4975
of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
an Opinion of Counsel satisfactory to the Securities Administrator for the
benefit of the Securities Administrator, the Depositor and the Servicer and
on
which they may rely to the effect that the purchase and holding of such ERISA
Restricted Certificate is permissible under applicable law, will not result
in
any prohibited transactions under ERISA or Section 4975 of the Code and
will not subject the Securities Administrator, the Depositor or the Servicer
to
any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Servicer or the Trustee. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject
to
Section 406 of ERISA and/or a plan subject to Section 4975 of the Code
other than in compliance with the foregoing shall be void and of no effect;
provided that the restriction set forth in this sentence shall not be applicable
if there has been delivered to the Securities Administrator an Opinion of
Counsel meeting the requirements of clause (ii) of the first sentence of this
paragraph. The Securities Administrator shall not be under any liability to
any
Person for any registration of transfer of any ERISA Restricted Certificate
that
is in fact not permitted by this Section 6.02(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. The Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate that was in fact an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a Person acting on behalf of any such plan at the time it became
a
Holder or, at such subsequent time as it became such a plan or Person acting
on
behalf of such a plan, all payments made on such ERISA Restricted 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 Holder of such Certificate that is not such a plan or Person
acting on behalf of a plan.
-
149
-
For
so
long as the Supplemental Interest Trust is in existence, each beneficial owner
of a Publicly Offered Certificate, Class B Certificate or any interest therein,
shall be deemed to have represented, by virtue of its acquisition or holding
of
the Publicly Offered Certificate, Class B Certificate or interest therein,
that
either (i) it is not a Plan or (ii)(A) it is an accredited investor within
the
meaning of Prohibited Transaction Exemption 2002-41, as amended from time to
time (the “Exemption”) and (B) the acquisition and holding of such Certificate
and the separate right to receive payments from the Supplemental Interest Trust
are eligible for the exemptive relief available under Prohibited Transaction
Class Exemption (“PTCE”) 84-14 (for transactions by independent “qualified
professional asset managers”), 91-38 (for transactions by bank collective
investment funds), 90-1 (for transactions by insurance company pooled separate
accounts), 95-60 (for transactions by insurance company general accounts) or
96-23 (for transactions effected by “in-house asset managers”) in the case of a
Publicly Offered Certificate, or PTCE 95-60 in the case of a Class B
Certificate.
Each
beneficial owner of a Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 or Class M-9 Certificate or any interest therein
that is acquired after the termination of the Supplemental Interest Trust shall
be deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with “Plan Assets”, (ii) it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than “BBB-“ (or its
equivalent) by S&P, Fitch or Xxxxx’x, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire
or
hold the certificate or interest therein is an “insurance company general
account,” as such term is defined in Prohibited Transaction Class Exemption
(“PTCE”) 95-60 and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
Each
beneficial owner of a Class B-1 Certificate or Class B-2 Certificate that is
acquired after the termination of the Supplemental Interest Trust shall be
deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with “Plan Assets” or (ii) (1) it is an insurance company, (2) the source of
funds used to acquire or hold the certificate or interest therein is an
“insurance company general account,” as such term is defined in Prohibited
Transaction Class Exemption (“PTCE”) 95-60 and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
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150
-
If
any
Certificate, or any interest therein, is acquired or held in violation of this
section 6.02(b), the next preceding permitted beneficial owner will be treated
as the beneficial owner of that Certificate, retroactive to the date of transfer
to the purported beneficial owner. Any purported beneficial owner whose
acquisition or holding of a Certificate, or interest therein, was effected
in
violation of this Section shall indemnify to the extent permitted by law and
hold harmless the Depositor, the Sponsor, the Master Servicer, the Securities
Administrator, the Servicer, the Underwriter and the Trustee from and against
any and all liabilities, claims, costs or expenses incurred by such parties
as a
result of such acquisition or holding.
(c) ii)
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:
(A) 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.
(B) In
connection with any proposed Transfer of any Ownership Interest in a Residual
Certificate, the Trustee shall require delivery to it, and shall not register
the Transfer of any Residual Certificate until its receipt of, an affidavit
and
agreement (a “Transfer Affidavit and Agreement,” in the form attached hereto as
Exhibit B-3) from the proposed Transferee, in form and substance satisfactory
to
the Securities Administrator, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person that is not
a
Permitted Transferee, that for so long as it retains its Ownership Interest
in a
Residual Certificate, it will endeavor to remain a Permitted Transferee, and
that it has reviewed the provisions of this Section 6.02(c) and agrees to
be bound by them.
(C) Notwithstanding
the delivery of a Transfer Affidavit and Agreement by a proposed Transferee
under clause (B) above, if an authorized officer of the Securities Administrator
who is assigned to this transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest in a
Residual Certificate and (Y) not to transfer its Ownership Interest unless
it
provides a Transferor Affidavit (in the form attached hereto as Exhibit B-2)
to
the Securities Administrator stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee.
-
151
-
(E) Each
Person holding or acquiring an Ownership Interest in a Residual Certificate,
by
purchasing an Ownership Interest in such Certificate, agrees to give the
Securities Administrator written notice that it is a “pass-through interest
holder” within the meaning of temporary Treasury regulation
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Residual Certificate, if it is, or is holding an Ownership
Interest in a Residual Certificate on behalf of, a “pass-through interest
holder.”
(ii) The
Securities Administrator will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement and all
of
such other documents as shall have been reasonably required by the Securities
Administrator as a condition to such registration. In addition, no Transfer
of a
Residual Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such Certificate
to
the effect that such Transferee is a Permitted Transferee.
(iii) (1)
If any
purported Transferee shall become a Holder of a Residual Certificate in
violation of the provisions of this Section 6.02(c), then the last
preceding Permitted Transferee shall be restored, to the extent permitted by
law, to all rights as holder thereof retroactive to the date of registration
of
such 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 this Section 6.02(c)
or for making any payments due on such Certificate to the holder thereof or
for
taking any other action with respect to such holder under the provisions of
this
Agreement.
(B) If
any
purported Transferee shall become a holder of a Residual Certificate in
violation of the restrictions in this Section 6.02(c) and to the extent
that the retroactive restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be invalid, illegal
or
unenforceable, then the Securities Administrator shall have the right, without
notice to the holder or any prior holder of such Residual Certificate, to sell
such Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose. Such
purported Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Securities Administrator.
Such purchaser may be the Securities Administrator itself or any Affiliate
of
the Securities Administrator. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Securities Administrator or its
Affiliates), expenses and taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and conditions of any
sale
under this clause (iii)(B) shall be determined in the sole discretion of the
Securities Administrator, and the Securities Administrator shall not be liable
to any Person having an Ownership Interest in a Residual Certificate as a result
of its exercise of such discretion.
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152
-
(iv) The
Securities Administrator shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions all information necessary
to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record holders
at any time any Person which is a Disqualified Organization. Reasonable
compensation for providing such information may be charged or collected by
the
Securities Administrator.
(v) The
provisions of this Section 6.02(c) set forth prior to this subsection (v)
may be modified, added to or eliminated, provided that there shall have been
delivered to the Securities Administrator at the expense of the party seeking
to
modify, add to or eliminate any such provision the following:
(A) written
notification from each Rating Agency to the effect that the modification,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates;
and
(B) an
Opinion of Counsel, in form and substance satisfactory to the Securities
Administrator, to the effect that such modification of, addition to or
elimination of such provisions will not cause any Trust REMIC to cease to
qualify as a REMIC and will not cause any Trust REMIC, as the case may be,
to be
subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person that is not a Permitted Transferee or a Person other
than the prospective transferee to be subject to a REMIC-tax caused by the
Transfer of a Residual Certificate to a Person that is not a Permitted
Transferee.
(d) Subject
to the preceding subsections, upon surrender for registration of transfer of
any
Certificate at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11, the Securities Administrator
shall execute, authenticate and deliver, in the name of the designated
Transferee or Transferees, one or more new Certificates of the same Class of
a
like aggregate Percentage Interest.
(e) At
the
option of the Holder thereof, any Certificate may be exchanged for other
Certificates of the same Class with authorized denominations and a like
aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Securities Administrator maintained
for
such purpose pursuant to Section 9.11. 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 transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer
in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest
in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest
respectively, in each case that was evidenced by the Class R Certificate being
exchanged.
-
153
-
(f) No
service charge to the Certificateholders shall be made for any transfer or
exchange of 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 Certificates.
(g) The
preparation and delivery of all certificates and opinions referred to above
in
this Section 6.02 shall not be an expense of the Trust Fund, the Securities
Administrator, the Depositor or the Sponsor.
(h) All
Certificates surrendered for transfer and exchange shall be canceled and
destroyed by the Securities Administrator in accordance with its customary
procedures.
Section
6.03 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 of the ownership thereof
and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save 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 6.03, 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 6.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Securities
Administrator under the terms of this Section 6.03 shall be canceled and
destroyed by the Securities Administrator in accordance with its standard
procedures without liability on its part.
Section
6.04 Persons
Deemed Owners.
The
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator and any of their agents 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 none of the Depositor, the Servicer, the Trustee, the Master
Servicer, the Securities Administrator nor any of their agents shall be affected
by any notice to the contrary.
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Section
6.05 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 that such Certificateholders propose to transmit or if the
Depositor 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 or such
Certificateholders at such recipients’ expense the most recent list of the
Certificateholders of the 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
6.06 Book-Entry
Certificates.
The
Regular Certificates, upon original issuance, shall be issued in the form of
one
or more typewritten Certificates representing the Book- Entry Certificates,
to
be delivered to the Depository by or on behalf of the Depositor. Such
Certificates shall initially be registered on the Certificate Register in the
name of the Depository or its nominee, and no Certificate Owner of such
Certificates will receive a definitive certificate representing such Certificate
Owner’s interest in such Certificates, except as provided in Section 6.08.
Unless and until definitive, fully registered Certificates (“Definitive
Certificates”) have been issued to the Certificate Owners of such Certificates
pursuant to Section 6.08:
(a) the
provisions of this Section shall be in full force and effect;
(b) the
Depositor and the Securities Administrator may deal with the Depository and
the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of such
Certificates;
(c) registration
of the Book-Entry Certificates may not be transferred by the Securities
Administrator except to another Depository;
(d) the
rights of the respective Certificate Owners of such Certificates shall be
exercised only through the Depository and the Depository Participants and shall
be limited to those established by law and agreements between the Owners of
such
Certificates and the Depository and/or the Depository Participants. Pursuant
to
the Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.08, the Depository will make book-entry transfers
among the Depository Participants and receive and transmit distributions of
principal and interest on the related Certificates to such Depository
Participants;
(e) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants;
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(f) the
Depositor, the Servicer, the Trustee, the Master Servicer and 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
(g) to
the
extent that the provisions of this Section conflict with any other
provisions of this Agreement, the provisions of this Section shall
control.
For
purposes of any provision of this Agreement requiring or permitting actions
with
the consent of, or at the direction of, Certificateholders evidencing a
specified percentage of the aggregate unpaid principal amount of any Class
of
Certificates, such direction or consent may be given by Certificate Owners
(acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section
6.07 Notices
to Depository.
Whenever
any notice or other communication is required to be given to Certificateholders
of a Class with respect to which Book-Entry Certificates have been issued,
unless and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Securities Administrator shall give all such notices
and
communications to the Depository.
Section
6.08 Definitive
Certificates.
If,
after
Book-Entry Certificates have been issued with respect to any Certificates,
(a)
the Depositor or the Depository advises the Securities Administrator that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Securities Administrator or the Depositor is unable to
locate a qualified successor, (b) the Depositor, at its sole option, advises
the
Securities Administrator that it elects to terminate the book-entry system
with
respect to such Certificates through the Depository or (c) after the occurrence
and continuation of either of the events described in clauses (a) or (b) above,
Certificate Owners of such Book-Entry Certificates having not less than fifty
one percent (51%) of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Securities Administrator and the Depository in writing
through the Depository Participants that the continuation of a book-entry system
with respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of
such
Class, then the Securities Administrator shall notify all Certificate Owners
of
such Certificates, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to applicable Certificate
Owners requesting the same. The Depositor shall provide the Securities
Administrator with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the
Securities Administrator of any such Certificates by the Depository, accompanied
by registration instructions from the Depository for registration, the
Securities Administrator shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall
be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such 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 such Definitive Certificates as
Certificateholders hereunder.
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Section
6.09 Maintenance
of Office or Agency.
Certificates
may be surrendered for registration of transfer or exchange at the applicable
Corporate Trust Office of the Securities Administrator. The Securities
Administrator will give prompt written notice to the Certificateholders of
any
change in such location of any such office or agency.
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ARTICLE
VII
THE
DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
Section
7.01 Liabilities
of the Depositor, the Servicer and the Master Servicer.
Each
of
the Depositor, the Servicer and the Master Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by it herein.
Section
7.02 Merger
or Consolidation of the Depositor, the Servicer or the Master
Servicer.
(a) Each
of
the Depositor and the Servicer will keep in full force and effect its rights
and
franchises as a corporation or limited liability company, as applicable, under
the laws of the state of its formation, and
will
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, the Certificates
or
any of the Mortgage Loans and to perform its duties under this
Agreement.
The
Master Servicer will keep in full force and effect its existence, rights and
franchises as a national banking association, and will 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, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
(b) The
Depositor, the Servicer or the Master Servicer may be merged or consolidated,
or
any person resulting from any merger or consolidation to which the Depositor,
the Servicer or the Master Servicer shall be a party, or any Person succeeding
to the business of the Depositor, the Servicer or the Master Servicer shall
be
the successor of the Depositor, the Servicer or the Master Servicer hereunder,
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, provided
that any Successor Servicer shall have represented that it meets the eligibility
criteria set forth in Section 8.02.
Section
7.03 Indemnification
of Depositor, the Servicer and Servicing Function Participants.
(a) The
Depositor agrees to indemnify the Indemnified Persons for, and to hold them
harmless against, any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained
in connection with, arising out of, or relating to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement or the Certificates (i) related to the Depositor’s failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Depositor’s willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. This indemnity shall survive
the
resignation and the termination of this Agreement.
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(b) The
Servicer agrees to indemnify the Indemnified Persons for, and to hold them
harmless against, any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained
in connection with, arising out of, or relating to, any claim or legal action
(including any pending or threatened claim or legal action) relating to the
Servicer’s gross negligence in the performance of its duties under this
Agreement or failure to service the Mortgage Loans in material compliance with
the terms of this Agreement and for a material breach of any representation,
warranty or covenant of the Servicer contained herein. The Servicer shall
immediately notify the Trustee if a claim relating to the preceding sentence
is
made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Trustee and with counsel reasonably satisfactory
to the Trustee) the defense of any such claim and, subject to Section 7.04(e),
pay all expenses in connection therewith, including counsel fees, and promptly
appeal or pay, discharge and satisfy any judgment or decree which may be entered
against it or any Indemnified Person in respect of such claim, but failure
to so
notify the Servicer shall not limit its obligations hereunder. The Servicer
agrees that it will not enter into any settlement of any such claim without
the
consent of the Indemnified Persons unless such settlement includes an
unconditional release of such Indemnified Persons from all liability that is
the
subject matter of such claim. The provisions of this Section 7.03(b) shall
survive termination of this Agreement.
(c) Each
of
the Depositor, Master Servicer, Securities Administrator, Trustee and any
Servicing Function Participant engaged by such party, respectively, shall
indemnify and hold harmless the Master Servicer, the Securities Administrator
and the Depositor, respectively, and each of its directors, officers, employees,
agents, and affiliates from and against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon (a) any
breach by such party of any if its obligations under hereunder, including
particularly its obligations to provide any Assessment of Compliance,
Attestation Report, Compliance Statement or any information, data or materials
required to be included in any 1934 Act report, (b) any material misstatement
or
omission in any information, data or materials provided by such party (or,
in
the case of the Securities Administrator or Master Servicer, any material
misstatement or material omission in (i) any Compliance Statement, Assessment
of
Compliance or Attestation Report delivered by it, or by any Servicing Function
Participant engaged by it, pursuant to this Agreement, or (ii) any Additional
Form 10-D Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure
concerning the Master Servicer or the Securities Administrator), or (c) the
negligence, bad faith or willful misconduct of such indemnifying party in
connection with its performance hereunder. If the indemnification provided
for
in this Section 11.03(e) is unavailable or insufficient to hold harmless the
Master Servicer, the Securities Administrator or the Depositor, as the case
may
be, then each such party agrees that it shall contribute to the amount paid
or
payable by the Master Servicer, the Securities Administrator or the Depositor,
as applicable, as a result of any claims, losses, damages or liabilities
incurred by such party in such proportion as is appropriate to reflect the
relative fault of the indemnified party on the one hand and the indemnifying
party on the other. This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
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Section
7.04 Limitations
on Liability of the Depositor, the Securities Administrator, the Master
Servicer, the Servicer and Others.
Subject
to the obligation of the Depositor and the Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither
the Depositor, the Securities Administrator, the Master Servicer, the Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Securities Administrator, the Master Servicer and the Servicer shall be under
any liability to the Indemnified Persons, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking 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
Securities Administrator, the Master Servicer, the Servicer or any such Person
against any breach of warranties, representations or covenants made herein
or
against any specific liability imposed on any such Person pursuant hereto or
against any liability which would otherwise be imposed by reason of such
Person’s willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder.
(b) The
Depositor, the Securities Administrator, the Master Servicer, the Servicer
and
any director, officer, employee or agent of the Depositor, the Securities
Administrator and the Master Servicer may rely in good faith on any document
of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
(c) The
Depositor, the Securities Administrator, the Master Servicer, the Servicer,
the
Trustee, the Custodian and any director, officer, employee or agent of the
Depositor, the Securities Administrator, the Master Servicer, the Servicer,
the
Trustee or the Custodian shall be indemnified by the Trust Fund and held
harmless thereby against any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or relating to this Agreement,
the
Custodial Agreement or the Certificates (including any pending or threatened
claim or legal action), other than (i) with respect to the Servicer, such loss,
liability or expense related to the Servicer’s failure to perform its duties in
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or, with respect
to
the Custodian, to the Custodian’s failure to perform its duties under the
Custodial Agreement, (ii) with respect to the Servicer, any such loss, liability
or expense incurred by reason of the Servicer’s willful misfeasance, bad faith
or gross negligence in the performance of its duties hereunder or (iii) with
respect to the Custodian, any such loss, liability or expense incurred by reason
of the Custodian’s willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder.
(d) The
Depositor, the Securities Administrator, the Servicer or the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties under this Agreement and that in
its
opinion may involve it in any expense or liability; provided, however, that
each
of the Depositor, the Securities Administrator, the Servicer and the Master
Servicer may in its discretion, undertake any such action which it may deem
necessary or desirable with 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 (except any loss, liability or expense incurred by reason
of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and
the
Depositor, the Securities Administrator, the Servicer and the Master Servicer
shall be entitled to be reimbursed therefor out of the Distribution Account
as
provided by Section 3.27 or Section 3.32, as applicable. Nothing in this
Subsection 7.04(d) shall affect the Master Servicer’s obligation to take such
actions as are necessary to ensure the servicing and administration of the
Mortgage Loans pursuant to this Agreement.
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(e) In
taking
or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Trustee shall
not
be required to investigate or make recommendations concerning potential
liabilities which the Trust might incur as a result of such course of action
by
reason of the condition of the Mortgaged Properties.
(f) The
Trustee shall not be liable for any acts or omissions of the Servicer, the
Depositor or the Custodian.
Section
7.05 Servicer
Not to Resign.
(a) The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except upon the determination that its duties hereunder are no longer
permissible under applicable law or the performance of such duties are no longer
possible in order to comply with applicable law and such incapacity or
impossibility cannot be reasonably cured by the Servicer. Any determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Master Servicer which Opinion of Counsel
shall be in form and substance acceptable to the Master Servicer. No appointment
of a successor to the Servicer shall be effective hereunder unless (a) the
Rating Agencies have confirmed in writing that such appointment will not result
in a downgrade, qualification or withdrawal of the then current ratings assigned
to the Certificates, (b) such successor shall have represented that it is meets
the eligibility criteria set forth in Section 8.02 and (c) such successor
has agreed in writing to assume the obligations of the Servicer hereunder.
The
Servicer shall provide a copy of the written confirmation of the Rating Agencies
and the agreement executed by such successor to the Master Servicer. No such
resignation shall become effective until a Successor Servicer or the Master
Servicer shall have assumed the Servicer’s responsibilities and obligations
hereunder. The Servicer shall notify the Master Servicer and the Rating Agencies
of its resignation.
(b) Except
as
expressly provided herein, the 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 Servicer hereunder.
The
foregoing prohibition on assignment shall not prohibit the Servicer from
designating a Subservicer as payee of any indemnification amount payable to
the
Servicer hereunder; provided, however, that as provided in Section 3.03, no
Subservicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Subservicer as an indemnitee under this
Agreement.
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(c) Notwithstanding
anything to the contrary herein, the Servicer may pledge or assign as collateral
all its rights, title and interest under this Agreement to a lender (the
“Servicing Rights Lender”), provided, that:
(i) upon
a
Servicer Event of Default and receipt of a notice of termination by the
Servicer, the Servicing Rights Lender may direct the Servicer or its designee
to
appoint a Successor Servicer pursuant to the provisions, and subject to the
conditions, set forth in Section 8.02 regarding such appointment of a
Successor Servicer;
(ii) the
Servicing Rights Lender’s rights are subject to this Agreement; and
(iii) the
Servicer shall remain subject to termination as Servicer under this Agreement
pursuant to the terms hereof.
Section
7.06 Appointment
of Special Servicer; Termination of the Servicer.
(a) The
Sponsor may appoint a special servicer with respect to certain of the Mortgage
Loans. The Sponsor and the Servicer shall negotiate in good faith with any
proposed special servicer with respect to the duties and obligations of such
special servicer with respect to any such Mortgage Loan. Any subservicing
agreement shall contain terms and provisions not inconsistent with this
Agreement and shall obligate the special servicer to service such Mortgage
Loans
in accordance with Accepted Servicing Practices. The fee payable to the special
servicer for the performance of such duties and obligations will be paid from
the Servicing Fee collected by the Servicer with respect to each such Mortgage
Loan and will be remitted to such special servicer by the Servicer. The Sponsor
shall reimburse the Servicer for Servicing Fee shortfalls, if any, incurred
as a
result of the fee payable to such special servicer.
(b) If
at any
time the Sponsor retains or comes into possession of any servicing rights with
respect to any of the Mortgage Loans, the Sponsor may, at its option, terminate
the servicing responsibilities of the Servicer hereunder with respect to such
Mortgage Loans without cause. No such termination shall become effective unless
and until a successor to the Servicer shall have been appointed to service
and
administer the related Mortgage Loans pursuant to the terms and conditions
of
this Agreement. No appointment shall be effective unless (i) such Successor
Servicer meets the eligibility criteria contained in Section 8.02, (ii) the
Master Servicer shall have consented to such appointment, (iii) the Rating
Agencies have been notified in writing of such appointment and such Successor
Servicer meets the Minimum Servicing Requirements, (iv) such successor has
agreed to assume the obligations of the Servicer hereunder to the extent of
the
related Mortgage Loans and (v) all amounts reimbursable to the terminated
Servicer pursuant to the terms of this Agreement shall have been paid to the
Servicer by the Successor Servicer appointed pursuant to the terms of this
Section 7.06 or by the Sponsor including without limitation, all unpaid
Servicing Fees accrued and unreimbursed Advances and Servicing Advances made
by
the terminated Servicer and all out-of-pocket expenses of the Servicer incurred
in connection with the transfer of servicing to such successor. The Sponsor
shall provide a copy of the agreement executed by such successor to the Trustee
and the Master Servicer.
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Section
7.07 Limitation
on Resignation of the Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall
be
evidenced by an Opinion of Counsel to such effect obtained at the expense of
the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee
or a
successor Master Servicer meeting the criteria specified in Section 7.08
shall have assumed the Master Servicer’s responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement.
Section
7.08 Assignment
of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation and assuming the obligations of the Master Servicer hereunder (a)
shall have a net worth of not less than $15,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (b) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (c) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as Master Servicer
under this Agreement, any custodial agreement from and after the effective
date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency’s rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter
to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning the master servicing shall deliver to the Trustee
an
officer’s certificate and an Opinion of Independent counsel, each stating that
all conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this Agreement.
No such assignment or delegation shall affect any liability of the Master
Servicer arising out of acts or omissions prior to the effective date
thereof.
Section
7.09 Rights
of the Depositor in Respect of the Servicer and the Master
Servicer.
Each
of
the Master Servicer and the Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Subservicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to
all
records maintained by the Master Servicer or the Servicer (and any such
Subservicer) in respect of the Servicer’s rights and obligations hereunder and
access to officers of the Master Servicer or the Servicer (and those of any
such
Subservicer) responsible for such obligations, and the Master Servicer shall
have access to all such records maintained by the Servicer and any Subservicers.
Upon request, each of the Master Servicer and the Servicer shall furnish to
the
Depositor and the Trustee its (and any such Subservicer’s) most recent financial
statements and such other information relating to the Master Servicer’s or the
Servicer’s capacity to perform its obligations under this Agreement as it
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possesses
(and that any such Subservicer possesses). To the extent the Depositor and
the
trustee are informed that such information is not otherwise available to the
public, the Depositor and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Master Servicer’s
or the Servicer’s written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) to its legal counsel,
auditors, taxing authorities or other governmental agencies and the
Certificateholders, (ii) pursuant to any law, rule, regulation, order, judgment,
writ, injunction or decree of any court or governmental authority having
jurisdiction over the Depositor and the Trustee or the Trust Fund, and in any
case, the Depositor or the Trustee, (iii) disclosure of any and all information
that is or becomes publicly known, or information obtained by the Trustee from
sources other than the Depositor, the Servicer or the Master Servicer, (iv)
disclosure as required pursuant to this Agreement or (v) disclosure of any
and
all information (A) in any preliminary or final offering circular, registration
statement or contract or other document pertaining to the transactions
contemplated by the Agreement approved in advance by the Depositor, the Servicer
or the Master Servicer or (B) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Trustee having a need to know the same,
provided that the Trustee advises such recipient of the confidential nature
of
the information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in
this
Section 7.09 shall limit the obligation of the Servicer to comply with any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the Servicer to provide access as provided in this
Section 7.09 as a result of such obligation shall not constitute a breach
of this Section. Nothing in this Section 7.09 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 ship documents to any party unless provisions have been made
for the reimbursement of the costs thereof. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer and the Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer or the
Servicer under this Agreement or exercise the rights of the Master Servicer
or
the Servicer under this Agreement; provided that neither the Master Servicer
nor
the Servicer shall be relieved of any of its obligations under this Agreement
by
virtue of such performance by the Depositor or its designee. The Depositor
shall
not have any responsibility or liability for any action or failure to act by
the
Master Servicer or the Servicer and is not obligated to supervise the
performance of the Master Servicer or the Servicer under this Agreement or
otherwise.
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ARTICLE
VIII
DEFAULT;
TERMINATION OF SERVICER AND MASTER SERVICER
Section
8.01 Events
of Default.
