HSI ASSET SECURITIZATION CORPORATION, Depositor NC CAPITAL CORPORATION, Mortgage Loan Seller, WELLS FARGO BANK, N.A., Master Servicer and Securities Administrator JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Servicer and DEUTSCHE BANK NATIONAL TRUST...
Execution
HSI
ASSET
SECURITIZATION CORPORATION,
Depositor
NC
CAPITAL CORPORATION,
Mortgage
Loan Seller,
▇▇▇▇▇
FARGO BANK, N.A.,
Master
Servicer and Securities Administrator
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION,
Servicer
and
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
Trustee
and Custodian
Dated
as
of February 1, 2006
HSI
ASSET
SECURITIZATION CORPORATION TRUST 2006-NC1
MORTGAGE
PASS-THROUGH CERTIFICATES,
SERIES 2006-NC1
TABLE
OF
CONTENTS
|
Page
|
||
|
ARTICLE
I
|
||
|
DEFINITIONS
|
||
|
ARTICLE
II
|
||
|
CONVEYANCE
OF MORTGAGE LOANS;
|
||
|
REPRESENTATIONS
AND WARRANTIES
|
||
|
Section
2.01
|
Conveyance
of Mortgage Loans
|
46
|
|
Section
2.02
|
Acceptance
by the Custodian of the Mortgage Loans
|
50
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Mortgage Loan Seller and the
Servicer;
Remedies for Breaches of Representations and Warranties with
Respect to
the Mortgage Loans
|
51
|
|
Section
2.04
|
Execution
and Delivery of Certificates
|
55
|
|
Section
2.05
|
REMIC
Matters
|
55
|
|
Section
2.06
|
Representations
and Warranties of the Depositor
|
55
|
|
ARTICLE
III
|
||
|
ADMINISTRATION
AND SERVICING
|
||
|
OF
MORTGAGE LOANS
|
||
|
Section
3.01
|
Servicer
to Service Mortgage Loans
|
56
|
|
Section
3.02
|
Subservicing
Agreements between Servicer and Subservicers; Use of
Subcontractors
|
58
|
|
Section
3.03
|
Successor
Subservicers
|
60
|
|
Section
3.04
|
Liability
of the Servicer
|
60
|
|
Section
3.05
|
No
Contractual Relationship between Subservicers and the Master
Servicer
|
61
|
|
Section
3.06
|
Assumption
or Termination of Subservicing Agreements by Master
Servicer
|
61
|
|
Section
3.07
|
Collection
of Certain Mortgage Loan Payments
|
61
|
|
Section
3.08
|
Subservicing
Accounts
|
64
|
|
Section
3.09
|
Collection
of Taxes, Assessments and Similar Items; Escrow Accounts
|
65
|
|
Section
3.10
|
Collection
Account
|
66
|
|
Section
3.11
|
Withdrawals
from the Collection Account
|
67
|
|
Section
3.12
|
Investment
of Funds in the Collection Account, Escrow Accounts and the Distribution
Account
|
68
|
-i-
|
Section
3.13
|
Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage
|
70
|
|
Section
3.14
|
Enforcement
of Due-On-Sale Clauses; Assumption Agreements
|
71
|
|
Section
3.15
|
Realization
upon Defaulted Mortgage Loans
|
72
|
|
Section
3.16
|
Release
of Mortgage Files
|
73
|
|
Section
3.17
|
Title,
Conservation and Disposition of REO Property
|
74
|
|
Section
3.18
|
Notification
of Adjustments
|
76
|
|
Section
3.19
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans
|
76
|
|
Section
3.20
|
Documents,
Records and Funds in Possession of the Servicer to Be Held for
the
Trustee
|
77
|
|
Section
3.21
|
Servicing
Compensation
|
77
|
|
Section
3.22
|
Report
on Assessment of Compliance with Relevant Servicing
Criteria.
|
78
|
|
Section
3.23
|
Report
on Attestation of Compliance with Relevant Servicing
Criteria.
|
79
|
|
Section
3.24
|
Annual
Officer’s Certificates.
|
79
|
|
Section
3.25
|
Master
Servicer to Act as Servicer
|
80
|
|
Section
3.26
|
Compensating
Interest
|
81
|
|
Section
3.27
|
Credit
Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
|
81
|
|
Section
3.28
|
[Reserved]
|
81
|
|
Section
3.29
|
Obligations
of the Custodian; Indemnification.
|
81
|
|
Section
3.30
|
Notifications
to Parties.
|
82
|
|
ARTICLE
IV
|
||
|
DISTRIBUTIONS
AND
|
||
|
ADVANCES
BY THE SERVICER
|
||
|
Section
4.01
|
Advances
|
83
|
|
Section
4.02
|
Priorities
of Distribution
|
84
|
|
Section
4.03
|
Monthly
Statements to Certificateholders
|
89
|
|
Section
4.04
|
Certain
Matters Relating to the Determination of LIBOR
|
92
|
|
Section
4.05
|
Allocation
of Applied Realized Loss Amounts
|
93
|
|
Section
4.06
|
Supplemental
Interest Trust.
|
93
|
|
Section
4.07
|
Rights
of the Swap Counterparty.
|
94
|
|
Section
4.08
|
Termination
Receipts.
|
95
|
|
ARTICLE
V
|
||
|
THE
CERTIFICATES
|
||
|
Section
5.01
|
The
Certificates
|
96
|
|
Section
5.02
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates
|
97
|
|
Section
5.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates
|
103
|
|
Section
5.04
|
Persons
Deemed Owners
|
103
|
|
Section
5.05
|
Access
to List of Certificateholders’ Names and Addresses
|
103
|
|
Section
5.06
|
Maintenance
of Office or Agency
|
104
|
-ii-
|
ARTICLE
VI
|
||
|
THE
DEPOSITOR AND THE SERVICER
|
||
|
Section
6.01
|
Respective
Liabilities of the Depositor and the Servicer
|
104
|
|
Section
6.02
|
Merger
or Consolidation of the Depositor or the Servicer
|
104
|
|
Section
6.03
|
Limitation
on Liability of the Depositor, the Servicer and Others.
|
104
|
|
Section
6.04
|
Limitation
on Resignation of the Servicer.
|
105
|
|
Section
6.05
|
Additional
Indemnification by the Servicer; Third Party Claims.
|
105
|
|
Section
6.06
|
Compliance
with Regulation AB; Cooperation of Parties
|
106
|
|
ARTICLE
VII
|
||
|
DEFAULT
|
||
|
Section
7.01
|
Events
of Default
|
107
|
|
Section
7.02
|
Master
Servicer to Act; Appointment of Successor
|
109
|
|
Section
7.03
|
Notification
to Certificateholders
|
110
|
|
ARTICLE
VIII
|
||
|
CONCERNING
THE TRUSTEE
|
||
|
Section
8.01
|
Duties
of the Trustee
|
111
|
|
Section
8.02
|
Certain
Matters Affecting the Trustee
|
112
|
|
Section
8.03
|
Trustee
Not Liable for Certificates or Mortgage Loans
|
113
|
|
Section
8.04
|
Trustee
May Own Certificates
|
113
|
|
Section
8.05
|
Trustee’s
Fees Indemnification and Expenses
|
113
|
|
Section
8.06
|
Eligibility
Requirements for the Trustee
|
114
|
|
Section
8.07
|
Resignation
and Removal of the Trustee
|
115
|
|
Section
8.08
|
Successor
Trustee
|
115
|
|
Section
8.09
|
Merger
or Consolidation of the Trustee
|
116
|
|
Section
8.10
|
Appointment
of Co-Trustee or Separate Trustee
|
116
|
|
Section
8.11
|
Tax
Matters
|
117
|
|
Section
8.12
|
Commission
Reporting
|
121
|
|
Section
8.13
|
Tax
Classification of the Excess Reserve Fund Account and the Supplemental
Interest Trust
|
127
|
|
ARTICLE
IX
|
||
|
ADMINISTRATION
OF THE MORTGAGE LOANS
|
||
|
BY
THE MASTER SERVICER
|
||
|
Section
9.01
|
Duties
of the Master Servicer; Enforcement of Servicer
Obligations.
|
127
|
-iii-
|
Section
9.02
|
Assessment,
Attestation Annual Statement as to Compliance of the Master
Servicer
|
128
|
|
Section
9.03
|
[Reserved]
|
128
|
|
Section
9.04
|
Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
|
128
|
|
Section
9.05
|
Representations
and Warranties of the Master Servicer
|
129
|
|
Section
9.06
|
Master
Servicer Events of Default
|
130
|
|
Section
9.07
|
Waiver
of Default.
|
132
|
|
Section
9.08
|
Successor
to the Master Servicer.
|
132
|
|
Section
9.09
|
Compensation
of the Master Servicer.
|
133
|
|
Section
9.10
|
Merger
or Consolidation.
|
133
|
|
Section
9.11
|
Resignation
of the Master Servicer.
|
133
|
|
Section
9.12
|
Assignment
or Delegation of Duties by the Master Servicer.
|
134
|
|
Section
9.13
|
Limitation
on Liability of the Master Servicer.
|
134
|
|
Section
9.14
|
Indemnification;
Third Party Claims.
|
135
|
|
ARTICLE
X
|
||
|
CONCERNING
THE SECURITIES ADMINISTRATOR
|
||
|
Section
10.01
|
Duties
of Securities Administrator.
|
136
|
|
Section
10.02
|
Certain
Matters Affecting the Securities Administrator.
|
137
|
|
Section
10.03
|
Securities
Administrator Not Liable for Certificates or Mortgage
Loans.
|
138
|
|
Section
10.04
|
Securities
Administrator May Own Certificates.
|
139
|
|
Section
10.05
|
Securities
Administrator’s Fees and Expenses.
|
139
|
|
Section
10.06
|
Eligibility
Requirements for Securities Administrator.
|
140
|
|
Section
10.07
|
Resignation
and Removal of Securities Administrator.
|
140
|
|
Section
10.08
|
Successor
Securities Administrator.
|
141
|
|
Section
10.09
|
Merger
or Consolidation of Securities Administrator.
|
142
|
|
Section
10.10
|
Assignment
or Delegation of Duties by the Securities Administrator.
|
142
|
|
Section
10.11
|
Attestation,
Annual Statement of Compliance of the Securities
Administrator
|
142
|
|
ARTICLE
XI
|
||
|
TERMINATION
|
||
|
Section
11.01
|
Termination
upon Liquidation or Purchase of the Mortgage Loans
|
143
|
|
Section
11.02
|
Final
Distribution on the Certificates
|
143
|
|
Section
11.03
|
Additional
Termination Requirements
|
145
|
|
ARTICLE
XII
|
||
|
MISCELLANEOUS
PROVISIONS
|
||
|
Section
12.01
|
Amendment
|
145
|
|
Section
12.02
|
Recordation
of Agreement; Counterparts
|
147
|
-iv-
|
Section
12.03
|
Governing
Law
|
148
|
|
Section
12.04
|
Intention
of Parties
|
148
|
|
Section
12.05
|
Notices
|
149
|
|
Section
12.06
|
Severability
of Provisions
|
150
|
|
Section
12.07
|
Assignment
|
150
|
|
Section
12.08
|
Limitation
on Rights of Certificateholders
|
150
|
|
Section
12.09
|
Inspection
and Audit Rights
|
151
|
|
Section
12.10
|
Certificates
Nonassessable and Fully Paid
|
151
|
|
Section
12.11
|
Rule of
Construction
|
152
|
|
Section
12.12
|
Waiver
of Jury Trial
|
152
|
-v-
|
SCHEDULES
|
|
|
Schedule I
|
Mortgage
Loan Schedule
|
|
Schedule II
|
Representations
and Warranties of JPMorgan Chase Bank, National Association, as
Servicer
|
|
Schedule III
|
Representations
and Warranties of NC Capital Corporation, as Mortgage Loan
Seller
|
|
Schedule IV
|
Representations
and Warranties of NC Capital Corporation as to the Individual Mortgage
Loans
|
|
EXHIBITS
|
|
|
Exhibit A
|
Form
of Class A and Class M Certificates
|
|
Exhibit B
|
Form
of Class P Certificate
|
|
Exhibit C
|
Form
of Class R Certificate
|
|
Exhibit D
|
Form
of Class X Certificate
|
|
Exhibit E
|
Form
of Initial Certification of Custodian
|
|
Exhibit F
|
Form
of Document Certification and Exception Report of
Custodian
|
|
Exhibit G
|
Form
of Residual Transfer Affidavit
|
|
Exhibit H
|
Form
of Transferor Certificate
|
|
Exhibit I
|
Form
of Rule 144A Letter
|
|
Exhibit J
|
Form
of Request for Release
|
|
Exhibit K
|
Contents
for Each Mortgage File
|
|
Exhibit L
|
Form
of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to be Provided by Master Servicer
(or
other Certification Party) with Form 10-K
|
|
Exhibit M
|
Form
of Servicer (or Servicing Function Participant) Back-Up
Certification
|
|
Exhibit
N-1
|
Form
of Monthly Remittance Advice
|
|
Exhibit
N-2
|
Standard
Layout for Monthly Defaulted Loan Report
|
|
Exhibit
N-3
|
Form
332 Realized Loss Report
|
-vi-
|
Exhibit
O
|
Form
of Swap Agreement
|
|
Exhibit
P
|
Form
of Cap Agreement
|
|
Exhibit
Q
|
Form
of Amended and Restated Master Mortgage Loan Purchase and Interim
Servicing Agreement
|
|
Exhibit
R
|
[Reserved]
|
|
Exhibit
S
|
Servicing
Criteria to be Addressed in Report on Assessment of
Compliance
|
|
Exhibit
T
|
Transaction
Parties
|
|
Exhibit
U
|
Form
of Annual Compliance Certificate
|
|
Exhibit
V
|
Additional
Form 10-D Disclosure
|
|
Exhibit
W
|
Additional
Form 10-K Disclosure
|
|
Exhibit
X
|
Form
8-K Disclosure Information
|
-vii-
THIS
POOLING AND SERVICING AGREEMENT, dated as of February 1, 2006, among HSI ASSET
SECURITIZATION CORPORATION, as depositor (the “Depositor”),
NC
CAPITAL CORPORATION, a California Corporation, as mortgage loan seller (the
“Mortgage
Loan Seller”),
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as servicer (the “Servicer”),
▇▇▇▇▇
FARGO BANK, N.A., a national banking association, as master servicer (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”),
and
DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee
(in such capacity, the “Trustee”)
and
custodian (in such capacity, the “Custodian”).
WITNESSETH:
In
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
PRELIMINARY
STATEMENT
The
Securities Administrator on behalf of the Trust Fund (exclusive of (i) the
Swap
Agreement, (u) the Cap Agreement (iii) the right to receive and the obligation
to pay Basis Risk Carryover Amounts, (iv) the Excess Reserve Fund Account,
(v)
the Supplemental Interest Trust and the Supplemental Interest Trust Account
and
(vi) the obligations to pay Class I Shortfalls (collectively, the “Excluded
Trust Assets”)
shall
elect that two segregated asset pools within the Trust Fund be treated for
federal income tax purposes as comprising three real estate mortgage investment
conduits under Section 860D of the Code (each a “REMIC”
or,
in
the alternative, “REMIC
1,”
REMIC
2”
and
“REMIC
3,”;
REMIC
3 also being referred to herein as the “Upper
Tier REMIC.”)
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 election.
Each
Certificate, other than the Class R Certificates, represents ownership of a
regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
In addition, each Certificate, other than the Class R, Class X and Class P
Certificates, represents (i) the right to receive payments with respect to
any
Basis Risk Carryover Amounts and (ii) the obligation to pay Class I Shortfalls.
The Class R Certificate represents ownership of the sole Class of residual
interest in each of REMIC 1, REMIC 2 and the Upper Tier REMIC for purposes
of
the REMIC Provisions.
The
Upper
Tier REMIC shall hold as its assets the uncertificated Lower Tier Interests
in
REMIC 2, other than the Class LT2-R interest, and each such Lower Tier Interest
is hereby designated as a regular interest in REMIC 2 for purposes of the REMIC
Provisions. REMIC 2 shall hold as its assets the uncertificated Lower Tier
Interests in REMIC 1, and each such Lower Tier Interest is hereby designated
as
a regular interest in REMIC 1. REMIC 1 shall hold as its assets the property
of
the Trust Fund other than the Lower Tier Interests in REMIC 1 and REMIC 2 and
the Excluded Trust Assets.