(a) In
case
one or more of the following events of default by the Servicer (each, a
“Servicer Default”) shall occur and be continuing, that is to say:
(i) any
failure by the Servicer to remit to the Securities Administrator any payment
required to be made under the terms of this Agreement (other than Advances
pursuant to Section 5.01) which continues unremedied for a period of two
Business Days
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 Master Servicer or to
the
Servicer and the Master Servicer by the holders of Certificates evidencing
not
less than 25% of the Voting Rights evidenced by the Certificates; provided,
however, failure of the Servicer to remit any Advance required pursuant to
Section 5.01 by noon on the related Distribution Date shall be a default
hereunder without notice; or
(ii) failure
on the part of the
Servicer to
duly
observe or perform in any material respect any other of the covenants or
agreements on the part of the Servicer set forth in this Agreement (other than
those described in (viii) and (ix) below), the breach of which has a material
adverse effect and which continue 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 Servicer by the Master Servicer or to
the
Servicer and the Master Servicer by the holders of Certificates evidencing
not
less than 25% of the Voting Rights evidenced by the Certificates;
or
(iii) 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 Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty days;
or
(iv) the
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 Servicer
or
of or relating to all or substantially all of its property; or
(v) the
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) the
Servicer attempts to assign its right to servicing compensation hereunder (other
than any payment by the Servicer to the Sponsor of any portion of the Servicing
Fee payable to the Servicer as provided in a separate side letter between the
Sponsor and the Servicer) or the Servicer attempts to sell or otherwise dispose
of all or substantially all of its property or assets or to assign this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof except, in each case as otherwise permitted
herein; or
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(vii) the
Servicer ceases to be qualified to transact business in any jurisdiction where
it is currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Servicer’s ability to perform its
obligations hereunder;
(viii) any
failure by the Servicer to duly perform, within the required time period, its
obligation to provide the annual statements and the accountant’s report
described in Sections 3.13 and 3.14 hereof, which failure continues unremedied
for a period of ten (10) days after the date on which written notice of such
failure, requiring the same to be remedied, has been given to the Servicer
by
the Master Servicer; or
(ix) any
failure by the Servicer to provide, within the required time period set forth
in
Section 3.28 hereof, any required reports or data pertaining to the Mortgage
Loans, 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, has been given to the Servicer by the Master Servicer;
then,
and
in each and every such case, so long as a Servicer Default shall not have been
remedied, the Master Servicer, by notice in writing to the defaulting Servicer
and the Trustee, shall with respect to a payment default by the Servicer
pursuant to Section 8.01(i) of this Agreement and, upon the occurrence and
continuance of any other Servicer Default, may, and, at the written direction
of
Certificateholders evidencing not less than 25% of the Voting Rights shall,
in
addition to whatever rights the Trustee on behalf of the Certificateholders
may
have under Section 7.03 and at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the defaulting Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the defaulting
Servicer for the same with respect to a default by the Servicer. On or after
the
receipt by the defaulting Servicer of such written notice, all authority and
power of the Servicer under this Agreement whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Master Servicer. Upon
written request from the Master Servicer, the defaulting Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in
the
Trustee’s (or its custodian’s) possession all Mortgage Files relating to the
related Mortgage Loans, and 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 related Mortgage
Loans and related documents, or otherwise, at the Servicer’s sole expense. The
defaulting Servicer shall cooperate with the Master Servicer in effecting the
termination of the Servicer’s responsibilities and rights hereunder including,
without limitation, the transfer to such successor for administration by it
of
all cash amounts which shall at the time be credited by the defaulting Servicer
to the Custodial Account or Escrow Account or thereafter received with respect
to the related Mortgage Loans or any related REO Property (provided, however,
that the defaulting Servicer shall continue to be entitled to receive all
amounts accrued or owing to it under this Agreement on or prior to the date
of
such termination, whether in respect of Advances, Servicing Advances, accrued
and unpaid Servicing Fees or otherwise, and shall continue to be entitled to
the
benefits of Section 7.04, notwithstanding any such termination, with
respect to events occurring prior to such termination). The Master Servicer
shall not have knowledge of any Servicer Default unless a Responsible Officer
of
the Master Servicer has actual knowledge or unless written notice of the
Servicer Default is received by the Master Servicer at its address for notice
and such notice references the Certificates, the Trust Fund or this
Agreement.
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(b) In
case
one or more of the following events of default by the Master Servicer (each,
a
“Master Servicer Default”) shall occur and be continuing, that is to
say:
(i) any
failure on the part of the Master Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Agreement, or the breach by the Master
Servicer of any representation and warranty contained in Section 2.03,
which 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 Depositor or the Trustee or to
the
Master Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least twenty-five percent (25%) of the Voting Rights;
or
(ii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, 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 ninety (90) days; or
(iii) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to it or of or relating to
all
or substantially all of its property; or
(iv) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its
creditors, or voluntarily suspend payment of its obligations.
If
a
Master Servicer Default shall occur, then, and in each and every such case,
so
long as such Master Servicer Default shall not have been remedied, the Depositor
or the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee
or
to the Trustee if given by the Depositor) with a copy to each Rating Agency,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. On or after
the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise including, without limitation, the compensation payable to the
Master Servicer under this Agreement, shall pass to and be vested in the Trustee
pursuant to and under this Section, and, without limitation, the Trustee is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Master Servicer, 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. The Master Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice)
to
provide the Trustee with all documents and records requested by it to enable
it
to assume the Master Servicer’s functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer’s
responsibilities and rights under this Agreement (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued
or
owing to it under this Agreement on or prior to the date of such termination
and
shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior
to
such termination). For purposes of this Section 8.01, the Trustee shall not
be deemed to have knowledge of a Master Servicer Default unless a Responsible
Officer of the Trustee assigned to and working in the Trustee’s Corporate Trust
Office has actual knowledge thereof or unless written notice of any event which
is in fact such a Master Servicer Default is received by the Trustee and such
notice references the Certificates, the Trust or this Agreement. The Trustee
shall promptly notify the Rating Agencies of the occurrence of a Master Servicer
Default of which it has knowledge as provided above.
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To
the
extent that the costs and expenses of the Trustee related to the termination
of
the Master Servicer, appointment of a successor Master Servicer or the transfer
and assumption of the master servicing by the Trustee (including, without
limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of the
Master Servicer as a result of a Master Servicer Default and (ii) all costs
and
expenses associated with the complete transfer of the master servicing,
including all servicing files and all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully
and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Neither
the Trustee nor any other successor master 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 Master Servicer to deliver or provide, or any
delay
in delivering or providing, any cash, information, documents or records to
it.
Notwithstanding
the above, the Trustee may, if it shall be unwilling to continue to so act,
or
shall, if it is unable to so act, petition a court of competent jurisdiction
to
appoint, or appoint on its own behalf, any established housing and home finance
institution servicer, master servicer, servicing or mortgage servicing
institution having a net worth of not less than $15,000,000 and meeting such
other standards for a successor master servicer as are set forth in this
Agreement, as the successor to such Master Servicer in the assumption of all
of
the responsibilities, duties or liabilities of a master servicer, like the
Master Servicer.
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Section
8.02 Master
Servicer to Act; Appointment of Successor.
On
and
after the time the Servicer receives a notice of termination pursuant to
Section 8.01, the Master Servicer shall become the successor to the
Servicer with respect to the transactions set forth or provided for herein
and
after a transition period (not to exceed 120 days), 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 Advances pursuant to Article V hereof, except as otherwise provided
herein; provided, however, that the Master Servicer’s obligation to make
Advances in its capacity as Successor Servicer shall not be subject to such
120
day transition period and the Master Servicer will make any Advance required
to
be made by the terminated Servicer on the Distribution Date on which the
terminated Servicer was required to make such Advance. Effective on the date
of
such notice of termination, as compensation therefor, the Master Servicer shall
be entitled to all fees, costs and expenses relating to the Mortgage Loans
that
the terminated Servicer would have been entitled to if it had continued to
act
hereunder, provided, however, that the Master Servicer shall not be (i) liable
for any acts or omissions of the terminated Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law or determines
that such Advance, if made, would constitute a Nonrecoverable Advance, (iii)
responsible for expenses of the terminated Servicer pursuant to
Section 2.03 or (iv) obligated to deposit losses on any Permitted
Investment directed by the terminated Servicer. Notwithstanding the foregoing,
the Master Servicer may, if it shall be unwilling to so act, or shall, if it
is
prohibited by applicable law from making Advances pursuant to Article VI of
this
Agreement or if it is otherwise unable to so act, 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 Servicer shall
(i) be an institution that is a Xxxxxx Xxx and Xxxxxxx Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and (ii) be willing to act as Successor Servicer of the Mortgage Loans under
this Agreement, and shall have executed and delivered to the Depositor and
the
Trustee an agreement accepting such delegation and assignment, that contains
an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the terminated Servicer (other than any
liabilities of the terminated Servicer hereof incurred prior to termination
of
the Servicer under Section 8.01), with like effect as if originally named
as a party to this Agreement, provided that each Rating Agency shall have
acknowledged in writing 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. If the Master Servicer
assumes the duties and responsibilities of the terminated Servicer in accordance
with this Section 8.02, the Master Servicer shall not resign as Servicer
until a Successor Servicer has been appointed and has accepted such appointment.
Pending appointment of a successor to the terminated Servicer hereunder, the
Master Servicer, unless the Master Servicer is prohibited by law from so acting,
shall 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 the Mortgage Loans or
otherwise as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the terminated Servicer
hereunder. The Master Servicer and such successor 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 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.
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The
costs
and expenses of the Master Servicer in connection with the termination of the
Servicer, appointment of a Successor Servicer and, if applicable, any transfer
of servicing, including, without limitation, all costs and expenses associated
with the complete transfer of all servicing data and the completion, correction
or manipulation of such servicing data as may be required by the Master Servicer
to correct any errors or insufficiencies in the servicing data or otherwise
to
enable the Master Servicer or the Successor Servicer to service the related
Mortgage Loans properly and effectively, to the extent not paid by the
terminated Servicer as may be required herein shall be payable to the Master
Servicer from the Distribution Account pursuant to Section 3.32. Any
successor to the terminated Servicer as Successor Servicer under this Agreement
shall give notice to the applicable Mortgagors of such change of the Servicer
and shall, during the term of its service as Successor Servicer maintain in
force the policy or policies that the terminated Servicer is required to
maintain pursuant to Section 3.05.
Notwithstanding
the foregoing, if a Servicer Default occurs, the Servicer or the Servicing
Rights Lender shall have a period of up to thirty (30) days after receipt of
a
notice of termination to appoint a Successor Servicer that satisfies the
eligibility criteria of a Successor Servicer set forth herein, which appointment
shall be subject to the consent of the Depositor, the Seller, the Master
Servicer, and the Trustee, which consent shall not be unreasonably withheld
or
delayed; provided that such Successor Servicer agrees to fully effect the
servicing transfer within 120 days following the termination of the Servicer
and
to make all P&I Advances that would otherwise be made by the Master Servicer
under Section 8.01 as of the date of such appointment, and to reimburse the
Master Servicer for any xxxxxxxxxxxx X&X Advances they have made and any
reimbursable expenses that they may have incurred in connection with this
Section 8.02. Any proceeds received in connection with the appointment of such
Successor Servicer shall be the property of the Servicer or its designee. This
30-day period shall terminate immediately (i) at the close of business on the
second Business Day of such 30-day period if (A) the Servicer was terminated
because of an Event of Default described in Section 8.01(a)(i) for failing
to
make a required Advance pursuant to section 5.01, and (B) the Servicer shall
have failed to make (or cause to be made) such Advance, or shall fail to
reimburse (or cause to be reimbursed) the Master Servicer for an Advance made
by
the Master Servicer, by the close of business on such second Business Day,
or
(ii) at the close of business on the second Business Day following the date
(if
any) during such 30-day period on which an Advance is due to be made, if the
Servicer shall have failed to make (or caused to be made) such Advance, or
the
Servicer shall have failed to reimburse (or cause to be reimbursed) the Master
Servicer for such Advance, by the close of business on such second Business
Day;
provided, that such 30-day period shall only be terminated to the extent that
the Lender has received notice of such failure from the Master Servicer and
the
Lender has not cured or caused the cure of such failure within two (2) Business
Days following receipt of notice, provided, however, that such notice
requirement shall only be applicable to the extent that the Master Servicer
has
been provided with the written address and contact information for the
Lender.
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Section
8.03 Notification
to Certificateholders.
(a) Upon
any
termination of or appointment of a successor to the Servicer or the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within
sixty (60) days after the occurrence of any Servicer Default or Master Servicer
Default, the Trustee shall transmit by mail to all Certificateholders notice
of
each such Servicer Default or Master Servicer Default hereunder known to the
Trustee, unless such default shall have been cured or waived.
Section
8.04 Waiver
of Servicer Defaults and Master Servicer Defaults.
The
Trustee may waive only by written notice from Certificateholders evidencing
66-2/3 of the Voting Rights (unless such default materially and adversely
affects all Certificateholders, in which case the written direction shall be
from all of the Certificateholders) any default by the Servicer or Master
Servicer in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist,
and
any Servicer Default or Master Servicer 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 in writing.
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ARTICLE
IX
CONCERNING
THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section
9.01 Duties
of Trustee and Securities Administrator.
(a) The
Trustee, prior to the occurrence of a Master Servicer Default, and after the
curing or waiver of all Master Servicer Defaults, which may have occurred,
and
the Securities Administrator each undertake to perform such duties and only
such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If a Master Servicer Default
has
occurred and has not been cured or waived, 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. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
(b) Each
of
the Trustee and the Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to it, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement in
a
material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
(c) The
Trustee shall promptly remit to the Servicer any complaint, claim, demand,
notice or other document (collectively, the “Notices”) delivered to the Trustee
as a consequence of the assignment of any Mortgage Loan hereunder and relating
to the servicing of the Mortgage Loans; provided than any such notice (i) is
delivered to the Trustee at its Corporate Trust Office, (ii) contains
information sufficient to permit the Trustee to make a determination that the
real property to which such document relates is a Mortgaged Property. The
Trustee shall have no duty hereunder with respect to any Notice it may receive
or which may be alleged to have been delivered to or served upon it unless
such
Notice is delivered to it or served upon it at its Corporate Trust Office and
such Notice contains the information required pursuant to clause (ii) of the
preceding sentence.
(d)
No
provision of this Agreement shall be construed to relieve the Trustee or the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however,
that:
(i) Prior
to
the occurrence of a Master Servicer Default and after the curing or waiver
of
all such Master Servicer Defaults which may have occurred with respect to the
Trustee and at all times with respect to the Securities Administrator, the
duties and obligations of the Trustee and the Securities Administrator shall
be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of its duties and obligations as are specifically set forth in
this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence of
bad
faith on the part of the Trustee or the Securities Administrator, respectively,
the Trustee or the Securities Administrator, respectively, may conclusively
rely
and shall be fully protected in acting or refraining from acting, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
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(ii) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity for an error of judgment made in good faith by a Responsible Officer
or
Responsible Officers of the Trustee or an officer or officers of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or
Securities Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither
the Trustee nor the Securities Administrator shall be liable with respect to
any
action taken, suffered or omitted to be taken by it in good faith and believed
by it to be authorized or within the rights or powers conferred upon it by
this
Agreement or in accordance with the directions of the Holders of Certificates
evidencing not less than 25% of the aggregate Voting Rights of the Certificates,
if such action or non-action relates to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or the Securities
Administrator or exercising any trust or other power conferred upon the Trustee
or the Securities Administrator under this Agreement;
(iv) The
Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any default or Master Servicer Default unless a Responsible Officer
of the Trustee shall have actual knowledge thereof. In the absence of such
notice, the Trustee may conclusively assume there is no such default or Master
Servicer Default;
(v) The
Trustee shall not in any way be liable by reason of any insufficiency in any
Account held by or in the name of Trustee unless it is determined by a court
of
competent jurisdiction that the Trustee’s gross negligence or willful misconduct
was the primary cause of such insufficiency (except to the extent that the
Trustee is obligor and has defaulted thereon);
(vi) Anything
in this Agreement to the contrary notwithstanding, in no event shall the Trustee
or the Securities Administrator be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Trustee or the Securities Administrator has been
advised of the likelihood of such loss or damage and regardless of the form
of
action and whether or not any such damages were foreseeable or contemplated;
and
(vii) None
of
the Sponsor, the Depositor or the Trustee shall be responsible for the acts
or
omissions of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another.
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Neither
the Trustee nor the Securities Administrator shall be required to expend or
risk
its own funds or otherwise incur liability, financial or otherwise, in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the terminated Servicer hereunder.
(e) All
funds
received by the Securities Administrator and required to be deposited in the
Distribution Account pursuant to this Agreement will be promptly so deposited
by
the Securities Administrator.
Section
9.02 Certain
Matters Affecting the Trustee and Securities Administrator.
(a) Except
as
otherwise provided in Section 9.01:
(i) The
Trustee and the Securities Administrator may conclusively rely and shall be
fully protected in acting or refraining from acting in reliance on any
resolution or certificate of the Sponsor, the Depositor or the Servicer, any
certificates 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;
(ii) The
Trustee and the Securities Administrator may consult with counsel and any advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel:
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement, other
than
its obligation to give notices pursuant to 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
Trustee or the Securities Administrator, as the case may be, reasonable security
or indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby. Nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of a Master
Servicer Default of which a Responsible Officer of the Trustee has actual
knowledge (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to 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 his own affairs;
(iv) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity 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;
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(v) Prior
to
the occurrence of a Master Servicer Default hereunder and after the curing
or
waiver of all Master Servicer Defaults which may have occurred with respect
to
the Trustee and at all times with respect to the Securities Administrator,
neither the Trustee nor the Securities Administrator shall 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 Holders of Certificates evidencing not less than 25% of the aggregate Voting
Rights of the Certificates and provided that the payment within a reasonable
time to the Trustee or 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 Trustee or the Securities Administrator, as applicable,
not reasonably assured to the Trustee or the Securities Administrator, as
applicable, by the security afforded to it by the terms of this Agreement,
the
Trustee or the Securities Administrator, as applicable, may require reasonable
indemnity against such expense or liability as a condition to taking any such
action. The reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or through Affiliates, nominees, custodians, agents
or
attorneys. The Trustee shall not be liable or responsible for the misconduct
or
negligence of any of the Trustee’s agents or attorneys or paying agent appointed
hereunder by the Trustee with due care;
(vii) Should
the Trustee deem the nature of any action required on its part to be unclear,
the Trustee may require prior to such action that it be provided by the
Depositor with reasonable further instructions; the right of the Trustee to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be accountable for other than
its
gross negligence or willful misconduct in the performance of any such
act;
(viii) The
Trustee shall not be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted
hereunder;
(ix) The
Trustee shall not have any duty to conduct any affirmative investigation as
to
the occurrence of any condition requiring the repurchase of any Mortgage Loan
by
any Person pursuant to this Agreement, or the eligibility of any Mortgage Loan
for purposes of this Agreement;
(x) The
Trustee shall have no duty hereunder with respect to any complaint, claim,
demand, notice or other document it may receive or which may be alleged to
have
been delivered or served upon it by the parties as a consequence of the
assignment of any Mortgage Loan hereunder; provided, however that the Trustee
shall promptly remit to the Servicer upon receipt any such complaint, claim,
demand, notice or other document (i) which is delivered to the Trustee at is
Corporate Trust Office, (ii) of which a Responsible Officer has actual knowledge
and (iii) which contains information sufficient to permit the Trustee to make
a
determination that the real property to which such document relates is a
Mortgaged Property;
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(xi) The
Trustee is hereby directed by the Depositor to execute the Swap
Agreement on
behalf
of the Supplemental Interest Trust, in the form presented to it by the Depositor
and shall have no responsibility for the contents of the Swap Agreement,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Securities Administrator, on behalf of the
Trustee, under the Swap Agreement at closing shall be paid by the Depositor;
(xii) None
of
the Securities Administrator, the Master Servicer, the Servicer, the Sponsor,
the Depositor, the Custodian or the Trustee shall be responsible for the acts
or
omissions of the others or of the Swap Provider, it being understood that this
Agreement shall not be construed to render them partners, joint venturers or
agents of one another; and
(xiii) The
permissive rights of the Trustee enumerated herein shall not be construed as
duties.
Section
9.03 Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
The
recitals contained herein and in the Certificates (other than the signature
of
the Securities Administrator, the authentication of the Securities Administrator
on the Certificates, the acknowledgements of the Trustee contained in Article
II
and the representations and warranties of the Trustee in Section 9.12)
shall be taken as the statements of the Depositor, and neither the Trustee
nor
the Securities Administrator assumes any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representations
or warranties as to the validity or sufficiency of this Agreement (other than
as
specifically set forth in Section 9.12), the Swap Agreement, the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02. The Securities
Administrator’s signature and authentication (or authentication of its agent) on
the Certificates shall be solely in its capacity as Securities Administrator
and
shall not constitute the Certificates an obligation of the Securities
Administrator in any other capacity. The Trustee and the Securities
Administrator shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates,
or
for the use or application of any funds paid to the Depositor with respect
to
the Mortgage Loans.
Section
9.04 Trustee
and Securities Administrator May Own Certificates.
Each
of
the Trustee and the Securities Administrator in its individual capacity or
in
any other capacity other than as Trustee or Securities Administrator hereunder
may become the owner or pledgee of any Certificates and may transact business
with other interested parties and their Affiliates with the same rights it
would
have if it were not the Trustee or the Securities Administrator.
Section
9.05 Fees
and Expenses of Trustee and Securities Administrator.
The
fees
of the Trustee and the Securities Administrator hereunder shall be paid in
accordance with a side letter agreement with the Master Servicer and at the
sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent of
the
Trustee, the Securities Administrator and the Custodian shall be indemnified
by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney’s fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator including any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its respective obligations and duties under this Agreement
and
any and all other agreements related hereto, other than any loss, liability
or
expense (i) for which the Trustee is indemnified by the Master Servicer or
the
Servicer, (ii) that constitutes a specific liability of the Trustee or the
Securities Administrator pursuant to this Agreement or (iii) any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form
of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold
the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney’s fees and expenses) incurred by the Trustee by reason of the Master
Servicer’s willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer’s
reckless disregard of its obligations and duties under this Agreement. The
indemnities in this Section 9.05 shall survive the termination or discharge
of this Agreement and the resignation or removal of the Master Servicer, the
Trustee, the Securities Administrator or the Custodian. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer’s
own funds, without reimbursement from REMIC I therefor.
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Section
9.06 Eligibility
Requirements for Trustee and Securities Administrator.
The
Trustee and the Securities Administrator shall at all times be a corporation
or
an association (other than the Depositor, the Sponsor or any Affiliate of the
foregoing) organized and doing business under the laws of any 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 (or a
member of a bank holding company whose capital and surplus is at least
$50,000,000) and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions
at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section 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 conditions so published. In case at any time the Trustee or
the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.
Additionally,
the Securities Administrator (i) may not be an originator, Master Servicer,
Servicer, Depositor or an affiliate of the Depositor unless the Securities
Administrator is in an institutional trust department, (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 S&P (or such rating acceptable to
Fitch pursuant to a rating confirmation). If no successor securities
administrator shall have been appointed and shall have accepted appointment
within sixty (60) days after Xxxxx Fargo Bank, N.A., as Securities
Administrator, ceases to be the securities administrator pursuant to this
Section 9.06, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth herein
as
the Trustee under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Trustee under this Agreement.
Xxxxx Fargo Bank, N.A. shall act as Securities Administrator for so long as
it
is Master Servicer under this Agreement.
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Section
9.07 Resignation
and Removal of Trustee and Securities Administrator.
The
Trustee and the Securities Administrator may at any time resign (including,
without limitation, and in the case of the Securities Administrator, upon the
resignation or removal of the Master Servicer) and be discharged from the trust
hereby created by giving written notice thereof to the Depositor, to the Master
Servicer, to the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and to the Certificateholders. Upon receiving such notice
of resignation, the Depositor shall promptly appoint a successor trustee or
successor securities administrator by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee or Securities
Administrator, as applicable, and to the successor trustee or successor
securities administrator, as applicable. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee, the Securities Administrator
and the Master Servicer by the Depositor. If no successor trustee or successor
securities administrator shall have been so appointed and have accepted
appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case
may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee or successor securities
administrator, as applicable.
If
at any
time the Trustee or the Securities Administrator shall cease to be eligible
in
accordance with the provisions of Section 9.06 and shall fail to resign
after written request therefor by the Depositor, or if at any time the Trustee
or the Securities Administrator shall become incapable of acting, or shall
be
adjudged bankrupt or insolvent, or a receiver of the Trustee or the Securities
Administrator or of its property shall be appointed, or any public officer
shall
take charge or control of the Trustee or the Securities Administrator or of
its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee or the Securities
Administrator, as applicable and appoint a successor trustee or successor
securities administrator, as applicable, by written instrument, in duplicate,
which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The
Holders of Certificates entitled to at least 51% of the Voting Rights may at
any
time remove the Trustee or the Securities Administrator and appoint a successor
trustee or 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 to
the
Depositor, one complete set to the Trustee or the Securities Administrator
so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee (in the
case of the removal of the Securities Administrator), the Securities
Administrator (in the case of the removal of the Trustee) and the Master
Servicer by the Depositor.
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Any
resignation or removal of the Trustee or the Securities Administrator and
appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in
Section 9.08.
Notwithstanding
anything to the contrary contained herein, the Master Servicer and the
Securities Administrator shall at all times be the same Person.
Section
9.08 Successor
Trustee or Securities Administrator.
Any
successor trustee or successor securities administrator appointed as provided
in
Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee or predecessor securities administrator
instrument accepting such appointment hereunder and thereupon the resignation
or
removal of the predecessor trustee or predecessor securities administrator
shall
become effective and such successor trustee or 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 trustee or Securities
Administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all monies, held by it hereunder,
and the Depositor and the predecessor trustee or 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 trustee or successor securities administrator all
such rights, powers, duties and obligations.
No
successor trustee or successor securities administrator shall accept appointment
as provided in this Section 9.08 unless at the time of such acceptance such
successor trustee or successor securities administrator shall be eligible under
the provisions of Section 9.07 hereof and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon
acceptance of appointment by a successor trustee or successor securities
administrator as provided in this Section 9.08, the successor trustee or
successor securities administrator shall mail notice of the succession of such
trustee or securities administrator hereunder to all Holders of Certificates.
If
the successor trustee or successor securities administrator fails to mail such
notice within ten days after acceptance of appointment, the Depositor shall
cause such notice to be mailed at the expense of the Trust Fund.
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Section
9.09 Merger
or Consolidation of Trustee or Securities Administrator.
Any
corporation, state bank or national banking association into which the Trustee
or Securities Administrator may be merged or converted or with which it may
be
consolidated or any corporation, state bank or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
or
the Securities Administrator shall be a party, or any corporation, state bank
or
national banking association succeeding to substantially all of the corporate
trust business of the Trustee or Securities Administrator shall be the successor
of the Trustee or Securities Administrator hereunder, provided that such
corporation shall be eligible under the provisions of Section 9.06 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
9.10 Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the REMIC I or property
securing the same may at the time be located, the Trustee 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 REMIC
I, and to vest in such Person or Persons, in such capacity, and for the benefit
of the Holders of the Certificates, such title to REMIC I, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary
or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet
the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
In
the
case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular
act
or acts are to be performed by the Trustee (whether as Trustee hereunder or
as
successor to a defaulting 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 REMIC
I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, 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
IX.
Each separate trustee and co-trustee, upon its acceptance of the trust
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 to, the Trustee. Every
such instrument shall be filed with the Trustee.
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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 or co-trustee.
Section
9.11 Appointment
of Office or Agency.
The
Certificates may be surrendered for registration of transfer or exchange at
the
Securities Administrator’s office initially located at Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator
where
notices and demands to or upon the Securities Administrator in respect of the
Certificates and this Agreement may be served.
Section
9.12 Representations
and Warranties.
The
Trustee hereby represents and warrants to the Master Servicer, the Securities
Administrator, the Servicer and the Depositor as applicable, as of the Closing
Date, that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(ii) The
execution and delivery of this Agreement by it, and the performance and
compliance with the terms of this Agreement by it, will not violate its articles
of association or bylaws or 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 agreement or other instrument to which it is a party
or
which is applicable to it or any of its assets.
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery
and
performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This
Agreement, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid, legal and binding obligation of it,
enforceable against it in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, receivership, reorganization, moratorium
and
other laws affecting the enforcement of creditors’ rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) It
is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in its good faith and reasonable
judgment, is likely to affect materially and adversely either the ability of
it
to perform its obligations under this Agreement or its financial
condition.
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No
litigation is pending or, to the best of its knowledge, threatened against
it,
which would prohibit it from entering into this Agreement or, in its good faith
reasonable judgment, is likely to materially and adversely affect either the
ability of it to perform its obligations under this Agreement or its financial
condition.
Section
9.13 Tax
Matters.