REMIC
1:
The
following table sets forth the designations, principal balances and interest
rates for each interest in REMIC 1, each of which (other than the Class LT1-R
Lower Tier Interest) is hereby designated as a regular interest in REMIC 1
(the
“REMIC 1 Regular Interests”):
|
Class
Designation
|
Initial
Principal Balance
|
Interest
Rate |
|||||
|
LT1-A
|
$
|
25,780,631.20
|
(1
|
)
|
|||
|
LT1-F1
|
$
|
3,834,949.26
|
(2
|
)
|
|||
|
LT1-V1
|
$
|
3,834,949.26
|
(3
|
)
|
|||
|
LT1-F2
|
$
|
4,392,183.35
|
(2
|
)
|
|||
|
LT1-V2
|
$
|
4,392,183.35
|
(3
|
)
|
|||
|
LT1-F3
|
$
|
4,930,349.57
|
(2
|
)
|
|||
|
LT1-V3
|
$
|
4,930,349.57
|
(3
|
)
|
|||
|
LT1-F4
|
$
|
5,443,289.45
|
(2
|
)
|
|||
|
LT1-V4
|
$
|
5,443,289.45
|
(3
|
)
|
|||
|
LT1-F5
|
$
|
5,924,612.01
|
(2
|
)
|
|||
|
LT1-V5
|
$
|
5,924,612.01
|
(3
|
)
|
|||
|
LT1-F6
|
$
|
6,368,494.20
|
(2
|
)
|
|||
|
LT1-V6
|
$
|
6,368,494.20
|
(3
|
)
|
|||
|
LT1-F7
|
$
|
6,071,750.18
|
(2
|
)
|
|||
|
LT1-V7
|
$
|
6,071,750.18
|
(3
|
)
|
|||
|
LT1-F8
|
$
|
5,776,668.58
|
(2
|
)
|
|||
|
LT1-V8
|
$
|
5,776,668.58
|
(3
|
)
|
|||
|
LT1-F9
|
$
|
5,495,927.68
|
(2
|
)
|
|||
|
LT1-V9
|
$
|
5,495,927.68
|
(3
|
)
|
|||
|
LT1-F10
|
$
|
5,228,830.54
|
(2
|
)
|
|||
|
LT1-V10
|
$
|
5,228,830.54
|
(3
|
)
|
|||
|
LT1-F11
|
$
|
4,974,714.07
|
(2
|
)
|
|||
|
LT1-V11
|
$
|
4,974,714.07
|
(3
|
)
|
|||
|
LT1-F12
|
$
|
4,732,947.44
|
(2
|
)
|
|||
|
LT1-V12
|
$
|
4,732,947.44
|
(3
|
)
|
|||
|
LT1-F13
|
$
|
4,502,930.45
|
(2
|
)
|
|||
|
LT1-V13
|
$
|
4,502,930.45
|
(3
|
)
|
|||
|
LT1-F14
|
$
|
4,284,092.08
|
(2
|
)
|
|||
|
LT1-V14
|
$
|
4,284,092.08
|
(3
|
)
|
|||
|
LT1-F15
|
$
|
4,077,346.63
|
(2
|
)
|
|||
|
LT1-V15
|
$
|
4,077,346.63
|
(3
|
)
|
|||
|
LT1-F16
|
$
|
3,879,032.23
|
(2
|
)
|
|||
|
LT1-V16
|
$
|
3,879,032.23
|
(3
|
)
|
|||
|
LT1-F17
|
$
|
6,962,774.90
|
(2
|
)
|
|||
|
LT1-V17
|
$
|
6,962,774.90
|
(3
|
)
|
|||
|
LT1-F18
|
$
|
6,326,980.58
|
(2
|
)
|
|||
|
LT1-V18
|
$
|
6,326,980.58
|
(3
|
)
|
|||
|
LT1-F19
|
$
|
5,723,968.20
|
(2
|
)
|
-2-
|
Class
Designation
|
Initial
Principal Balance
|
Interest
Rate
|
|||||
|
LT1-V19
|
$
|
5,723,968.20
|
(3
|
)
|
|||
|
LT1-F20
|
$
|
5,151,079.61
|
(2
|
)
|
|||
|
LT1-V20
|
$
|
5,151,079.61
|
(3
|
)
|
|||
|
LT1-F21
|
$
|
4,639,019.07
|
(2
|
)
|
|||
|
LT1-V21
|
$
|
4,639,019.07
|
(3
|
)
|
|||
|
LT1-F22
|
$
|
2,699,234.04
|
(2
|
)
|
|||
|
LT1-V22
|
$
|
2,699,234.04
|
(3
|
)
|
|||
|
LT1-F23
|
$
|
2,514,317.96
|
(2
|
)
|
|||
|
LT1-V23
|
$
|
2,514,317.96
|
(3
|
)
|
|||
|
LT1-F24
|
$
|
2,370,595.08
|
(2
|
)
|
|||
|
LT1-V24
|
$
|
2,370,595.08
|
(3
|
)
|
|||
|
LT1-F25
|
$
|
3,059,691.97
|
(2
|
)
|
|||
|
LT1-V25
|
$
|
3,059,691.97
|
(3
|
)
|
|||
|
LT1-F26
|
$
|
2,815,452.51
|
(2
|
)
|
|||
|
LT1-V26
|
$
|
2,815,452.51
|
(3
|
)
|
|||
|
LT1-F27
|
$
|
2,578,987.17
|
(2
|
)
|
|||
|
LT1-V27
|
$
|
2,578,987.17
|
(3
|
)
|
|||
|
LT1-F28
|
$
|
2,364,027.49
|
(2
|
)
|
|||
|
LT1-V28
|
$
|
2,364,027.49
|
(3
|
)
|
|||
|
LT1-F29
|
$
|
1,133,930.01
|
(2
|
)
|
|||
|
LT1-V29
|
$
|
1,133,930.01
|
(3
|
)
|
|||
|
LT1-F30
|
$
|
1,730,842.06
|
(2
|
)
|
|||
|
LT1-V30
|
$
|
1,730,842.06
|
(3
|
)
|
|||
|
LT1-F31
|
$
|
1,308,461.62
|
(2
|
)
|
|||
|
LT1-V31
|
$
|
1,308,461.62
|
(3
|
)
|
|||
|
LT1-F32
|
$
|
1,223,918.26
|
(2
|
)
|
|||
|
LT1-V32
|
$
|
1,223,918.26
|
(3
|
)
|
|||
|
LT1-F33
|
$
|
1,149,695.58
|
(2
|
)
|
|||
|
LT1-V33
|
$
|
1,149,695.58
|
(3
|
)
|
|||
|
LT1-F34
|
$
|
1,079,969.16
|
(2
|
)
|
|||
|
LT1-V34
|
$
|
1,079,969.16
|
(3
|
)
|
|||
|
LT1-F35
|
$
|
1,014,466.88
|
(2
|
)
|
|||
|
LT1-V35
|
$
|
1,014,466.88
|
(3
|
)
|
|||
|
LT1-F36
|
$
|
15,688,704.61
|
(2
|
)
|
|||
|
LT1-V36
|
$
|
15,688,704.61
|
(3
|
)
|
|||
|
LT1-R
|
(4)
|
|
(4
|
)
|
|
(1)
|
For
any Distribution Date (and the related Interest Accrual Period) the
interest rate for the Class LT1-A Interest shall be the Net WAC Rate.
|
|
(2)
|
For
any Distribution Date (and the related Interest Accrual Period) the
interest rate for each of these Lower Tier Interests shall be the
lesser
of (i) 10.20% and (ii) the product of (a) the Net WAC Rate and (b)
2.
|
-3-
|
(3)
|
For
any Distribution Date (and the related Interest Accrual Period) the
interest rate for each of these Lower Tier Interests shall be the
excess,
if any, of (i) the product of (a) the Net WAC Rate and (b) 2, over
(ii)
10.20%.
|
|
(4)
|
The
Class LT1-R interest shall not have a principal amount and shall
not bear
interest. The Class LT1-R interest is hereby designated as the sole
class
of residual interest in REMIC 1.
|
On
each
Distribution Date, the Securities Administrator shall first pay or charge as
an
expense of REMIC 1 all expenses of the Trust Fund for such Distribution Date,
other than any Net Swap Payment or Swap Termination Payment required to be
made
from the Trust Fund.
On
each
Distribution Date the Securities Administrator shall distribute the Interest
Remittance Amount (net of expenses described in the preceding paragraph) with
respect to each of the Lower Tier Interests in REMIC 1 based on the
above-described interest rates.
On
each
Distribution Date, the Securities Administrator shall distribute the Principal
Remittance Amount with respect to the Lower Tier Interests in REMIC 1, first
to
the Class LT1-A Interest until its principal balance is reduced to zero, and
then sequentially, to the other Lower Tier Interests in REMIC 1 in ascending
order of their numerical class designation, and, with respect to each pair
of
classes having the same numerical designation, in equal amounts to each such
class, until the principal balance of each such class is reduced to zero. All
losses on the Mortgage Loans shall be allocated among the Lower Tier Interests
in REMIC 1 in the same manner that principal distributions are
allocated.
On
each
Distribution Date, the Securities Administrator shall distribute the Prepayment
Premiums collected during the preceding Prepayment Period to the Class LT1-V36
Lower Tier Interests.
-4-
REMIC
2:
The
following table sets forth the designations, principal balances and interest
rates for each interest in REMIC 2, each of which (other than the Class LT2-R
interest) is hereby designated as a regular interest in REMIC 2 (the “REMIC 2
Regular Interests”):
|
REMIC
2
Lower
Tier
Class
Designation
|
REMIC
2
Lower
Tier
Interest
Rate
|
Initial
Class
Principal
Amount
|
Corresponding
Class of Certificate(s)
|
|||
|
Class
LT2-I-A
|
(1)
|
(4)
|
I-A
|
|||
|
Class
LT2-II-A
|
(1)
|
(4)
|
II-A
|
|||
|
Class
LT2-M1
|
(1)
|
(4)
|
M-1
|
|||
|
Class
LT2-M2
|
(1)
|
(4)
|
M-2
|
|||
|
Class
LT2-M3
|
(1)
|
(4)
|
M-3
|
|||
|
Class
LT2-M4
|
(1)
|
(4)
|
M-4
|
|||
|
Class
LT2-M5
|
(1)
|
(4)
|
M-5
|
|||
|
Class
LT2-M6
|
(1)
|
(4)
|
M-6
|
|||
|
Class
LT2-M7
|
(1)
|
(4)
|
M-7
|
|||
|
Class
LT2-M8
|
(1)
|
(4)
|
M-8
|
|||
|
Class
LT2-M9
|
(1)
|
(4)
|
M-9
|
|||
|
Class
LT2-M10
|
(1)
|
(4)
|
M-10
|
|||
|
Class
LT2-M11
|
(1)
|
(4)
|
M-11
|
|||
|
Class
LT2-Q
|
(1)
|
(5)
|
N/A
|
|||
|
Class
LT2-IO
|
(2)
|
(2)
|
N/A
|
|||
|
Class
LT2-R
|
(3)
|
(3)
|
R
|
___________________________
|
(1)
|
For
any Distribution Date (and the related Interest Accrual Period) the
interest rate for each of these Lower Tier Interests in REMIC 2 is
a per
annum rate equal to the weighted average of the interest rates on
the
Lower Tier Interests in REMIC 1 for such Distribution Date; provided,
however,
that (i) for any Distribution Date on which the Class LT2-IO Interest
is
entitled to a portion of the interest accruals on a Lower Tier Interest
in
REMIC 1 having an “F” in its class designation, as described in footnote
two below, such weighted average shall be computed by first subjecting
the
rate on such Lower Tier Interest in REMIC 1 to a cap equal to Swap
LIBOR
for such Distribution Date.
|
|
(2)
|
The
Class LT2-IO is an interest only class that does not have a principal
balance. For only those Distribution Dates listed in the first column
in
the table below, the Class LT2-IO shall be entitled to interest accrued
on
the Lower Tier Interest in REMIC 1 listed in second column in the
table
below at a per annum rate equal to the excess, if any, of (i) the
interest
rate for such Lower Tier Interest in REMIC 1 for such Distribution
Date
over (ii) Swap LIBOR for such Distribution
Date.
|
|
Distribution
Dates
|
REMIC
1
Class Designation
|
|
|
2
|
Class
LT1-F1
|
|
|
2-3
|
Class
LT1-F2
|
|
|
2-4
|
Class
LT1-F3
|
|
|
2-5
|
Class
LT1-F4
|
|
|
2-6
|
Class
LT1-F5
|
|
|
2-7
|
Class
LT1-F6
|
|
|
2-8
|
Class
LT1-F7
|
|
|
2-9
|
Class
LT1-F8
|
|
|
2-10
|
Class
LT1-F9
|
|
|
2-11
|
Class
LT1-F10
|
-5-
|
2-12
|
Class
LT1-F11
|
|
2-13
|
Class
LT1-F12
|
|
2-14
|
Class
LT1-F13
|
|
2-15
|
Class
LT1-F14
|
|
2-16
|
Class
LT1-F15
|
|
2-17
|
Class
LT1-F16
|
|
2-18
|
Class
LT1-F17
|
|
2-19
|
Class
LT1-F18
|
|
2-20
|
Class
LT1-F19
|
|
2-21
|
Class
LT1-F20
|
|
2-22
|
Class
LT1-F21
|
|
2-23
|
Class
LT1-F22
|
|
2-24
|
Class
LT1-F23
|
|
2-25
|
Class
LT1-F24
|
|
2-26
|
Class
LT1-F25
|
|
2-27
|
Class
LT1-F26
|
|
2-28
|
Class
LT1-F27
|
|
2-29
|
Class
LT1-F28
|
|
2-31
|
Class
LT1-F29
|
|
2-32
|
Class
LT1-F30
|
|
2-33
|
Class
LT1-F31
|
|
2-34
|
Class
LT1-F32
|
|
2-35
|
Class
LT1-F33
|
|
2-36
|
Class
LT1-F34
|
|
2-37
|
Class
LT1-F35
|
|
2-38
|
Class
LT1-F36
|
|
(3)
|
The
Class LT2-R interest is the sole class of residual interests in REMIC
2.
It does not have an interest rate or a principal balance.
|
|
(4)
|
This
Lower Tier Interest shall have an initial class principal amount
equal to
one-half of the initial Class Principal Amount of its Corresponding
Class
of Certificates.
|
|
(5)
|
This
Lower Tier Interest shall have an initial class principal amount
equal to
the excess of (i) the Pool Stated Principal Balance as of the Cut-off
Date, over (ii) the aggregate initial Class Principal Amount of each
other
regular interest in REMIC 2 (other than any interest-only Lower Tier
Interest).
|
On
each
Distribution Date, interest shall be distributed on the Lower Tier Interests
in
REMIC 2 based on the above-described interest rates; provided,
however,
that
interest that accrues on the Class LT2-Q Interest shall be deferred in an amount
equal to one-half of the increase, if any, in the Overcollateralization Amount
for such Distribution Date. Any interest so deferred shall itself bear interest
at the interest rate for the Class LT2-Q Interest. An amount equal to the
interest so deferred shall be distributed as additional principal on the other
Lower Tier Interests in REMIC 2 having a principal balance in the manner
described under priority (a) below.
On
each
Distribution Date principal shall be distributed, and Realized Losses shall
be
allocated, among the Lower Tier Interests in REMIC 2 in the following order
of
priority:
(a) First,
to
the Class LT2-I-A, Class LT2-II-A, Class LT2-II-A4, Class LT2-M1, Class
LT2-M2, Class LT2-M3, Class LT2-M4, Class LT2-M5, Class LT2-M6, Class LT2-M7,
Class LT2-M8, Class LT2-M9, Class LT2-M10, Class LT2-M11 and Class LT2-M12
Interests until the principal balance of each such Lower Tier Interest equals
one-half of the Class Principal Amount of the Corresponding Class of
Certificates immediately after such Distribution Date; and
-6-
(b) Second,
to the Class LT2-Q Interests, any remaining amounts.
On
each
Distribution Date, the Securities Administrator shall be deemed to have
distributed the Prepayment Premiums passed through with respect to REMIC 1
on
such Distribution Date to the Class LT2-Q Interest.
Upper
Tier REMIC
The
Upper
Tier REMIC shall issue the following Classes of Upper Tier REMIC Regular
Interests and each such interest, other than the Class R Interest, is hereby
designated as a regular interest in the Upper Tier REMIC.
Upper
Tier REMIC
|
Upper
Tier REMIC
Class Designation
|
Upper
Tier REMIC Interest Rate and Corresponding Class Interest
Rate
|
Initial
Upper Tier REMIC Principal Amount and Corresponding Class Certificate
Balance
|
Corresponding
Class of
Certificates
|
|||
|
Class I-A
|
(1)
|
$119,285,000
|
Class I-A(7)
|
|||
|
Class II-A
|
(2)
|
$146,131,000
|
Class II-A-1(7)
|
|||
|
Class M-1
|
(3)
|
$
11,504,000
|
Class M-1(7)
|
|||
|
Class M-2
|
(3)
|
$
10,353,000
|
Class M-2(7)
|
|||
|
Class M-3
|
(3)
|
$
6,409,000
|
Class M-3(7)
|
|||
|
Class M-4
|
(3)
|
$
5,587,000
|
Class M-4(7)
|
|||
|
Class M-5
|
(3)
|
$
5,423,000
|
Class M-5(7)
|
|||
|
Class M-6
|
(3)
|
$
4,930,000
|
Class M-6(7)
|
|||
|
Class M-7
|
(3)
|
$
4,601,000
|
Class M-7(7)
|
|||
|
Class M-8
|
(3)
|
$
3,779,000
|
Class M-8(7)
|
|||
|
Class M-9
|
(3)
|
$
2,958,000
|
Class M-9(7)
|
|||
|
Class M-10
|
(3)
|
$
2,300,000
|
Class M-10(7)
|
|||
|
Class M-11
|
(3)
|
$
3,286,000
|
Class M-11(7)
|
|||
|
Class X
|
(4)
|
(4)
|
Class X
|
|||
|
Class R
|
(5)
|
(5)
|
Class R
|
|||
|
Class P
|
(6)
|
(6)
|
Class
P
|
|
(1)
|
The
Class I-A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Interest Margin and (ii) the Group I Available Funds Cap or
(b) after the Optional Termination Date, the lesser of (i) LIBOR
plus the applicable Interest Margin and (ii) the Group I
Available Funds Cap. For purposes of the REMIC Provisions, the reference
to “Group I Available Funds Cap” in clause (ii) of the preceding sentence
shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore,
on
any Distribution Date on which the Interest Rate for the Class I-A
Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals
based on
such excess shall be treated as having been paid from the Excess
Reserve
Fund Account or the Supplemental Interest Trust, as applicable; on
any
Distribution Date on which the Interest Rate on the Class I-A Certificates
is based on the Group I Available Funds Cap, the amount of interest
that
would have accrued on the Class I-A Certificates if the REMIC 2 Net
Funds
Cap were substituted for the Group I Available Funds Cap shall be
treated
as having been paid by the Class I-A Certificateholders to the
Supplemental Interest Trust, all pursuant to and as further provided
in
Section 8.11 hereof.
|
-7-
|
(2)
|
The
Class II-A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Interest Margin and (ii) the Group II Available Funds Cap or
(b) after the Optional Termination Date, the lesser of (i) LIBOR
plus the applicable Interest Margin and (ii) the Group II
Available Funds Cap. For purposes of the REMIC Provisions, the reference
to “Group II Available Funds Cap” in clause (ii) of the preceding sentence
shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore,
on
any Distribution Date on which the Interest Rate for the Class II-A
Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals
based on
such excess shall be treated as having been paid from the Excess
Reserve
Fund Account or the Supplemental Interest Trust, as applicable; on
any
Distribution Date on which the Interest Rate on the Class II-A
Certificates is based on the Group II Available Funds Cap, the amount
of
interest that would have accrued on the Class II-A Certificates if
the
REMIC 2 Net Funds Cap were substituted for the Group II Available
Funds
Cap shall be treated as having been paid by the Class II-A
Certificateholders to the Supplemental Interest Trust, all pursuant
to and
as further provided in Section 8.11
hereof.
|
|
(3)
|
The
Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10 and Class M-11 Interests will bear
interest during each Interest Accrual Period at a per annum rate
equal to
(a) on or prior to the Optional Termination Date, the lesser of
(i) LIBOR plus the applicable Interest Margin and (ii) the Class
M Available Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Interest Margin and
(ii) the Class M Available Funds Cap. For purposes of the REMIC
Provisions, the reference to Class M Available Funds Cap in clause
(ii) of
the preceding sentence shall be deemed to be a reference to the REMIC
2
Net Funds Cap; therefore, on any Distribution Date on which the Interest
Rate for the Class ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-6, M-7, M-8, M-9, M-10
or
M-11 Certificates, as applicable, exceeds the REMIC 2 Net Funds Cap,
interest accruals based on such excess shall be treated as having
been
paid from the Excess Reserve Fund Account or the Supplemental Interest
Trust, as applicable; on any Distribution Date on which the Interest
Rate
on the Class ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-6, M-7, M-8, M-9, M-10 or
M-11
Certificates, as applicable, is based on the Class M Available Funds
Cap,
the amount of interest that would have accrued on such applicable
Class of
Certificates if the REMIC 2 Net Funds Cap were substituted for the
Class M
Available Funds Cap shall be treated as having been paid by the Class
▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, M-6, M-7, M-8, M-9, M-10 or M-11 Certificateholders,
as applicable, to the Supplemental Interest Trust, all pursuant to
and as
further provided in Section 8.11 hereof.
|
|
(4)
|
For
purposes of the REMIC Provisions the Class X Certificate shall reflect
beneficial ownership of the Class X Interest in the Upper Tier REMIC.
The
Class X Interest shall have an initial principal balance of $2,143,000.35,
and the right to receive distributions of such amount represents
a regular
interest in the Upper Tier REMIC. The Class X Interest shall also
comprise
two notional components, each of which represents a regular interest
in
the Upper Tier REMIC. The first such component has a notional balance
that
will at all times equal the aggregate of the Class Principal Amounts
of
the Lower Tier Interests in REMIC 2, and, for each Distribution Date
(and
the related Interest Accrual Period) this notional component shall
bear
interest at a per annum rate equal to the excess, if any, of (i)
the
weighted average of the interest rates on the Lower Tier Interests
in
REMIC 2 (other than any interest-only regular interest) over (ii)
the
Adjusted Lower Tier WAC. The second notional component represents
the
right to receive all distributions in respect of the Class LT2-IO
Interest
in REMIC 2 (the “LT3-I” interest). In addition, for purposes of the REMIC
Provisions, the Class X Certificate shall represent beneficial ownership
of (i) the Excess Reserve Fund Account; (ii) the Supplemental Interest
Trust, including the Swap Agreement and (iii) an interest in the
notional
principal contracts described in Section 8.11
hereof.
|
|
(5)
|
The
Class R Interest is the sole Class of residual interest in the Upper
Tier REMIC. The Class R Interest is issued without a principal amount
does not bear a stated Interest Rate. The Class R Certificate will
be
issued as a single certificate evidencing the initial Percentage
Interest
of such Class.
|
-8-
|
(6)
|
The
Class P Interest shall not bear interest at a stated Interest Rate.
Prepayment Charges paid with respect to the Mortgage Loans shall
be paid
to the Class P Certificateholders as provided in Section 4.02(b).
For
purposes of the REMIC Provisions, the Class P Interest shall represent
a
regular interest in the Upper Tier REMIC, and the Class P Certificate
shall reflect beneficial ownership of the Class P Interest. The Class
P
Certificate will have a Class P Principal Amount of
$100.
|
|
(7)
|
Each
of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier REMIC Regular Interest but also the
right to receive payments from (i) the Excess Reserve Fund Account
in
respect of any Basis Risk Carryover Amounts and (ii) the Supplemental
Interest Trust in respect of proceeds from the Derivative Agreements.
For
federal income tax purposes, the Securities Administrator will treat
a
Certificateholder’s right to receive payments from the Excess Reserve Fund
Account as payments made pursuant to an a notional principal contract
written by the Class X
Certificateholders.
|
The
minimum denomination for each Class of Certificates, other than the
Class P, Class R and the Class X Certificates, will be $25,000
($100,000 with respect to initial investors resident in a Member State of the
European Economic Area subject to Directive 2003/71/EC) with integral multiples
of $1 in excess thereof except that one Certificate in each Class may be
issued in a different amount. The minimum denomination for each of the
Class P and Class X Certificates will be a 10.00% Percentage Interest
in such Class, and the minimum denomination for the Class R Certificates
shall be 100% Percentage Interest in such Class.
Set
forth
below are designations of Classes of Certificates to the categories used
herein:
|
Book-Entry
Certificates
|
All
Classes of Certificates other than the Physical
Certificates.
|
|
|
Class A
Certificates
|
Class I-A
and Class II-A Certificates.
|
|
|
Class M
Certificates
|
Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9,
Class M-10 and Class M-11 Certificates.
|
|
|
Delay
Certificates
|
None.
|
|
|
ERISA-Restricted
|
||
|
Certificates
|
Class
M10, Class M-11, Class P, Class X and Class R Certificates; any
Certificate with a rating which falls below the lowest applicable
permitted rating under the Underwriters’ Exemption.
|
|
|
ERISA-Restricted
|
||
|
Derivative
Certificates
|
Any
Offered Certificate prior to the termination of the Cap Agreement
and the
Swap Agreement.
|
|
|
LIBOR
Certificates
|
Collectively,
Class A and Class M Certificates.
|
|
|
Non-Delay
Certificates
|
Class A,
Class M and Class X Certificates.
|
|
|
Offered
Certificates
|
All
Classes of Certificates other than the Private
Certificates.
|
-9-
|
Physical
Certificates
|
Class P,
Class X and Class R Certificates.
|
|
|
Private
Certificates
|
Class
M10, Class M-11, Class P, Class X and Class R
Certificates.
|
|
|
Rating
Agencies
|
Moody’s
and Standard & Poor’s.
|
|
|
Regular
Certificates
|
All
Classes of Certificates other than the Class R
Certificates.
|
|
|
Residual
Certificates
|
Class R
Certificates.
|
ARTICLE
I
DEFINITIONS
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
10-K
Filing Deadline:
As
defined in Section 8.12(a)(ii).
Accepted
Servicing Practices:
With
respect to any Mortgage Loan and the Servicer, the servicing and administration
of such Mortgage Loan (i) in the same manner in which, and with the same
care, skill, prudence and diligence with which the Servicer generally services
and administers similar mortgage loans with similar mortgagors (A) for
other third parties, giving due consideration to customary and usual standards
of practice of prudent institutional residential mortgage lenders servicing
their own mortgage loans or (B) held in the Servicer’s own portfolio,
whichever standard is higher, and (ii) in accordance with applicable local,
state and federal laws, rules and regulations.
Account:
Any of
the Collection Account, the Distribution Account, any Escrow Account, the Excess
Reserve Fund Account, and with respect to the Supplemental Interest Trust,
the
Supplemental Interest Trust Account. Each Account shall be an Eligible
Account.
Additional
Form 10-D Disclosure:
As
defined in Section 8.12(a)(i).
Additional
Form 10-K Disclosure:
As
defined in Section 8.12(a)(ii).
Additional
Servicer:
Any
affiliate of the Servicer that Services any of the Mortgage Loans and each
Person that is not an affiliate of the Servicer that Services 10% or more of
the
Mortgage Loans. For clarification purposes, for purposes of this Agreement,
the
Master Servicer and the Securities Administrator are Additional Servicers.
Additional
Termination Event:
As
defined in the Swap Agreement.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan which provides for the adjustment of the Mortgage Rate payable
in
respect thereto.
-10-
Adjusted
Lower TIER WAC:
For
any
Distribution Date (and the related Accrual Period), an amount equal to (i)
two,
multiplied by (ii) the weighted average of the interest rates for such
Distribution Date for the Class LT2-I-A, LT2-II-A, LT2-M-1, LT2-M-2, LT2-M-3,
LT2-M-4, LT2-M-5, LT2-M-6, LT2-M-7, LT2-M-8, LT2-M-9, LT2-M-10, LT2-M-11 and
LT2-Q Interests, weighted in proportion to their Class Principal Amounts as
of
the beginning of the related Accrual Period and computed by subjecting the
rate
on the Class LT2-Q Interest to a cap of 0.00%, and by subjecting the rate on
each of the Class LT2-I-A, LT2-II-A, LT2-M-1, LT2-M-2, LT2-M-3, LT2-M-4,
LT2-M-5, LT2-M-6, LT2-M-7, LT2-M-8, LT2-M-9, LT2-M-10 and LT2-M-11 Interests
to
a cap that corresponds to the Interest Rate (determined by substituting the
REMIC 2 Net Funds Cap for the applicable Available Funds Cap) for the
Corresponding Class of Certificates; provided,
however,
that
for each Class of LIBOR Certificates, the Certificate Interest Rate shall be
multiplied by an amount equal to (a) the actual number of days in the Interest
Accrual Period, divided by (b) 30.
Adjustment
Date:
As to
any Adjustable Rate Mortgage Loan, the first Due Date on which the related
Mortgage Rate adjusts as set forth in the related Mortgage Note and each Due
Date thereafter on which the Mortgage Rate adjusts as set forth in the related
Mortgage Note.
Advance:
Any
P&I Advance or Servicing Advance.
Affected
Party:
As
defined in the Swap Agreement.
Affiliate:
With
respect to any Person, any other Person controlling, controlled by or under
common control with such first Person. For the purposes of this definition,
“control” means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.
Agreement:
This
Pooling and Servicing Agreement and all amendments or supplements
hereto.
Amounts
Held for Future Distribution:
As to
the Certificates on any Distribution Date, the aggregate amount held in the
Collection Account at the close of business on the related Determination Date
on
account of (i) Principal Prepayments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and Subsequent Recoveries on the Mortgage Loans
received after the end of the related Prepayment Period and (ii) all
Scheduled Payments on the Mortgage Loans due after the end of the related Due
Period.
Applied
Realized Loss Amount:
With
respect to any Distribution Date, the amount, if any, by which the aggregate
Class Certificate Balance of the LIBOR Certificates after distributions of
principal on such Certificates on such Distribution Date exceeds the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution
Date.
Appraised
Value:
The
value set forth in an appraisal made in connection with the origination of
the
related Mortgage Loan as the value of the Mortgaged Property.
-11-
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form (other than the assignee’s name and recording information not
yet returned from the recording office), reflecting the sale of the Mortgage
to
the Trustee.
Available
Funds:
With
respect to any Distribution Date and the Mortgage Loans to the extent received
by the Master Servicer (x) the sum of (i) all scheduled installments
of interest (net of the related Expense Fees) and principal due on the Due
Date
on such Mortgage Loans in the related Due Period and received by the Servicer
on
or prior to the related Determination Date, together with any
P&I Advances in respect thereof; (ii) all Condemnation Proceeds,
Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries received
by
the Servicer during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments
on the Mortgage Loans received by the Servicer during the related Prepayment
Period together with all Compensating Interest paid by the Servicer in
connection therewith (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur on or prior to the related Determination Date; (v) all
amounts received with respect to such Distribution Date as the Repurchase Price
in respect of a Mortgage Loan repurchased by the Originator or the Sponsor
on or
prior to the related Determination Date; and (vi) the proceeds with respect
to the termination of the Trust Fund pursuant to clause (a) of
Section 11.01; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to
which
the Servicer, the Depositor, the Master Servicer, the Securities Administrator,
the Swap Counterparty or the Trustee are entitled to be paid or reimbursed
pursuant to this Agreement.
Back-up
Certification:
As
defined in Section 3.24.
Basic
Principal Payment Amount:
With
respect to any Distribution Date, the excess of (i) the Principal
Remittance Amount for such Distribution Date over (ii) the Excess
Overcollateralization Amount, if any, for such Distribution Date.