It
is
intended that the Trust Fund shall constitute, and that the affairs of the
Trust
Fund shall be conducted so that each REMIC formed hereunder qualifies 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
Trust Fund. The Securities Administrator, as agent on behalf of the Trust Fund,
shall do or refrain from doing, as applicable, the following: (a) the Securities
Administrator shall prepare and file, or cause to be prepared and filed, in
a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each such 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 or cause to be
furnished to Certificateholders the schedules, statements or information at
such
times and in such manner as may be required thereby; (b) the Securities
Administrator shall apply for an employer identification number with the
Internal Revenue Service via a Form SS-4 or other comparable method for each
REMIC that is or becomes a taxable entity, and within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on
Forms
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 for the Trust Fund; (c) the Securities
Administrator shall make or cause to be made elections, on behalf of each REMIC
formed hereunder to be treated as a REMIC on the federal tax return of such
REMIC for its first taxable year (and, if necessary, under applicable state
law); (d) the Securities Administrator shall prepare and forward, or cause
to be
prepared and forwarded, 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 without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) the Securities Administrator
shall
provide information necessary for the computation of tax imposed on the transfer
of a Residual Certificate to a Person that is not a Permitted Transferee, or
an
agent (including a broker, nominee or other middleman) of a Person that is
not a
Permitted Transferee, or a pass-through entity in which a Person that is not
a
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) the Securities Administrator shall, to the extent under
its
control, conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC formed
hereunder as a REMIC under the REMIC Provisions; (g) the Securities
Administrator shall not knowingly or intentionally take any action or omit
to
take any action that would cause the termination of the REMIC status of any
REMIC formed hereunder; (h) the Securities Administrator shall pay, from the
sources specified in the last paragraph of this Section 9.12, the amount of
any federal, state and local taxes, including prohibited transaction taxes
as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund 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) the
Trustee shall sign or cause to be signed federal, state or local income tax
or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 9.13 requiring a signature thereon
by the Trustee; (j) the Securities Administrator shall maintain records relating
to each REMIC formed hereunder including but not limited to the income,
expenses, assets and liabilities of each such REMIC and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the
Code,
as may be necessary to prepare the foregoing returns, schedules, statements
or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) the Securities Administrator shall not enter
into any arrangement not otherwise provided for in this Agreement by which
the
REMICs will receive a fee or other compensation for services nor permit the
REMICs to receive any income from assets other than “qualified mortgages” as
defined in Section 860G(a)(3) of the Code or “permitted investments” as
defined in Section 860G(a)(5) of the Code; and (m) as and when necessary
and appropriate, the Securities Administrator shall represent the Trust Fund
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 any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such
REMIC.
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In
order
to enable the Securities Administrator to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Securities
Administrator within 10 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, without limitation, the price, yield, prepayment assumption and
projected cash flows of the Certificates and the Mortgage Loans. Thereafter,
the
Depositor shall provide to the Securities Administrator promptly upon written
request therefor, any such additional information or data that the Securities
Administrator may, from time to time, request in order to enable the Securities
Administrator to perform its duties as set forth herein. 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, or to cause to be provided, accurate information
or
data to the Securities Administrator on a timely basis.
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In
the
event that any tax is imposed on “prohibited transactions” of any of REMIC as
defined in Section 860F(a)(2) of the Code, on the “net income from
foreclosure property” of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to any of REMIC after the startup day pursuant
to
Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any federal, state or local tax or minimum tax imposed
upon
any REMIC, and is not paid as otherwise provided for herein, such tax shall
be
paid by (i) the Securities Administrator, if any such other tax arises out
of or
results from a breach by the Securities Administrator of any of its obligations
under this Section, (ii) any party hereto (other than the Securities
Administrator) to the extent any such other tax arises out of or results from
a
breach by such other party of any of its obligations under this Agreement or
(iii) in all other cases, or in the event that any liable party hereto fails
to
honor its obligations under the preceding clauses (i) or (ii), any such tax
will
be paid first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to
all
other Certificateholders in the following order of priority: first, to the
Class
B-2 Certificates; second, to the Class B-1 Certificates; third, to the Class
M-9
Certificates; fourth, to the Class M-8 Certificates; fifth, to the Class M-7
Certificates; sixth, to the Class M-6 Certificates; seventh, to the Class M-5
Certificates; eighth, to the Class M-4 Certificates; ninth, to the Class M-3
Certificates; tenth, to the Class M-2 Certificates; eleventh, to the Class
M-2
Certificates; and twelfth, to the Senior Certificates (pro rata based on the
amounts to be distributed). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Holder of any
Certificates, the Securities Administrator is hereby authorized to retain on
any
Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Securities Administrator
shall include in its monthly report to Certificateholders distributions to
such
parties taking into account the priorities described in the second preceding
sentence. The Securities Administrator agrees to promptly notify in writing
the
party liable for any such tax of the amount thereof and the due date for the
payment thereof. Notwithstanding the foregoing, however, in no event shall
the
Securities Administrator have any liability (1) for any action or omission
that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of this Agreement, (2) for any losses
other than arising out of a grossly negligent performance by the Securities
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
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ARTICLE
X
TERMINATION
Section
10.01 Termination
upon Liquidation or Repurchase of all Mortgage Loans.
Subject
to Section 10.03, the obligations and responsibilities of the Depositor,
the Sponsor, the Securities Administrator, the Master Servicer and the Trustee
created hereby with respect to the Trust Fund shall terminate (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05
and of the Securities Administrator to make payments in respect of the REMIC
I
Regular Interests or the Classes of Certificates as hereinafter set forth)
upon
the earlier of (a) the Master Servicer’s exercise of its optional right to
purchase the Mortgage Loans and related REO Properties (the “Cleanup Call”), (b)
Ocweon Loan Servicing, LLC’s exercise of its optional right to purchase the
Mortgage Loans and related REO Properties (the “Backup Cleanup Call”) and (c)
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,
as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of twenty-one (21) years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of
the United States to the Court of St. Xxxxx, living on the date hereof and
(ii)
the Latest Possible Maturity Date.
The
Cleanup Call or Backup Cleanup Call shall be exercisable at a price (the
“Termination Price”) equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan, (ii) accrued interest thereon at the applicable
Mortgage Rate to, but not including, the first day of the month of such
purchase, (iii) the appraised value of any related REO Property (up to the
Stated Principal Balance of the related Mortgage Loan), such appraisal to be
conducted by an appraiser mutually agreed upon by the Master Servicer and the
Trustee, (iv) unreimbursed out-of-pocket costs of the Securities Administrator,
the Master Servicer, the Servicer or the Trustee, including unreimbursed
servicing advances and the principal portion of any unreimbursed Advances,
made
on the related Mortgage Loans prior to the exercise of such repurchase right,
(v) any Swap Termination Payment payable to the Swap Provider which remains
unpaid or which is due to such Cleanup Call and (vi) any other amounts due
and
owing to the Trustee, the Securities Administrator, the Master Servicer and
the
Custodian payable pursuant to this Agreement or the Custodial
Agreement.
The
right
to exercise the Cleanup Call pursuant to the preceding paragraph shall be
exercisable if the Stated Principal Balance of all of the Mortgage Loans at
the
time of any such repurchase, is less than or equal to ten percent (10%) of
the
aggregate Cut-off Date Principal Balance of the Mortgage Loans.
The
right
to exercise the Backup Cleanup Call pursuant to the second paragraph hereof
shall be exercisable if the Master Servicer fails to exercise the Cleanup Call
and the Stated Principal Balance of all of the Mortgage Loans at the time of
any
such repurchase, is less than or equal to five percent (5%) of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans.
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Section
10.02 Final
Distribution on the Certificates.
If
on any
Determination Date, (i) the Securities Administrator determines based on the
reports delivered by the Master Servicer under this Agreement that there are
no
Outstanding Mortgage Loans, and no other funds or assets in the Trust Fund
other
than the funds in the Distribution Account, the Securities Administrator shall
notify the Trustee and send a final distribution notice promptly to each related
Certificateholder or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired after a final distribution on such Class,
the
Securities Administrator shall notify the Trustee and the Certificateholders
within five (5) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be
made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the related Certificates at the office of the
Securities Administrator set forth herein. If the Master Servicer or Ocwen
Loan
Servicing, LLC (each, a “Terminator”) elects to terminate the Trust Fund
pursuant to Section 10.01, at least twenty (20) days prior to the date
notice is to be mailed to the Certificateholders, the related Terminator shall
notify the Securities Administrator and the Trustee of the date the related
Terminator intends to terminate the Trust Fund. The related Terminator shall
remit the related Termination Price to the Securities Administrator on behalf
of
the Trust Fund on the Business Day prior to the Distribution Date for such
Optional Termination by the related Terminator.
Notice
of
the exercise of the Cleanup Call or Backup Cleanup Call, as applicable,
specifying the Distribution Date on which the Certificateholders may surrender
their Certificates for payment of the final distribution and cancellation,
shall
be given promptly by the Securities Administrator by letter to the
Certificateholders mailed no later than the fifteenth (15th) day of the month
of
such final distribution. Any such notice shall specify (a) the Distribution
Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of the 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
to
each Rating Agency at the time such notice is given to the
Certificateholders.
In
the
event such notice is given, the Master Servicer shall, or Ocwen Loan Servicing,
LLC shall, as applicable, remit to the Master Servicer to, deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date an amount equal to the final distribution in respect of the Certificates.
Upon certification to the Trustee by the Securities Administrator of the making
of such final deposit, the Trustee shall promptly release or cause to be
released to the applicable Terminator the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements
and
other instruments delivered to it and necessary to effectuate such
transfer.
Upon
presentation and surrender of the related Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account
in
the order and priority set forth in Section 5.04 hereof on the final
Distribution Date and in proportion to their respective Percentage
Interests.
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In
the
event that any affected Certificateholders shall not surrender Certificates
for
cancellation within six (6) months after the date specified in the above
mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining affected Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six (6) months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining affected Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within two (2) years after the second notice all affected Certificates shall
not
have been surrendered for cancellation, the related Residual Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund
that
remain subject hereto and the Securities Administrator shall release such funds
upon written direction.
Section
10.03 Additional
Termination Requirements.
In
the
event of (i) the exercise by the Master Servicer of the Cleanup Call pursuant
to
the terms of this Agreement, (ii) the exercise by Ocwen Loan Servicing, LLC
of
the Backup Cleanup Call pursuant to the terms of this Agreement, or (iii) the
final payment on or other liquidation of the last Mortgage Loan or REO Property
in REMIC I pursuant to Section 10.01, the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the applicable Terminator (in the case of the exercise of
the
Cleanup Call or the Backup Cleanup Call) or the Depositor, to the effect that
the failure of the Trust Fund to comply with the requirements of this
Section 10.03 will not (i) result in the imposition of taxes on “prohibited
transactions” of a REMIC, or (ii) cause any REMIC to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
| (1) |
The
applicable Terminator (in the case of the exercise of the Cleanup
Call or
the Backup Cleanup Call) or the Depositor (in all other cases)
shall
establish a ninety-day liquidation period and notify the Trustee
thereof,
and the Trustee shall in turn specify the first day of such period
in a
statement attached to the tax return for each REMIC pursuant to
Treasury
Regulation Section 1.860F-1. The Master Servicer, Ocwen Loan
Servicing, LLC or the Depositor, as applicable, shall satisfy all
the
requirements of a qualified liquidation under Section 860F of the
Code and any regulations thereunder, as evidenced by an Opinion
of Counsel
obtained at the expense of the Master Servicer, Ocwen Loan Servicing,
LLC
or the Depositor,, as
applicable;
|
| (2) |
During
such ninety-day liquidation period, and at or prior to the time
of making
the final payment on the Certificates, the applicable Terminator
(in the
case of the exercise of the Cleanup Call or the Backup Cleanup
Call) or
the Depositor (in all other cases) shall sell all of the assets
of REMIC I
for cash; and
|
| (3) |
At
the time of the making of the final payment on the Certificates,
the
Trustee shall distribute or credit, or cause to be distributed
or
credited, to the Holders of the related Residual Certificates all
cash on
hand in the Trust Fund (other than cash retained to meet claims),
and the
Trust Fund shall terminate at that
time.
|
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By
their
acceptance of the Certificates, the Holders thereof hereby authorize the Master
Servicer (in the case of the exercise of the Cleanup Call), Ocwen Loan
Servicing, LLC (in the case of the exercise of the Backup Cleanup Call) or
the
Depositor (in all other cases) to specify the ninety-day liquidation period
for
REMIC I, REMIC II and REMIC III, which authorization shall be binding upon
all
successor Certificateholders.
The
Trustee as agent for each REMIC hereby agrees to adopt and sign such a plan
of
complete liquidation upon the written request of the Master Servicer, Ocwen
Loan
Servicing, LLC or the Depositor, as applicable, and the receipt of the Opinion
of Counsel referred to in Section 10.03(1) and to take such other action in
connection therewith as may be reasonably requested by the Master Servicer,
Ocwen Loan Servicing, LLC or the Depositor, as applicable.
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ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Amendment.
This
Agreement may be amended from time to time by parties hereto, without the
consent of any of the Certificateholders to cure any ambiguity, to correct
or
supplement any provisions herein, to change the manner in which the Distribution
Account maintained by the Securities Administrator or the Custodial Account
maintained by the Servicer is maintained or to make such other provisions with
respect to matters or questions arising under this Agreement as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the
interests of any Certificateholder (or the Swap Provider unless the Swap
Provider shall have consented to the amendment); provided that any such
amendment shall be deemed not to adversely affect in any material respect the
interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading
or
withdrawal of the respective ratings then assigned to the Certificates; provided
further that any such amendment shall be deemed not to adversely affect in
any
material respect the interests of the Certificateholders and no such Opinion
of
Counsel nor any letter from the Rating Agencies stating that such amendment
would not result in the downgrading or withdrawal of the respective ratings
then
assigned to the Certificates shall be required if such amendment is to effect
a
transfer of servicing pursuant to Section 7.06(a) to a servicer satisfying
the
Minimum Servicing Requirements.
Notwithstanding
the foregoing, without the consent of the Certificateholders or the Swap
Provider, the parties hereto may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent
as
shall be necessary or appropriate to maintain the qualification of each REMIC
created hereunder as a REMIC under the Code or to avoid or minimize the risk
of
the imposition of any tax on any of REMIC pursuant to the Code that would be
a
claim against any of REMIC at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but
in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or appropriate to maintain such qualification
or
to avoid or minimize the risk of the imposition of such a tax.
This
Agreement may also be amended from time to time by the parties hereto and the
Holders of each Class of Certificates affected thereby evidencing over 50%
of
the Voting Rights of such Class or Classes 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 (or if such amendment modifies the rights of the Swap Provider
hereunder, with the consent of the Swap Provider); provided 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) cause any REMIC created hereunder to cease
to qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates
of each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of all Certificates of such Class then
outstanding.
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Notwithstanding
any contrary provision of this Agreement, the Trustee shall not consent to
any
amendment to this Agreement unless it shall have first received an Opinion
of
Counsel, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment will not (other than an amendment pursuant to clause (ii)
of, and in accordance with, the preceding paragraph) cause the imposition of
any
tax on any REMIC or the Certificateholders or cause any REMIC to cease to
qualify as a REMIC at any time that any Certificates are outstanding. Further,
nothing in this Agreement shall require the Trustee to enter into an amendment
without receiving an Opinion of Counsel, satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and (ii)
that all requirements for amending this Agreement (including any consent of
the
applicable Certificateholders) have been complied with. None of the parties
hereto shall consent to an amendment to this Agreement for which the consent
of
the Swap Provider is expressly required without the consent of the Swap
Provider, which consent shall not be unreasonably withheld.
Promptly
after the execution of any amendment to this Agreement requiring the consent
of
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and each Rating
Agency.
It
shall
not be necessary for the consent of Certificateholders under this
Section 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.
Section
11.02 Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all of 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. The Sponsor or the Depositor shall effect such recordation at the
Trust’s expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
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
11.03 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 WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN
THE
PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
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Section
11.04 Intention
of Parties.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage Notes,
Mortgages, assignments of Mortgages, title insurance policies and any
modifications, extensions and/or assumption agreements and private mortgage
insurance policies relating to the Mortgage Loans by the Sponsor to the
Depositor, and by the Depositor to the Trust Fund be, and be construed as,
an
absolute sale thereof to the Depositor or the Trust Fund, as applicable. It
is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Sponsor to the Depositor, or by the Depositor to the
Trust
Fund. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Sponsor or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in 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) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Sponsor or
the
Depositor, as applicable, for the benefit of the Certificateholders and the
Swap
Provider, of a security interest in all of the assets that constitute the Trust
Fund, 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 assets
of 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.
Section
11.05 Notices.
(a) The
Trustee shall use its best efforts to promptly provide notice to each Rating
Agency with respect to each of the following of which it has actual
knowledge:
(i) Any
material change or amendment to this Agreement;
(ii) The
occurrence of any Servicer Default or Master Servicer Default that has not
been
cured;
(iii) The
resignation or termination of the Servicer, the Master Servicer or the Trustee
and the appointment of any successor; and
(iv) The
final
payment to Certificateholders.
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In
addition, the Securities Administrator shall promptly furnish to each Rating
Agency copies of the following:
(i)
Each
annual statement as to compliance described in Section 4.14;
and
(ii)
Each
annual independent public accountants’ servicing report described in
Section 4.15.
All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered at or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
or by facsimile transmission to a number provided by the appropriate party
if
receipt of such transmission is confirmed to (i) in the case of the Depositor,
Nomura Home Equity Loan, Inc., 2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx,
Xxx Xxxx 00000 Attention: Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
Series 2006-HE1; (ii) in the case of the Sponsor, Nomura Credit & Capital,
Inc., 2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1 or such
other address as may be hereafter furnished to the other parties hereto by
the
Sponsor in writing; (iii) in the case of the Servicer, Ocwen Loan Servicing,
LLC, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000,
Attention: Secretary; (iv) in the case of the Trustee, at each Corporate Trust
Office or such other address as the Trustee may hereafter furnish to the other
parties hereto; (v) in the case of Xxxxx Fargo Bank, National Association,
as
Custodian, 00 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, (vi) in
the
case of the Securities Administrator, its Corporate Trust Office; (vii) in
the
case of the Master Servicer, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for
overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention Client Manager - NHEL 2006-HE1) and (viii) in the case of the Rating
Agencies, (a) Standard & Poor’s, 00 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group; (b) Xxxxx’x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Home Equity Monitoring; (c) Fitch Ratings, 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx
Xxxx 00000; and (d) Dominion Bond Rating Service, Inc., 55 Broadway, Residential
Mortgage Ratings, Xxx Xxxx, Xxx Xxxx 00000. Any notice delivered to the Sponsor
or the Trustee under this Agreement shall be effective only upon receipt. Any
notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register;
any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section
11.06 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.
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Section
11.07 Assignment.
Notwithstanding
anything to the contrary contained herein, except as provided pursuant to
Section 7.02, this Agreement may not be assigned by the Sponsor or the
Depositor.
Section
11.08 Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, 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 Fund,
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 a
Servicer Default and of the continuance thereof, as hereinbefore provided,
the
Holders of Certificates evidencing not less than twenty five percent (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 indemnity
satisfactory to it as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee or for sixty
(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 11.08,
each and every Certificateholder or the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section
11.09 Certificates
Nonassessable and Fully Paid.
It
is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully
paid.
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Section
11.10 Third
Party Beneficiaries.
The
Swap
Provider is an express third party beneficiary to this Agreement, and shall
have
to the right to enforce the provisions of this Agreement.
Section
11.11 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.13, 3.14,
3.18 and 5.13 of this Agreement is to facilitate compliance by the Sponsor
and
the Depositor with the provisions of Regulation AB promulgated by the SEC under
the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from
time to time and subject to clarification and interpretive advice as may be
issued by the staff of the SEC from time to time. Therefore, each of the parties
agrees that (a) the obligations of the parties hereunder shall be interpreted
in
such a manner as to accomplish that purpose, (b) the parties’ obligations
hereunder will be supplemented and modified as necessary to be consistent with
any such amendments, interpretive advice or guidance, convention or consensus
among active participants in the asset-backed securities markets, advice of
counsel, or otherwise in respect of the requirements of Regulation AB, (c)
the
parties shall comply with requests made by the Sponsor or the Depositor for
delivery of additional or different information as the Sponsor or the Depositor
may determine in good faith is necessary to comply with the provisions of
Regulation AB, and (d) no amendment of this Agreement shall be required to
effect any such changes in the parties’ obligations as are necessary to
accommodate evolving interpretations of the provisions of Regulation
AB.
Notwithstanding
the foregoing, the Servicer shall be under no obligation to provide any
information in addition to that required by Sections 3.13, 3.14, 3.18 and 5.13
of this Agreement as of the Closing Date that the Depositor deems required
under
Regulation AB if (i) the Servicer does not believe that such additional
information is required under Regulation AB and (ii) the Servicer is not
providing such additional information for its own securitizations, unless the
Depositor pays all reasonable costs incurred by the Servicer in connection
with
the preparation and delivery of such additional information and the Servicer
is
given reasonable time to establish the necessary systems and procedures to
produce such additional information.
Section
11.12 Early
Termination of Swap Agreement.
In
the
event that the Swap Agreement is canceled or otherwise terminated for any reason
(other than the exhaustion of the interest rate protection provided thereby),
the Sponsor shall, to the extent a replacement contract is available, direct
the
Trustee to execute a replacement contract comparable to the Swap Agreement,
providing interest rate protection which is equal to the then-existing
protection provided by the Swap Agreement, provided, however, that the cost
of
any such replacement contract providing the same interest rate protection
provided by such replacement contract may be reduced to a level such that the
cost of such replacement contract shall not exceed the amount of any early
termination payment.
-
194
-
IN
WITNESS WHEREOF, the Depositor, the Sponsor, the Servicer, the Master Servicer,
the Securities Administrator and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
|
NOMURA
HOME EQUITY LOAN, INC.,
|
|
|
as
Depositor
|
|
|
By:
/s/Xxxx
X. Xxxxxx
|
|
|
Name:
Xxxx X. Xxxxxx
|
|
|
Title:
Managing Director
|
|
|
NOMURA
CREDIT & CAPITAL, INC.,
|
|
|
as
Sponsor
|
|
|
By:
/s/
Xxxxx Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|
|
Title:
Vice President
|
|
|
XXXXX
FARGO
BANK, NATIONAL
ASSOCIATION,
|
|
|
as
Master Servicer and Securities Administrator
|
|
|
By:
/s/
Xxx Xxxxx
|
|
|
Name:
Xxx Xxxxx
|
|
|
Title:
Vice President
|
|
|
HSBC
BANK
USA, NATIONAL
ASSOCIATION,
|
|
|
as
Trustee
|
|
|
By:
/s/
Xxxxx Xxxxx
|
|
|
Name:
Xxxxx Xxxxx
|
|
|
Title:
Assistant Vice President
|
|
|
OCWEN
LOAN SERVICING, LLC,
|
|
|
as
Servicer
|
|
|
By:
/s/
Xxxxxxx Xxxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxxx
|
|
|
Title:
Authorized Representative
|
|
With
respect to Sections 3.33 and 3.34
|
|
|
PORTFOLIO
SURVEILLANCE ANALYTICS, LLC
|
|
|
By:
/s/
Xxxxx X. Xxxxx
|
|
|
Name:
Xxxxx X. Xxxxx
|
|
|
Title:
Managing Partner
|
|
STATE
OF NEW YORK
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
this
___ day of March 2006, before me, a notary public in and for said State,
appeared _____________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of Nomura Home Equity Loan, Inc.,
one of the corporations that executed the within instrument, and also known
to
me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
____________________________
|
||
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF NEW YORK
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
this
____ day of March 2006 before me, a notary public in and for said State,
appeared_______________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of Nomura Credit & Capital,
Inc., that executed the within instrument, and also known to me to be the person
who executed it on behalf of such corporation, and acknowledged to me that
such
corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
____________________________
|
||
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF CALIFORNIA
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF
|
)
|
On
this
____ day of March 2006, before me, a notary public in and for said State,
appeared _________________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of Ocwen Loan Servicing, LLC, one
of
the entities that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation and acknowledged to me
that
such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
____________________________
|
||
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF
|
)
|
On
this
____ day of March 2006, before me, a notary public in and for said State,
appeared _______________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of HSBC Bank USA, National
Association that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
____________________________
|
||
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF
|
)
|
On
this
____ day of March
2006,
before
me, a notary public in and for said State, appeared _______________, personally
known to me on the basis of satisfactory evidence to be an authorized
representative of Xxxxx Fargo Bank, National Association that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
____________________________
|
||
|
Notary
Public
|
[Notarial
Seal]
EXHIBIT
A-1
FORM
OF CLASS A-[1][2][3][4] CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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
(THE “CODE”).
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED
HEREIN.
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PRIOR
TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, ANY PERSON ACQUIRING
A
CERTIFICATE SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS IN SECTION 6.02(b)
OF THE POOLING AND SERVICING AGREEMENT.
A-1-1
|
Certificate
No. [__]
|
Pass-Through
Rate: Floating
|
|
Class
A-[1][2][3][4] Senior
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: February 1, 2006
|
Aggregate
Initial Certificate Principal Balance of the Class A-[1][2][3][4]
Certificates as of the Cut-off Date:
$
|
|
Trustee:
HSBC Bank USA, National Association
|
|
|
First
Distribution Date: March 25, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$
|
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[______________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
A-[1][2][3][4] Certificates with respect to a Trust Fund consisting primarily
of
a pool of conventional one- to four-family fixed rate and adjustable rate
mortgage loans sold by NOMURA HOME EQUITY LOAN, INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Cede & Co. is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional
first lien, adjustable rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the “Mortgage Loans”) sold by NHEL. The Mortgage Loans were sold
by Nomura Credit & Capital, Inc. (the “Sponsor”) to NHEL. The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the “Agreement”), among NHEL, as depositor (the
“Depositor”), the Sponsor, Ocwen
Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx
Fargo Bank, N.A., as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”) and HSBC Bank USA, National
Association, as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
A-1-2
Interest
on this Certificate will accrue during the period commencing on the immediately
preceding Distribution Date (as hereinafter defined) (or with respect to the
First Distribution Date, the Closing Date) and ending on the day immediately
preceding the related Distribution Date on the Certificate Principal Balance
hereof at a per annum Pass-Through Rate will equal the lesser of (i) the sum
of
One-Month LIBOR for that distribution date plus (A) on or prior to the first
possible optional termination date, [___]% or (B) after the first possible
optional termination date, [___]% and (ii) the Net Funds Cap. The Securities
Administrator will distribute on the 25th day of each month, or, if such 25th
day is not a Business Day, the immediately following Business Day (each, a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the Business Day immediately preceding such Distribution Date,
an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to
be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in
the
month following the latest scheduled maturity date of any Mortgage Loan and
is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The initial Certificate Principal Balance of this
Certificate is set forth above. The Certificate Principal Balance hereof will
be
reduced to the extent of distributions allocable to principal
hereon.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
A-1-3
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund 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 hereby, and the rights, duties and immunities
of the Securities Administrator. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans
and
other assets included in the Trust Fund, all as more specifically set forth
in
the Agreement.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
Prior
to the termination of the Supplemental Interest Trust, any transferee of this
Certificate shall be deemed to make the representations in Section 6.02(b)
of
the Agreement.
The
Certificates are issuable only as registered Certificates without coupons in
the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
A-1-4
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-1-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated: March
__,
2006
| XXXXX
FARGO BANK,
N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class A-[1][2][3][4] Certificates referred to in the within-mentioned
Agreement.
| XXXXX
FARGO BANK,
N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-1-6
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
X-0-0
XXXXXXX
X-0
FORM
OF CLASS M-[1][2][3][4][5][6][7][8][9] CERTIFICATE
THIS
CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
[[AND
]THE CLASS M-1 CERTIFICATES] [[,/AND] THE CLASS M-2 CERTIFICATES] [[AND/,]
THE
CLASS M-3 CERTIFICATES] [[AND/,] THE CLASS M-4 CERTIFICATES] [[,/AND] THE CLASS
M-5 CERTIFICATES] [[,/AND] THE CLASS M-6 CERTIFICATES] [[,/AND] THE CLASS M-7
CERTIFICATES] [AND] THE CLASS M-8 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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
(THE “CODE”).
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY PRINCIPAL
PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY, FOLLOWING
THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF
THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE
BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
ANY
TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE REPRESENTATIONS
SET
FORTH IN SECTION 6.02(b) OF THE AGREEMENT.
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
A-2-1
|
Certificate
No. [__]
|
Pass-Through
Rate: Floating
|
|
Class
M-[1][2][3][4][5][6][7][8][9] Subordinate
|
|
|
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
February
1, 2006
|
Aggregate
Initial Certificate Principal Balance of the Class
M-[1][2][3][4][5][6][7][8][9] Certificates as of the Cut-off
Date:
$
|
|
Trustee:
HSBC Bank USA, National Association
|
|
|
First
Distribution Date:
March
25, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$
|
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[__________________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
M-[1][2][3][4][5][6][7][8][9] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family fixed rate
and adjustable rate mortgage loans sold by NOMURA HOME EQUITY LOAN,
INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Cede & Co. is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional first lien, adjustable rate mortgage loans secured
by
one- to four- family residences, units in planned unit developments and
individual condominium units (collectively, the “Mortgage Loans”) sold by NHEL.