Basis
Risk Carryover Amount:
With
respect to each Class of LIBOR Certificates, as of any Distribution Date,
the sum of (A) if on such Distribution Date the Interest Rate for any
Class of LIBOR Certificates is based upon the Group I Available Funds
Cap, the Group II Available Funds Cap or the Class M Available Funds Cap, as
applicable, the excess of (i) the amount of interest such Class of
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated (x) as the sum of LIBOR and the applicable
Interest Margin on such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Certificates
at, with respect to the Class I-A Certificates, the Group I Available
Funds Cap, at, with respect to the Class II-A Certificates, the
Group II Available Funds Cap, and, at, with respect to the Class M
Certificates, the Class M Available Funds Cap, as applicable, for such
Distribution Date and (B) the portion of any such excess described in
clause (A) for such Class of Certificates from all previous
Distribution Dates not previously paid, together with interest thereon at a
rate
equal the applicable Interest Rate for each such Class of Certificates for
such Distribution Date.
-12-
Basis
Risk Payment:
For any
Distribution Date, an amount equal to the lesser of (i) the aggregate of
the Basis Risk Carryover Amounts for such Distribution Date and (ii) the
Class X Distributable Amount (prior to any reduction for Basis Risk
Payments).
Best’s:
Best’s
Key Rating Guide, as the same shall be amended from time to time.
Book-Entry
Certificates:
As
specified in the Preliminary Statement.
Business
Day:
Any day
other than (i) Saturday or Sunday, or (ii) a day on which banking and
savings and loan institutions, in (a) the States of New York, California,
Maryland or Minnesota, (b) or any other State in which the Servicer’s
servicing operations are located, or (c) any State in which the Corporate
Trust Office is located, are authorized or obligated by law or executive order
to be closed.
Cap
Account:
The
account created pursuant to Section 4.06(b).
Cap
Agreement:
The
interest rate cap agreement entered into by the Supplemental Interest Trust
and
the Cap Counterparty, dated March 7, 2006, which agreement provides for the
monthly payment specified to the Securities Administrator (for the benefit
of
Certificateholders) commencing with the Distribution Date in September 2006
and
ending on the Distribution Date in December 2011, by the Cap Counterparty,
but
subject to the conditions set forth therein together with any schedule,
confirmations or other agreements relating thereto, attaches as Exhibit
P.
Cap
Amount:
With
respect to each Distribution Date, the amount of any Cap Payment deposited
into
the Cap Account.
Cap
Counterparty:
The
counterparty to the Supplemental Interest Trust under the Cap Agreement, and
any
successor in interest or its assigns. Initially, the Cap Counterparty shall
be
Bear ▇▇▇▇▇▇▇ Financial Products Inc.
Cap
Payment:
With
respect to each Distributing Date, any payment required to be made by the Cap
Counterparty to the Supplemental Interest Trust pursuant to the terms of the
Cap
Agreement.
Cap
Payment Date:
For as
long as the Cap Agreement is in effect or any amounts remain unpaid thereunder,
the Business Day immediately preceding each Distribution Date.
Cap
Replacement Receipts:
As
defined in Section 4.08(b)(i).
Cap
Replacement Receipts Account:
As
defined in Section 4.08(b)(i).
Cap
Termination Payment:
Upon
the designation of an “Early Termination Date” as defined in the Cap Agreement,
the payment required to be made by the Cap Counterparty to the Supplemental
Interest Trust pursuant to the terms of the Cap Agreement, and any unpaid
amounts due on previous Cap Payment Dates and accrued interest thereon as
provided in the Cap Agreement, as calculated by the Cap Counterparty and
furnished to the Trustee.
-13-
Cap
Termination Receipts:
As
defined in Section 4.08(b)(i).
Cap
Termination Receipts Account:
As
defined in Section 4.08(b)(i).
Certificate:
Any one
of the Certificates executed by the Securities Administrator in substantially
the forms attached hereto as exhibits.
Certificate
Balance:
With
respect to the Certificates, other than the Class X, Class P or
Class R Certificates, at any date, the maximum dollar amount of principal
to which the Holder thereof is then entitled hereunder, such amount being equal
to the Denomination thereof minus all distributions of principal previously
made
with respect thereto and in the case of any Class M Certificates, reduced by
any
Applied Realized Loss Amounts allocated to such Class of Certificates
pursuant to Section 4.05; provided,
however,
that
immediately following the Distribution Date on which a Subsequent Recovery
is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of any Subsequent
Recovery distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date).
The Class P Certificates are issued with an initial Class P Principal
Amount of $100. The Class X and Class R Certificates have no
Certificate Balance.
Certificate
Group:
The
Group I Certificates or the Group II Certificates, as
applicable.
Certificate
Owner:
With
respect to a Book-Entry Certificate, the Person who is the beneficial owner
of
such Book-Entry Certificate.
Certificate
Register:
The
register maintained pursuant to Section 5.02.
Certificateholder
or
Holder:
The
person in whose name a Certificate is registered in the Certificate Register,
except that, solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary
to
effect such consent has been obtained; provided,
however,
that if
any such Person (including the Depositor) owns 100.00% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires
the
consent of the Holders of Certificates of a particular Class as a condition
to the taking of any action hereunder. The Securities Administrator is entitled
to rely conclusively on a certification of the Depositor or any Affiliate of
the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.
Certification
Parties:
As
defined in Section 3.24.
Certifying
Person:
As
defined in Section 3.24.
Class:
All
Certificates bearing the same class designation as set forth in the Preliminary
Statement.
-14-
Class I-A
Certificates:
All
Certificates bearing the Class designation of “Class I-A”.
Class II-A
Certificates:
All
Certificates bearing the Class designation of “Class II-A”.
Class A
Certificates:
As
specified in the Preliminary Statement.
Class Certificate
Balance:
With
respect to any Class of LIBOR Certificate and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates
of
such Class as of such date. With respect to the Class X, Class P and Class
R Certificates, zero. With respect to any Lower Tier Interest, the initial
Class
Principal Balance as shown or described in the table set forth in the
Preliminary Statement to this Agreement for the issuing REMIC, as reduced by
any
principal distributed with respect to such Lower Tier Interest and Realized
Losses allocated to such Lower Tier Interest.
Class
I Shortfalls:
As
defined in Section 8.11 hereof. For
purposes of clarity, the Class I Shortfall for any Distribution Date shall
equal
the amount payable to the Swap Counterparty on such Distribution Date in excess
of the amount payable with respect to the Class LT3-I interest in the Upper
Tier
REMIC on such Distribution Date, all as further provided in Section
8.11 hereof.
Class
M Available Funds Cap:
With
respect to the Class M Certificates as of any Distribution Date, a per annum
rate equal to the weighted average of the Group I Available Funds Cap and the
Group II Available Funds Cap, weighted on the basis of the Group Subordinate
Amount for the Group 1 Mortgage Loans and the Group Subordinate Amount for
the
Group II Mortgage Loans.
Class M
Certificates:
As
specified in the Preliminary Statement.
Class M
Principal Payment Amount:
With
respect to any Distribution Date and any Class of Class M Certificates
is the lesser of (i) the excess of (a) the Principal Payment Amount
over (b) the aggregate amount distributed on that Distribution Date as
principal to all Classes of Certificates more senior than that Class of
Class M Certificates and (ii) the excess of (a) the sum of the aggregate
Class Certificate Balances of all Class of Certificates more senior
than that Class of Class M Certificates (after giving effect to all
amounts distributed on that Distribution Date to those Classes of more senior
certificates) and the Class Certificate Balance of that Class of
Class M Certificates immediately prior to that Distribution Date over (b)
the lesser of:
(x) the
percentage set forth in the table below for the applicable Class of
Class M Certificates multiplied by the aggregate Stated Principal Balance
of the Mortgage Loans for that Distribution Date:
-15-
|
Class
|
Percentage
|
|
|
M-1
|
68.50%
|
|
|
M-2
|
74.80%
|
|
|
M-3
|
78.70%
|
|
|
M-4
|
82.10%
|
|
|
M-5
|
85.40%
|
|
|
M-6
|
88.40%
|
|
|
M-7
|
91.20%
|
|
|
M-8
|
93.50%
|
|
|
M-9
|
95.30%
|
|
|
M-10
|
96.70%
|
|
|
M-11
|
98.70%
|
and
(y) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for that Distribution Date over 0.50% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date, until the Class Certificate
Balance of that Class of Class M Certificates has been reduced to
zero.
Class M-1
Certificates:
All
Certificates bearing the Class designation of “Class M-1”.
Class M-2
Certificates:
All
Certificates bearing the Class designation of “Class M-2”.
Class M-3
Certificates:
All
Certificates bearing the Class designation of “Class M-3”.
Class M-4
Certificates:
All
Certificates bearing the Class designation of “Class M-4”.
Class M-5
Certificates:
All
Certificates bearing the Class designation of “Class M-5”.
Class M-6
Certificates:
All
Certificates bearing the Class designation of “Class M-6”.
Class M-7
Certificates:
All
Certificates bearing the Class designation of “Class M-7”.
Class M-8
Certificates:
All
Certificates bearing the Class designation of “Class M-8”.
Class M-9
Certificates:
All
Certificates bearing the Class designation of “Class M-9”.
Class M-10
Certificates:
All
Certificates bearing the Class designation of
“Class M-10”.
-16-
Class M-11
Certificates:
All
Certificates bearing the Class designation of “Class M-11”.
Class P
Certificates:
All
Certificates bearing the Class designation of “Class P”.
Class R
Certificates:
All
Certificates bearing the Class designation of “Class R”.
Class P
Principal Amount:
As of
the Closing Date, $100.00.
Class X
Certificates:
All
Certificates bearing the Class designation of “Class X”.
Class
X Distributable Amount:
With
respect to any Distribution Date, the amount of interest that has accrued on
the
Class X Notional Balance, as described in the Preliminary Statement, but that
has not been distributed prior to such date. In addition, such amount shall
include the initial Overcollateralization Amount of $2,143,000.35 ($2,143,100.35
less $100 of such amount allocated to the Class P Certificates) to the extent
such amount has not been distributed on an earlier Distribution Date as part
of
the Overcollateralization Reduction Amount.
Class
X Notional Balance:
With
respect to
any
Distribution Date (and the related Interest Accrual Period) the aggregate
principal balance of the regular interests in REMIC 3 as specified in the
Preliminary Statement hereto.
Closing
Date:
March
7, 2006.
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Collection
Account:
As
defined in Section 3.10(a).
Commission:
The
United States Securities and Exchange Commission.
Compensating
Interest:
For any
Distribution Date, the lesser of (a) the amount, if any, by which the
Prepayment Interest Shortfall, if any, for such Distribution Date, with respect
to all voluntary Principal Prepayments (excluding any payments made upon
liquidation of any Mortgage Loan) exceeds all Prepayment Interest Excesses
for
such Distribution Date, and (b) the aggregate amount of the Servicing Fee
actually retained by or paid to the Servicer for such Distribution
Date.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation.
Controlling
Person:
With
respect to any Person, any other Person who “controls” such Person within the
meaning of the Securities Act.
-17-
Corporate
Trust Office:
With
respect to the Securities Administrator, (i) for transfer, presentation or
surrender of Certificates, the office at ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Services - (HASCO) HASCO 2006-NC1, and (ii) for all other purposes, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services
-
(HASCO) HASCO 2006-NC1 or at such other address as the Securities Administrator
may designate from time to time by notice to the Certificateholders, the
Depositor, the Master Servicer and the Trustee. With respect to the Trustee,
the
designated office of the Trustee in the State of California at which any
particular time its corporate trust business with respect to this Agreement
is
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Trust Administration - TBP, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, and
its
telephone number is (▇▇▇) ▇▇▇-▇▇▇▇ and which is also the address to which
notices to and correspondence with the Trustee under this Agreement should
be
directed.
Corresponding
Class:
As
described in the Preliminary Statement.
Credit
Enhancement Percentage:
With
respect to any Distribution Date, the percentage obtained by dividing
(x) the sum of (i) the aggregate Class Certificate Balance of the
Class M Certificates and (ii) the Overcollateralization Amount
(assuming the Overcollateralization Amount is not less than zero and in each
case after taking into account the distributions of the Principal Payment Amount
for such Distribution Date assuming no Trigger Event has occurred) by
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Credit
Risk Manager:
Not
applicable.
Credit
Risk Management Agreement:
Not
applicable.
Credit
Risk Manager’s Fee Rate:
Not
applicable.
Cumulative
Loss Percentage:
With
respect to any Distribution Date, the percentage equivalent of a fraction,
the
numerator of which is the aggregate amount of Realized Losses incurred from
the
Cut-off Date to the last day of the calendar month preceding the month in which
such Distribution Date occurs and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative
Loss Trigger Event:
If,
with respect to any Distribution Date, the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since
the Cut-off Date through the last day of the related Prepayment Period, divided
by (y) the Cut-off Date Pool Principal Balance, exceeds the applicable loss
percentages set forth below with respect to such Distribution
Date:
-18-
|
Distribution
Date Occurring In:
|
Loss
Percentage:
|
|
|
March
2008 through
|
1.10%
for the first month, plus an additional 1/12th of
|
|
|
February
2009
|
1.35%
for each month thereafter
|
|
|
March
2009 through
|
2.45%
for the first month, plus an additional 1/12th of
|
|
|
February
2010
|
1.35%
for each month thereafter
|
|
|
March
2010 through
|
3.80%
for the first month, plus an additional 1/12th of
|
|
|
February
2011
|
1.10%
for each month thereafter
|
|
|
March
2011 through
|
4.90%
for the first month, plus an additional 1/12th of
|
|
|
February
2012
|
0.50%
for each month thereafter
|
|
|
March
2012 and thereafter
|
5.40%
|
Custodial
File:
The
meaning assigned to such term in Section 2.01(a).
Custodian:
Initially, Deutsche Bank, or any successor custodian appointed
hereunder.
Cut-off
Date:
February 1, 2006.
Cut-off
Date Pool Principal Balance:
The
aggregate Stated Principal Balances of all Mortgage Loans as of the Cut-off
Date.
Cut-off
Date Principal Balance:
As to
any Mortgage Loan, the Stated Principal Balance thereof as of the close of
business on the Cut-off Date.
Data
Tape Information:
With
respect to each Mortgage Loan, the same information (provided as of the Cut-off
Date) included in the data fields specified under the definition of “Mortgage
Loan Schedule” in the Master MLPISA, with such additions and modifications as
agreed upon by the Originator and the Depositor. A copy of the Master MLPISA
is
attached as Exhibits Q hereto.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
in a proceeding under the United States Bankruptcy Code in the Scheduled Payment
for such Mortgage Loan which became final and non-appealable, except such a
reduction resulting from a Deficient Valuation or any reduction that results
in
a permanent forgiveness of principal.
Defaulting
Party:
As
defined in the Swap Agreement.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation of the related Mortgaged Property
by a
court of competent jurisdiction in an amount less than then outstanding
principal balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the United States Bankruptcy Code.
-19-
Definitive
Certificates:
Any
Certificate evidenced by a Physical Certificate and any Certificate issued
in
lieu of a Book-Entry Certificate pursuant to Section 5.02(e).
Delay
Certificates:
As
specified in the Preliminary Statement.
Deleted
Mortgage Loan:
As
defined in Section 2.03.
Delinquency
Rate:
For any
calendar month, a fraction, expressed as a percentage, the numerator of which
is
the aggregate Stated Principal Balance of 60+ Day Delinquent Mortgage Loans
as
of the close of business on the last day of such month, and the denominator
of
which is the aggregate Stated Principal Balance of the Mortgage Loans as of
the
close of business on the last day of such month.
Delinquency
Trigger Event:
With
respect to any Distribution Date, the circumstances in which the Rolling Three
Month Delinquency Rate as of the last day of the immediately preceding calendar
month exceeds 38.95% of the Credit Enhancement Percentage for the Class A
Certificates.
Denomination:
With
respect to each Certificate, the amount set forth on the face thereof as the
“Initial Certificate Balance of this Certificate” or the Percentage Interest
appearing on the face thereof.
Depositor:
HSI
Asset Securitization Corporation, a Delaware corporation, and its successors
in
interest.
Depository:
The
initial Depository shall be The Depository Trust Company, the nominee of which
is CEDE & Co., as the registered Holder of the Book-Entry Certificates.
The Depository shall at all times be a “clearing corporation” as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New
York.
Depository
Institution:
Any
depository institution or trust company, including the Trustee and the
Securities Administrator, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and
(c) has outstanding unsecured commercial paper or other short-term
unsecured debt obligations that are rated P-1 by Moody’s, F1+ by Fitch and A-1
by Standard & Poor’s.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Derivative
Counterparty:
Collectively, the Cap Counterparty and the Swap Counterparty.
-20-
Derivative
Counterparty Trigger Event:
A
Derivative Counterparty Trigger Event shall have occurred if any of a Swap
Default with respect to which the Swap Counterparty is a Defaulting Party,
a
Termination Event with respect to which the Swap Counterparty is the sole
Affected Party or an Additional Termination Event with respect to which the
Swap
Counterparty is the sole Affected Party has occurred.
Derivative
Payment Date:
For so
long as either the Cap Agreement or the Swap Agreement is in effect, the
Business Day preceding each Distribution Date.
Deutsche
Bank:
Deutsche Bank National Trust Company.
Determination
Date:
With
respect to each Remittance Date, the 15th day (or if such day is not a Business
Day, the immediately preceding Business Day) in the calendar month in which
such
Remittance Date occurs.
Disqualified
Non-U.S. Person:
With
respect to a Class R Certificate, any Non-U.S. Person or agent thereof
other than (i) a Non-U.S. Person that holds the Class R Certificate in
connection with the conduct of a trade or business within the United States
and
has furnished the transferor and the Securities Administrator with an effective
IRS Form W-8ECI or (ii) a Non-U.S. Person that has delivered to both the
transferor and the Securities Administrator an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R
Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class R
Certificate will not be disregarded for federal income tax
purposes.
Distribution
Account:
The
separate Eligible Account created and maintained by the Securities Administrator
pursuant to Section 3.07(d) in the name of the Securities Administrator as
paying agent for the benefit of the Trustee and the Certificateholders and
designated “▇▇▇▇▇ Fargo Bank, N.A. as paying agent in trust for registered
holders of HSI Asset Securitization Corporation Trust 2006-NC1 Mortgage
Pass-Through Certificates, Series 2006-NC1”. Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution
Account Deposit Date:
As to
any Distribution Date, 12:00 noon New York City time on the third Business
Day
immediately preceding such Distribution Date.
Distribution
Date:
The
25th day of each calendar month, or if such day is not a Business Day, the
next
succeeding Business Day, commencing in March 2006.
Document
Certification and Exception Report:
The
form of report attached to Exhibit F hereto.
Due
Date:
The day
of the month on which the Scheduled Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due
Period:
With
respect to any Distribution Date, the period commencing on the second day of
the
calendar month preceding the month in which such Distribution Date occurs and
ending on the first day of the calendar month in which such Distribution Date
occurs.
-21-
▇▇▇▇▇:
The
Commission’s Electronic Data Gathering and Retrieval System.
Eligible
Account:
Either
(i) an account maintained with a federal or state-chartered depository
institution or trust company that complies with the definition of Eligible
Institution, (ii) an account maintained with the corporate trust department
of a
federal depository institution or state-chartered depository institution subject
to regulations regarding fiduciary funds on deposit similar to Title 12 of
the
U.S. Code of Federal Regulation Section 9.10(b), which, in either case, has
corporate trust powers and is acting in its fiduciary capacity or (iii) any
other account acceptable to each Rating Agency. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Securities Administrator.
Eligible
Institution:
A
federal or state-chartered depository institution or trust company the
commercial paper, short-term debt obligations, or other short-term deposits
of
which are rated at least “A-1+” by Standard & Poor’s if the amounts on
deposit are to be held in the account for no more than 365 days (or at least
“A-2” if the amounts on deposit are to be held in the account for no more than
30 days), “P-1” by Moody’s and “F1+” by Fitch (or a comparable rating if another
Rating Agency is specified by the Depositor by written notice to each of the
Servicer and the Securities Administrator) or long-term unsecured debt
obligations are rated at least “AA-” by Standard & Poor’s if the amounts on
deposit are to be held in the account for no more than 365 days.
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying
Underwriting:
A best
efforts or firm commitment underwriting or private placement that meets the
requirements of Prohibited Transaction Exemption (“PTE”) 96-84,
61 Fed. Reg. 58234 (1996), as amended by ▇▇▇ ▇▇-▇▇, ▇▇ ▇▇▇. ▇▇▇. ▇▇▇▇▇
(1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, 67 Fed.
Reg. 54487 (2002) (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of
Labor.
ERISA-Restricted
Certificate:
As
specified in the Preliminary Statement.
ERISA-Restricted
Derivative Certificate:
As
specified in the Preliminary Statement.
Escrow
Account:
The
Eligible Account or Accounts established and maintained by the Servicer pursuant
to Section 3.09(b).
Escrow
Payments:
As
defined in Section 3.09(b).
Event
of Default:
As
defined in Section 7.01.
Excess
Overcollateralization
Amount:
With
respect to any Distribution Date, the excess, if any, of (a) the
Overcollateralization Amount on such Distribution Date over (b) the
Overcollateralization Target Amount for such Distribution Date.
-22-
Excess
Reserve Fund Account:
The
separate Eligible Account created and maintained by the Securities Administrator
pursuant to Sections 3.07(b) and 3.07(c) in the name of the Securities
Administrator as paying agent for the benefit of the LIBOR Certificateholders
and the Class X Certificateholders and designated “▇▇▇▇▇ Fargo Bank, N.A. as
paying agent in trust for registered holders of HSI Asset Securitization
Corporation Trust 2006-NC1, Mortgage Pass-Through Certificates,
Series 2006-NC1”. Funds in the Excess Reserve Fund Account shall be held in
trust for such Certificateholders for the uses and purposes set forth in this
Agreement. Amounts on deposit in the Excess Reserve Fund Account shall not
be
invested. The Excess Reserve Fund Account shall be considered part of the Trust
Fund but not the part of any REMIC.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Excluded
Trust Assets:
As
defined in the Preliminary Statement.
Expense
Adjusted Mortgage Rate:
With
respect to any Distribution Date and as to each Mortgage Loan, the per annum
rate equal to the Mortgage Rate as of the first day of the related Due Period
less the Expense Fee Rate.
Expense
Fee Rate:
As to
each Mortgage Loan, a per annum rate equal to the sum of the Servicing Fee
Rate
and the Master Servicing Fee Rate.
Expense
Fees:
As to
each Mortgage Loan and any Distribution Date, the sum of the Servicing Fee
and
the Master Servicing Fee.
Extra
Principal Payment Amount:
As of
any Distribution Date, the lesser of (x) the related Total Monthly Excess
Spread for such Distribution Date and (y) the related Overcollateralization
Deficiency for such Distribution Date.
▇▇▇▇▇▇
Mae:
The
Federal National Mortgage Association, or any successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased by the Mortgage Loan Seller or the
Sponsor as contemplated by this Agreement or the Purchase Agreement, as
applicable), a determination made by the Servicer that all Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries
which the Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final
Scheduled Distribution Date:
The
Final Scheduled Distribution Date for each Class of Certificates is the
Distribution Date occurring in November 2035.
Fitch:
Fitch,
Inc., or any successor thereto. If Fitch is designated as a Rating Agency in
the
Preliminary Statement, for purposes of Section 12.05(c) the address for
notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - HASCO (HSI Asset Securitization
Corporation Trust 2006-NC1), or such other address as Fitch may hereafter
furnish to the Depositor and the Securities Administrator.
-23-
Fixed
Rate Mortgage Loan:
A
Mortgage Loan with respect to which the Mortgage Rate set forth in the Mortgage
Note is fixed for the term of such Mortgage Loan.
Form
8-K Disclosure Information:
As
defined in Section 8.12(a)(iii).
▇▇▇▇▇▇▇
Mac:
The
Federal Home Loan Mortgage Corporation, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home
Finance Act of 1970, as amended, or any successor thereto.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note to be added to the Index to determine the
Mortgage Rate.
Group I
Available Funds Cap:
With
respect to the Group I Mortgage Loans as of any Distribution Date, the per
annum
rate (subject to adjustment based on the actual number of days elapsed in the
related Interest Accrual Period) equal to (x) the weighted average of the
Expense Adjusted Mortgage Rate for each Group I Mortgage Loan then in effect
on
the beginning of the related Due Period (not including for this purpose any
Group I Mortgage Loans for which Principal Prepayments in Full have been
received and distributed in the month prior to that Distribution Date)
minus
(y) a
percentage equal to the product of (i) a fraction, the numerator of which is
equal to the portion of the Net Derivative Payment or Swap Termination Payment
allocated to the Group I Mortgage Loans based on the applicable Group Percentage
(other than a Swap Termination Payment caused by the Derivative Counterparty)
made to the Derivative Counterparty and the denominator of which is equal to
the
Stated Principal Balance of the Group I Mortgage Loans and (ii) 12.
Group I
Certificates:
The
Class I-A Certificates.
Group I
Mortgage Loans:
The
Mortgage Loans identified on the Mortgage Loan Schedule as Group I Mortgage
Loans.
Group I
Principal Payment Amount:
With
respect to any Distribution Date prior to the Stepdown Date, the Principal
Payment Amount multiplied by the Group Principal Allocation Percentage for
the Group I Certificates.
Group I
Senior Principal Payment Amount:
With
respect to any Distribution Date, the lesser of (i) the Group I Principal
Payment Amount for that Distribution Date and (ii) the excess of (a) the
aggregate Class Certificate Balance of the Group I Certificates
immediately prior to that Distribution Date over (b) the lesser of
(x) 61.50% of the aggregate Stated Principal Balance of the Group I
Mortgage Loans for that Distribution Date and (y) the excess, if any, of
the aggregate Stated Principal Balance of the Group I Mortgage Loans for
that Distribution Date over 0.50% of the aggregate State Principal Balance
of
the Group I Mortgage Loans as of the Cut-off Date.
-24-
Group II
Available Funds Cap:
With
respect to the Group II Mortgage Loans as of any Distribution Date, the per
annum rate (subject to adjustment based on the actual number of days elapsed
in
the related Interest Accrual Period) equal to (x) the weighted average of the
Expense Adjusted Mortgage Rate of the Group II Mortgage Loans then in effect
at
the beginning of the related Due Period (not including for this purpose any
Group II Mortgage Loans for which Principal Prepayments in Full have been
received and distributed in the month prior to that Distribution Date
minus
(y) a
percentage equal to the product of (i) a fraction, the numerator of which is
equal to the portion of the Net Derivative Payment or Swap Termination Payment
allocated to the Group II Certificates based on the applicable Group Percentage
(other than a Swap Termination Payment caused by the Derivative Counterparty)
made to the Derivative Counterparty and the denominator of which is equal to
the
aggregate Stated Principal Balance of the Group II Mortgage Loans and (ii)
12.
Group II
Certificates:
The
Class II-A Certificates.
Group II
Mortgage Loans:
The
Mortgage Loans identified on the Mortgage Loan Schedule as Group II
Mortgage Loans.
Group II
Principal Payment Amount:
With
respect to any Distribution Date, the Principal Payment Amount multiplied by
the
Group Principal Allocation Percentage for the Group II
Certificates.
Group II
Senior Principal Payment Amount:
With
respect to any Distribution Date, the lesser of (i) the Group II Principal
Payment Amount for that Distribution Date and (ii) the excess of (a) the
aggregate Class Certificate Balance of the Group II Certificates
immediately prior to that Distribution Date over (b) the lesser of
(x) 61.50% of the aggregate Stated Principal Balance of the Group II
Mortgage Loans for that Distribution Date and (y) the excess, if any, of
the aggregate Stated Principal Balance of the Group II Mortgage Loans for
that Distribution Date over 0.50% of the aggregate State Principal Balance
of
the Group II Mortgage Loans as of the Cut-off Date.
Group Available
Funds Cap:
The
Group I Available Funds Cap or the Group II Available Funds Cap, as
applicable.
Group
Percentage:
For
any
Distribution Date and for each of the Group I Mortgage Loans and the Group
II
Mortgage Loans, a fraction (expressed as a percentage) the numerator of which
is
the aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group
and the denominator of which is equal to the aggregate Stated Principal Balance
of all the Mortgage Loans as of such date.
Group Principal
Allocation Percentage:
With
respect to any Distribution Date, the percentage equivalent of a fraction,
determined as follows:
(i) with
respect to the Group I Certificates, a fraction, the numerator of which is
the portion of the Principal Remittance Amount for that Distribution Date that
is attributable to the principal received or advanced on the Group I
Mortgage Loans and the denominator of which is the Principal Remittance Amount
for that Distribution Date; and
-25-
(ii) with
respect to the Group II Certificates, a fraction, the numerator of
which is the portion of the Principal Remittance Amount for that Distribution
Date that is attributable to the principal received or advanced on the
Group II Mortgage Loans and the denominator of which is the Principal
Remittance Amount for that Distribution Date.
Group Subordinate
Amount:
For any
Distribution Date and (i) for the Group I Mortgage Loans, the excess
of the aggregate Stated Principal Balance of the Group I Mortgage Loans as
of the beginning of the related Due Period over the Class Certificate
Balance of the Class I-A Certificates immediately prior to the current
Distribution Date and (ii) for the Group II Mortgage Loans, the excess
of the aggregate Stated Principal Balance of the Group II Mortgage Loans as
of the beginning of the related Due Period over the aggregate
Class Certificate Balance of the Class II-A Certificates immediately
prior to such Distribution Date.
Independent:
When
used with respect to any accountants, a Person who is “independent” within the
meaning of Rule 2-01(B) of the 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, trustee, 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 to
each Adjustable Rate Mortgage Loan, the six-month LIBOR index from time to
time
in effect for the adjustment of the Mortgage Rate as set forth in the related
Mortgage Note.
Initial
Certification:
As
defined in Section 2.02.
Initial
Sale Date:
The
date the Mortgage Loan was purchased by the Sponsor from the Mortgage Loan
Seller under the Master MLPISA.
Insurance
Policy:
With
respect to any Mortgage Loan included in the Trust Fund, any insurance policy,
including, but not limited to, any standard hazard insurance policy, flood
insurance policy, earthquake insurance policy, title insurance policy or Primary
Mortgage Insurance Policy (if any), including all riders and endorsements
thereto in effect, including any replacement policy or policies.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of Insurance Policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Accrual Period:
With
respect to each Class of LIBOR Certificates and the Corresponding
Class of Lower Tier REMIC Regular Interests and any Distribution Date, the
period commencing on the Distribution Date occurring in the month preceding
the
month in which the current Distribution Date occurs and ending on the day
immediately preceding the current Distribution Date (or, in the case of the
first Distribution Date, the period from and including the Closing Date to
but
excluding such first Distribution Date). For purposes of computing interest
accruals on each Class of LIBOR Certificates, each Interest Accrual Period
has the actual number of days in such month and each year is assumed to have
360 days.
-▇▇-
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇:
As of
any Distribution Date and any Class of LIBOR Certificates, the sum of (i)
the excess of (a) the sum of (x) the Interest Payment Amount with respect
to the current Distribution Date (excluding any Basis Risk Carryover Amount
with
respect to such Class), plus (y) the portion of the Interest Payment Amount
from
Distribution Dates prior to the current Distribution Date remaining unpaid
immediately prior to the current Distribution Date, over (b) the amount
actually paid to such Class with respect to interest on such prior
Distribution Dates, and (ii) interest on the amount in clause (i) above at
the
applicable Interest Rate (to the extent permitted by applicable
law).
Interest
Margin:
Except
as set forth in the following sentence, with respect to each Class of
Regular Certificates, the following percentages: Class I-A Certificates,
0.210%; Class II-A Certificates, 0.220%; Class M-1 Certificates,
0.400%; Class M-2 Certificates, 0.420%; Class M-3 Certificates,
0.440%; Class M-4 Certificates, 0.540%; Class M-5 Certificates,
0.570%; Class M-6 Certificates, 0.700%, Class M-7 Certificates,
1.000%, Class M-8 Certificates, 1.000%, Class M-9 Certificates,
1.000%, Class M-10 Certificates, 1.000% and Class M-11 Certificates,
1.000% Certificates, 2.000%. On the first Distribution Date after the Optional
Termination Date, the Interest Margins shall increase to the following
percentages: Class I-A Certificates, 0.210%; Class II-A Certificates,
0.220%; Class M-1 Certificates, 0.400%; Class M-2 Certificates,
0.420%; Class M-3 Certificates, 0.440%; Class M-4 Certificates,
0.540%; Class M-5 Certificates, 0.570%; Class M-6 Certificates,
0.700%, Class M-7 Certificates, 1.000%, Class M-8 Certificates,
1.000%, Class M-9 Certificates, 1.000%, Class M-10 Certificates,
1.500% and Class M-11 Certificates, 1.500%.