The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the
“Sponsor”) to NHEL. The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among NHEL, as depositor (the “Depositor”), the Sponsor, Ocwen
Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx Fargo Bank, N.A. as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”) and HSBC Bank USA, National Association, as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
A-2-2
Interest
on this Certificate will accrue during the period commencing on the immediately
preceding Distribution Date (as hereinafter defined) (or with respect to the
First Distribution Date, the Closing Date) and ending on the day immediately
preceding the related Distribution Date on the Certificate Principal Balance
hereof at a per annum Pass-Through Rate will equal the lesser of (i) the sum
of
One-Month LIBOR for that distribution date plus (A) on or prior to the first
possible optional termination date, [___]% or (B) after the first possible
optional termination date, [___]% and (ii) the Net Funds Cap. The Securities
Administrator will distribute on the 25th day of each month, or, if such 25th
day is not a Business Day, the immediately following Business Day (each, a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the Business Day immediately preceding such Distribution Date,
an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to
be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in
the
month following the latest scheduled maturity date of any Mortgage Loan and
is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The initial Certificate Principal Balance of this
Certificate is set forth above. The Certificate Principal Balance hereof will
be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
A-2-3
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund 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 hereby, and the rights, duties and immunities
of the Securities Administrator. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans
and
other assets included in the Trust Fund, all as more specifically set forth
in
the Agreement.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
Any
transferee of this Certificate shall be deemed to make the representations
set
forth in Section 6.02(b) of the Agreement.
The
Certificates are issuable only as registered Certificates without coupons in
the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
A-2-4
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-2-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated: March
__,
2006
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class M-[1][2][3][4][5][6][7][8][9] Certificates referred to in
the
within-mentioned Agreement.
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-2-6
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
X-0-0
XXXXXXX
X-0
FORM
OF CLASS B-[1][2] CERTIFICATE
THIS
CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES,
THE
MEZZANINE CERTIFICATES [AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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
(THE “CODE”).
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE
144A
UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A
“QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT
TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF
AVAILABLE) OR (3) TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING
THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR
ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE
AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE
TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION.
A-3-1
ANY
TRANSFEREE OF THIS CERTIFICATE SHALL MAKE OR BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 6.02(b) OF THE
AGREEMENT.
A-3-2
|
Certificate
No. [__]
|
Pass-Through
Rate: Floating
|
|
Class
B-[1][2] Subordinate
|
|
|
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
February
1, 2006
|
Aggregate
Initial Certificate Principal Balance of the Class B-[1][2] Certificates
as of the Cut-off Date:
$
|
|
Trustee:
HSBC Bank USA, National Association
|
|
|
First
Distribution Date:
March
25, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$
|
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[__________________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
B-[1][2] Certificates with respect to a Trust Fund consisting primarily of
a
pool of conventional one- to four-family fixed rate and adjustable rate mortgage
loans sold by NOMURA HOME EQUITY LOAN, INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Cede & Co. is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional first lien, adjustable rate mortgage loans secured
by
one- to four- family residences, units in planned unit developments and
individual condominium units (collectively, the “Mortgage Loans”) sold by NHEL.
The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the
“Sponsor”) to NHEL. The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among NHEL, as depositor (the “Depositor”), the Sponsor, Ocwen
Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx Fargo Bank, N.A. as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”) and HSBC Bank USA, National Association, as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
A-3-3
Interest
on this Certificate will accrue during the period commencing on the immediately
preceding Distribution Date (as hereinafter defined) (or with respect to the
First Distribution Date, the Closing Date) and ending on the day immediately
preceding the related Distribution Date on the Certificate Principal Balance
hereof at a per annum Pass-Through Rate will equal the lesser of (i) the sum
of
One-Month LIBOR for that distribution date plus (A) on or prior to the first
possible optional termination date, [___]% or (B) after the first possible
optional termination date, [___]% and (ii) the Net Funds Cap. The Securities
Administrator will distribute on the 25th day of each month, or, if such 25th
day is not a Business Day, the immediately following Business Day (each, a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if
any)
required to be distributed to the Holders of Certificates of the same Class
as
this Certificate. The Assumed Final Distribution Date is the Distribution Date
in the month following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Certificate Principal Balance
of
this Class of Certificates will be reduced to zero.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The initial Certificate Principal Balance of this
Certificate is set forth above. The Certificate Principal Balance hereof will
be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund 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.
A-3-4
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 hereby, and the rights, duties and immunities
of the Securities Administrator. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans
and
other assets included in the Trust Fund, all as more specifically set forth
in
the Agreement.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit E and either F or G, as applicable,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor or
the
Securities Administrator in their respective capacities as such), together
with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder’s prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Securities
Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law
or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Depositor and the Sponsor 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.
A-3-5
Any
Transferee of this Certificate shall make or be deemed to make the
representations set forth in Section 6.02(b) of the Agreement.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-3-6
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
March __, 2006
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class B-[1][2] Certificates referred to in the within-mentioned
Agreement.
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-3-7
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) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
X-0-0
XXXXXXX
X-0
FORM
OF CLASS X CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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
(THE “CODE”).
THIS
CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND SUBORDINATE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE
144A
UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A
“QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT
TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF
AVAILABLE) OR (3) TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING
THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR
ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE SECURITIES ADMINISTRATOR THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.
NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE
AGREEMENT.
A-4-1
|
Certificate
No. [__]
|
Percentage
Interest: [___]%
|
|
Class
X
|
Variable
Pass-Through Rate
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
February
1, 2006
|
Initial
Certificate Notional Balance of this Certificate as of the Cut-off
Date:
$
|
|
Trustee:
HSBC Bank USA, National Association
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
First
Distribution Date:
March
25, 2006
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[_____________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
X
Certificates with respect to a Trust Fund consisting primarily of a pool of
conventional one- to four-family fixed rate and adjustable rate mortgage loans
sold by NOMURA HOME EQUITY LOAN, INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Nomura Securities International, Inc. is the registered owner
of
the Percentage Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust
Fund”), generally consisting of conventional first lien, adjustable rate
mortgage loans secured by one- to four- family residences, units in planned
unit
developments and individual condominium units (collectively, the “Mortgage
Loans”) sold by NHEL. The Mortgage Loans were sold by Nomura Credit &
Capital, Inc. (the “Sponsor”) to NHEL. The Trust Fund was created pursuant to
the Pooling and Servicing Agreement dated as of the Cut-off Date specified
above
(the “Agreement”), among NHEL, as depositor (the “Depositor”), the Sponsor,
Ocwen Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx Fargo Bank, N.A.,
as master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”) and HSBC Bank USA, National Association, as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
A-4-2
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the Certificate Notional
Balance hereof at a per annum rate equal to the Class X Pass-Through Rate as
set
forth in the Agreement. The Securities Administrator will distribute on the
25th
day of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a “Distribution Date”), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day
is
not a Business Day, the Business Day immediately preceding such last day) of
the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced
by
this Certificate and the amount required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit E and either F or G, as applicable,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Securities Administrator or the Trustee in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. Neither the Depositor
nor the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law
or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Depositor and the Sponsor 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.
A-4-3
No
transfer of this Certificate shall be made to any person unless the transferee
provides a certification pursuant to Section 6.02(b) of the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that the Securities
Administrator is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in
the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced hereby, and the rights, duties and immunities
of the Securities Administrator.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons in
the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
A-4-4
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-4-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
March __, 2006
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class X Certificates referred to in the within-mentioned
Agreement.
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-4-6
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
______________________________________
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
X-0-0
XXXXXXX
X-0
FORM
OF CLASS P CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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
(THE “CODE”).
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE
144A
UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A
“QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT
TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF
AVAILABLE) OR (3) TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING
THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR
ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR
OF
SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION.
NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE
AGREEMENT.
A-5-1
|
Certificate
No. [__]
|
Percentage
Interest: 100%
|
|
Class
P
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
February
1, 2006
|
Aggregate
Initial Certificate Principal Balance of the Class P Certificates
as of
the Cut-off Date: $100
|
|
Trustee:
HSBC Bank USA, National Association
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
First
Distribution Date:
March
25, 2006
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[________________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
P
Certificates with respect to a Trust Fund consisting primarily of a pool of
conventional one- to four-family fixed rate and adjustable rate mortgage loans
sold by NOMURA HOME EQUITY LOAN, INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Nomura Securities International, Inc. is the registered owner
of
the Percentage Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust
Fund”), generally consisting of conventional first lien, adjustable rate
mortgage loans secured by one- to four- family residences, units in planned
unit
developments and individual condominium units (collectively, the “Mortgage
Loans”) sold by NHEL. The Mortgage Loans were sold by Nomura Credit &
Capital, Inc. (the “Sponsor”) to NHEL. The Trust Fund was created pursuant to
the Pooling and Servicing Agreement dated as of the Cut-off Date specified
above
(the “Agreement”), among NHEL, as depositor (the “Depositor”), the Sponsor,
Ocwen Loan Servicing, LLC (the “Servicer”), as servicer, Xxxxx Fargo Bank, N.A.,
as master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”) and HSBC Bank USA, National Association, as trustee
(the “Trustee”), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is
bound.
A-5-2
The
Securities Administrator will distribute on the 25th day of each month, or,
if
such 25th day is not a Business Day, the immediately following Business Day
(each, a “Distribution Date”), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered
at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar
month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to the Holders of Certificates of
the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date
of
any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit E and either F or G, as applicable,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, THE
Securities Administrator or the Trustee in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. Neither the Depositor,
the Securities Administrator nor the Trustee is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or
any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor and the Sponsor 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.
A-5-3
No
transfer of this Certificate shall be made to any person unless the transferee
provides a certification pursuant to Section 6.02(b) of the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that the Securities
Administrator is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in
the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced hereby, and the rights, duties and immunities
of the Securities Administrator.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons in
the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
A-5-4
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-5-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
March __, 2006
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class P Certificates referred to in the within-mentioned
Agreement.
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-5-6
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
__________________________________ (Please print or typewrite name and address
including postal zip code of assignee) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
X-0-0
XXXXXXX
X-0
FORM
OF CLASS R CERTIFICATE
THIS
CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A
DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL 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
(THE “CODE”).
NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE
AGREEMENT.
A-6-1
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF
THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE TRUSTEE THAT (1)
SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION
IF
ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY
OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN
CERTAIN FARMERS’ COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED
BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL
ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C) OF THE
CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING
HEREIN REFERRED TO AS A “DISQUALIFIED ORGANIZATION”), OR (F) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR
ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER
OF
THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
A-6-2
|
Certificate
No. [__]
|
|
|
Class
R
|
Percentage
Interest: [__]
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: February 1, 2006
|
|
|
Trustee:
HSBC Bank USA, National Association
|
Master
Servicer and Securities Administrator: Xxxxx Fargo Bank,
N.A.
|
|
First
Distribution Date:
March
25, 2006
|
|
|
Assumed
Final Distribution Date:
February
25, 2036
|
CUSIP:
[_______________]
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-HE1
evidencing
a fractional undivided interest in the distributions allocable to the Class
R Certificates
with respect to a Trust Fund consisting primarily of a pool of conventional
one-
to four-family fixed rate and adjustable rate mortgage loans sold by NOMURA
HOME
EQUITY LOAN, INC.
This
Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Nomura Home Equity Loan, Inc.
(“NHEL”), the Securities Administrator or the Trustee or any of their affiliates
or any other person. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed or insured by any governmental entity or by NHEL, the Securities
Administrator or the Trustee or any of their affiliates or any other person.
None of NHEL, the Trustee, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This
certifies that Nomura Securities International, Inc. is the registered owner
of
the Percentage Interest evidenced hereby in the beneficial ownership interest
of
Certificates of the same Class as this Certificate in a trust (the “Trust
Fund”), generally consisting
of conventional
first lien, adjustable rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the “Mortgage Loans”) sold by NHEL. The Mortgage Loans were sold
by Nomura Credit & Capital, Inc. (the “Sponsor”) to NHEL. The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the “Agreement”), among NHEL, as depositor (the
“Depositor”), the Sponsor, Ocwen Loan Servicing, LLC (the “Servicer”), as
servicer, Xxxxx Fargo Bank, N.A., as master servicer (the “Master Servicer”) and
securities administrator (the “Securities Administrator”) and HSBC Bank USA,
National Association, as trustee (the “Trustee”), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, capitalized terms used herein shall have the meaning ascribed to them
in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
A-6-3
Each
Holder of this Certificate will be deemed to have agreed to be bound by the
restrictions set forth in the Agreement to the effect that (i) each person
holding or acquiring any Ownership Interest in this Certificate must be a United
States Person and a Permitted Transferee, (ii) the transfer of any Ownership
Interest in this Certificate will be conditioned upon the delivery to the
Trustee of, among other things, an affidavit to the effect that it is a United
States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right,
in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
The
Securities Administrator will distribute on the 25th day of each month, or,
if
such 25th day is not a Business Day, the immediately following Business Day
(each, a “Distribution Date”), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered
at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar
month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of
the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date
of
any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator by check mailed
to the address of the Person entitled thereto as such name and address shall
appear on the Certificate Register or, if such Person so requests by notifying
the Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice.
No
transfer of this Certificate shall be made to any person unless the transferee
provides a certification pursuant to Section 6.02(b) of the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
set
forth on the face hereof (the “Certificates”). The Certificates, in the
aggregate, evidence the entire beneficial ownership interest in the Trust Fund
formed pursuant to the Agreement.
A-6-4
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund 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 hereby, and the rights, duties and immunities
of the Securities Administrator. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans
and
other assets included in the Trust Fund, all as more specifically set forth
in
the Agreement.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor
and
the rights of the Certificateholders under the Agreement from time to time
by
the parties thereto with the consent of the Holders of the Class or Classes
of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated
transferee.
The
Certificates are issuable only as registered Certificates without coupons in
the
Classes and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this Certificate
is exchangeable for one or more new Certificates evidencing the same Class
and
in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made to the Certificateholders for any such registration
of transfer, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee, the Securities
Administrator and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of
Depositor, the Master Servicer, the Trustee, the Securities Administrator or
any
such agent shall be affected by notice to the contrary.
The
obligations created by the Agreement and the Trust Fund created thereby (other
than the obligations to make payments to Certificateholders with respect to
the
termination of the Agreement) shall terminate upon the earlier of (i) the later
of (A) the maturity or other liquidation (or Advance with respect thereto)
of
the last Mortgage Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or
(ii) the optional repurchase by either party named in the Agreement of all
the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made (i) by the Master
Servicer only if on such Distribution Date the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date and (ii)
by
Ocwen Loan Servicing, LLC only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.
A-6-5
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any
purpose.
A-6-6
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
March __, 2006
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class R Certificates referred to in the within-mentioned
Agreement.
|
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
A-6-7
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) a Percentage Interest evidenced by the
within Asset-Backed Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I
(We)
further direct the Certificate Registrar 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
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
A-6-8
EXHIBIT
B
MORTGAGE
LOAN SCHEDULE
The
Preliminary and Final Mortgage Loan Schedules shall set forth the following
information with respect to each Mortgage Loan:
|
a)
|
the
Mortgage Loan identifying number;
|
|
b)
|
a
code indicating to which Loan Group a Mortgage Loan has been assigned,
if
applicable;
|
|
c)
|
a
code indicating whether the Mortgaged Property is
owner-occupied;
|
|
d)
|
the
type of Residential Dwelling constituting the Mortgaged
Property;
|
|
e)
|
the
original months to maturity;
|
|
f)
|
the
original date of the Mortgage Loan and the remaining months to maturity
from the Cut-off Date, based on the original amortization
schedule;
|
|
g)
|
the
Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable,
at
origination;
|
|
h)
|
the
Mortgage Rate in effect immediately following the Cut-off
Date;
|
|
i)
|
the
date on which the first Monthly Payment was due on the Mortgage
Loan;
|
|
j)
|
the
stated maturity date;
|
|
k)
|
the
amount of the Monthly Payment at
origination;
|
|
l)
|
the
amount of the Monthly Payment as of the Cut-off
Date;
|
|
m)
|
the
last Due Date on which a Monthly Payment was actually applied to
the
unpaid Stated Principal Balance;
|
|
n)
|
the
original principal amount of the Mortgage
Loan;
|
|
o)
|
the
Stated Principal Balance of the Mortgage Loan as of the close of
business
on the Cut-off Date;
|
|
p)
|
with
respect to each adjustable rate Mortgage Loan, the first Adjustment
Date;
|
|
q)
|
with
respect to each adjustable rate Mortgage Loan, the Gross
Margin;
|
|
r)
|
a
code indicating the purpose of the loan (i.e., purchase financing,
rate/term refinancing, cash-out
refinancing);
|
B-1
|
s)
|
with
respect to each adjustable rate Mortgage Loan, the Maximum Mortgage
Rate
under the terms of the Mortgage
Note;
|
|
t)
|
with
respect to each adjustable rate Mortgage Loan, the Minimum Mortgage
Rate
under the terms of the Mortgage
Note;
|
|
u)
|
the
Mortgage Rate at origination;
|
|
v)
|
with
respect to each adjustable rate Mortgage Loan, the Periodic Rate
Cap;
|
|
w)
|
with
respect to each adjustable rate Mortgage Loan, the first Adjustment
Date
immediately following the Cut-off
Date;
|
|
x)
|
with
respect to each adjustable rate Mortgage Loan, the
Index;
|
|
y)
|
the
date on which the first Monthly Payment was due on the Mortgage Loan
and,
if such date is not consistent with the Due Date currently in effect,
such
Due Date;
|
|
z)
|
a
code indicating whether the Mortgage Loan is an Adjustable Rate Mortgage
Loan or a fixed rate Mortgage Loan;
|
|
aa)
|
a
code indicating the documentation style (i.e., full, stated or
limited);
|
|
bb)
|
a
code indicating if the Mortgage Loan is subject to a primary insurance
policy or lender paid mortgage insurance policy and the name of the
insurer;
|
|
cc)
|
the
Appraised Value of the Mortgaged
Property;
|
|
dd)
|
the
sale price of the Mortgaged Property, if
applicable;
|
|
ee)
|
a
code indicating whether the Mortgage Loan is subject to a Prepayment
Charge, the term of such Prepayment Charge and the amount of such
Prepayment Charge;
|
|
ff)
|
the
product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
|
|
gg)
|
the
Mortgagor’s debt to income ratio at
origination;
|
|
hh)
|
the
FICO score at origination;
|
|
ii)
|
the
applicable Servicer; and
|
|
jj)
|
the
initial seller who sold such Mortgage Loan to the
Sponsor.
|
B-2
EXHIBIT
C
FORM
OF
MORTGAGE
LOAN PURCHASE AGREEMENT
This
is a
Mortgage Loan Purchase Agreement (this “Agreement”), dated March 9, 2006,
between Nomura Credit & Capital, Inc., a Delaware corporation (the “Seller”)
and Nomura Home Equity Loan, Inc., a Delaware corporation (the
“Purchaser”).
Preliminary
Statement
The
Seller intends to sell the Mortgage Loans (as hereinafter identified) and the
Interest Rate Swap Agreement to the Purchaser on the terms and subject to the
conditions set forth in this Agreement. The Purchaser intends to deposit the
Mortgage Loans into a mortgage pool comprising the Trust Fund. The Trust Fund
will be evidenced by a single series of asset-backed certificates designated
as
Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1,
Asset-Backed Certificates (the “Certificates”). The Certificates will consist of
eighteen (18) classes of certificates. The Certificates will be issued pursuant
to a Pooling and Servicing Agreement for Series 2006-HE1, dated as of February
1, 2006 (the “Pooling and Servicing Agreement”), among the Purchaser as
depositor, Xxxxx Fargo Bank, N.A. as master servicer and securities
administrator (“Xxxxx Fargo”), Ocwen Loan Servicing, LLC as servicer (the
“Servicer”), the Seller as seller and HSBC Bank USA, National Association as
trustee (the “Trustee”). The Purchaser will sell the Class A-1, Class A-2, Class
X-0, Xxxxx X-0, 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 B-1 and Class B-2 Certificates
to
Nomura Securities International, Inc. (the “Underwriter”), pursuant to the
Underwriting Agreement, dated as of January 1, 2006, between the Purchaser
and
the Underwriter, and the Terms Agreement, dated March 8, 2006 (collectively,
the
“Underwriting Agreement”), between the Purchaser and the Underwriter.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Pooling and Servicing Agreement. Pursuant to the custodial agreement,
dated as of February 1, 2006 (the “Custodial Agreement”), among the Trustee, the
Servicer and Xxxxx Fargo Bank, N.A. as the custodian (the “Custodian”), the
Trustee desires to have the Custodian take possession of the Mortgages and
Mortgage Notes, along with certain other documents specified in the Custodial
Agreement, as the custodian of the Trustee, in accordance with the terms and
conditions thereof.
The
parties hereto agree as follows:
SECTION
1. Agreement
to Purchase.
The
Seller hereby sells, and the Purchaser hereby purchases, on March 9, 2006 (the
“Closing Date”), certain conventional, one-to four family, fixed-rate and
adjustable-rate mortgage loans secured by first and second liens on residential
real properties (the “Mortgage Loans”), having an aggregate principal balance as
of the close of business on January 1, 2006 (the “Cut-off Date”) of
approximately $980,223,809.37 (the “Closing Balance”), after giving effect to
all payments due on the Mortgage Loans on or before the Cut-off Date, whether
or
not received, including the right to any Prepayment Charges payable by the
related Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans.
C-1
SECTION
2. Mortgage
Loan Schedule.
The
Purchaser and the Seller have agreed upon which of the mortgage loans owned
by
the Seller are to be purchased by the Purchaser pursuant to this Agreement
and
the Seller will prepare or cause to be prepared on or prior to the Closing
Date
a final schedule (the “Closing Schedule”) that describes such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement,
including the Prepayment Charges. The Closing Schedule will conform to the
requirements set forth in this Agreement and to the definition of “Mortgage Loan
Schedule” under the Pooling and Servicing Agreement.
SECTION
3. Consideration.
(a) In
consideration for the Mortgage Loans to be purchased hereunder, the Purchaser
shall, as described in Section 10, (i) pay to or upon the order of the Seller
in
immediately available funds an amount (the “Purchase Price”) equal to (i)
$____________*
and (ii)
a 100% interest in the Class B-1, Class B-2, Class X, Class P and Class R
certificates (collectively the “Private Certificates”) which shall be registered
in the name of the Underwriter.
(b) The
Purchaser or any assignee, transferee or designee of the Purchaser shall be
entitled to all scheduled payments of principal due after the Cut-off Date,
all
other payments of principal due and collected after the Cut-off Date, and all
payments of interest on the Mortgage Loans allocable to the period after the
Cut-off Date. All scheduled payments of principal and interest due on or before
the Cut-off Date and collected after the Cut-off Date shall belong to the
Seller.
(c) Pursuant
to the Pooling and Servicing Agreement, the Purchaser will assign all of its
right, title and interest in and to the Mortgage Loans, together with its rights
under this Agreement, to the Trustee for the benefit of the
Certificateholders.
SECTION
4. Transfer
of the Mortgage Loans.
(a) Possession
of Mortgage Files.
The
Seller does hereby sell to the Purchaser, without recourse but subject to the
terms of this Agreement, all of its right, title and interest in, to and under
the Mortgage Loans, including the related Prepayment Charges. The contents
of
each Mortgage File not delivered to the Purchaser or to any assignee, transferee
or designee of the Purchaser on or prior to the Closing Date are and shall
be
held in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser. Upon the sale of the Mortgage Loans,
the ownership of each Mortgage Note, the related Mortgage and the other contents
of the related Mortgage File is vested in the Purchaser and the ownership of
all
records and documents with respect to the related Mortgage Loan prepared by
or
that come into the possession of the Seller on or after the Closing Date shall
immediately vest in the Purchaser and shall be delivered immediately to the
Purchaser or as otherwise directed by the Purchaser.
*
Please
contact Nomura Credit & Capital, Inc. for pricing
information.
C-2
(b) Delivery
of Mortgage Loan Documents.
Pursuant
to various conveyance documents to be executed on the Closing Date and pursuant
to the Pooling and Servicing Agreement, the Purchaser will assign on the Closing
Date all of its right, title and interest in and to the Mortgage Loans to the
Trustee for the benefit of the Certificateholders. In connection with the
transfer and assignment of the Mortgage Loans, the Seller has delivered or
will
deliver or cause to be delivered to the Trustee by the Closing Date or such
later date as is agreed to by the Purchaser and the Seller (each of the Closing
Date and such later date is referred to as a “Mortgage
File Delivery Date”),
the
items of each Mortgage File as defined in section 2.01 of the Pooling and
Servicing Agreement, provided,
however,
that in
lieu of the foregoing, the Seller may deliver the following documents, under
the
circumstances set forth below: (x) in lieu of the original Mortgage, assignments
to the Trustee or intervening assignments thereof which have been delivered,
are
being delivered or will upon receipt of recording information relating to the
Mortgage required to be included thereon, be delivered to recording offices
for
recording and have not been returned in time to permit their delivery as
specified above, the Seller may deliver a true copy thereof with a certification
by the Seller on the face of such copy, substantially as follows: “Certified to
be a true and correct copy of the original, which has been transmitted for
recording;” (y) in lieu of the Mortgage, assignments to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents or if the originals are lost (in each case, as
evidenced by a certification from the Seller to such effect), the Seller may
deliver photocopies of such documents containing an original certification
by
the judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (z) in lieu of the Mortgage Notes relating to
the
Mortgage Loans, each identified in the list delivered by the Purchaser to the
Trustee on the Closing Date and attached hereto as Exhibit
2
the
Seller may deliver lost note affidavits and indemnities of the Seller; and
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee
a
certification by the Seller to such effect. The Seller shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) or such certified copies to the Trustee
promptly after they are received. The Seller shall cause the Mortgage and
intervening assignments, if any, and the assignment of the Mortgage to be
recorded not later than 180 days after the Closing Date, or, in lieu of such
assignments, shall provide an Opinion of Counsel pursuant to Section 6 hereof
to
the effect that the recordation of such assignment is not necessary to protect
the Trustee’s interest in the related Mortgage Loan. Upon the request of the
Purchaser, the Seller will assist the Purchaser in effecting the assignment
referred to above.
(c) In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Seller further agrees that it will cause, at the Seller’s own
expense, within thirty (30) days after the Closing Date, the MERS® System to
indicate that such Mortgage Loans have been assigned by the Seller to the
Purchaser and by the Purchaser to the Trustee in accordance with this Agreement
for the benefit of the Certificateholders by including (or deleting, in the
case
of Mortgage Loans which are repurchased in accordance with this Agreement)
in
such computer files (a) the code in the field which identifies the specific
Trustee and (b) the code in the field “Pool Field” which identifies the series
of the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Servicer to alter
the
codes referenced in this paragraph with respect to any Mortgage Loan during
the
term of the Pooling and Servicing Agreement unless and until such Mortgage
Loan
is repurchased in accordance with the terms of the Pooling and Servicing
Agreement.
C-3
(d) Acceptance
of Mortgage Loans.
The
documents delivered pursuant to Section 4(b) hereof shall be reviewed by the
Purchaser or any assignee, transferee or designee of the Purchaser at any time
before or after the Closing Date (and with respect to each document permitted
to
be delivered after the Closing Date, within seven (7) days of its delivery)
to
ascertain that all required documents have been executed and received and that
such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.
(e) Transfer
of Interest in Agreements.
The
Purchaser has the right to assign its interest under this Agreement, in whole
or
in part, to the Trustee, as may be required to effect the purposes of the
Pooling and Servicing Agreement, without the consent of the Seller, and the
assignee shall succeed to the rights and obligations hereunder of the Purchaser.
Any expense reasonably incurred by or on behalf of the Purchaser or the Trustee
in connection with enforcing any obligations of the Seller under this Agreement
will be promptly reimbursed by the Seller.
SECTION
5. Examination
of Mortgage Files.
(a) On
or
before the Mortgage File Delivery Date, the Seller will have made the Mortgage
Files available to the Purchaser or its agent for examination which may be
at
the offices of the Trustee or the Seller and/or the Seller’s custodians. The
fact that the Purchaser or its agent has conducted or has failed to conduct
any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser’s rights to demand cure, repurchase, substitution or other relief as
provided in this Agreement. In furtherance of the foregoing, the Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Seller’s compliance with the
delivery and recordation requirements of this Agreement and the Pooling and
Servicing Agreement. In addition, upon request of the Purchaser, the Seller
agrees to provide to the Purchaser, the Underwriter and to any investors or
prospective investors in the Certificates information regarding the Mortgage
Loans and their servicing, to make the Mortgage Files available to the
Purchaser, the Underwriter and to such investors or prospective investors (which
may be at the offices of the Seller and/or the Seller’s custodians) and to make
available personnel knowledgeable about the Mortgage Loans for discussions
with
the Purchaser, the Underwriter and such investors or prospective investors,
upon
reasonable request during regular business hours, sufficient to permit the
Purchaser, the Underwriter and such investors or potential investors to conduct
such due diligence as any such party reasonably believes is
appropriate.
(b) Pursuant
to the Pooling and Servicing Agreement, on the Closing Date the Custodian on
behalf of the Trustee, for the benefit of the Certificateholders, will review
items of the Mortgage Files as set forth on Exhibit
1
and will
deliver to the Seller a certification in the form attached as Exhibit 1 to
the
Custodial Agreement.
C-4
(c) Pursuant
to the Pooling and Servicing Agreement, the Trustee or the Custodian, on behalf
of the Trustee, will review the Mortgage Files within 180 days of the Closing
Date and will deliver to the Seller a final certification substantially in
the
form of Exhibit C-2 to the Custodial Agreement. If the Custodian is unable
to
deliver a final certification with respect to the items listed in Exhibit
2
due to
any document that is missing, has not been executed or is unrelated, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in the Final Mortgage Loan Schedule (a
“Material
Defect”),
pursuant to Section 6 of the Custodial Agreement, the Custodian will notify
the
Trustee of such Material Defect and the Trustee shall notify the Seller of
such
Material Defect. The Seller shall correct or cure any such Material Defect
within ninety (90) days from the date of notice from the Trustee of the Material
Defect and if the Seller does not correct or cure such Material Defect within
such period and such defect materially and adversely affects the interests
of
the Certificateholders in the related Mortgage Loan, the Seller will, in
accordance with the terms of the Pooling and Servicing Agreement, within ninety
(90) days of the date of notice, provide the Trustee with a Substitute Mortgage
Loan (if within two (2) years of the Closing Date) or purchase the related
Mortgage Loan at the applicable Purchase Price; provided, however, that if
such
defect relates solely to the inability of the Seller to deliver the original
security instrument or intervening assignments thereof, or a certified copy
because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan if the Seller delivers such original documents
or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate of the
Seller or a Servicing Officer confirming that such documents have been accepted
for recording, and delivery to the Trustee shall be effected by the Seller
within thirty (30) days of its receipt of the original recorded
document.
(d) At
the
time of any substitution, the Seller shall deliver or cause to be delivered
the
Replacement Mortgage Loan, the related Mortgage File and any other documents
and
payments required to be delivered in connection with a substitution pursuant
to
the Pooling and Servicing Agreement. At the time of any purchase or
substitution, the Trustee shall (i) assign to the Seller and cause the
Custodian, on behalf of the Trustee, to release the documents (including, but
not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage
File) in the possession of the Custodian, on behalf of the Trustee, relating
to
the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to
vest in the Seller title to such Deleted Mortgage Loan.
SECTION
6. Recordation
of Assignments of Mortgage.
(a) The
Seller will, promptly after the Closing Date, cause each Mortgage and each
assignment of Mortgage from the Seller to the Trustee, and all unrecorded
intervening assignments, if any, delivered on or prior to the Closing Date,
to
be recorded in all recording offices in the jurisdictions where the related
Mortgaged Properties are located; provided,
however,
the
Seller need not cause to be recorded any assignment for which (a) the related
Mortgaged Property is located in (a) any jurisdiction under the laws of which,
as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee
and
the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee’s interest in the related Mortgage Loan or (b) MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as mortgagee of record solely as nominee for Seller and its successors and
assigns; provided,
however,
notwithstanding the delivery of any Opinion of Counsel, each assignment of
Mortgage shall be submitted for recording by the Seller in the manner described
above, at no expense to the Trust Fund or Trustee, upon the earliest to occur
of
(i) reasonable direction by the Holders of Certificates evidencing Percentage
Interests aggregating not less than twenty-five percent (25%) of the Trust,
(ii)
the occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 8.02 of the Pooling and Servicing
Agreement or (v) with respect to any assignment of Mortgage, the occurrence
of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage.
C-5
(b) While
each such Mortgage or assignment is being recorded, if necessary, the Seller
shall leave or cause to be left with the Custodian, on behalf of the Trustee,
a
certified copy of such Mortgage or assignment. In the event that, within 180
days of the Closing Date, the Trustee has not been provided with an Opinion
of
Counsel as described above or received evidence of recording with respect to
each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof
or as
set forth above and the related Mortgage Loan is not a MOM Loan, the failure
to
provide evidence of recording or such Opinion of Counsel shall be considered
a
Material Defect, and the provisions of Section 5(c) and (d) shall apply. All
customary recording fees and reasonable expenses relating to the recordation
of
the assignments of mortgage to the Trustee or the Opinion of Counsel, as the
case may be, shall be borne by the Seller.
SECTION
7. Representations,
Warranties and Covenants of the Seller.
The
Seller hereby represents and warrants to the Purchaser, as of the date hereof
and as of the Closing Date, and covenants, that:
(i) The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is qualified and in good standing
to
do business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Seller’s business as presently conducted or on
the Seller’s ability to enter into this Agreement and to consummate the
transactions contemplated hereby.
(ii) The
Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a legal, valid and binding obligation of the Seller, enforceable against it
in
accordance with its terms except as the enforceability thereof may be limited
by
bankruptcy, insolvency or reorganization or by general principles of
equity.
(iii) The
execution, delivery and performance of this Agreement by the Seller (x) does
not
conflict and will not conflict with, does not breach and will not result in
a
breach of and does not constitute and will not constitute a default (or an
event, which with notice or lapse of time or both, would constitute a default)
under (A) any terms or provisions of the organizational documents of the Seller,
(B) any term or provision of any material agreement, contract, instrument or
indenture, to which the Seller is a party or by which the Seller or any of
its
property is bound, or (C) any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Seller or any of its property and (y) does not create or impose and
will not result 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.
C-6
(iv) No
consent, approval, authorization or order of, registration or filing with,
or
notice on behalf of the Seller to any governmental authority or court is
required, under federal laws or the laws of the State of New York, for the
execution, delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation by the Seller of any other
transaction contemplated hereby and by the Pooling and Servicing Agreement;
provided, however, that the Seller makes no representation or warranty regarding
federal or state securities laws in connection with the sale or distribution
of
the Certificates.
(v) This
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby taken
in
the aggregate do not contain any untrue statement of material fact or omit
to
state a material fact necessary to make the statements contained therein not
misleading.
(vi) The
Seller is not in violation of, and the execution and delivery of this Agreement
by the Seller and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any order or decree
of any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction over the Seller or its assets, which
violation might have consequences that would materially and adversely affect
the
condition (financial or otherwise) or the operation of the Seller or its assets
or might have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder.
(vii) The
Seller does not believe, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in this
Agreement.
(viii) Immediately
prior to the sale of the Mortgage Loans to the Purchaser as herein contemplated,
the Seller was the owner of the related Mortgage and the indebtedness evidenced
by the related Mortgage Note, and, upon the payment to the Seller of the
Purchase Price, in the event that the Seller retains or has retained record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust
for
the Purchaser as the owner thereof from and after the date
hereof.
C-7
(ix) There
are
no actions or proceedings against, or investigations known to it of, the Seller
before any court, administrative or other tribunal (A) that might prohibit
its
entering into this Agreement, (B) seeking to prevent the sale of the Mortgage
Loans by the Seller or the consummation of the transactions contemplated by
this
Agreement or (C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or validity or
enforceability of, this Agreement.
(x) The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any relevant jurisdiction, except any as may have been
complied with.
(xi) The
Seller has not dealt with any broker, investment banker, agent or other person,
except for the Purchaser or any of its affiliates, that may be entitled to
any
commission or compensation in connection with the sale of the Mortgage Loans
(except that an entity that previously financed the Seller’s ownership of the
Mortgage Loans may be entitled to a fee to release its security interest in
the
Mortgage Loans, which fee shall have been paid and which security interest
shall
have been released on or prior to the Closing Date).
(xii) There
is
no litigation currently pending or, to the best of the Seller’s knowledge
without independent investigation, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates or the execution, delivery, performance or
enforceability of this Agreement, or that would result in a material adverse
change in the financial condition of the Seller.
(xiii) The
information set forth in the applicable part of the Mortgage Loan Schedule
relating to the existence of a Prepayment Charge is complete, true and correct
in all material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge was originated in compliance with all
applicable federal, state and local laws and is permissible and enforceable
in
accordance with its terms (except to the extent that the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors’ rights generally or the collectability
thereof may be limited due to acceleration in connection with a foreclosure)
under the applicable state law.
(xiv) The Seller
is a HUD approved mortgagee pursuant to Section 203 of the National Housing
Act.
SECTION
8. Representations
and Warranties of the Seller Relating to the Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that as to each Mortgage
Loan as of the Closing Date:
(i) Information
provided to the Rating Agencies, including the loan level detail, is true and
correct according to the Rating Agency requirements;
C-8
(ii) No
fraud
has taken place on the part of the Mortgagor or any other party involved in
the
origination or servicing of the Mortgage Loan;
(iii) No
Monthly Payment required to be made under any Mortgage Loan has been, or will
be, contractually delinquent by one month or more on, or at any time preceding,
the date such Mortgage Loan was purchased by the Seller;
(iv) Neither
the Seller nor the related originator of the Mortgage Loan has advanced any
Monthly Payment required under the terms of the Mortgage Note;
(v) There
are
no delinquent taxes, assessment liens or insurance premiums affecting the
related Mortgaged Property;
(vi) The
terms
of the Mortgage Note and the Mortgage have not been materially impaired, waived,
altered or modified in any respect, except by written instruments, recorded
in
the applicable public recording office if necessary to maintain the lien
priority of the Mortgage. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required
by
the related policy. 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 Trustee;
(vii) The
Mortgaged Property is insured against loss by fire and hazards of extended
coverage (excluding earthquake insurance) in an amount which is at least equal
to the lesser of (i) the amount necessary to compensate for any damage or loss
to the improvements which are a part of such property on a replacement cost
basis or (ii) the outstanding principal balance of the Mortgage Loan. 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. All such insurance policies
contain a standard mortgagee clause naming the originator of the Mortgage Loan,
its successors and assigns as mortgagee and the Seller has not engaged in any
act or omission which would impair the coverage of any such insurance policies.
Except as may be limited by applicable law, 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;
(viii) Each
Mortgage Loan and the related Prepayment Charge, if any, complied in all
material respects with any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, anti-predatory
lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity, fair housing or disclosure laws applicable to the
origination and servicing of the Mortgage Loans and the consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;
C-9
(ix) The
Mortgage has not been satisfied, cancelled, subordinated (other than with
respect to second lien Mortgage Loans, the subordination to the first lien)
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;
(x)
The
Mortgage was recorded or was submitted for recording in accordance with all
applicable laws and is a valid, existing and enforceable perfected first or
second lien on the Mortgaged Property including all improvements on the
Mortgaged Property, subject only to (a) the lien of the current real property
taxes and (b) covenants, conditions and restrictions, rights of way and
easements;
(xi) The
Mortgage Note and the related Mortgage are genuine and each is the legal, valid
and binding obligation of the maker thereof, insured under the related title
policy, and enforceable in accordance with its terms, except to the extent
that
the enforceability thereof may be limited by a bankruptcy, insolvency or
reorganization;
(xii) The
Seller is the sole legal, beneficial and equitable owner of the Mortgage Note
and the Mortgage and has the full right to convey, transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien
(other than with respect to second lien Mortgage Loans, the subordination to
the
first lien), pledge, charge, claim or security interest and immediately upon
the
sale, assignment and endorsement of the Mortgage Loans from the Seller to the
Purchaser, the Purchaser shall have good and indefeasible title to and be the
sole legal owner of the Mortgage Loans subject only to any encumbrance, equity,
lien, pledge, charge, claim or security interest arising out of the Purchaser’s
actions;
(xiii) Each
Mortgage Loan is covered by a valid and binding American Land Title Association
lender's title insurance policy issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located, which
title insurance policy is generally acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
No
claims have been filed under such lender's title insurance policy, and the
Seller has not done, by act or omission, anything that would impair the coverage
of the lender's title insurance policy;
(xiv) There
is
no material default, breach, violation event or event of acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the passage
of
time or with notice and the expiration of any grace or cure period, would
constitute a material default, breach, violation or event of acceleration,
and
the Seller has not, nor has its predecessors, waived any material default,
breach, violation or event of acceleration;
(xv) There
are
no mechanics' or similar liens or claims which have been filed for work, labor
or material provided to the related Mortgaged Property prior to the origination
of the Mortgage Loan which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage, except as may be disclosed in the
related title policy;
(xvi) Each
Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest (subject to adjustment in the case of
the
adjustable rate Mortgage Loans), with interest calculated on a 30/360 basis
and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated
maturity date over an original term from commencement of amortization to not
more than thirty (30) years. No Mortgage Loan is a balloon loan. No Mortgage
Loan permits negative amortization;
C-10
(xvii) The
servicing practices used in connection with the servicing of the Mortgage Loans
have been in all respects reasonable and customary in the mortgage servicing
industry of like mortgage loan servicers, servicing mortgage loans similar
to
the Mortgage Loans in the same jurisdiction as the Mortgaged
Property;
(xviii) At
the
time of origination of the Mortgage Loan there was no proceeding pending for
the
total or partial condemnation of the Mortgaged Property and, as of the date
such
Mortgage Loan was purchased by the Purchaser, to the best of the Purchaser’s
knowledge there is no proceeding pending for the total or partial condemnation
of the Mortgaged Property;
(xix) 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
foreclosure;
(xx) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the related Mortgage referred to in subsection (x) above;
(xxi) 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 Seller to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(xxii) The
Mortgage Loan is not subject to any valid right of rescission, set-off,
counterclaim or defense, including without limitation the defense of usury,
nor
will the operation of any of the terms of the Mortgage Note or the Mortgage,
or
the exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any such right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(xxiii) The
Mortgaged Property is free of material damage and in good repair, excepting
therefrom any Mortgage Loan subject to an escrow withhold as shown on the
Mortgage Loan Schedule;
(xxiv) All
of
the improvements which were included in determining the appraised value of
the
Mortgaged Property lie wholly within the Mortgaged Property's boundary lines
and
no improvements on adjoining properties encroach upon the Mortgaged Property,
excepting therefrom: (i) any encroachment insured against in the lender's title
insurance policy identified in clause (xiii) above, (ii) any encroachment
generally acceptable to mortgage loan originators doing business in the same
jurisdiction as the Mortgaged Property, and (iii) any encroachment which does
not materially interfere with the benefits of the security intended to be
provided by such Mortgage;
C-11
(xxv) All
parties to the Mortgage Note had the legal capacity to execute the Mortgage
Note
and the Mortgage, and the Mortgage Note and the Mortgage have been duly executed
by such parties;
(xxvi) To
the
best of the Seller’s knowledge, at the time of origination of the Mortgage Loan,
no appraised improvement located on or being part of the Mortgaged Property
was
in violation of any applicable zoning law or regulation and all inspections,
licenses and certificates required in connection with the origination of any
Mortgage Loan with respect to the occupancy of the Mortgaged Property, have
been
made or obtained from the appropriate authorities;
(xxvii) No
Mortgagor has notified the Seller of any relief requested or allowed under
the
Servicemember’s Civil Relief Act;
(xxviii)
All
parties which have held an interest in the Mortgage Loan are (or during the
period in which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the state wherein the
Mortgaged Property is located, (2) organized under the laws of such state,
(3)
qualified to do business in such state, (4) a federal savings and loan
association or national bank, (5) not doing business in such state, or (6)
exempt from the applicable licensing requirements of such state;
(xxix) The
Mortgage File contains an appraisal of the related Mortgaged Property which
was
made prior to the approval of the Mortgage Loan by a qualified appraiser, duly
appointed by the related originator and was made in accordance with the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
Uniform Standards of Professional Appraisal Practice;
(xxx) Except
as
may otherwise be limited by applicable law, the Mortgage contains an enforceable
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;
(xxxi) The
Mortgage Loan does not contain any provision which would constitute a “buydown”
provision and pursuant to which Monthly Payments are paid or partially paid
with
funds deposited in a separate account established by the related originator,
the
Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other
than
the Mortgagor. 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;
(xxxii) To
the
best of the Seller's knowledge there is no action or proceeding directly
involving the Mortgaged Property presently pending in which compliance with
any
environmental law, rule or regulation is at issue and the Seller has received
no
notice of any condition at the Mortgaged Property which is reasonably likely
to
give rise to an action or proceeding in which compliance with any environmental
law, rule or regulation is at issue;
C-12
(xxxiii)
Each Mortgage Loan is an obligation which is principally secured by an interest
in real property within the meaning of Treasury Regulation section
1.860G-2(a);
(xxxiv)
Each Mortgage Loan is directly secured by a first or second lien on, and
consists of a single parcel of, real property with a detached one-to-four family
residence erected thereon, a townhouse or an individual condominium unit in
a
condominium project, or an individual unit in a planned unit development
(“PUD”). No residence or dwelling is a leasehold, mobile home or a manufactured
dwelling unless it is an Acceptable Manufactured Dwelling. An “Acceptable
Manufactured Dwelling” is a manufactured dwelling, which is permanently affixed
to a foundation and treated as “real estate” under applicable law. No Mortgaged
Property is used for commercial purposes. Mortgaged Properties which contain
a
home office shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial purposes
and
is not storing any chemicals or raw materials other than those commonly used
for
homeowner repair, maintenance and/or household purposes;
(xxxv) The
Mortgage Interest Rate payable by the Mortgagor with respect to the Adjustable
Rate Mortgage Loans is subject to adjustment at the time and in the amounts
as
are set forth in the related Mortgage Note;
(xxxvi)
The first scheduled Monthly Payment under the terms of each Mortgage Note was
received by the servicer servicing such Mortgage Loan by the 30th day following
the related due date;
(xxxvii)
No
Mortgagor was required to purchase any single premium credit insurance policy
(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
insurance policy (e.g., 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 or debt cancellation agreements as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xxxviii)
With respect to any Mortgage Loan that contains a provision permitting
imposition of a Prepayment Charge upon a prepayment prior to maturity: (i)
prior
to the loan's origination, the Mortgagor agreed to such Prepayment Charge in
exchange for a monetary benefit, including but not limited to a rate or fee
reduction, (ii) prior to the loan's origination, the Mortgagor was offered
the
option of obtaining a mortgage loan that did not require payment of such a
Prepayment Charge, (iii) the Prepayment Charge is disclosed to the Mortgagor
in
the loan documents pursuant to applicable state and federal law, (iv) for loans
originated on or after October 1, 2002, the duration of the Prepayment Period
shall not exceed three (3) years from the date of the note, unless the loan
was
modified to reduce the Prepayment Period to no more than three years from the
date of the note and the Mortgagor was notified in writing of such reduction
in
Prepayment Period, and (v) notwithstanding any state or federal law to the
contrary, no Servicer shall impose such Prepayment Premium in any instance
when
the mortgage debt is accelerated or paid off in connection with the workout
of a
delinquent mortgage or due to the Mortgagor’s default in making the loan
payments;
C-13
(xxxix)
To the best of the Seller’s knowledge, the servicer for each Mortgage Loan has
accurately and fully reported its borrower credit files to each of the credit
repositories in a timely manner;
(xl) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994
or any comparable law and no Mortgage Loan is classified and/or defined as
a
“high cost”, “covered” (excluding home loans defined as “covered home loans” in
the New Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), “high risk home” or “predatory” loan under
any other federal, state or local law or regulation or ordinance (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees);
(xli) No
Mortgage Loan was selected from the mortgage loans in the Seller’s portfolio in
a manner so as to affect adversely the interests of the Purchaser;
(xlii) Each
Mortgage File contains a full appraisal on form 1004 or 2055 with an interior
inspection (or the equivalent form for two-to four-family and investor
properties), or on a similar alternate form which includes substantially similar
information to that required such forms, as applicable;
(xliii) Each
Mortgage Loan is and will be a mortgage loan arising out of the originator’s
practice in accordance with the originator’s underwriting guidelines;
(xliv) As
of the
Closing Date, the Seller has no knowledge of any fact that should lead it to
expect that the Mortgage Loan will not be paid in full when due;
(xlv) No
loan
is a high cost loan or a covered loan, as applicable (as such terms are defined
in the then current Standard & Poor’s LEVELS Version 5.6 Glossary Revised,
Appendix E;
(xlvi) No
Mortgage Loan originated on or after August 1, 2004 requires the borrower to
submit to arbitration to resolve any dispute arising out of or relating in
any
way to the mortgage loan transaction;
(xlvii) No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan's originator 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's originator or any affiliate of the Mortgage Loan's originator.
If, at the time of loan application, the borrower may have qualified for a
lower
cost credit product then offered by any mortgage lending affiliate of the
Mortgage Loan's originator, the Mortgage Loan's originator referred the
Mortgagor’s application to such affiliate for underwriting
consideration;
C-14
(xlviii) The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the borrower's income,
assets and liabilities 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;
(xlix) All
points and fees related to each Mortgage Loan were disclosed in writing to
the
borrower 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 five percent (5)% of the principal amount of such loan, such five
percent (5)% limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae Selling
Guide;
(l) 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 has been disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation;
(li) The
Servicer will transmit full-file credit reporting data for each Mortgage Loan
pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that for each Mortgage
Loan,
the Servicer 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;
(lii) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the Georgia Fair Lending
Act, as amended and no
Mortgage Loan originated (or modified) on or after October 1, 2002 through
and
including March 6, 2003 and secured by owner occupied real property or an owner
occupied manufactured home located in the state of Georgia is governed by the
Georgia Fair Lending Act;
(liii) The
prepayment penalties included in the transaction are enforceable and were
originated in compliance with all applicable federal, state and local
laws;
(liv) The
information set forth in the Prepayment Penalty Schedule is complete, true
and
correct in all material respects at the date or dates on which such information
is furnished respecting with such information is furnished, and each prepayment
penalty is permissible and enforceable in accordance with its terms upon the
mortgagor's full and voluntary principal prepayment under applicable law, except
to the extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights; (2) the collectability thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary prepayment;
or (3) subsequent changes in applicable law may limit or prohibit enforceability
thereof under applicable law;
C-15
(lv) Each
mortgage loan and prepayment penalty associated with the mortgage loan at
origination complied in all material respects with applicable local, state
and
federal laws, including, without limitation, usury, equal credit opportunity,
real estate settlement procedures, truth-in-lending and disclosure laws, and
the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws;
(lvi) No
Mortgage Loan contains a provision whereby the Mortgagor can convert an
Adjustable Rate Mortgage Loan into a Fixed Rate Mortgage Loan;
(lvii) With
respect to any Mortgage Loan that is secured by a second lien on the related
Mortgaged Property, either (i) no consent for the Mortgage Loan is required
by
the holder of any related senior lien or (ii) such consent has been obtained
and
is contained in the Mortgage File; and
(lviii) With
respect to a Mortgage Loan which is a second lien, as of the date hereof, the
Seller has not received a notice of default of a senior lien on the related
Mortgaged Property which has not been cured.
SECTION
9. Repurchase
Obligation for Defective Documentation and for Breach of Representation and
Warranty.
(a) The
representations and warranties contained in Section 8 shall not be impaired
by
any review and examination of loan files or other documents evidencing or
relating to the Mortgage Loans or any failure on the part of the Seller or
the
Purchaser to review or examine such documents and shall inure to the benefit
of
any assignee, transferee or designee of the Purchaser, including the Trustee
for
the benefit of the Certificateholders. With respect to the representations
and
warranties contained herein as to which the Seller has no knowledge, if it
is
discovered that the substance of any such representation and warranty was
inaccurate as of the date such representation and warranty was made or deemed
to
be made, and such inaccuracy materially and adversely affects the value of
the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser’s assignee, transferee or designee, then notwithstanding the lack of
knowledge by the Seller with respect to the substance of such representation
and
warranty being inaccurate at the time the representation and warranty was made,
the Seller shall take such action described in the following paragraph in
respect of such Mortgage Loan. Notwithstanding anything to the contrary
contained herein, any breach of a representation or warranty contained in
clauses (xxxiii), (xxxvii), (xxxviii), (xl), (xlv) and/or (lii) of Section
8
above, shall be automatically deemed to affect materially and adversely the
interests of the Purchaser or the Purchaser’s assignee, transferee or designee.
Upon
discovery by the Seller, the Purchaser or any assignee, transferee or designee
of the Purchaser of any materially defective document in, or that any material
document was not transferred by the Seller (as listed on an exception report
attached to the initial certification prepared by the Custodian, on behalf
of
the Trustee), or of a breach of any of the representations and warranties
contained in Section 8 that materially and adversely affects the value of any
Mortgage Loan or the interest therein of the Purchaser or the Purchaser’s
assignee, transferee or designee, the party discovering such breach shall give
prompt written notice to the Seller. Within 365 days of its discovery or its
receipt of notice of any such missing documentation that was not transferred
by
the Seller as described above, or of materially defective documentation, or
within 120 days of any such breach of a representation and warranty, the Seller
promptly shall deliver such missing document or cure such defect or breach
in
all material respects or, in the event the Seller cannot deliver such missing
document or cannot cure such defect or breach, the Seller shall, within 365
days
of its discovery or receipt of notice of any such missing or materially
defective documentation or within 120 days of any such breach of a
representation and warranty, either (i) repurchase the affected Mortgage Loan
at
the Purchase Price (as such term is defined in the Pooling and Servicing
Agreement) or (ii) pursuant to the provisions of the Pooling and Servicing
Agreement, cause the removal of such Mortgage Loan from the Trust Fund and
substitute one or more Replacement Mortgage Loans. The Seller shall amend the
Closing Schedule to reflect the withdrawal of such Mortgage Loan from the terms
of this Agreement and the Pooling and Servicing Agreement. The Seller shall
deliver to the Purchaser such amended Closing Schedule and shall deliver such
other documents as are required by this Agreement or the Pooling and Servicing
Agreement within five (5) days of any such amendment. Any repurchase pursuant
to
this Section 9(a) shall be accomplished by transfer to an account designated
by
the Purchaser of the amount of the Purchase Price in accordance with Section
2.03 of the Pooling and Servicing Agreement. Any repurchase required by this
Section shall be made in a manner consistent with Section 2.03 of the Pooling
and Servicing Agreement.
C-16
(b) If
the
representation made by the Seller in Section 7(xiii) is breached, the Seller
shall not have the right or obligation to cure, substitute or repurchase the
affected Mortgage Loan but shall remit to the Servicer for deposit in the
Collection Account, prior to the next succeeding Servicer Remittance Date,
the
amount of the Prepayment Charge indicated on the applicable part of the Mortgage
Loan Schedule to be due from the Mortgagor in the circumstances less any amount
collected and remitted to the Servicer for deposit into the Collection
Account.
(c) It
is
understood and agreed that the obligations of the Seller set forth in this
Section 9 to cure or repurchase a defective Mortgage Loan (and to make payments
pursuant to Section 9(b)) constitute the sole remedies of the Purchaser against
the Seller respecting a missing document or a breach of the representations
and
warranties contained in Section 8.
SECTION
10. Closing;
Payment for the Mortgage Loans. The
closing of the purchase and sale of the Mortgage Loans shall be held at the
New
York City office of Xxxxxxx Xxxxxxxx & Wood llp
at 10:00
a.m. New York City time on the Closing Date.