Interest
Payment Amount:
With
respect to any Distribution Date for each Class of LIBOR Certificates, the
amount of interest accrued during the related Interest Accrual Period at the
applicable Interest Rate on the related Class Certificate Balance
immediately prior to such Distribution Date, as reduced by such Class’s share of
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date allocated to such Class pursuant to
Section 4.02.
Interest
Rate:
For
each Class of Certificates, each Class of Upper Tier REMIC Regular
Interest and each Class of Lower Tier REMIC Regular Interest, the per annum
rate set forth or calculated in the manner described in the Preliminary
Statement.
Interest
Remittance Amount:
With
respect to any Distribution Date and the Mortgage Loans in a Loan Group, that
portion of Available Funds attributable to interest relating to Mortgage Loans
in that Loan Group.
Investment
Account:
As
defined in Section 3.12(a).
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
IRS:
The
Internal Revenue Service.
-27-
JPMorgan:
JPMorgan Chase Bank, National Association and its successors and
assigns.
Late
Collections:
With
respect to any Mortgage Loan and any Due Period, all amounts received after
the
Determination Date immediately following such Due Period, whether as late
payments of Scheduled Payments or as Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, Subsequent Recoveries or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to
any
acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent for such Due Period and not previously recovered.
LIBOR:
With
respect to any Interest Accrual Period for the LIBOR Certificates, the rate
determined by the Securities Administrator on the related LIBOR Determination
Date on the basis of the offered rate for one-month U.S. dollar deposits as
such
rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such
date; provided,
that if
such rate does not appear on Telerate Page 3750, the rate for such date
will be determined on the basis of the rates at which one-month U.S. dollar
deposits are offered by the Reference Banks at approximately 11:00 a.m.
(London time) on such date to prime banks in the London interbank market. In
such event, the Securities Administrator shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If
at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Securities Administrator
(after consultation with the Depositor), at approximately 11:00 a.m. (New
York City time) on such date for one-month U.S. dollar loans to leading European
banks.
LIBOR
Certificates:
As
specified in the Preliminary Statement.
LIBOR
Determination Date:
With
respect to any Interest Accrual Period for the LIBOR Certificates, the second
London Business Day preceding the commencement of such Interest Accrual
Period.
Liquidated
Mortgage Loan:
With
respect to any Distribution Date, a defaulted Mortgage Loan (including any
REO
Property) which was liquidated in the calendar month preceding the month of
such
Distribution Date and as to which the Servicer has certified to the Securities
Administrator that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a Liquidated Mortgage Loan,
whether through a trustee’s sale, foreclosure sale or otherwise.
Loan
Group:
The
Group I Mortgage Loans or the Group II Mortgage Loans, as
applicable.
Loan-to-Value
Ratio
or
LTV:
As of
any date and as to any Mortgage Loan, the ratio (expressed as a
percentage) of the outstanding principal balance of the Mortgage Loan to
(a) in the case of a purchase, the lesser of (i) the sale price of the
Mortgaged Property and (ii) its appraised value at the time of sale or
(b) in the case of a refinancing or modification, the appraised value of
the Mortgaged Property at the time of the refinancing or
modification.
-▇▇-
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Day:
Any day
on which dealings in deposits of United States dollars are transacted in the
London interbank market.
Lower
Tier REMIC:
As
described in the Preliminary Statement.
Master
MLPISA:
The
Amended and Restated Master Mortgage Loan Purchase and Interim Servicing
Agreement, among the Mortgage Loan Seller, New Century Mortgage Corporation,
as
interim servicer, and the Sponsor, as initial purchaser, dated as of March
1,
2006 (for first and second lien, fixed and adjustable rate mortgage
loans).
Master
Servicer:
▇▇▇▇▇
Fargo, and if a successor master servicer is appointed hereunder, such
successor.
Master
Servicer Event of Default:
As
defined in Section 9.06.
Master
Servicing Fee:
As to
any Distribution Date and each Mortgage Loan, an amount equal to
1/12th
the
product of (a) the Master Servicing Fee Rate and (b) the outstanding Stated
Principal Balance of such Mortgage Loan as of the prior Distribution Date (or
as
of the Cut-off Date in the case of the first Distribution Date).
Master
Servicing Fee Rate:
With
respect to any Mortgage Loan, a per annum rate equal to 0.005%.
Master
Servicing Officer:
Any
officer of the Master Servicer involved in, or responsible for, the
administration and master servicing of the Mortgage Loans.
Maximum
Mortgage Rate:
With
respect to each Adjustable Rate Mortgage Loan, a rate that (i) is set forth
on the Data Tape Information and in the related Mortgage Note and (ii) is
the maximum interest rate to which the Mortgage Rate on such Mortgage Loan
may
be increased during the lifetime of such Mortgage Loan.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and
its
successors in interest.
MERS
Designated Mortgage Loan:
Mortgage Loans for which (a) the Originator has designated or will
designate MERS as, and has taken or will take such action as is necessary to
cause MERS to be, the mortgagee of record, as nominee for the Originator, in
accordance with the MERS Procedure Manual and (b) the Originator has
designated or will designate the Trustee as the Investor on the MERS
System.
MERS
Procedure Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS®
System:
MERS
mortgage electronic registry system, as more particularly described in the
MERS
Procedures Manual.
-29-
MIN:
The
Mortgage Identification Number of Mortgage Loans registered with MERS on the
MERS® System.
Minimum
Mortgage Rate:
With
respect to each Adjustable Rate Mortgage Loan, a rate that (i) is set forth
on the Data Tape Information and in the related Mortgage Note and (ii) is
the minimum interest rate to which the Mortgage Rate on such Mortgage Loan
may
be decreased during the lifetime of such Mortgage Loan.
Monthly
Statement:
The
statement delivered to the Certificateholders pursuant to
Section 4.03.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. If ▇▇▇▇▇’▇ is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 12.05(c) the address for
notices to Moody’s shall be ▇▇▇▇▇’▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Pass-Through Group,
HASCO (HSI Asset Securitization Corporation Trust Series 2006-NC1), or such
other address as Moody’s may hereafter furnish to the Depositor and the
Securities Administrator.
Mortgage:
The
mortgage, deed of trust or other instrument identified on the Mortgage Loan
Schedule as securing a Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan contained in either the Servicing
File or Custodial File.
Mortgage
Loan:
An
individual Mortgage Loan that is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File, the Scheduled Payments, Principal Prepayments, Liquidation
Proceeds, Subsequent Recoveries, Condemnation Proceeds, Insurance Proceeds,
REO
Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage
Loan Schedule:
A
schedule of Mortgage Loans prepared by the Depositor, delivered to the Trustee
on the Closing Date and referred to on Schedule I, such schedule setting
forth for each Loan Group the Data Tape Information with respect to each
Mortgage Loan.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage
Rate:
The
annual rate of interest borne on a Mortgage Note, which shall be adjusted from
time to time.
Mortgaged
Property:
With
respect to each Mortgage Loan, the real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment
of
the debt evidenced by the related Mortgage Note.
-30-
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Derivative Payment:
The net
payment required to be made on the Derivative Payment Date either by (a) the
Supplemental Interest Trust to the Derivative Counterparty, to the extent that
the fixed amount payable by the Supplemental Interest Trust under the terms
of
the Swap Agreement exceeds the sum of (1) the corresponding floating amount
payable by the Derivative Counterparty under the terms of the Swap Agreement
and
(2) any amounts payable by the Derivative Counterparty under the Cap Agreement,
or (b) the Derivative Counterparty to the Supplemental Interest Trust, to the
extent that the sum of (1) of the floating amount payable by the Derivative
Counterparty under the terms of the Swap Agreement and (2) any such amount
payable by the Derivative Counterparty under the Cap Agreement exceeds the
corresponding fixed amount payable by the Supplemental Interest Trust under
the
terms of the Swap Agreement, plus in the case of a payment made under either
clause (a) or clause (b) any unpaid amounts due under such clause from previous
Derivative Payment Dates, and accrued interest thereon as provided in the
applicable Derivative Agreement, as calculated by the Derivative Counterparty
and furnished to the Securities Administrator.
Net
Monthly Excess Cash Flow:
For any
Distribution Date, the amount of interest and principal remaining for
distribution pursuant to subsection 4.02(a)(iii) (before giving effect to
distributions pursuant to such subsection).
Net
Prepayment Interest Shortfall:
For any
Distribution Date, the amount by which the sum of the Prepayment Interest
Shortfalls for such Distribution Date exceeds the sum of Compensating Interest
payments made with respect to such Distribution Date.
Net
Swap Payment:
With
respect to each Swap Payment Date, the net payment (not including any Swap
Termination Payment) required to be made pursuant to the terms of the Swap
Agreement plus any unpaid amounts due on previous Swap Payment Dates and accrued
interest thereon as provided in the Swap Agreement, as calculated by the Swap
Counterparty and furnished to the Securities Administrator.
Net
WAC Rate:
With
respect to any Distribution Date (and the related Interest Accrual Period),
a
per annum rate equal to the weighted average of the Net Mortgage Rates of the
Mortgage Loans as of the first day of the related Due Period (not including
for
this purpose Mortgage Loans for which Principal Prepayments in Full have been
received and distributed in the month prior to that Distribution
Date).
NIM
Issuer:
The
entity established as the issuer of the NIM Securities.
NIM
Securities:
Any
debt securities secured or otherwise backed by some or all of the Class X
and Class P Certificates that are rated by any Rating Agency.
NIM
Trustee:
The
Indenture trustee for the NIM Securities.
Non-Delay
Certificates:
As
specified in the Preliminary Statement.
Non-Permitted
Transferee:
A
Person other than a Permitted Transferee.
-31-
Non-U.S.
Person:
A
person that is not a U.S. Person.
Nonrecoverable
P&I Advance:
Any
P&I Advance previously made or proposed to be made in respect of a Mortgage
Loan or REO Property that, in the good faith business judgment (taking into
account Accepted Servicing Practices) of the Servicer, the Master Servicer,
as
successor servicer, or any successor master servicer including the Trustee,
as
applicable, will not or, in the case of a proposed P&I Advance, would not be
ultimately recoverable from related Late Collections on such Mortgage Loan
or
REO Property as provided herein.
Nonrecoverable
Servicing Advance:
Any
Servicing Advances previously made or proposed to be made in respect of a
Mortgage Loan or REO Property, which, in accordance with Accepted Servicing
Practices, will not or, in the case of a proposed Servicing Advance, would
not
be ultimately recoverable from related Late Collections.
Notice
of Final Distribution:
The
notice to be provided by the Securities Administrator pursuant to
Section 11.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender
thereof.
Offered
Certificates:
As
specified in the Preliminary Statement.
Officer’s
Certificate:
A
certificate signed by an officer of the Servicer or the Master Servicer, as
applicable, with responsibility for the servicing of the Mortgage Loans and
listed on a list delivered to the Trustee and the Securities Administrator
pursuant to this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be in-house counsel for the Servicer or
any
Subservicer, reasonably acceptable to the Trustee and/or the Securities
Administrator, as applicable (and/or such other Persons as may be set forth
herein); provided,
that
any Opinion of Counsel relating to (a) qualification of any REMIC created
hereby or (b) compliance with the REMIC Provisions, must be (unless
otherwise stated in such Opinion of Counsel) an opinion of counsel who
(i) is in fact independent of the Servicer or the Master Servicer,
(ii) does not have any material direct or indirect financial interest in
the Servicer or the Master Servicer or in an affiliate of either and
(iii) is not connected with the Servicer or the Master Servicer as an
officer, employee, director or person performing similar functions.
Option
to Purchase:
On the
first Optional Termination Date and any Distribution Date thereafter, the Master
Servicer, upon the instruction of the Depositor, shall have the option to
purchase
the Mortgage Loans; provided,
however,
if on
the first Optional Termination Date and any Date thereafter, the Depositor
fails
to instruct the Master Servicer to purchase the Mortgage Loans, the Servicer
may
exercise its option to purchase the Mortgage Loans on the first Distribution
Date following the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
is
less than or equal to 5.00% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date and on each Distribution Date thereafter;
provided,
further,
if the
Servicer fails to exercise its Option to Purchase pursuant to the immediately
preceding proviso, the Master Servicer has the right, in its own discretion,
to
purchase the Mortgage Loans on any Distribution Date, with respect to which
the
Servicer fails to so exercise its Option to Purchase.
-32-
Optional
Termination Date:
Any
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans, as of the last day of the related Due Period, is less than
or
equal to 10.00% of the Cut-off Date Pool Principal Balance.
Originator:
New
Century Mortgage Corporation and its successors in interest, as originator
of
the Mortgage Loans.
OTS:
Office
of Thrift Supervision, and any successor thereto.
Outstanding:
With
respect to the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
(i) Certificates
theretofore canceled by the Securities Administrator or delivered to the
Securities Administrator for cancellation; and
(ii) Certificates
in exchange for which or in lieu of which other Certificates have been executed
and delivered by the Securities Administrator pursuant to this
Agreement.
Outstanding
Mortgage Loan:
As of
any Due Date, a Mortgage Loan with a Stated Principal Balance greater than
zero
which was not the subject of a Principal Prepayment in Full prior to such Due
Date and which did not become a Liquidated Mortgage Loan prior to such Due
Date.
Overcollateralization
Amount:
As of
any Distribution Date, the excess, if any, of (a) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
(b) the aggregate of the Class Certificate Balances of the LIBOR
Certificates as of such Distribution Date (after giving effect to the payment
of
the Principal Remittance Amount on such Certificates on such Distribution
Date).
Overcollateralization
Deficiency:
With
respect to any Distribution Date, the excess, if any, of (a) the
Overcollateralization Target Amount applicable to such Distribution Date over
(b) the Overcollateralization Amount applicable to such Distribution
Date.
Overcollateralization
Reduction Amount:
With
respect to any Distribution Date, an amount equal to the lesser of (a) the
Excess Overcollateralization Amount and (b) the Net Monthly Excess Cash
Flow.
Overcollateralization
Target Amount:
Prior
to the Stepdown Date, an amount equal to 0.65% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date. On and after the Stepdown
Date, an amount equal to the greater of (i) 1.30% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (ii) 0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date; provided,
however,
that
if, on any Distribution Date, a Trigger Event exists, the Overcollateralization
Target Amount shall not be reduced to the applicable percentage of then current
aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
Date on which a Trigger Event no longer exists but rather shall remain the
Overcollateralization Target Amount as determined for the immediately preceding
Distribution Date. When the Class Certificate Balance of each Class of
LIBOR Certificates has been reduced to zero, the Overcollateralization Target
Amount will thereafter equal zero.
-33-
Ownership
Interest:
As to
any Residual Certificate, any ownership interest in such Certificate including
any interest in such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or beneficial.
P&I
Advance:
As to
any Mortgage Loan or REO Property, any advance made by the Servicer in respect
of any Remittance Date representing the aggregate of all payments of principal
and interest, net of the Servicing Fee, that were due during the related Due
Period on the Mortgage Loans and that were delinquent on the related
Determination Date, plus certain amounts representing assumed payments not
covered by any current net income on the Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure as determined pursuant to
Section 4.01.
PCAOB:
The
Public Company Accounting Oversight Board.
Percentage
Interest:
As to
any Certificate, the percentage interest evidenced thereby in distributions
required to be made on the related Class, such percentage interest being set
forth on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
Permitted
Investments:
Any one
or more of the following obligations or securities acquired at a purchase price
of not greater than par, regardless of whether issued by the Servicer, the
Securities Administrator, the Trustee or any of their respective
Affiliates:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit
of
the United States;
(ii) demand
and time deposits in, certificates of deposit of, or bankers’ acceptances (which
shall each have an original maturity of not more than 90 days and, in the
case of bankers’ acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars and issued by, any Depository Institution
and rated F1+ by Fitch, A-1+ by Standard & Poor’s and P-1 by
Moody’s;
(iii) repurchase
obligations with respect to any security described in clause (i) above
entered into with a Depository Institution (acting as principal);
(iv) securities
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States of America or any state thereof
and that are rated by Fitch, Moody’s and Standard & Poor’s (in each case, to
the extent they are designated as Rating Agencies in the Preliminary Statement),
and by each other Rating Agency that rates such securities, in its highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
-34-
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than 30 days after the date of acquisition thereof) that is rated by Fitch,
Moody’s and Standard & Poor’s (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement), and by each other
Rating Agency that rates such securities, in its highest short-term unsecured
debt rating available at the time of such investment;
(vi) units
of
money market funds, including money market funds managed or advised by the
Trustee, the Securities Administrator or an Affiliate thereof, that have been
rated “Aaa” by Moody’s, “AAAm” or “AAAm-G” by Standard & Poor’s and, if
rated by Fitch, “AAA” by Fitch; and
(vii) if
previously confirmed in writing to the Securities Administrator, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each of the Rating Agencies as a permitted
investment of funds backing “Aaa” or “AAA” rated securities;
provided,
however,
that no
instrument described hereunder shall evidence either the right to receive
(a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity at par greater
than
120.00% of the yield to maturity at par of the underlying
obligations.
Permitted
Transferee:
Any
Person other than (i) the United States, any State or political subdivision
thereof, or any agency or instrumentality of any of the foregoing, (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers’
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511
of the Code on unrelated business taxable income) on any excess inclusions
(as
defined in Section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, (v) a Person that is a Disqualified
Non-U.S. Person or a U.S. Person with respect to whom income from a Residual
Certificate is attributable to a foreign permanent establishment or fixed base,
within the meaning of an applicable income tax treaty, of such Person or any
other U.S. Person, (vi) an “electing large partnership” within the meaning
of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause either the Lower
Tier REMIC or the Upper Tier REMIC to fail to qualify as a REMIC at any time
that the Certificates are outstanding. The terms “United States”, “State” and
“international organization” shall have the meanings set forth in
Section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject
to
tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority of its board of directors
is not selected by such government unit.
-35-
Person:
Any
individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization
or
government, or any agency or political subdivision thereof.
Physical
Certificates:
As
specified in the Preliminary Statement.
Pool
Stated Principal Balance:
As to
any Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans for such Distribution Date that were Outstanding Mortgage Loans
on the Due Date in the related Due Period.
Prepayment
Charge:
Any
prepayment premium, penalty or charge collected by the Servicer with respect
to
a Mortgage Loan from a Mortgagor in connection with any Principal Prepayment
pursuant to the terms of the related Mortgage Note.
Prepayment
Interest Excess:
With
respect to any Distribution Date, any interest collected by the Servicer with
respect to any Mortgage Loan as to which a Principal Prepayment in Full occurs
from the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the
1st
day of such month to the date of such Principal Prepayment.
Prepayment
Interest Shortfall:
With
respect to any Distribution Date, the sum of, for each Mortgage Loan that was,
during the portion of the related Prepayment Period from the first day of such
Prepayment Period through the last day of the month preceding the month in
which
such Distribution Date occurs, the subject of a Principal Prepayment which
is
not accompanied by an amount equal to one month of interest that would have
been
due on such Mortgage Loan on the Due Date that occurs during such Prepayment
Period and which was applied by the Servicer to reduce the outstanding principal
balance of such Mortgage Loan on a date preceding such Due Date, an amount
equal
to the product of (a) the Mortgage Rate net of the Servicing Fee Rate for
such Mortgage Loan, (b) the amount of the Principal Prepayment for such
Mortgage Loan, (c) 1/360 and (d) the number of days commencing on the
date on which such Principal Prepayment was applied and ending on the last
day
of the calendar month in which the related Prepayment Period
begins.
Prepayment
Period:
With
respect to any Distribution Date and any Principal Prepayment in Full, the
period commencing on the 16th day of the month preceding the month in which
such
Distribution Date occurs (or in the case of the first Distribution Date,
commencing on the Cut-off Date) and ending on the 15th day of the month in
which
that Distribution Date occurs. With respect to Principal Prepayments in part,
the calendar month preceding the month in which the Distribution Date
occurs.
Primary
Mortgage Insurance Policy:
Any
mortgage guaranty insurance, if any, on an individual Mortgage Loan as evidenced
by a policy or certificate, whether such policy is obtained by the originator,
the lender or the borrower.
-36-
Principal
Payment Amount:
For any
Distribution Date, the sum of (i) the Basic Principal Payment Amount for
such Distribution Date and (ii) the Extra Principal Payment Amount for such
Distribution Date.
Principal
Prepayment:
Any
full or partial payment or other recovery of principal on a Mortgage Loan
(including upon liquidation of a Mortgage Loan) that is received in advance
of
its scheduled Due Date, excluding any Prepayment Charge thereon, and that is
not
accompanied by an amount of interest representing scheduled interest due on
any
date or dates in any month or months subsequent to the month of prepayment.
Principal
Prepayment in Full:
Any
Principal Prepayment made by a Mortgagor of the entire principal balance of
a
Mortgage Loan.
Principal
Remittance Amount:
With
respect to any Distribution Date, the amount equal to the sum of the following
amounts (without duplication) with respect to the related Due Period:
(i) each scheduled payment of principal on a Mortgage Loan due during such
Due Period and received by the Servicer on or prior to the related Determination
Date or advanced by the Servicer for the related Remittance Date, (ii) all
Principal Prepayments received during the related Prepayment Period;
(iii) all net Liquidation Proceeds, Condemnation Proceeds and Insurance
Proceeds on the Mortgage Loans allocable to principal, and all Subsequent
Recoveries, actually collected by the Servicer during the related Prepayment
Period; (iv) the portion of the Repurchase Price allocable to principal
with respect to each Mortgage Loan repurchased by the Mortgage Loan Seller
or
the Sponsor, as the case may be, that was repurchased on or prior to the related
Determination Date; and (v) all Substitution Adjustment Amounts allocable
to principal with respect to the substitutions of Mortgage Loans that occur
on
or prior to the related Determination Date; (vi) the allocable portion of
the proceeds received with respect to the termination of the Trust Fund pursuant
to clause (a) of Section 11.01 (to the extent such proceeds
relate to principal).
Private
Certificates:
As
specified in the Preliminary Statement.
Prospectus
Supplement:
The
Prospectus Supplement, dated March 6, 2006, relating to the Offered
Certificates.
PTCE:
As
defined in Section 5.02(b).
Purchase
Agreement:
The
Mortgage Loan Purchase Agreement, dated as of February 1, 2006, between the
Depositor and the Sponsor.
Rating
Agency:
Each of
the Rating Agencies specified in the Preliminary Statement. If such organization
or a successor is no longer in existence, “Rating Agency” shall be such
nationally recognized statistical rating organization, or other comparable
Person, as is designated by the Depositor, notice of which designation shall
be
given to the Trustee and the Securities Administrator. References herein to
a
given rating or rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers. For purposes of
Section 12.05(c), the addresses for notices to each Rating Agency shall be
the address specified therefor in the definition corresponding to the name
of
such Rating Agency, or such other address as either such Rating Agency may
hereafter furnish to the Depositor and the Securities
Administrator.
-37-
Realized
Losses:
With
respect to any date of determination and any Liquidated Mortgage Loan, the
amount, if any, by which (a) the unpaid principal balance of such
Liquidated Mortgage Loan together with accrued and unpaid interest thereon
exceeds (b) the Liquidation Proceeds with respect thereto net of the
expenses incurred by the Servicer in connection with the liquidation of such
Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record
Date:
With
respect to any Distribution Date, the close of business on the Business Day
immediately preceding such Distribution Date; provided,
however,
that,
for any Certificate issued in definitive form, the Record Date shall be the
close of business on the last Business Day of the month preceding the month
in
which such applicable Distribution Date occurs (or, in the case of the first
Distribution Date, the Closing Date).
Reference
Bank:
As
defined in Section 4.04.
Regulation
AB:
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.
Regular
Certificates:
As
specified in the Preliminary Statement.
Relevant
Servicing Criteria:
The
Servicing Criteria applicable to the Servicer or any Servicing Function
Participant, as set forth on Exhibit S 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, the Custodian, the Trustee
or
the Servicer, the term “Relevant Servicing Criteria” may refer to a portion of
the Relevant Servicing Criteria applicable to such parties.
Relief
Act Interest Shortfall:
With
respect to any Distribution Date and any Mortgage Loan, any reduction in the
amount of interest collectible on such Mortgage Loan for the most recently
ended
Due Period as a result of the application of the Servicemembers Civil Relief
Act
or any applicable similar state statutes.
REMIC:
Each
pool of assets in the Trust Fund designated as a REMIC pursuant to the
Preliminary Statement.
REMIC
1:
As
described in the Preliminary Statement.
REMIC
2:
As
described in the Preliminary Statement.
REMIC
2 Net Funds Cap:
For any
Distribution Date (and the related Interest Accrual Period) and any Class of
Certificates, an amount equal to (i) the weighted average of the interest rates
on the Lower Tier Interests in REMIC 2 (other than any interest-only regular
interest), weighted in proportion to their Class Principal Amounts as of the
beginning of the related Interest Accrual Period, multiplied by (ii) an amount
equal to (a) 30, divided by (b) the actual number of days in the Interest
Accrual Period.
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REMIC
3:
As
described in the Preliminary Statement.
REMIC
Provisions:
Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of
Subchapter M of Chapter 1 of the Code, and related provisions, and regulations
promulgated thereunder, as the foregoing may be in effect from time to time
as
well as provisions of applicable state laws.
Remittance
Date:
With
respect to any Distribution Date, the 21st
day of
the month in which such Distribution Date occurs, or, if the 21st
is not a
Business Day, the immediately succeeding Business Day.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Imputed Interest:
As to
any REO Property, for any period, an amount equivalent to interest (at the
Mortgage Rate net of the applicable Servicing Fee Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof
(as
such balance is reduced pursuant to Section 3.17 by any income from the REO
Property treated as a recovery of principal).
REO
Mortgage Loan:
A
Mortgage Loan where title to the related Mortgaged Property has been obtained
by
the Servicer in the name of the Trustee on behalf of the
Certificateholders.
REO
Property:
A
Mortgaged Property acquired by the Trust Fund through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
Reportable
Event:
As
defined in Section 8.12(a)(iii).
Reporting
Servicer:
As
defined in Section 8.12(a)(ii).
Repurchase
Price:
With
respect to any Mortgage Loan, an amount equal to the sum of (i) the unpaid
principal balance of such Mortgage Loan as of the date of repurchase,
(ii) interest on such unpaid principal balance of such Mortgage Loan at the
Mortgage Rate from the last date through which interest has been paid to the
date of repurchase, (iii) all unreimbursed Servicing Advances and
(iv) all expenses incurred by the Master Servicer, the Servicer or Trustee
arising out of the Master Servicer’s, the Servicer’s or Trustee’s enforcement of
the Mortgage Loan Seller’s or Sponsor’s repurchase obligation
hereunder.
Request
for Release:
The
Request for Release submitted by the Servicer to the Trustee, substantially
in
the form of Exhibit J.
-39-
Residual
Certificates:
As
specified in the Preliminary Statement.
Responsible
Officer:
When
used with respect to the Trustee, the Securities Administrator, the Master
Servicer, any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, any associate, or any other officer of
the
Trustee, the Securities Administrator or the Master Servicer customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer’s knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Rolling
Three Month Delinquency Rate:
With
respect to any Distribution Date, the average of the Delinquency Rates for
each
of the three (or one or two, in the case of the first and second Distribution
Dates) immediately preceding calendar months.
Rule 144A
Letter:
As
defined in Section 5.02(b).
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification:
As
defined in Section 3.24.
Scheduled
Payment:
The
scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
to
principal and/or interest on such Mortgage Loan which, unless otherwise
specified herein, shall give effect to any related Debt Service Reduction and
any Deficient Valuation that affects the amount of the monthly payment due
on
such Mortgage Loan.
Securities
Act:
The
Securities Act of 1933, as amended.
Securities
Administrator:
▇▇▇▇▇
Fargo, and if a successor securities administrator is appointed hereunder,
such
successor.
Securities
Administrator Float Period:
With
respect to the Distribution Date and the related amounts in the Distribution
Account, the period commencing on the Remittance Date immediately preceding
such
Distribution Date and ending on such Distribution Date.
Senior
Interest Payment Amount:
With
respect to any Distribution Date and any Class of Class A
Certificates, the sum of the Interest Payment Amount and the Interest Carry
Forward Amount, if any, for that Distribution Date for that Class.
Servicer:
JPMorgan Chase Bank, National Association, and its successors in interest,
and
if a successor servicer is appointed hereunder, such successor.
Servicer
Remittance Report:
The
reports submitted by the Servicer pursuant to Section 4.03(d).
Service(s)(ing):
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 Item 1108 of Regulation AB. For
clarification purposes, any uncapitalized occurrence of this term in this
Agreement shall have the meaning commonly understood by participants in the
residential mortgage-backed securitization market.
-40-
Servicing
Advances:
The
reasonable “out-of-pocket” costs and expenses (including legal fees) incurred by
the Servicer in the performance of its servicing obligations in connection
with
a default, delinquency or other unanticipated event, including, but not limited
to, the cost of (i) the maintenance, preservation, restoration, inspection
and protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in
connection therewith) and liquidation of any REO Property and (iv) the
performance of its obligations under Sections 3.01, 3.09, 3.13 and 3.15.
The Servicing Advances shall also include any reasonable “out-of-pocket” costs
and expenses (including legal fees) incurred by the Servicer in connection
with
executing and recording instruments of satisfaction, deeds of reconveyance
or
Assignments of Mortgage in connection with any satisfaction or foreclosure
in
respect of any Mortgage Loan to the extent not recovered from the Mortgagor
or
otherwise payable under this Agreement and obtaining or correcting any legal
documentation required to be included in the Mortgage File and necessary for
the
Servicer to perform its obligations under this Agreement. The Servicer shall
not
be required to make any Nonrecoverable Servicing Advances.
Servicing
Criteria:
The
criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such
may
be amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan and for any calendar month, an amount equal to
one
month’s interest (or in the event of any payment of interest which accompanies a
Principal Prepayment made by the Mortgagor during such calendar month, interest
for the number of days covered by such payment of interest) at the Servicing
Fee
Rate on the applicable Stated Principal Balance of such Mortgage Loan as of
the
first day of such calendar month. Such fee shall be payable monthly, and shall
be prorated for any portion of a month during which the Mortgage Loan is
serviced by the Servicer under this Agreement. The Servicing Fee is payable
solely from the interest portion (including recoveries with respect to interest
from Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds,
Condemnation Proceeds and proceeds received with respect to REO Properties)
of such Scheduled Payment collected by the Servicer, or as otherwise provided
under Section 3.11.
Servicing
Fee Rate:
0.50%
per annum.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Servicer consisting
of
originals or copies of all documents in the Mortgage File which are not
delivered to the Custodian on behalf of the Trustee in the Custodial File and
copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing
Function Participant:
Any
Sub-Servicer or Subcontractor, or any other Person other than the Servicer,
the
Master Servicer, the Trustee and the Securities Administrator determined by
the
party utilizing such Sub-Servicer, Subcontractor or such other Person to be
a
“participant in the servicing function” within the meaning of Item 1122 of
Regulation AB (without regard to the 5.00% threshold contained
therein).
-41-
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name and facsimile signature appear on
a
list of servicing officers furnished to the Master Servicer and the Trustee
by
the Servicer on the Closing Date pursuant to this Agreement, as such list may
from time to time be amended.
Similar
Law:
As
defined in Section 5.02(b).
60+
Day Delinquent Mortgage Loan:
Each
Mortgage Loan with respect to which any portion of a Scheduled Payment is,
as of
the last day of the prior Due Period, two months or more past due (without
giving effect to any grace period), each Mortgage Loan in foreclosure, each
Mortgage Loan related to REO Property and each Mortgage Loan where the related
Mortgagor has filed for bankruptcy.
Sponsor:
HSBC
Bank USA, National Association, a national banking association, and its
successors in interest.
Standard &
Poor’s:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. If Standard & Poor’s is designated as a Rating Agency
in the Preliminary Statement, for purposes of Section 12.05(c) the address
for notices to Standard & Poor’s shall be Standard & Poor’s,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Surveillance Group - HASCO (HSI Asset Securitization Corporation Trust,
Series 2006-NC1, or such other address as Standard & Poor’s may
hereafter furnish to the Depositor and the Securities
Administrator.
Standard &
Poor’s Glossary:
The
Standard & Poor’s LEVELS® Glossary, as may be in effect from time to
time.
Startup
Day:
The
Closing Date.