The
closing shall be subject to each of the following conditions:
(a) All
of
the representations and warranties of the Seller under this Agreement shall
be
true and correct in all material respects as of the date as of which they are
made and no event shall have occurred which, with notice or the passage of
time,
would constitute a default under this Agreement;
C-17
(b) The
Purchaser shall have received, or the attorneys of the Purchaser shall have
received in escrow (to be released from escrow at the time of closing), all
Closing Documents as specified in Section 11 of this Agreement, in such forms
as
are agreed upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the respective
terms thereof;
(c) The
Seller shall have delivered or caused to be delivered and released to the
Purchaser or to its designee, all documents (including without limitation,
the
Mortgage Loans) required to be so delivered by the Purchaser pursuant to Section
2.01 of the Pooling and Servicing Agreement; and
(d) All
other
terms and conditions of this Agreement and the Pooling and Servicing Agreement
shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall deliver or cause to be
delivered to the Seller on the Closing Date, against delivery and release by
the
Seller to the Trustee of all documents required pursuant to the Pooling and
Servicing Agreement, the consideration for the Mortgage Loans as specified
in
Section 3 of this Agreement.
SECTION
11. Closing
Documents.
Without
limiting the generality of Section 8 hereof, the closing shall be subject to
delivery of each of the following documents:
(a) An
Officers’ Certificate of the Seller, dated the Closing Date, upon which the
Purchaser and the Underwriter may rely with respect to certain facts regarding
the sale of the Mortgage Loans by the Seller to the Purchaser;
(b) An
Opinion of Counsel of the Seller, dated the Closing Date and addressed to the
Purchaser and the Underwriter;
(c) Such
opinions of counsel as the Rating Agencies or the Trustee may request in
connection with the sale of the Mortgage Loans by the Seller to the Purchaser
or
the Seller’s execution and delivery of, or performance under, this Agreement;
and
(d) Such
further information, certificates, opinions and documents as the Purchaser
or
the Underwriter may reasonably request.
SECTION
12. Costs.
The
Seller shall pay (or shall reimburse the Purchaser or any other Person to the
extent that the Purchaser or such other Person shall pay) all costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, fees for title policy endorsements and
continuations, the fees and expenses of the Seller’s accountants and attorneys,
the costs and expenses incurred in connection with producing the Servicer’s loan
loss, foreclosure and delinquency experience, and the costs and expenses
incurred in connection with obtaining the documents referred to in Sections
11(b) and 11(c), the costs and expenses of printing (or otherwise reproducing)
and delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus and prospectus supplement, and any private
placement memorandum relating to the Certificates and other related documents,
the initial fees, costs and expenses of the Trustee and its counsel, the fees
and expenses of the Purchaser’s counsel in connection with the preparation of
all documents relating to the securitization of the Mortgage Loans, the filing
fee charged by the Securities and Exchange Commission for registration of the
Certificates and the fees charged by any rating agency to rate the Certificates.
The Seller shall pay all costs and expenses related to recording the Assignments
of Mortgage. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such
expense.
C-18
SECTION
13. Mandatory
Delivery; Grant of Security Interest.
The
sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award
of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller’s failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller’s interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller
of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser’s (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by
this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 3 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights
or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or
successively.
Notwithstanding
the foregoing, if on the Closing Date, each of the conditions set forth in
Section 10 hereof shall have been satisfied and the Purchaser shall not have
paid or caused to be paid the Purchase Price, or any such condition shall not
have been waived or satisfied and the Purchaser determines not to pay or cause
to be paid the Purchase Price, the Purchaser shall immediately effect the
redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred,
and
the security interest created by this Section 13 shall be deemed to have been
released.
SECTION
14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by fax and, receipt of which
is
confirmed by telephone, if to the Purchaser, addressed to the Purchaser at
Two
World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, fax: (000) 000-0000, Attention: Legal Department
(NHEL
2006-HE1), or such other address as may hereafter be furnished to the Seller
in
writing by the Purchaser; and if to the Seller, addressed to the Seller at
Two
World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, fax: (000) 000-0000, Attention: Xxxxx Xxxxxx, or
to
such other address as the Seller may designate in writing to the
Purchaser.
C-19
SECTION
15. Severability
of Provisions.
Any
part, provision, representation or warranty of this Agreement that is prohibited
or that is held to be void or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION
16. Agreement
of Parties.
The
Seller and the Purchaser each agree to execute and deliver such instruments
and
take such actions as either of the others may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement and the Pooling and Servicing Agreement.
SECTION
17. Survival.
The
Seller agrees that the representations, warranties and agreements made by it
herein and in any certificate or other instrument delivered pursuant hereto
shall be deemed to be relied upon by the Purchaser, notwithstanding any
investigation heretofore or hereafter made by the Purchaser or on its behalf,
and that the representations, warranties and agreements made by the Seller
herein or in any such certificate or other instrument shall survive the delivery
of and payment for the Mortgage Loans and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Notes and notwithstanding subsequent termination of this Agreement, the Pooling
and Servicing Agreement or the Trust Fund.
SECTION
18. GOVERNING
LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
(EXCLUDING THE CHOICE OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW
YORK.
THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW
YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION
19. Miscellaneous.
This
Agreement may be executed in two or more counterparts, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Neither this Agreement
nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement
of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
C-20
It
is the
express intent of the parties hereto that the conveyance of the Mortgage Loans
by the Seller to the Purchaser as provided in Section 4 hereof be, and be
construed as, a sale of the Mortgage Loans by the Seller to the Purchaser and
not as a pledge of the Mortgage Loans by the Seller to the Purchaser to secure
a
debt or other obligation of the Seller. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans
are
held to be property of the Seller, then (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller
and
(b) (1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2)
the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by
the
Seller to the Purchaser of a security interest in all of the Seller’s right,
title and interest in and to the Mortgage Loans and all amounts payable to
the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account whether in the form of cash, instruments, securities
or other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to
be
“possession by the secured party” for purposes of perfecting the security
interest pursuant to Section 9-305 of the New York Uniform Commercial Code;
and
(4) notifications to persons holding such property and acknowledgments, receipts
or confirmations from persons holding such property shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to Section 4(d) hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser 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 Mortgage Loans,
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 this Agreement and the Pooling and Servicing Agreement.
[Signature
page to follow]
C-21
IN
WITNESS WHEREOF, the Purchaser and the Seller have caused their names to be
signed by their respective officers thereunto duly authorized as of the date
first above written.
| NOMURA CREDIT & CAPITAL, INC. | ||
| |
|
|
| By: | ||
|
Name:
Xxxxx Xxxxxxx
Title:
Vice President
|
||
| NOMURA HOME EQUITY LOAN, INC. | ||
| |
|
|
| By: | ||
|
Name:
Xxxx X. Xxxxxx
Title:
Managing Director
|
||
C-22
EXHIBIT
1
CONTENTS
OF 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 or
its
designee, and which shall be delivered to the Purchaser or its designee pursuant
to the terms of the Agreement.
(a) the
original Mortgage Note (including all riders thereto) bearing all intervening
endorsements necessary to show a complete chain of endorsements from the
original payee, endorsed in blank, via
original signature,
and, if
previously endorsed, signed in the name of the last endorsee by a duly qualified
officer of the last endorsee. If
the
Mortgage Loan was acquired by the last endorsee in a merger, the endorsement
must be by “[name of last endorsee], successor by merger to [name of
predecessor]”. If the Mortgage Loan was acquired or originated by the last
endorsee while doing business under another name, the endorsement must be by
“[name of last endorsee], formerly known as [previous name]”;
(b) the
original Assignment of Mortgage executed in blank;
(c) the
original of any guarantee executed in connection with the Mortgage Note, if
any;
(d) the
original Mortgage (including all riders thereto) with evidence of recording
thereon and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording thereon,
and in the case of each MOM Loan, the original Mortgage, noting the presence
of
the MIN of the Mortgage Loan and either language indicating that the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination,
the original Mortgage and the assignment thereof to MERS®, with evidence of
recording indicated thereon; or, if the original Mortgage with evidence of
recording thereon has not been returned by the public recording office where
such Mortgage has been delivered for recordation or such Mortgage has been
lost
or such public recording office retains the original recorded Mortgage, a
photocopy of such Mortgage, together with (i) in the case of a delay caused
by
the public recording office, an Officer’s Certificate of the title insurer
insuring the Mortgage, the escrow agent, the seller or the Servicer stating
that
such Mortgage has been delivered to the appropriate public recording office
for
recordation and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the
original recorded Mortgage will be promptly delivered to the Custodian upon
receipt thereof by the party delivering the Officer’s Certificate or by the
Servicer; or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage with
the
recording information thereon certified by such public recording office to
be a
true and complete copy of the original recorded Mortgage;
(e) the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any;
C-23
(f) the
originals of any 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 (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of the title insurer insuring the
Mortgage, the escrow agent, the seller or the Servicer 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 Custodian upon receipt thereof by the party delivering
the Officer’s Certificate or by the Servicer; or (ii) 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;
(g) 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 original
power of attorney or other instrument that authorized and empowered such Person
to sign;
(h) the
original lender’s title insurance policy in the form of an ALTA mortgage title
insurance policy
or,
if the
original lender’s title insurance policy has not been issued, the irrevocable
commitment to issue the same; and
(i) the
original of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any.
C-24
EXHIBIT
2
FORM
OF LOST NOTE AFFIDAVIT
|
Loan
#:
|
|
|
Borrower:
|
|
LOST
NOTE
AFFIDAVIT
I,
as
_____________________ of ____________________, a _______________ am authorized
to make this Affidavit on behalf of Nomura Credit & Capital, Inc. (the
“Seller”). In connection with the administration of the Mortgage Loans held by
______________________, a _______________ [corporation] as Seller on behalf
of
____________________ (the “Purchaser”), _______________________ (the
“Deponent”), being duly sworn, deposes and says that:
1. The
Seller’s address is:
2. The
Seller previously delivered to the Purchaser a signed Initial Certification
with
respect to such Mortgage and/or Assignment of Mortgage;
3. Such
Mortgage Note and/or Assignment of Mortgage was assigned or sold to the
Purchaser by __________________, a _________________ pursuant to the terms
and
provisions of a Mortgage Loan Purchase Agreement dated as of March 9,
2006;
4. Such
Mortgage Note and/or Assignment of Mortgage is not outstanding pursuant to
a
request for release of Documents;
5. Aforesaid
Mortgage Note and/or Assignment of Mortgage (the “Original”) has been
lost;
6. Deponent
has made or caused to be made a diligent search for the Original and has been
unable to find or recover same;
7. The
Seller was the Seller of the Original at the time of the loss; and
8. Deponent
agrees that, if said Original should ever come into Seller’s possession, custody
or power, Seller will immediately and without consideration surrender the
Original to the Purchaser.
9. Attached
hereto is a true and correct copy of (i) the Note, endorsed in blank by the
Mortgagee and (ii) the Mortgage or Deed of Trust (strike one) which secures
the
Note, which Mortgage or Deed of Trust is recorded in the county where the
property is located.
C-25
10. Deponent
hereby agrees that the Seller (a) shall indemnify and hold harmless the
Purchaser, its successors and assigns, against any loss, liability or damage,
including reasonable attorney’s fees, resulting from the unavailability of any
Notes, including but not limited to any loss, liability or damage arising from
(i) any false statement contained in this Affidavit, (ii) any claim of any
party
that purchased a mortgage loan evidenced by the Lost Note or any interest in
such mortgage loan, (iii) any claim of any borrower with respect to the
existence of terms of a mortgage loan evidenced by the Lost Note on the related
property to the fact that the mortgage loan is not evidenced by an original
note
and (iv) the issuance of a new instrument in lieu thereof (items (i) through
(iv) above hereinafter referred to as the “Losses”) and (b) if required by any
Rating Agency in connection with placing such Lost Note into a Pass-Through
Transfer, shall obtain a surety from an insurer acceptable to the applicable
Rating Agency to cover any Losses with respect to such Lost Note.
11. This
Affidavit is intended to be relied upon by the Purchaser, its successors and
assigns. Nomura Credit & Capital, Inc., represents and warrants that is has
the authority to perform its obligations under this Affidavit of Lost
Note.
Executed
this _ day of _______, 200_.
| |
|
|
| By: | ||
| Name: | ||
| Title: | ||
On
this
__ day of ______, 200_, before me appeared ______________________ to me
personally known, who being duly sworn did say that he is the
_______________________ of ____________________, a ______________________ and
that said Affidavit of Lost Note was signed and sealed on behalf of such
corporation and said acknowledged this instrument to be the free act and deed
of
said entity.
Signature:
[Seal]
C-26
EXHIBIT
D
FORM
OF
TRANSFER AFFIDAVIT
|
|
|
Affidavit pursuant to Section 860E(e)(4) of the Internal Revenue Code of 1986, as amended, and for other purposes |
|
STATE
OF
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF
|
)
|
[NAME
OF
OFFICER], being first duly sworn, deposes and says:
1. That
he/she is [Title of Officer] of [Name of Investor] (the “Investor”), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of _____] [the United States], on behalf of which he makes this
affidavit.
2. That
(i)
the Investor is not a “disqualified organization” as defined in Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), and
will not be a disqualified organization as of [Closing Date] [date of purchase];
(ii) it is not acquiring the Nomura Home Equity Loan, Inc. Home Equity Loan
Trust, Asset-Backed Certificates, Series 2006-HE1, Class R Certificates (the
“Residual Certificates”) for the account of a disqualified organization; (iii)
it consents to any amendment of the Pooling and Servicing Agreement that shall
be deemed necessary by Nomura Home Equity Loan, Inc. (upon advice of counsel)
to
constitute a reasonable arrangement to ensure that the Residual Certificates
will not be owned directly or indirectly by a disqualified organization; and
(iv) it will not transfer such Residual Certificates unless (a) it has received
from the transferee an affidavit in substantially the same form as this
affidavit containing these same four representations and (b) as of the time
of
the transfer, it does not have actual knowledge that such affidavit is
false.
3. That
the
Investor is one of the following: (i) a citizen or resident of the United
States, (ii) a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated
as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are United States Persons, (iii) an estate
whose income is subject to United States federal income tax regardless of its
source, or (iv) a trust other than a “foreign trust,” as defined in Section 7701
(a)(31) of the Code.
4. That
the
Investor’s taxpayer identification number is
______________________.
5. That
no
purpose of the acquisition of the Residual Certificates is to avoid or impede
the assessment or collection of tax.
D-1
6. That
the
Investor understands that, as the holder of the Residual Certificates, the
Investor may incur tax liabilities in excess of any cash flows generated by
such
Residual Certificates.
7. That
the
Investor intends to pay taxes associated with holding the Residual Certificates
as they become due.
IN
WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its
behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this ____ day of _________, 20__.
|
[NAME
OF INVESTOR]
|
||||||
|
By:
|
||||||
|
[Name
of Officer]
|
||||||
|
[Title
of Officer]
|
||||||
|
[Address
of Investor for receipt of distributions]
|
||||||
|
Address
of Investor for receipt of tax
information:
|
||||||
D-2
Personally
appeared before me the above-named [Name of Officer], known or proved to me
to
be the same person who executed the foregoing instrument and to be the [Title
of
Officer] of the Investor, and acknowledged to me that he/she executed the same
as his/her free act and deed and the free act and deed of the
Investor.
Subscribed
and sworn before me this ___ day of _________, 20___.
NOTARY
PUBLIC
COUNTY
OF
STATE
OF
My
commission expires the ___ day of ___________________, 20___.
D-3
EXHIBIT
E
FORM
OF
TRANSFEROR CERTIFICATE
______________,
2006
Nomura
Home Equity Loan, Inc.
2
World
Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx
Xxxx,
Xxx Xxxx 00000
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
|
Re:
|
Nomura
Home Equity Loan, Inc.
Asset-Backed
Certificates, Series 2006-HE1,
Class_[_]
|
Ladies
and Gentlemen:
In
connection with the sale by ___________ (the “Sponsor”) to ________ (the
“Purchaser”) of $_________ Initial Certificate Principal Balance of Asset-Backed
Certificates, Series 2006-HE1, Class _____ (the “Certificates”), issued pursuant
to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”),
dated as of February 1, 2006, among Nomura Home Equity Loan, Inc., as depositor
(the “Depositor”), Nomura Credit & Capital, Inc., as sponsor, Ocwen
Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx
Fargo Bank, N.A., as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”) and HSBC Bank USA, National
Association, as trustee (the “Trustee”). The Sponsor hereby certifies,
represents and warrants to, a covenants with, the Depositor, the Securities
Administrator and the Trustee that:
Neither
the Sponsor nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b)
has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate
or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner,
or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the “Act”), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Sponsor will not act in
any
manner set forth in the foregoing sentence with respect to any Certificate.
The
Sponsor has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing
Agreement.
E-1
|
Very
truly yours,
|
|
|
|
|
|
(Sponsor)
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
E-2
EXHIBIT
F
FORM
OF
INVESTOR REPRESENTATION LETTER (NON-RULE 144A)
___________,
2006
Nomura
Home Equity Loan, Inc.
0
Xxxxx
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
|
Re:
|
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Asset-Backed Certificates,
Series 2006-HE1
|
Ladies
and Gentlemen:
_______________
(the “Purchaser”) intends to purchase from ____________ (the “Sponsor”)
$_________ Initial Certificate Principal Balance of Asset-Backed Certificates,
Series 2006-HE1, Class _____ (the “Certificates”), issued pursuant to the
Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated
as of February 1, 2006, among Nomura Home Equity Loan, Inc., as depositor (the
“Depositor”), Nomura Credit & Capital, Inc., as sponsor, Ocwen Loan
Servicing, LLC, as servicer (the “Servicer”), Xxxxx Fargo Bank, N.A., as master
servicer (the “Master Servicer”) and securities administrator (the “Securities
Administrator”) and HSBC Bank USA, National Association, as trustee (the
“Trustee”). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor, the
Securities Administrator and the Trustee that:
|
1.
|
The
Purchaser understands that (a) the Certificates have not been and
will not
be registered or qualified under the Securities Act of 1933, as amended
(the “Act”) or any state securities law, (b) the Depositor is not required
to so register or qualify the Certificates, (c) the Certificates
may be
resold only if registered and qualified pursuant to the provisions
of the
Act or any state securities law, or if an exemption from such registration
and qualification is available, (d) the Pooling and Servicing Agreement
contains restrictions regarding the transfer of the Certificates
and (e)
the Certificates will bear a legend to the foregoing
effect.
|
|
2.
|
The
Purchaser is acquiring the Certificates for its own account for investment
only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or
any
applicable state securities
laws.
|
F-1
|
3.
|
The
Purchaser is (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar
to the
Certificates, such that it is capable of evaluating the merits and
risks
of investment in the Certificates, (b) able to bear the economic
risks of
such an investment and (c) an “accredited investor” within the meaning of
Rule 501 (a) promulgated pursuant to the Act.
|
|
4.
|
The
Purchaser has been furnished with, and has had an opportunity to
review
(a) a copy of the Pooling and Servicing Agreement and (b) such other
information concerning the Certificates, the Mortgage Loans and the
Depositor as has been requested by the Purchaser from the Depositor
or the
Sponsor and is relevant to the Purchaser’s decision to purchase the
Certificates. The Purchaser has had any questions arising from such
review
answered by the Depositor or the Sponsor to the satisfaction of the
Purchaser.
|
|
5.
|
The
Purchaser has not and will not nor has it authorized or will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer
any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy
or to
accept a pledge, disposition of other transfer of any Certificate,
any
interest in any Certificate or any other similar security from any
person
in any manner, (c) otherwise approach or negotiate with respect to
any
Certificate, any interest in any Certificate or any other similar
security
with any person in any manner, (d) make any general solicitation
by means
of general advertising or in any other manner or (e) take any other
action, that (as to any of (a) through (e) above) would constitute
a
distribution of any Certificate under the Act, that would render
the
disposition of any Certificate a violation of Section 5 of the Act
or any
state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer
any of
the Certificates, except in compliance with the provisions of the
Pooling
and Servicing Agreement.
|
F-2
|
Very
truly yours,
|
|
|
|
|
|
(Purchaser)
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
F-3
EXHIBIT
G
FORM
OF
RULE 144A INVESTMENT LETTER
[Date]
Nomura
Credit & Capital, Inc.
2
World
Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx
Xxxx,
Xxx Xxxx 00000
Nomura
Home Equity Loan, Inc.
0
Xxxxx
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
|
Re:
|
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Asset-Backed Certificates,
Series 2006-HE1 (the “Certificates”), including the Class Certificates
(the “Private Certificates”)
|
Dear
Ladies and Gentlemen:
In
connection with our purchase of Private Certificates, we confirm
that:
|
(i)
|
we
understand that the Private Certificates are not being registered
under
the Securities Act of 1933, as amended (the “Act”) or any applicable state
securities or “Blue Sky” laws, and are being sold to us in a transaction
that is exempt from the registration requirements of such
laws;
|
|
|
(ii)
|
any
information we desired concerning the Certificates, including the
Private
Certificates, the trust in which the Certificates represent the entire
beneficial ownership interest (the “Trust”) or any other matter we deemed
relevant to our decision to purchase Private Certificates has been
made
available to us;
|
|
|
(iii)
|
we
are able to bear the economic risk of investment in Private Certificates;
we are an institutional “accredited investor” as defined in Section 501(a)
of Regulation D promulgated under the Act and a sophisticated
institutional investor and we agree to obtain a representation from
any
transferee that such transferee is an institutional “accredited investor”
so long as we are required to obtain a representation letter regarding
compliance with the Act;
|
|
|
(iv)
|
we
are acquiring Private Certificates for our own account, not as nominee
for
any other person, and not with a present view to any distribution
or other
disposition of the Private
Certificates;
|
G-1
|
(v)
|
we
agree the Private Certificates must be held indefinitely by us (and
may
not be sold, pledged, hypothecated or in any way disposed of) unless
subsequently registered under the Act and any applicable state securities
or “Blue Sky” laws or an exemption from the registration requirements of
the Act and any applicable state securities or “Blue Sky” laws is
available;
|
|
|
(vi)
|
we
agree that in the event that at some future time we wish to dispose
of or
exchange any of the Private Certificates (such disposition or exchange
not
being currently foreseen or contemplated), we will not transfer or
exchange any of the Private Certificates unless:
|
|
|
(A)
(1) the sale is to an Eligible Purchaser (as defined below), (2)
if
required by the Pooling and Servicing Agreement (as defined below)
a
letter to substantially the same effect as either this letter or,
if the
Eligible Purchaser is a Qualified Institutional Buyer as defined
under
Rule 144A of the Act, the Rule 144A and Related Matters Certificate
in the
form attached to the Pooling and Servicing Agreement (as defined
below)
(or such other documentation as may be acceptable to the Trustee)
is
executed promptly by the purchaser and delivered to the addressees
hereof
and (3) all offers or solicitations in connection with the sale,
whether
directly or through any agent acting on our behalf, are limited only
to
Eligible Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; and
|
||
|
(B) if
the Private Certificate is not registered under the Act (as to which
we
acknowledge you have no obligation), the Private Certificate is sold
in a
transaction that does not require registration under the Act and
any
applicable state securities or “blue sky” laws and, if HSBC Bank USA,
National Association, as trustee (the “Trustee”) so requests, a
satisfactory Opinion of Counsel is furnished to such effect, which
Opinion
of Counsel shall be an expense of the transferor or the
transferee;
|
||
|
(vii)
|
we
agree to be bound by all of the terms (including those relating to
restrictions on transfer) of the Pooling and Servicing, pursuant
to which
the Trust was formed; we have reviewed carefully and understand the
terms
of the Pooling and Servicing Agreement;
|
|
|
(viii)
|
we
either: (i) are not acquiring the Privately Offered Certificate directly
or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, and/or section
4975 of
the Internal Revenue Code of 1986, as amended, or (ii) in the case
of a
Class B Certificate, are making or are deemed to make the representations
set forth in Section 6.02(b) of the Agreement, or (iii) in the case
of a
Class X, Class P or Class R Certificate, are providing the opinion
of
counsel specified in Section 6.02(b) of the
Agreement.
|
G-2
|
(ix)
|
we
understand that each of the Class ___ Certificates bears, and will
continue to bear, legends substantially to the following effect:
“THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A
“QIB”),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT
OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER,
RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
“INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY
IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A)
THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY
IN THE
FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES
ADMINISTRATOR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE SECURITIES
ADMINISTRATOR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN
EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION.
|
|
|
[FOR
CLASS B-1 CERTIFICATES] ANY TRANSFEREE OF THIS CERTIFICATE SHALL
MAKE OR
BE DEEMED TO MAKE THE REPRESENTATIONS SET FORTH IN SECTION 6.02(b)
OF THE
AGREEMENT.
|
||
|
[FOR
CLASS B-2, CLASS X, CLASS P AND CLASS R CERTIFICATES] NO TRANSFER
OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(b) OF THE AGREEMENT
|
G-3
“Eligible
Purchaser”
means
a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe (i) can make representations with respect to itself
to
substantially the same effect as the representations set forth herein, and
(ii)
is either a Qualified Institutional Buyer as defined under Rule 144A of the
Act
or an institutional “Accredited Investor” as defined under Rule 501 of the
Act.
Terms
not
otherwise defined herein shall have the meanings assigned to them in the Pooling
and Servicing Agreement, dated as of January 1, 2006, between Nomura Home Equity
Loan, Inc., as depositor, Nomura Credit & Capital, Inc., as sponsor, Ocwen
Loan Servicing, LLC, as servicer (the “Servicer”), Xxxxx Fargo Bank, N.A., as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”) and HSBC Bank USA, National Association, as trustee
(the “Trustee”) (the “Pooling and Servicing Agreement’).
If
the
Purchaser proposes that its Certificates be registered in the name of a nominee
on its behalf, the Purchaser has identified such nominee below, and has caused
such nominee to complete the Nominee Acknowledgment at the end of this
letter.
Name
of
Nominee (if any): _______________________________
G-4
IN
WITNESS WHEREOF, this document has been executed by the undersigned who is
duly
authorized to do so on behalf of the undersigned Eligible Purchaser on the
___
day of ________, 20___.
|
Very
truly yours,
|
|||
|
[PURCHASER]
|
|||
| By: | |||
|
(Authorized
Officer)
|
|||
| [By: | |||
|
Attorney-in-fact]
|
|||
G-5
Nominee
Acknowledgment
The
undersigned hereby acknowledges and agrees that as to the Certificates being
registered in its name, the sole beneficial owner thereof is and shall be the
Purchaser identified above, for whom the undersigned is acting as
nominee.
| [NAME OF NOMINEE] | |||
| By: | |||
|
(Authorized
Officer)
|
|||
| [By: | |||
|
Attorney-in-fact]
|
|||
G-6
EXHIBIT
H
FORM
OF
ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxx
Fargo Bank, N.A. as Trustee
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Fax:
(000) 000-0000
E-mail:
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
| Attn: |
Corporate
Trust Services - Nomura Home Equity Loan, Inc., Home Equity Loan
Trust,
Asset-Backed
Certificates, Series 2006-HE1 - SEC REPORT
PROCESSING
|
| RE: |
**Additional
Form [10-K][10-D][8-K]
Disclosure**Required
|
Ladies
and Gentlemen:
In
accordance with Section [ ] of the Pooling and Servicing Agreement,
dated as of January 1, 2006, among the Purchaser as depositor, Ocwen Loan
Servicing, LLC, as a servicer (“Ocwen”), Xxxxx Fargo Bank, National Association,
as Master Servicer and Securities Administrator, the Undersigned, as
[ ], hereby notifies you that certain events have come to
our attention that [will][may] need to be disclosed on Form
[10-K][10-D][8-K].
Description
of Additional Form [10-K][10-D][8-K]Disclosure:
List
of
Any Attachments hereto to be included in the Additional Form [10-K][10-D][8-K]
Disclosure:
Any
inquiries related to this notification should be directed to
[ ], phone number: [ ]; email address:
[ ].
| [NAME
OF
PARTY] as [role] |
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
H-1
EXHIBIT
I
DTC
Letter of Representations
[provided
upon request]
I-1
EXHIBIT
J
Schedule
of Mortgage Loans with Lost Notes
NONE
J-1
EXHIBIT
K
Prepayment
Charge Schedule
K-1
EXHIBIT
L
SERVICING
CRITERIA
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Assessments
of Compliance and Attestation Reports Servicing Criteria1
|
Reg.
AB Item 1122(d) Servicing Criteria
|
Depositor
|
Seller
|
Servicer
|
Trustee
|
Custodian
|
Paying
Agent
|
Master
Servicer
|
Securities
Administrator
|
|
(1) General
Servicing Considerations
|
||||||||
|
(i) monitoring
performance or other triggers and events of default
|
X
|
X
|
X
|
|||||
|
(ii) monitoring
performance of vendors of activities outsourced
|
X
|
|||||||
|
(iii) maintenance
of back-up servicer for pool assets
|
||||||||
|
(iv) fidelity
bond and E&O policies in effect
|
X
|
X
|
||||||
|
(2) Cash
Collection and Administration
|
||||||||
|
(i) timing
of deposits to custodial account
|
X
|
X
|
X
|
X
|
||||
|
(ii) wire
transfers to investors by authorized personnel
|
X
|
X
|
X
|
|||||
|
(iii) advances
or guarantees made, reviewed and approved as required
|
X
|
X
|
*
The
descriptions of the Item 1122(d) servicing criteria use key words and phrases
and are not verbatim recitations of the servicing criteria. Refer to Regulation
AB, Item 1122 for a full description of servicing criteria
L-1
|
Reg.
AB Item 1122(d) Servicing Criteria
|
Depositor
|
Seller
|
Servicer
|
Trustee
|
Custodian
|
Paying
Agent
|
Master
Servicer
|
Securities
Administrator
|
|
(iv) accounts
maintained as required
|
X
|
X
|
X
|
X
|
||||
|
(v) accounts
at federally insured depository institutions
|
X
|
X
|
X
|
X
|
||||
|
(vi) unissued
checks safeguarded
|
X
|
X
|
X
|
|||||
|
(vii) monthly
reconciliations of accounts
|
X
|
X
|
X
|
X
|
||||
|
(3) Investor
Remittances and Reporting
|
||||||||
|
(i) investor
reports
|
X
|
X
|
X
|
X
|
||||
|
(ii) remittances
|
X
|
X
|
X
|
|||||
|
(iii) proper
posting of distributions
|
X
|
X
|
X
|
|||||
|
(iv) reconciliation
of remittances and payment statements
|
X
|
X
|
X
|
X
|
||||
|
(4) Pool
Asset Administration
|
||||||||
|
(i) maintenance
of pool collateral
|
X
|
X
|
||||||
|
(ii) safeguarding
of pool assets/documents
|
X
|
X
|
||||||
|
(iii) additions,
removals and substitutions of pool assets
|
X
|
X
|
X
|
|||||
|
(iv) posting
and allocation of pool asset payments to pool assets
|
X
|
|||||||
|
(v) reconciliation
of servicer records
|
X
|
|||||||
|
(vi) modifications
or other changes to terms of pool assets
|
X
|
L-2
|
Reg.
AB Item 1122(d) Servicing Criteria
|
Depositor
|
Seller
|
Servicer
|
Trustee
|
Custodian
|
Paying
Agent
|
Master
Servicer
|
Securities
Administrator
|
|
(vii) loss
mitigation and recovery actions
|
X
|
|||||||
|
(viii)records
regarding collection efforts
|
X
|
|||||||
|
(ix) adjustments
to variable interest rates on pool assets
|
X
|
|||||||
|
(x) matters
relating to funds held in trust for obligors
|
X
|
|||||||
|
(xi) payments
made on behalf of obligors (such as for taxes or
insurance)
|
X
|
|||||||
|
(xii) late
payment penalties with respect to payments made on behalf of obligors
|
X
|
|||||||
|
(xiii)records
with respect to payments made on behalf of obligors
|
X
|
|||||||
|
(xiv) recognition
and recording of delinquencies, charge-offs and uncollectible
accounts
|
X
|
X
|
X
|
|||||
|
(xv) maintenance
of external credit enhancement or other support
|
X
|
X
|
X
|
X
(If required pursuant to
Agreement)
|
.
L-3
EXHIBIT
M
BACK-UP
CERTIFICATION
Re: __________
(the “Trust”)
Asset-Backed
Certificates, Series 2006-HE1
I,
[identify the certifying individual], certify to Nomura Home Equity Loan, Inc.
(the “Depositor”), HSBC Bank USA, National Association (the “Trustee”) and Xxxxx
Fargo Bank, N.A. (the “Master Servicer”), and their respective officers,
directors and affiliates, and with the knowledge and intent that they will
rely
upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Servicer
during 200[ ] that were delivered by the Servicer to the Master Servicer
pursuant to the Agreement (collectively, the “Servicer Servicing
Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the Master
Servicer;
(4) I
am
responsible for reviewing the activities performed by the Servicer as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report, the
Servicer has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by any Subservicer or Subcontractor pursuant to
the
Agreement, have been provided to the Master Servicer. Any material instances
of
noncompliance described in such reports have been disclosed to the Master
Servicer. Any material instance of noncompliance with the Servicing Criteria
has
been disclosed in such reports.
M-1
Capitalized
terms used and not otherwise defined herein have the meanings assigned thereto
in the Pooling and Servicing Agreement (the “Agreement”), dated as of February
1, 2006, among Nomura Home Equity Loan, Inc., Nomura Credit & Capital, Inc.,
Ocwen Loan Servicing, LLC, Xxxxx Fargo Bank, N.A. and HSBC Bank USA, National
Association
|
Date:
|
|
|
[Signature]
|
|
|
[Title]
|
|
M-2
EXHIBIT
N
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant to
Section 5.12. An asterisk indicates that the Responsible Party is responsible
for aggregating the information it receives from other Responsible
Parties.
Under
Item 1 of Form 10-D: a) items marked “5.07 statement” are required to be
included in the periodic Distribution Date statement under Section 5.07,
provided by the Securities Administrator based on information received from
the
Master Servicer; and b) items marked “Form 10-D report” are required to be in
the Form 10-D report but not the 5.07 statement, provided by the party
indicated. Information under all other Items of Form 10-D is to be included
in
the Form 10-D report.
Additional
Form 10-D Disclosure
|
Item
on Form 10-D
|
Party
Responsible
|
|
Item
1: Distribution and Pool Performance Information
Any
information required by 1121 which is NOT included on the Monthly
Statement
|
Servicer
Securities
Administrator
Depositor
|
|
Item
2: Legal Proceedings
per
Item 1117 of Reg AB
|
(i)
All parties to the PSA (as to themselves), (ii) the Securities
Administrator as to the issuing entity, (iii) the Depositor as to
the
sponsor, any 11106(b) originator, any 1100(d)(1) party
|
|
Item
3: Sale of Securities and Use of Proceeds
|
Depositor
|
|
Item
4: Defaults Upon Senior Securities
|
Securities
Administrator
|
|
Item
5: Submission of Matters to a Vote of Security Holders
|
Securities
Administrator
Trustee
|
|
Item
6: Significant Obligors of Pool Assets
|
Depositor
|
|
Item
7: Significant Enhancement Provider Information
|
Depositor
|
|
Item
8: Other Information
|
Any
party responsible for disclosure items on Form 8-K
|
|
Item
9: Exhibits
|
Securities
Administrator
Depositor
|
N-1
Additional
Form 10-K Disclosure
|
Item
on Form 10-K
|
Party
Responsible
|
|
Item
1B: Unresolved Staff Comments
|
Depositor
|
|
Item
9B: Other Information
|
Any
party responsible for disclosure items on Form 8-K
|
|
Item
15: Exhibits, Financial Statement Schedules
|
Securities
Administrator
Depositor
|
|
Additional
Item:
Disclosure
per Item 1117 of Reg AB
|
(i)
All parties to the PSA (as to themselves), (ii) the Trustee, Securities
Administrator and Master Servicer as to the issuing entity, (iii)
the
Depositor as to the sponsor, any 11106(b) originator, any 1100(d)(1)
party
|
|
Additional
Item:
Disclosure
per Item 1119 of Reg AB
|
(i)
All parties to the Pooling and Servicing Agreement as to themselves (or, with respect to the Trustee, disclosure pursuant to Item 1119(a) only), and (ii)
the Depositor as to the sponsor, originator, significant obligor,
enhancement or support provider
|
|
Additional
Item:
Disclosure
per Item 1112(b) of Reg AB
|
Depositor
|
|
Additional
Item:
Disclosure
per Items 1114(b) and 1115(b) of Reg AB
|
Depositor
|
N-2
Form
8-K
Disclosure Information
|
Item
on Form 8-K
|
Party
Responsible
|
|
Item
1.01- Entry into a Material Definitive Agreement
|
All
parties
|
|
Item
1.02- Termination of a Material Definitive Agreement
|
All
parties
|
|
Item
1.03- Bankruptcy or Receivership
|
Depositor
|
|
Item
2.04- Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement
|
Depositor
Securities
Administrator
|
|
Item
3.03- Material Modification to Rights of Security Holders
|
Securities
Administrator
Trustee
|
|
Item
5.03- Amendments of Articles of Incorporation or Bylaws; Change of
Fiscal
Year
|
Depositor
|
|
Item
6.01- ABS Informational and Computational Material
|
Depositor
|
|
Item
6.02- Change of Servicer or Securities Administrator
|
Servicer/Securities
Administrator/Depositor
|
|
Item
6.03- Change in Credit Enhancement or External Support
|
Depositor/Securities
Administrator
|
|
Item
6.04- Failure to Make a Required Distribution
|
Securities
Administrator
|
|
Item
6.05- Securities Act Updating Disclosure
|
Depositor
|
|
Item
7.01- Reg FD Disclosure
|
Depositor
|
|
Item
8.01
|
Depositor
|
|
Item
9.01
|
Depositor
|
N-3
EXHIBIT
O
APPENDIX
E - Standard & Poor’s Anti-Predatory Lending
Categorization
Standard
& Poor’s has categorized loans governed by anti-predatory lending laws in
the Jurisdictions listed below into three categories based upon a combination
of
factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor’s High Cost Loan Category because they included thresholds
and tests that are typical of what is generally considered High Cost by the
industry.
|
Standard
& Poor’s High Cost Loan
Categorization
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Arkansas
|
Arkansas
Home Loan Protection Act, Ark. Code Xxx. §§ 00-00-000 et seq.
Effective
July 16, 2003
|
High
Cost Home Loan
|
|
Cleveland
Heights, OH
|
Ordinance
No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.
Effective
June 2, 2003
|
Covered
Loan
|
|
Colorado
|
Consumer
Equity Protection, Colo. Stat. Xxx. §§ 5-3.5-101 et seq.
Effective
for covered loans offered or entered into on or after January 1,
2003.
Other provisions of the Act took effect on June 7, 2002
|
Covered
Loan
|
|
Connecticut
|
Connecticut
Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746
et seq.
Effective
October 1, 2001
|
High
Cost Home Loan
|
|
District
of Columbia
|
Home
Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.
Effective
for loans closed on or after January 28, 2003
|
Covered
Loan
|
|
Florida
|
Fair
Lending Act, Fla. Stat. Xxx. §§ 494.0078 et seq.
Effective
October 2, 2002
|
High
Cost Home Loan
|
O-1
|
Standard
& Poor’s High Cost Loan
Categorization
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
High
Cost Home Loan
|
|
Georgia
as amended (Mar. 7, 2003 - current)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
for loans closed on or after March 7, 2003
|
High
Cost Home Loan
|
|
HOEPA
Section 32
|
Home
Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R.
§§ 226.32 and 226.34
Effective
October 1, 1995, amendments October 1, 2002
|
High
Cost Loan
|
|
Illinois
|
High
Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq.
Effective
January 1, 2004 (prior to this date, regulations under Residential
Mortgage License Act effective from May 14, 2001)
|
High
Risk Home Loan
|
|
Kansas
|
Consumer
Credit Code, Kan. Stat. Xxx. §§ 16a-1-101 et seq.
Sections
16a-1-301 and 16a-3-207 became effective April 14, 1999; Section
16a-3-308a became effective July 1, 1999
|
High
Loan to Value Consumer Loan (id.§
16a-3-207) and;
|
|
High
APR Consumer Loan (id.§
16a-3-308a)
|
||
|
Kentucky
|
2003
KY H.B. 000 - Xxxx Xxxx Xxxx Xxxx Xxx, Xx. Rev. Stat. §§ 360.100
et seq.
Effective
June 24, 2003
|
High
Cost Home Loan
|
|
Maine
|
Truth
in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.
Effective
September 29, 1995 and as amended from time to time
|
High
Rate High Fee Mortgage
|
O-2
|
Standard
& Poor’s High Cost Loan
Categorization
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Massachusetts
|
Part
40 and Part 32, 209 C.M.R. §§ 32.00 et seq.
and 209 C.M.R. §§ 40.01 et seq.
Effective
March 22, 2001 and amended from time to time
|
High
Cost Home Loan
|
|
Nevada
|
Assembly
Xxxx No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.
Effective
October 1, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
for loans closed on or after November 27, 2003
|
High
Cost Home Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
High
Cost Home Loan
|
|
New
York
|
N.Y.
Banking Law Article 6-l
Effective
for applications made on or after April 1, 2003
|
High
Cost Home Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
High
Cost Home Loan
|
|
Ohio
|
H.B.
386 (codified in various sections of the Ohio Code), Ohio Rev. Code
Xxx.
§§ 1349.25 et seq.
Effective
May 24, 2002
|
Covered
Loan
|
|
Oklahoma
|
Consumer
Credit Code (codified in various sections of Title 14A)
Effective
July 1, 2000; amended effective January 1, 2004
|
Subsection
10 Mortgage
|
O-3
|
Standard
& Poor’s High Cost Loan
Categorization
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code Xxx. §§ 37-23-10
et seq.
Effective
for loans taken on or after January 1, 2004
|
High
Cost Home Loan
|
|
West
Virginia
|
West
Virginia Residential Mortgage Lender, Broker and Servicer Act, W.
Va. Code
Xxx. §§ 31-17-1 et seq.
Effective
June 5, 0000
|
Xxxx
Xxxxxxxx Mortgage Loan Act Loan
|
Standard
& Poor’s Covered Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Covered
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
November 27, 2003 - July 5, 2004
|
Covered
Home Loan
|
O-4
|
Standard
& Poor’s Home Loan
Categorization
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
for loans closed on or after November 27, 2003
|
Home
Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
Home
Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
Consumer
Home Loan
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code Xxx. §§ 37-23-10
et seq.
Effective
for loans taken on or after January 1, 2004
|
Consumer
Home Loan
|
O-5
EXHIBIT
P
BEAR
XXXXXXX FINANCIAL PRODUCTS INC.
000
XXXXXXX XXXXXX
XXXXX
0000
XXX
XXXX,
XXX XXXX 00000
000-000-0000
|
DATE:
|
March
9, 2006
|
|
TO:
|
HSBC
Bank USA, National Association, not individually, but solely as
Trustee on
behalf of the Supplemental Interest Trust with respect to Nomura
Home
Equity Loan, Inc., Home Equity Loan Trust, Series
2006-HE1
|
|
ATTENTION:
|
Corporate
Trust-Xxxxx Xxxxx
|
|
FACSIMILE:
|
000-000-0000
|
|
FROM:
|
Derivatives
Documentation
|
|
TELEPHONE:
|
000-000-0000
|
|
FACSIMILE:
|
000-000-0000
|
|
SUBJECT:
|
Mortgage
Derivatives Confirmation and Agreement
|
|
REFERENCE
NUMBER:
|
FXNHEL6H1
|
The
purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Xxxxxxx Financial Products Inc. ("BSFP") and
HSBC
Bank USA, National Association, not individually, but solely as Trustee on
behalf of the Supplemental Interest Trust with respect to Nomura Home Equity
Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
("Counterparty"). This Agreement, which evidences a complete and binding
agreement between you and us to enter into the Transaction on the terms set
forth below, constitutes a "Confirmation" as referred to in the "ISDA Form
Master Agreement" (as defined below), as well as a “Schedule” as referred to in
the ISDA Form Master Agreement.
1.
This
Agreement is subject to the 2000
ISDA Definitions (the
“Definitions”), as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). You and we have agreed to enter into this Agreement
in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) form (the "ISDA Form Master Agreement") but,
rather, an ISDA Form Master Agreement shall be deemed to have been executed
by
you and us relating to the Reference Loans on the date we entered into the
Transaction. Terms capitalized but not defined herein except
in
the Definitions
shall
have the respective meanings attributed to them in the Pooling and Servicing
Agreement,
(the “Pooling and Servicing Agreement”).,
dated
as of February
1, 2006,
among Nomura Home Equity Loan, Inc, as depositor (the “Depositor”), Nomura
Credit & Capital, Inc. as sponsor (the “Sponsor”), Ocwen Loan Servicing LLC
as servicer (the “Servicer”), HSBC Bank USA, National Association, as trustee
(the “Trustee”) and Xxxxx Fargo Bank, N.A., as Master Servicer and Securities
Administrator.
In the
event of any inconsistency between the provisions of this Agreement and the
Definitions or the ISDA Form Master Agreement, this Agreement shall prevail
for
purposes of the Transaction. Each reference to a “Section” (unless specifically
referencing the Pooling and Servicing Agreement) or to a “Section” “of this
Agreement” will be construed as a reference to a Section of the ISDA Form Master
Agreement.
Reference
Number: FXNHEL6H1
March
9,
2006
Page
of
2 of
18
2.
The
terms of the particular Transaction to which this Confirmation relates are
as
follows:
|
Trade
Date:
|
February
17, 2006
|
|
Effective
Date:
|
Xxxxx
0, 0000
|
|
Xxxxxxxx
Xxxxxx:
|
With
respect to any the initial Calculation Period USD 953,750,000
and with respect to any subsequent Calculation Period, the lesser
of:
|
|
(i)
the outstanding principal balance of the Senior Certificates and
Subordinate Certificates as of the last day of the month in which
the
Calculation Period begins, and
|
|
|
(ii)
the amount set forth for such period in the Schedule of Notional
Amounts
attached hereto.
|
|
|
Reference
Certificates:
|
The
Class A, Class M and Class B Certificates
|
|
Termination
Date:
|
February
25, 2011,
subject to adjustment in accordance with the Business
Day Convention
|
|
Fixed
Amounts:
|
|
|
Fixed
Rate Payer:
|
Counterparty
|
|
Fixed
Rate Payer
|
|
|
Period
End Dates:
|
The
25th
of
each month in each year from (and including) March 25, 2006 to (and
including) the Termination Date, with
No Adjustment
|
Reference
Number: FXNHEL6H1
March
9,
2006
Page
of
3 of 18
|
Fixed
Rate Payer
|
|
|
Payment
Dates:
|
Early
Payment shall be applicable. For each Calculation Period, the Fixed
Rate Payer Payment Date shall be the first Business Day prior to
the
related Fixed Rate Payer Period End Date.
|
|
Fixed
Rate:
|
5.152%
|
|
Fixed
Rate Day
|
|
|
Count
Fraction:
|
30/360
|
|
Floating
Amounts:
|
|
|
Floating
Rate Payer:
|
BSFP
|
|
Floating
Rate Payer
|
|
|
Period
End Dates:
|
The
25th
calendar day of each month in each year from (and including) March
25, 2006 to (and including) the Termination Date, subject to adjustment
in
accordance with the Business Day Convention.
|
|
Floating
Rate Payer
|
|
|
Payment
Dates:
|
Early
Payment shall be applicable. For each Calculation Period, the
Floating Rate Payer Payment Date shall be the first Business Day
prior to
the related Floating Rate Payer Period End Date.
|
|
Floating
Rate Option:
|
USD-LIBOR-BBA
|
|
Designated
Maturity:
|
One
month,
except with respect to the initial Calculation Period for which
the
Designated Maturity shall be the Linear Interpolation of the two
weeks and
the one month
|
|
Spread:
|
None
|
|
Floating
Rate Day
|
|
|
Count
Fraction:
|
Actual/360
|
|
Reset
Dates:
|
The
first day of each Calculation Period
|
|
Compounding:
|
Inapplicable
|
|
Business
Day Convention:
|
Following
|
|
Business
Days:
|
New
York
|
|
Calculation
Agent:
|
BSFP
|
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of
4 of 18
|
3.
Additional Provisions:
|
1)
Each party hereto is hereby advised and acknowledges that the other
party
has engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into the Transaction
being entered into on the terms and conditions set forth herein
and in the
Confirmation relating to such Transaction, as applicable. This
paragraph
(1) shall be deemed repeated on the trade date of each
Transaction.
|
4.
Provisions
Deemed Incorporated in a Schedule to the Master
Agreement:
| 1) |
The
parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form
Master Agreement will apply to any
Transaction.
|
| 2) |
Termination
Provisions.
For purposes of the ISDA Form Master
Agreement:
|
(a)
"Specified
Entity" is not applicable to BSFP or Counterparty for any purpose.
(b)
"Specified
Transaction" is not applicable to BSFP or Counterparty for any purpose, and,
accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.
(c)
The
"Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP or
to
Counterparty.
(d) The
"Credit Event Upon Merger" provisions of Section 5(b)(iv) will not apply to
BSFP
or Counterparty.
(e) The
“Bankruptcy” provision of Section 5(a)(vii)(2) of this Agreement will be
inapplicable to Counterparty.
(f) The
"Automatic Early Termination" provision of Section 6(a) will not apply to BSFP
or to Counterparty.
(g) Payments
on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market
Quotation will apply.
(ii) The
Second Method will apply.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of
5 of 18
(h) "Termination
Currency" means United States Dollars.
(i) Tax
Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of the printed ISDA
Form Master Agreement shall not apply to Counterparty and Counterparty shall
not
be required to pay any additional amounts referred to therein.
3)
Tax
Representations.
| (a) |
Payer
Representations. For the purpose of Section 3(e) of this Agreement,
each
of BSFP and the Counterparty will make the following
representations:
|
It
is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made
by it to the other party under this Agreement. In making this representation,
it
may rely on:
(i) the
accuracy of any representations made by the other party pursuant to Section
3(f)
of this Agreement;
(ii) the
satisfaction of the agreement contained in Section 4(a)(iii) of this Agreement
and the accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(iii) of this Agreement; and
(iii)
the
satisfaction of the agreement of the other party contained in Section 4(d)
of
this Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not deliver
a
form or document under Section 4(a)(iii) by reason of material prejudice
to its
legal or commercial position.
| (b) |
Payee
Representations. For the purpose of Section 3(f) of this Agreement,
each
of BSFP and the Counterparty make the following representations.
|
The
following representation will apply to BSFP:
BSFP
is a
corporation organized under the laws of the State of Delaware and its U.S.
taxpayer identification number is 00-0000000.
The
following representation will apply to the Counterparty:
Counterparty
represents that it is the Trustee on behalf of the Supplemental Interest
Trust
under the Pooling and Servicing Agreement.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of
6 of
18
4)
The
ISDA Form Master Agreement is hereby amended as follows:
The
word
“third” shall be replaced by the word “second” in the third line of Section
5(a)(i) of the ISDA Form Master Agreement.
5)
Documents
to be Delivered.
For the
purpose of Section 4(a):
| (1) |
Tax
forms, documents, or certificates to be delivered
are:
|
|
Party
required to deliver
document |
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
|
BSFP
and
the
Counterparty
|
Any
document required or reasonably requested to allow the other party
to make
payments under this Agreement without any deduction or withholding
for or
on the account of any Tax or with such deduction or withholding at
a
reduced rate
|
Promptly
after the earlier of (i) reasonable demand by either party or (ii)
learning that such form or document is
required
|
| (2) |
Other
documents to be delivered are:
|
|
Party
required to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
Covered
by Section 3(d)
Representation
|
|
BSFP
and
the
Counterparty
|
Any
documents required by the receiving party to evidence the authority
of the
delivering party or its Credit Support Provider, if any, for it to
execute
and deliver this Agreement, any Confirmation , and any Credit Support
Documents to which it is a party, and to evidence the authority of
the
delivering party or its Credit Support Provider to perform its obligations
under this Agreement, such Confirmation and/or Credit Support Document,
as
the case may be
|
Upon
the execution and delivery of this Agreement and such
Confirmation
|
Yes
|
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of
7 of 18
|
Party
required to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
Covered
by Section 3(d)
Representation
|
|
BSFP
and
the
Counterparty
|
A
certificate of an authorized officer of the party, as to the incumbency
and authority of the respective officers of the party signing this
Agreement, any relevant Credit Support Document, or any Confirmation,
as
the case may be
|
Upon
the execution and delivery of this Agreement and such
Confirmation
|
Yes
|
6)
Miscellaneous.
Miscellaneous
|
(a)
|
Address
for Notices: For the purposes of Section 12(a) of this
Agreement:
|
Address
for notices or communications to BSFP:
Address: 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC
Manager
Facsimile: (000)
000-0000
with
a
copy to:
Address: Xxx
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative
Operations - 7th Floor
Facsimile: (000)
000-0000
(For
all
purposes)
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 8
of 18
Address
for notices or communications to the Counterparty:
HSBC
Bank USA, National Association
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Corporate Trust - Xxxxx Xxxxx
Fax:
(000) 000-0000
(For
all
purposes)
With
a
copy to:
Xxxxx
Fargo Bank, N.A.
0000
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
XX 00000
Attention:
NHEL 2006-HE1
Fax:
000-000-0000
| (b) |
Process
Agent. For the purpose of Section
13(c):
|
BSFP
appoints as its
Process
Agent: Not
Applicable
The
Counterparty appoints as its
Process
Agent: Not
Applicable
| (c) |
Offices.
The provisions of Section 10(a) will not apply to this Agreement;
neither
BSFP nor the Counterparty have any Offices other than as
|
set
forth
in
the
Notices Section and BSFP agrees that, for purposes of Section 6(b) of this
Agreement, it shall not in future have any Office other than one in the United
States.
|
(d)
|
Multibranch
Party. For the purpose of Section 10(c) of this
Agreement:
|
BSFP
is
not a Multibranch Party.
|
The
Counterparty is not a Multibranch
Party.
|
| (e) |
Calculation
Agent. The Calculation Agent is
BSFP.
|
| (f) |
Credit
Support Document. Not applicable for either BSFP or the
Counterparty.
|
|
(g)
|
Credit
Support Provider.
|
BSFP: Not
Applicable
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 9
of 18
|
The
Counterparty:
|
Not
Applicable
|
(h) Governing
Law. The
parties to this Agreement hereby agree that the laws of the State of New York
shall govern their rights and duties in whole, without regard to the conflict
of
law provisions thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i)
Proceedings.
BSFP hereby irrevocably and unconditionally agrees that it will not institute
against, or join any other person in instituting against or cause any other
person to institute against the Counterparty, any bankruptcy, reorganization,
arrangement, insolvency, or similar proceeding under the laws of the United
States, or any other jurisdiction for the non-payment of any amount due
hereunder or any other reason until the payment in full of the Certificates
(as
defined in the Pooling and Servicing Agreement) and the expiration of a period
of one year plus ten days (or, if longer, the applicable preference period)
following such payment.
(j) Severability. If
any
term, provision, covenant, or condition of this Agreement, or the application
thereof to any party or circumstance, shall be held to be invalid or
unenforceable (in whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in full force and
effect as if this Agreement had been executed with the invalid or unenforceable
portion eliminated, so long as this Agreement as so modified continues to
express, without material change, the original intentions of the parties as
to
the subject matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits or expectations
of the parties.
The
parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid
or
enforceable term, provision, covenant or condition, the economic effect of
which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(k) Consent
to Recording.
Each
party hereto consents to the monitoring or recording, at any time and from
time
to time, by the other party of any and all communications between officers
or
employees of the parties, waives any further notice of such monitoring or
recording, and agrees to notify its officers and employees of such monitoring
or
recording.
(l) Waiver
of
Jury Trial. Each
party waives any right it may have to a trial by jury in respect of any
Proceedings relating to this Agreement or any Credit Support Document.
(m)
Limited Set-Off. The provisions for Set-off set forth in Section 6(e) of the
ISDA Form Master Agreement shall not apply for purposes of this Transaction.
Notwithstanding any provision of this Agreement or any other existing or future
agreement, each party irrevocably waives any and all rights it may have to
set
off, net, recoup or otherwise withhold or suspend or condition payment or
performance of any obligation between it and the other party hereunder against
any obligation between it and the other party under any other agreements.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 10
of 18
(n)
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
(o)
Additional Definitional Provisions. As used in this Agreement, the following
terms shall have the meanings set forth below, unless the context clearly
requires otherwise:
“Moody’s”
means Xxxxx’x Investors Service, Inc., or any successor.
“S&P”
means Standard & Poor's Ratings Services, or any successor.
“Fitch”
means Fitch Ratings, or any successor
“DBRS”
means Dominion Bond Rating Service, or any successor
(p)
Trustee Liability Limitations. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by HSBC Bank
USA, National Association not individually or personally but solely as Trustee
of the Supplemental Interest Trust, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Supplemental Interest Trust is made
and intended not as personal representations, undertakings and agreements by
HSBC but is made and intended for the purpose of binding only the Supplemental
Interest Trust, (c) nothing herein contained shall be construed as creating
any
liability on HSBC individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through
or
under the parties hereto; provided that nothing in this paragraph shall relieve
HSBC from performing its duties and obligations under the Pooling and Servicing
Agreement in accordance with the standard of care set forth therein, and (d)
under no circumstances shall HSBC be personally liable for the payment of any
indebtedness or expenses of the Supplemental Interest Trust or be liable for
the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Supplemental Interest Trust under this Agreement or any
other related documents.
(q)
Additional Provisions. The provisions of Sections 5(a)(ii), 5(a)(iii) and
5(a)(iv) shall not apply to BSFP or Counterparty.
7)
"Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any Affiliates
for purposes of this Agreement, including for purposes of Section
6(b)(ii).
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 11
of 18
8)
Rating
Agency Downgrade. In
the
event that BSFP’s long-term unsecured and unsubordinated debt rating is reduced
below “AA-” by S&P or its long-term unsecured and unsubordinated debt rating
is withdrawn or reduced below “Aa3” by Moody’s (such rating thresholds,
“Approved Rating Thresholds”), then within 30 days after such rating withdrawal
or downgrade (unless, within 30 days after such withdrawal or downgrade, each
of
S&P and Fitch (and together with S&P, Moodys and DBRS, the “Swap Rating
Agencies”), has reconfirmed the rating of the Certificates, which was in effect
immediately prior to such withdrawal or downgrade), BSFP shall, at its own
expense and subject to the Rating Agency Condition, either (i) seek another
entity to replace BSFP as party to this Agreement that meets or exceeds the
Approved Rating Thresholds on terms substantially similar to this Agreement,
(ii) obtain a guaranty of, or a contingent agreement of another person with
the
Approved Rating Thresholds, to honor, BSFP’s obligations under this Agreement or
(iii) post collateral. BSFP’s failure to do any of the foregoing shall, at the
Counterparty’s option, constitute an Additional Termination Event with BSFP as
the Affected Party. In the event that BSFP’s long-term unsecured and
unsubordinated debt rating is withdrawn or reduced below “BBB-” by S&P, then
within 10 Business Days after such rating withdrawal or downgrade, BSFP shall,
subject to the Rating Agency Condition and at its own expense, either (i) secure
another entity to replace BSFP as party to this Agreement that meets or exceeds
the Approved Rating Thresholds on terms substantially similar to this Agreement
or (ii) obtain a guaranty of, or a contingent agreement of another person with
the Approved Rating Thresholds, to honor, BSFP’s obligations under this
Agreement. For purposes of this provision, “Rating Agency Condition” means, with
respect to any particular proposed act or omission to act hereunder that the
party acting or failing to act must consult with each of the Swap Rating
Agencies then providing a rating of the Certificates and receive from each
of
the Swap Rating Agencies a prior written confirmation that the proposed action
or inaction would not cause a downgrade or withdrawal of the then-current rating
of the Certificates.
9)
Payment Instructions. BSFP hereby agrees that, unless notified in writing by
the
Trustee of other payment instructions, any and all amounts payable by BSFP
to
the Counterparty under this Agreement shall be paid to the Trustee at the
account specified in Section 5.
10)
Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the
end thereof the following subsection (g):
"(g) Relationship
Between Parties.
|
Each
party represents to the other party on each date when it enters into
a
Transaction that:--
|
(1)
Nonreliance.
(i) It
is not relying on any statement or representation of the other party regarding
the Transaction (whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in respect of that
Transaction and (ii) it has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent it has
deemed necessary, and it has made its own investment, hedging and trading
decisions based upon its own judgment and upon any advice from such advisors
as
it has deemed necessary and not upon any view expressed by the other
party.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 12
of 18
(2)
Evaluation
and Understanding.
(i)
It
has the capacity to evaluate (internally or through independent professional
advice) the Transaction and has made its own decision to enter into the
Transaction; and
(ii)
It
understands the terms, conditions and risks of the Transaction and is willing
and able to accept those terms and conditions and to assume those risks,
financially and otherwise.
(3)
Purpose.
It is
entering into the Transaction for the purposes of managing its borrowings or
investments, hedging its underlying assets or liabilities or in connection
with
a line of business.
(4)
Principal.
It is
entering into the Transaction as principal, and not as agent or in any other
capacity, fiduciary or otherwise.
(5)
Eligible
Contract Participant.
It
constitutes an “eligible contract participant” as such term is defined in
Section 1(a)12 of the Commodity Exchange Act, as amended.
11)
Transfer, Amendment and Assignment. No transfer, amendment, waiver, supplement,
assignment or other modification of this Transaction shall be permitted by
either party unless each of S&P, Moody’s, DBRS and Fitch have been provided
prior notice of the same and confirms in writing (including by facsimile
transmission) that it will not downgrade, withdraw or otherwise modify its
then-current ratings of the Certificates.
12)
Non-Recourse. Notwithstanding any provision herein or in the ISDA Form Master
Agreement to the contrary, the obligations of Counterparty hereunder are limited
recourse obligations of Counterparty, payable solely from the Swap Account
and
the proceeds thereof, in accordance with the terms of the Pooling and Servicing
Agreement. In the event that the Swap Account and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the realization
of
the Swap Account and the proceeds thereof, any claims against or obligations
of
Counterparty under the ISDA Form Master Agreement or any other confirmation
thereunder still outstanding shall be extinguished and thereafter not revive.
The Trustee shall not have liability for any failure or delay in making a
payment hereunder to BSFP due to any failure or delay in receiving amounts
in
the Swap Account from the Trust created pursuant to the Pooling and Servicing
Agreement.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 13
of 18
13)
Additional Termination Events. (a) If a Rating Agency Downgrade has occurred
and
BSFP has not complied with Section 8 above, then an Additional Termination
Event
shall have occurred with respect to BSFP and BSFP shall be the sole Affected
Party with respect to such an Additional Termination Event. (b) If the Trustee
is unable to pay its Class A Certificates or fails or admits in writing its
inability to pay its Class A Certificates as they become due, then an Additional
Termination Event shall have occurred with respect to Counterparty and
Counterparty shall be the sole Affected Party with respect to such Additional
Termination Event. (c) If, at any time, the Majority Class CE Certificateholder
or the Master Servicer, as applicable, purchases the Mortgage Loans pursuant
to
Section 10.01 of the Pooling and Servicing Agreement, then an Additional
Termination Event shall have occurred and Counterparty shall be the sole
Affected Party with respect thereto; provided, however, that notwithstanding
Section 6(b)(iv) of the ISDA Form Master Agreement, both BSFP and Counterparty
shall have the right to designate an Early Termination Date (such Termination
Date shall not be later than the date on which the Mortgage Loans are purchased)
in respect of this Additional Termination Event. (d) If, upon the occurrence
of
a Swap Disclosure Event (as defined in paragraph 15 below) BSFP has not, within
10 Business Days after such Swap Disclosure Event complied with any of the
provisions set forth in clause (iii) of paragraph 15 below, then an Additional
Termination Event shall have occurred with respect to BSFP and BSFP shall be
the
sole Affected Party with respect to such Additional Termination
Event
14)
At
least
three Business Days prior to each Payment Date, Counterparty shall provide
or
make available to BSFP a statement indicating the
outstanding principal balance of the Senior Certificates and Subordinate
Certificates as of the last day of the month in which the Calculation Period
begins
15)
Compliance with Regulation AB.
(i) BSFP
agrees and acknowledges that Nomura Home Equity Loan, Inc. (“Nomura”) is
required under Regulation AB under the Securities Act of 1933, as amended,
and
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(“Regulation AB”), to disclose certain financial information regarding BSFP or
its group of affiliated entities, if applicable, depending on the aggregate
“significance percentage” of this Agreement and any other derivative contracts
between BSFP or its group of affiliated entities, if applicable, and
Counterparty, as calculated from time to time in accordance with Item 1115
of
Regulation AB.
(ii) It
shall
be a swap disclosure event (“Swap Disclosure Event”) if, on any Business Day
after the date hereof, Nomura requests from BSFP the applicable financial
information described in Item 1115 of Regulation AB (such request to be based
on
a reasonable determination by Nomura, in good faith, that such information
is
required under Regulation AB) (the “Swap Financial Disclosure”).
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 14
of 18
(iii) Upon
the
occurrence of a Swap Disclosure Event, BSFP, at its own expense, shall (a)
provide to Nomura the Swap Financial Disclosure, (b) secure another entity
to
replace BSFP as party to this Agreement on terms substantially similar to this
Agreement and subject to prior notification to the Swap Rating Agencies, which
entity (or a guarantor therefor) meets or exceeds the Approved Rating Thresholds
and which satisfies the Rating Agency Condition and which entity is able to
comply with the requirements of Item 1115 of Regulation AB or (c) obtain a
guaranty of the BSFP’s obligations under this Agreement, subject to Rating
Agency Condition, from an affiliate of the BSFP that is able to comply with
the
financial information disclosure requirements of Item 1115 of Regulation AB,
such that disclosure provided in respect of the affiliate will satisfy any
disclosure requirements applicable to the Swap Provider, and cause such
affiliate to provide Swap Financial Disclosure. If permitted by Regulation
AB,
any required Swap Financial Disclosure may be provided by incorporation by
reference from reports filed pursuant to the Exchange Act.
(iv) BSFP
agrees that, in the event that BSFP provides Swap Financial Disclosure to Nomura
in accordance with clause (iii)(a) of paragraph 15 or causes its affiliate
to
provide Swap Financial Disclosure to Nomura in accordance with clause (iii)(c)
of paragraph 15, it will indemnify and hold harmless Nomura, its respective
directors or officers and any person controlling Nomura, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in such Swap Financial
Disclosure or caused by any omission or alleged omission to state in such Swap
Financial Disclosure a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
|
NEITHER
THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF
THE
BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP IS AN OBLIGOR OR A CREDIT
SUPPORT PROVIDER ON THIS
AGREEMENT.
|
| 5. Account Details and Settlement Information: | Payments to BSFP: |
|
|
Citibank, N.A., New York |
| ABA Number: 000-0000-00, for the account of | |
| Bear, Xxxxxxx Securities Corp. | |
| Account Number: 0925-3186, for further credit to | |
| Bear Xxxxxxx Financial Products Inc. | |
| Sub-account Number: 102-04654-1-3 | |
| Attention: Derivatives Department |
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 15
of 18
Payments
to Counterparty:
Xxxxx
Fargo Bank, N.A.
ABA#
000-000-000
Acct
#
0000000000
Acct
Name: SAS Clearing
FFC:
NHEL
2006-HE1,
Supplemental
Interest Account,
Account
#
00000000
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
Counterparty
hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space
provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000.
To
discuss an inquiry regarding U.S. Transactions, please contact Xxxx
Xxxxxxx
by
telephone at 000-000-0000.
For all
other inquiries please contact Derivatives
Documentation by
telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 16
of 18
We
are
very pleased to have executed this Transaction with you and we look forward
to
completing other transactions with you in the near future.
Very
truly yours,
BEAR
XXXXXXX FINANCIAL PRODUCTS INC.
By: ______________________________
Name:
Title:
Counterparty,
acting through its duly authorized signatory, hereby agrees to, accepts and
confirms the terms of the foregoing as of the Trade Date.
HSBC
BANK USA, NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEE ON
BEHALF OF THE SUPPLEMENTAL INTEREST TRUST WITH RESPECT TO NOMURA HOME EQUITY
LOAN, INC., HOME EQUITY LOAN TRUST, SERIES 2006-HE1
By: _______________________
Name:
Title:
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 17
of 18
SCHEDULE
OF NOTIONAL AMOUNTS
(with
respect to the Floating Amounts all such dates are subject to adjustment in
accordance with the Business Day Convention and with respect to the Fixed
Amounts all such dates not subject to adjustment in accordance with the Business
Day Convention
)
|
From
and
including |
To
but excluding
|
Notional
Amount (USD) |
|
Effective
Date
|
25-Mar-06
|
953,750,000.00
|
|
25-Mar-06
|
25-Apr-06
|
938,124,000.00
|
|
25-Apr-06
|
25-May-06
|
920,988,000.00
|
|
25-May-06
|
25-Jun-06
|
902,399,000.00
|
|
25-Jun-06
|
25-Jul-06
|
882,417,000.00
|
|
25-Jul-06
|
25-Aug-06
|
861,107,000.00
|
|
25-Aug-06
|
25-Sep-06
|
838,560,000.00
|
|
25-Sep-06
|
25-Oct-06
|
814,879,000.00
|
|
25-Oct-06
|
25-Nov-06
|
790,700,000.00
|
|
25-Nov-06
|
25-Dec-06
|
767,150,000.00
|
|
25-Dec-06
|
25-Jan-07
|
744,280,000.00
|
|
25-Jan-07
|
25-Feb-07
|
722,069,000.00
|
|
25-Feb-07
|
25-Mar-07
|
700,499,000.00
|
|
25-Mar-07
|
25-Apr-07
|
679,551,000.00
|
|
25-Apr-07
|
25-May-07
|
659,207,000.00
|
|
25-May-07
|
25-Jun-07
|
639,449,000.00
|
|
25-Jun-07
|
25-Jul-07
|
620,256,000.00
|
|
25-Jul-07
|
25-Aug-07
|
601,415,000.00
|
|
25-Aug-07
|
25-Sep-07
|
582,830,000.00
|
|
25-Sep-07
|
25-Oct-07
|
559,393,000.00
|
|
25-Oct-07
|
25-Nov-07
|
526,297,000.00
|
|
25-Nov-07
|
25-Dec-07
|
494,660,000.00
|
|
25-Dec-07
|
25-Jan-08
|
465,090,000.00
|
|
25-Jan-08
|
25-Feb-08
|
437,506,000.00
|
|
25-Feb-08
|
25-Mar-08
|
414,821,000.00
|
|
25-Mar-08
|
25-Apr-08
|
399,748,000.00
|
|
25-Apr-08
|
25-May-08
|
385,597,000.00
|
|
25-May-08
|
25-Jun-08
|
371,928,000.00
|
|
25-Jun-08
|
25-Jul-08
|
358,721,000.00
|
|
25-Jul-08
|
25-Aug-08
|
345,959,000.00
|
Reference
Number: FXNHEL6H1
Nomura
Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1
March
9,
2006
Page
of 18
of 18
|
25-Aug-08
|
25-Sep-08
|
333,626,000.00
|
|
25-Sep-08
|
25-Oct-08
|
321,708,000.00
|
|
25-Oct-08
|
25-Nov-08
|
310,190,000.00
|
|
25-Nov-08
|
25-Dec-08
|
299,061,000.00
|
|
25-Dec-08
|
25-Jan-09
|
288,306,000.00
|
|
25-Jan-09
|
25-Feb-09
|
277,913,000.00
|
|
25-Feb-09
|
25-Mar-09
|
267,868,000.00
|
|
25-Mar-09
|
25-Apr-09
|
267,868,000.00
|
|
25-Apr-09
|
25-May-09
|
260,381,000.00
|
|
25-May-09
|
25-Jun-09
|
251,804,000.00
|
|
25-Jun-09
|
25-Jul-09
|
243,514,000.00
|
|
25-Jul-09
|
25-Aug-09
|
235,501,000.00
|
|
25-Aug-09
|
25-Sep-09
|
227,757,000.00
|
|
25-Sep-09
|
25-Oct-09
|
220,272,000.00
|
|
25-Oct-09
|
25-Nov-09
|
213,037,000.00
|
|
25-Nov-09
|
25-Dec-09
|
206,044,000.00
|
|
25-Dec-09
|
25-Jan-10
|
199,284,000.00
|
|
25-Jan-10
|
25-Feb-10
|
192,751,000.00
|
|
25-Feb-10
|
25-Mar-10
|
186,435,000.00
|
|
25-Mar-10
|
25-Apr-10
|
180,330,000.00
|
|
25-Apr-10
|
25-May-10
|
174,428,000.00
|
|
25-May-10
|
25-Jun-10
|
168,723,000.00
|
|
25-Jun-10
|
25-Jul-10
|
163,208,000.00
|
|
25-Jul-10
|
25-Aug-10
|
157,877,000.00
|
|
25-Aug-10
|
25-Sep-09
|
152,722,000.00
|
|
25-Sep-10
|
25-Oct-10
|
147,740,000.00
|
|
25-Oct-10
|
25-Nov-10
|
142,903,000.00
|
|
25-Nov-10
|
25-Dec-10
|
138,223,000.00
|
|
25-Dec-10
|
25-Jan-11
|
133,699,000.00
|
|
25-Jan-11
|
Termination
Date
|
129,325,000.00
|
P-1
EXHIBIT
X-1
FORM
OF SERVICING CRITERIA
|
Standard
File Layout - Master Servicing
|
||||
|
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
Max
Size
|
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
|
Text
up to 10 digits
|
20
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
|
Text
up to 10 digits
|
10
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
|
Text
up to 10 digits
|
10
|
|
BORROWER_NAME
|
The
borrower name as received in the file. It is not separated by first
and
last name.
|
|
Maximum
length of 30 (Last, First)
|
30
|
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported by
the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
6
|
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
|
MM/DD/YYYY
|
10
|
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
X-1-1
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
MM/DD/YYYY
|
10
|
|
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
Action
Code Key: 15=Bankruptcy, 00xXxxxxxxxxxx, , 00xXXX, 63=Substitution,
65=Repurchase,70=REO
|
2 |
|
|
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of the
cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_NET_INT
|
The
scheduled gross interest amount less the service fee amount for the
current cycle as reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_PRIN_AMT
|
The
actual principal amount collected by the Servicer for the current
reporting cycle -- only applicable for Actual/Actual
Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_NET_INT
|
The
actual gross interest amount less the service fee amount for the
current
reporting cycle as reported by the Servicer -- only applicable for
Actual/Actual Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
AMT
|
The
penalty amount received when a borrower prepays on his loan as reported
by
the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
WAIVED
|
The
prepayment penalty amount for the loan waived by the
servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
|
|
|
|
|
|
MOD_DATE
|
The
Effective Payment Date of the Modification for the loan.
|
|
MM/DD/YYYY
|
10
|
|
MOD_TYPE
|
The
Modification Type.
|
|
Varchar
- value can be alpha or numeric
|
30
|
|
DELINQ_P&I_ADVANCE_AMT
|
The
current outstanding principal and interest advances made by
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
X-1-2
Exhibit: Standard
File Layout - Delinquency Reporting
|
Tab
1
|
Fields
for Tab 1
|
Fields
for Tab 2 thru Tab 7
|
||
|
Summary
|
Investor
Number
|
CHL
Loan No
|
||
|
Portfolio
Balance
|
Investor
No
|
|||
|
Tab
2
|
Loan
Count
|
Investor
Block No
|
||
|
Normal
Servicing
|
Delinquencies
|
Investor
Loan No
|
||
|
30
|
Borrower
Name
|
|||
|
Tab
3
|
60
|
CoBorrower
Name
|
||
|
DEL
|
90
|
State
|
||
|
120
|
Original
Balance
|
|||
|
Tab
4
|
120+
|
Current
Balance
|
||
|
BK
|
FC
|
Escrow
Balance
|
||
|
BK
|
Paid
To Date
|
|||
|
Tab
5
|
WO
|
No
Days Delinquent
|
||
|
FC
|
REO
|
Next
Due Date
|
||
|
Totals
|
Status
|
|||
|
Tab
6
|
Monthly
Payment
|
|||
|
WO
|
Delinquent
Payment Balance
|
|||
|
First
Due Date
|
||||
|
Tab
7
|
Date
Mortgage Recorded
|
|||
|
REO
|
Lien
Position
|
|||
|
Reason
for Default
|
||||
|
Property
Condition
|
||||
|
Occupancy
Status
|
||||
|
Refered
to Attorney
|
||||
|
FC
Sale Date
|
||||
|
Notice
of Default
|
||||
|
1st
Legal Action
|
||||
|
BPO
Amount
|
||||
|
BPO
Dt
|
||||
|
Bankruptcy
Case No
|
||||
|
Chapter
No
|
||||
|
Discharge
Dt
|
||||
|
Proof
of Claim Filed
|
||||
|
Motion
Filed Dt
|
||||
|
BK
Filing Dt
|
||||
|
BK
Setup Dt
|
||||
|
Hearing
Dt
|
||||
|
Confirmation
Dt
|
||||
|
Post
Petition Payed to Dt
|
||||
|
Investor
Name
|
||||
|
Warning
Code
|
||||
|
Lockout
Code
|
||||
|
Address
|
||||
|
CityState
|
X-1-3
|
ZipCode
|
||||
|
Appraisal
Amount
|
||||
|
Appraisal
Date
|
||||
|
MI
Company
|
||||
|
MI
Covereage %
|
||||
|
Original
Loan Amount
|
||||
|
Interest
Rate
|
||||
|
Servicing
Fee
|
||||
|
PI
|
||||
|
Maturity_Date
|
||||
|
Loan
Term
|
||||
|
Property
Type
|
||||
|
Original
Purchase Price
|
||||
|
Purpose
of Loan
|
||||
|
Borrower
Social Security
|
||||
|
Original
FICO
|
||||
|
ARM
|
||||
|
MARGIN
|
||||
|
Arm
Index
|
||||
|
ARM
Rounding Feature
|
||||
|
Next
Interest Rate_Change
|
||||
|
Rate
Adjustment Cap
|
||||
|
Lifetime
Caps
|
X-1-4
EXHIBIT
X-2
Exhibit
2: Standard
File Codes - Delinquency Reporting
The
Loss
Mit Type
field
should show the approved Loss Mitigation Code as follows:
|
·
|
ASUM-
|
Approved
Assumption
|
|
|
·
|
BAP-
|
Borrower
Assistance Program
|
|
|
·
|
CO-
|
Charge
Off
|
|
|
·
|
DIL-
|
Deed-in-Lieu
|
|
|
·
|
FFA-
|
Formal
Forbearance Agreement
|
|
|
·
|
MOD-
|
Loan
Modification
|
|
|
·
|
PRE-
|
Pre-Sale
|
|
|
·
|
SS-
|
Short
Sale
|
|
|
·
|
MISC-
|
Anything
else approved by the PMI or Pool
Insurer
|
NOTE:
Xxxxx Fargo Bank 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 Xxxxx Fargo
Bank
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 code as
follows:
|
·
|
Mortgagor
|
|
|
·
|
Tenant
|
|
|
·
|
Unknown
|
|
|
·
|
Vacant
|
The
Property
Condition
field should show the last reported condition of the property as follows:
|
·
|
Damaged
|
|
|
·
|
Excellent
|
|
|
·
|
Fair
|
|
|
·
|
Gone
|
|
|
·
|
Good
|
|
|
·
|
Poor
|
|
|
·
|
Special
Hazard
|
|
|
·
|
Unknown
|
X-2-1
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Reason Code
field should show the Reason for Delinquency as follows:
|
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
|
X-2-2
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Status Code
field should show the Status of Default as follows:
|
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
|
X-2-3
Exhibit
: Calculation
of Realized Loss/Gain Form 332- Instruction Sheet
NOTE:
Do not net or combine items. Show all expenses individually and all credits
as
separate line items. Claim packages are due on the remittance report date.
Late
submissions may result in claims not being passed until the following month.
The
Servicer is responsible to remit all funds pending loss approval and /or
resolution of any disputed items.
1.
2. The
numbers on the 332 form correspond with the numbers listed below.
Liquidation
and Acquisition Expenses:
|
1.
|
The
Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
an Amortization Schedule from date of default through liquidation
breaking
out the net interest and servicing fees advanced is
required.
|
|
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.
For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced
is
required.
|
|
3.
|
Accrued
Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage
Loan as calculated on a monthly basis. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net
interest and servicing fees advanced is
required.
|
|
4-12.
|
Complete
as applicable. Required
documentation:
|
*
For
taxes and insurance advances - see page 2 of 332 form - breakdown required
showing period of
coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances.
*
For
escrow advances - complete payment history
(to
calculate advances from last positive escrow balance forward)
*
Other
expenses - copies of corporate advance history showing all payments
*
REO
repairs > $1500 require explanation
*
REO
repairs >$3000 require evidence of at least 2 bids.
*
Short
Sale or Charge Off require P&L supporting the decision and
WFB’s approved Officer Certificate
*
Unusual
or extraordinary items may require further documentation.
|
13.
|
The
total of lines 1 through 12.
|
|
3.
|
Credits:
|
|
14-21.
|
Complete
as applicable. Required
documentation:
|
*
Copy of
the HUD 1 from the REO sale. If a 3rd
Party
Sale, bid instructions and Escrow
Agent / Attorney
X-2-4
Letter
of
Proceeds
Breakdown.
*
Copy of
EOB for any MI or gov't guarantee
*
All
other credits need to be clearly defined on the 332
form
|
22.
|
The
total of lines 14 through 21.
|
Please
Note: For
HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for
Part
B/Supplemental proceeds.
Total
Realized Loss (or Amount of Any Gain)
| 23. |
The
total derived from subtracting line 22 from 13. If the amount represents
a
realized gain, show
the amount in parenthesis ( ).
|
X-2-5
Exhibit
3A: Calculation
of Realized Loss/Gain Form 332
|
Prepared
by:
|
Date:
|
||
|
Phone:
|
Email
Address:
|
|
Servicer
Loan No.
|
Servicer
Name
|
Servicer
Address
|
XXXXX
FARGO BANK, N.A. Loan No._____________________________
Borrower's
Name: _________________________________________________________
Property
Address: _________________________________________________________
|
Liquidation
Type: REO Sale
|
3rd
Party Sale
|
Short
Sale
|
Charge
Off
|
|||
|
Was
this loan granted a Bankruptcy deficiency or
cramdown
|
Yes
|
|
No
|
|
If
“Yes”, provide deficiency or cramdown amount
_______________________________
|
|
|
|
|
Liquidation
and Acquisition Expenses:
|
|||
|
(1)
|
Actual
Unpaid Principal Balance of Mortgage Loan
|
$
______________
|
(1)
|
|
(2)
|
Interest
accrued at Net Rate
|
________________
|
(2)
|
|
(3)
|
Accrued
Servicing Fees
|
________________
|
(3)
|
|
(4)
|
Attorney's
Fees
|
________________
|
(4)
|
|
(5)
|
Taxes
(see page 2)
|
________________
|
(5)
|
|
(6)
|
Property
Maintenance
|
________________
|
(6)
|
|
(7)
|
MI/Hazard
Insurance Premiums (see page 2)
|
________________
|
(7)
|
|
(8)
|
Utility
Expenses
|
________________
|
(8)
|
|
(9)
|
Appraisal/BPO
|
________________
|
(9)
|
|
(10)
|
Property
Inspections
|
________________
|
(10)
|
|
(11)
|
FC
Costs/Other Legal Expenses
|
________________
|
(11)
|
|
(12)
|
Other
(itemize)
|
________________
|
(12)
|
|
Cash
for Keys__________________________
|
________________
|
(12)
|
|
|
HOA/Condo
Fees_______________________
|
________________
|
(12)
|
|
|
______________________________________
|
________________
|
(12)
|
|
X-2-6
|
Total
Expenses
|
$
_______________
|
(13)
|
|
|
Credits:
|
|||
|
(14)
|
Escrow
Balance
|
$
_______________
|
(14)
|
|
(15)
|
HIP
Refund
|
________________
|
(15)
|
|
(16)
|
Rental
Receipts
|
________________
|
(16)
|
|
(17)
|
Hazard
Loss Proceeds
|
________________
|
(17)
|
|
(18)
|
Primary
Mortgage Insurance / Gov’t Insurance
|
________________
|
(18a)
HUD Part A
|
|
|
________________
|
(18b)
HUD Part B
|
|
|
(19)
|
Pool
Insurance Proceeds
|
________________
|
(19)
|
|
(20)
|
Proceeds
from Sale of Acquired Property
|
________________
|
(20)
|
|
(21)
|
Other
(itemize)
|
________________
|
(21)
|
|
_________________________________________
|
________________
|
(21)
|
|
|
Total
Credits
|
$________________
|
(22)
|
|
|
Total
Realized Loss (or Amount of Gain)
|
$________________
|
(23)
|
|
X-2-7
Escrow
Disbursement Detail
|
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of Coverage
|
Total
Paid
|
Base
Amount
|
Penalties
|
Interest
|
X-2-8