Stated
Principal Balance:
As to
each Mortgage Loan and as of any date of determination, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date (whether or not received), minus
(ii) all amounts previously remitted to the Securities Administrator with
respect to the related Mortgage Loan representing payments or recoveries of
principal including advances in respect of scheduled payments of principal.
For
purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give effect to any scheduled payments of principal received by the
Servicer on or prior to the related Determination Date or advanced by the
Servicer for the related Remittance Date and any unscheduled principal payments
and other unscheduled principal collections received during the related
Prepayment Period, and the Stated Principal Balance of any Mortgage Loan that
has prepaid in full or has become a Liquidated Mortgage Loan during the related
Prepayment Period shall be zero.
Stepdown
Date:
The
earlier to occur of (i) the first Distribution Date following the Distribution
Date on which the aggregate Class Certificate Balances of the Class A
Certificates have been reduced to zero and (ii) the later to occur of (a) the
Distribution Date in March 2009 and (b) the first Distribution Date on which
the
Credit Enhancement Percentage for the Class A Certificates (calculated for
this
purpose only after taking into account payments of principal applied to reduce
the Stated Principal Balance of the Mortgage Loans for that Distribution Date
but prior to any applications of Principal Payment Amounts to the Certificates
on that Distribution Date) is greater than or equal to 38.50%.
-42-
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing of the Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans
under
the direction or authority of any Servicer (or a Sub-Servicer of any Servicer),
the Master Servicer, the Trustee or the Securities Administrator.
Subsequent
Recovery:
With
respect to any Mortgage Loan or related Mortgaged Property that became a
Liquidated Mortgage Loan or was otherwise disposed of, all amounts received
in
respect of such Liquidated Mortgage Loan after an Applied Realized Loss Amount
related to such Mortgage Loan or Mortgaged Property is allocated to reduce
the
Class Certificate Balance of any Class of Class M Certificates.
Any Subsequent Recovery that is received during a Prepayment Period will be
included as part of the Principal Remittance Amount for the related Distribution
Date.
Sub-Servicer:
Any
Person that (i) is considered to be a Servicing Function Participant, (ii)
services Mortgage Loans on behalf of any Servicer, and (iii) is responsible
for
the performance (whether directly or through sub-servicers or Subcontractors)
of
Servicing functions required to be performed under this Agreement, any related
servicing agreement or any sub-servicing agreement that are identified in Item
1122(d) of Regulation AB.
Subservicing
Account:
As
defined in Section 3.08.
Subservicing
Agreement:
As
defined in Section 3.02(a).
Substitute
Mortgage Loan:
A
Mortgage Loan substituted by the Originator or the Sponsor for a Deleted
Mortgage Loan which must, on the date of such substitution, as confirmed in
a
Request for Release, substantially in the form of Exhibit J,
(i) have a Stated Principal Balance, after deduction of all Scheduled
Payments due in the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) be accruing interest at a rate
not lower than and not more than 1.00% higher than that of the Deleted Mortgage
Loan; (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; (iv) be of
the same type as the Deleted Mortgage Loan; and (v) comply with each
representation and warranty set forth in Section 2.03.
Substitution
Adjustment Amount: As
defined in Section 2.03.
Supplemental
Interest Trust:
The
corpus of a trust created pursuant to Section 4.06 of this Agreement and
designated as the “Supplemental Interest Trust,” consisting of the Swap
Agreement, the Swap Account, the Cap Agreement, the Cap Account, the right
to
receive the Class X Distributable Amount as provided in Section 4.02(a)(iii)(F),
the Class LT3-I Interest in REMIC 3 and the right to receive Class I
Shortfalls.
Swap
Agreement:
The
interest rate swap agreement entered into by the Supplemental Interest Trust
and
the Swap Counterparty, dated March 7, 2006, which agreement provides for, among
other things, a Net Swap Payment to be paid pursuant to the conditions provided
therein, commencing with the Distribution Date in April 2006 and ending on
the
Distribution Date in April 2009 , together with any schedules, confirmations
or
other agreements relating thereto, attached hereto as Exhibit
O.
-▇▇-
▇▇▇▇
▇▇▇▇▇▇:
With
respect to each Distribution Date and the related Swap Payment Date, the sum
of
any Net Swap Payment and any Swap Termination Payment deposited in the Swap
Account.
Swap
Counterparty:
The
counterparty to the Supplemental Interest Trust under the Swap Agreement, and
any successor in interest or assigns. Initially, the Swap Counterparty shall
be
Bear ▇▇▇▇▇▇▇ Financial Products Inc..
Swap
Default:
Any of
the circumstances constituting an “Event of Default” under the Swap
Agreement.
Swap
LIBOR:
With
respect to any Distribution Date (and the Accrual Period relating to such
Distribution Date), the product of (i) the Floating Rate Option (as defined
in
the Swap Agreement) for the related Swap Payment Date, (ii) two, and (iii)
the
quotient of (a) the actual number of days in the Accrual Period for the LIBOR
Certificates and (b) 30, as calculated by the Swap Counterparty and furnished
to
the Securities Administrator.
Swap
Payment Date:
For so
long as the Swap Agreement is in effect or any amounts remain unpaid thereunder,
the Business Day immediately preceding each Distribution Date.
Swap
Replacement Receipts:
As
defined in Section 4.08(a)(i).
Swap
Replacement Receipts Account:
As
defined in Section 4.08(a)(i).
Swap
Termination Payment:
Upon
the designation of an “Early Termination Date” as defined in the Swap Agreement,
the payment required to be made by the Supplemental Interest Trust to the Swap
Counterparty, or by the Swap Counterparty to the Supplemental Interest Trust,
as
applicable, pursuant to the terms of the Swap Agreement, and any unpaid amounts
due on previous Distribution Dates and accrued interest thereon as provided
in
the Swap Agreement, as calculated by the Swap Counterparty and furnished to
the
Securities Administrator.
Swap
Termination Receipts:
As
defined in Section 4.08(a)(i).
Swap
Termination Receipts Account:
As
defined in Section 4.08(a)(i).
Tax
Matters Person:
The
Holder of the Class R Certificates designated as “tax matters person” of
each REMIC created hereunder in the
manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations
Section 301.6231(a)(7)-1.
Tax
Service Contract:
As
defined in Section 3.09.
-44-
Telerate
Page 3750:
The
display page currently so designated on the Bridge Telerate Service (or
such other page as may replace that page on that service for
displaying comparable rates or prices).
Termination
Price:
As
defined in Section 11.01.
Total
Monthly Excess Spread:
As to
any Distribution Date, an amount equal to the excess, if any, of (i) the
interest on the Mortgage Loans (other than Prepayment Interest Excesses)
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date (net of Expense Fees)
over (ii) the sum of the amounts payable to the Certificates pursuant to
Section 4.02(a)(i) (A) through (C) on such Distribution Date.
Transfer:
Any
direct or indirect transfer or sale of any Ownership Interest in a Residual
Certificate.
Transfer
Affidavit:
As
defined in Section 5.02(c).
Transferor
Certificate:
As
defined in Section 5.02(b).
Trigger
Event:
Either
a Cumulative Loss Trigger Event or a Delinquency Trigger Event.
Trust:
The
express trust created hereunder in Section 2.01(c).
Trust
Fund:
The
corpus of the trust created hereunder consisting of (i) the Mortgage Loans
and all interest and principal with respect thereto received on or after the
related Cut-off Date, other than such amounts which were due on the Mortgage
Loans on or prior to the related Cut-off Date; (ii) the Collection Account,
Excess Reserve Fund Account, the Distribution Account, the Cap Termination
Receipts Account, the Cap Replacement Receipts Account, the Swap Termination
Receipts Account, the Swap Replacement Receipts Account and
all
amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Depositor’s rights under the Purchase Agreement; (v) the Insurance
Policies; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee:
Deutsche Bank National Trust Company, a national banking association, and its
successors in interest and, if a successor trustee is appointed hereunder,
such
successor.
Underwriters’
Exemption:
Any
exemption listed under footnote 1 of, and amended by, Prohibited Transaction
Exemption 96-84, 61 Fed. Reg. 58234 (1996), as amended by ▇▇▇ ▇▇-▇▇,
▇▇ ▇▇▇. ▇▇▇. ▇▇▇▇▇ (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and
PTE 2002-41, 67 Fed. Reg. 54487 (2002), or any successor
exemption.
Unpaid
Realized Loss Amount:
With
respect to any Class of Class M Certificates and as to any
Distribution Date, is the excess of (i) Applied Realized Loss Amounts with
respect to such Class over (ii) the sum of (a) all distributions
in reduction of such Applied Realized Loss Amounts on all previous Distribution
Dates, and (b) the amount by which the Class Certificate Balance of
such Class has been increased due to the distribution of any Subsequent
Recoveries on all previous Distribution Dates. Any amounts distributed to a
Class of Class M Certificates in respect of any Unpaid Realized Loss
Amount will not be applied to reduce the Class Certificate Balance of such
Class.
-45-
Upper
Tier REMIC:
As
described in the Preliminary Statement.
Upper
Tier REMIC Regular Interest:
As
described in the Preliminary Statement.
U.S.
Person:
(i) A citizen or resident of the United States; (ii) a corporation (or
entity treated as a corporation for tax purposes) created or organized in the
United States or under the laws of the United States or of any State thereof,
including, for this purpose, the District of Columbia; (iii) a partnership
(or entity treated as a partnership for tax purposes) organized in the United
States or under the laws of the United States or of any State thereof,
including, for this purpose, the District of Columbia (unless provided otherwise
by future Treasury regulations); (iv) an estate whose income is includible
in gross income for United States income tax purposes regardless of its source;
or (v) a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue
to
be U.S. Persons.
Voting
Rights:
The
portion of the voting rights of all of the Certificates which is allocated
to
any Certificate. As of any date of determination, 1.00% of all Voting Rights
shall be allocated to each of the Class X, Class P and Class R
Certificates, if any (such Voting Rights to be allocated among the holders
of
Certificates of each such Class in accordance with their respective
Percentage Interests) and the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
▇▇▇▇▇
Fargo:
▇▇▇▇▇
Fargo Bank, N.A., a national banking association, and its successors in
interest.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
REPRESENTATIONS
AND WARRANTIES
Section
2.01 Conveyance
of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the benefit of the Certificateholders, without recourse, all the right,
title and interest of the Depositor in and to the Trust Fund.
Concurrently
with the execution of this Agreement, the Derivative Agreements shall be
delivered to the Securities Administrator. In connection therewith, the
Depositor hereby directs the Securities Administrator (solely in its capacity
as
Securities Administrator of the Supplemental Interest Trust) and the Securities
Administrator is hereby authorized to execute and deliver each of the Derivative
Agreements (on behalf of the Supplemental Interest Trust), for the benefit
of
Certificateholders. The Depositor, the Sponsor, the Master Servicer, the
Servicer, the Mortgage Loan Seller and the Certificateholders (by their
acceptance of such Certificates) acknowledge and agree that the Securities
Administrator is executing and delivering the Derivative Agreements solely
in
its capacity as Securities Administrator of the Supplemental Interest Trust
and
not in its individual capacity. The Securities Administrator shall have no
duty
or responsibility to enter into any other interest rate swap agreement upon
the
expiration or termination of the Swap Agreement or interest rate cap agreement
upon the termination of the Cap Agreement unless so directed by the
Depositor.
-46-
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 Purchase
Agreement, including the right to enforce the Sponsor’s obligation to repurchase
or substitute defective Mortgage Loans under Section 5 of the Purchase
Agreement. The Trustee hereby accepts such assignment, and as set forth herein
in Section 2.03(k), shall be entitled to exercise all the rights of the
Depositor under the Purchase Agreement as if, for such purpose, it were the
Depositor.
(b) In
connection with the transfer and assignment of each Mortgage Loan, the Depositor
has delivered or caused to be delivered to the Custodian for the benefit of
the
Certificateholders the following documents or instruments with respect to each
Mortgage Loan so assigned:
(i) the
original Mortgage Note bearing all intervening endorsements necessary to show
a
complete chain of endorsements from the original payee, endorsed in blank,
“Pay
to the order of _____________, without recourse”, and, if previously endorsed,
signed in the name of the last endorsee by a duly qualified officer of the
last
endorsee;
(ii) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Mortgage shall be assigned, with assignee’s name
left blank;
(iii) the
original of each guarantee executed in connection with the Mortgage Note, if
any;
(iv) the
original recorded Mortgage, with evidence of recording thereon. If in connection
with any Mortgage Loan, the original Mortgage cannot be delivered with evidence
of recording thereon on or prior to the Closing Date because of a delay caused
by the public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Mortgage Loan
Seller shall deliver or cause to be delivered to the Custodian, (A) in the
case of a delay caused by the public recording office, a copy of such Mortgage
certified by the Mortgage Loan Seller, escrow agent, title insurer or closing
attorney to be a true and complete copy of the original recorded Mortgage and
(B) in the case where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation
in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
-47-
(v) originals
or a certified copy of each modification agreement, if any;
(vi) the
originals of all intervening assignments of Mortgage with evidence of recording
thereon evidencing a complete chain of ownership from the Mortgage Loan Seller
to the last assignee, or if any such intervening assignment of Mortgage has
not
been returned from the applicable public recording office or has been lost
or if
such public recording office retains the original recorded intervening
assignments of Mortgage, a photocopy of such intervening assignment of Mortgage,
together with (A) in the case of a delay caused by the public recording
office, an officer’s certificate of the Mortgage Loan Seller, escrow agent,
closing attorney or the title insurer insuring the Mortgage stating that such
intervening assignment of Mortgage has been delivered to the appropriate public
recording office for recordation and that such original recorded intervening
assignment of Mortgage or a copy of such intervening assignment of Mortgage
certified by the appropriate public recording office to be a true and complete
copy of the original recorded intervening assignment of Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the party delivering
the officer’s certificate or by the Mortgage Loan Seller; or (B) in the
case of an intervening assignment of mortgage where a public recording office
retains the original recorded intervening assignment of Mortgage or in the
case
where an intervening assignment of Mortgage is lost after recordation in a
public recording office, a copy of such intervening assignment of Mortgage
with
recording information thereon certified by such public recording office to
be a
true and complete copy of the original recorded intervening assignment of
Mortgage;
(vii) if
the
Mortgage Note, the Mortgage, any Assignment of Mortgage or any other related
document has been signed by a Person on behalf of the Mortgagor, the copy of
the
power of attorney or other instrument that authorized and empowered such Person
to sign;
(viii) the
original lender’s title insurance policy (or a marked title insurance
commitment, in the event that an original lender’s title insurance policy has
not yet been issued) in the form of an ALTA mortgage title insurance policy,
containing all required endorsements and insuring the Trustee and its successors
and assigns as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan;
(ix) if
applicable, the original of any Primary Mortgage Insurance Policy or certificate
or, an electronic certification, evidencing the existence of the Primary
Mortgage Insurance Policy or certificate, if private mortgage guaranty insurance
is required; and
(x) original
of any security agreement, chattel mortgage or equivalent document executed
in
connection with the Mortgage, if any.
-48-
To
the
extent not previously delivered to the Sponsor pursuant to the Master MLPISA,
the Mortgage Loan Seller shall promptly upon receipt from the respective
recording office cause to be delivered to the Custodian the original recorded
document described in clauses (iv) and (vi) above.
From
time
to time, the Mortgage Loan Seller, the Depositor or the Servicer, as applicable,
shall forward to the Custodian additional original documents, additional
documents evidencing an assumption, modification, consolidation or extension
of
a Mortgage Loan, in accordance with the terms of this Agreement upon receipt
of
such documents. All such mortgage documents held by the Custodian as to each
Mortgage Loan shall constitute the “Custodial
File”.
To
the
extent not previously delivered to the Sponsor pursuant to the Master MLPISA,
on
or prior to the Closing Date, the Mortgage Loan Seller shall deliver to the
Custodian Assignments of Mortgages, in blank, for each Mortgage Loan. No later
than thirty (30) Business Days following the later of the Closing Date and
the
date of receipt by the Servicer of the complete recording information for a
Mortgage, the Servicer shall promptly submit or cause to be submitted for
recording, at the expense of the Mortgage Loan Seller and at no expense to
the
Trust Fund, the Trustee, the Servicer or the Depositor, in the appropriate
public office for real property records, each Assignment of Mortgage referred
to
in Section 2.01(b)(ii). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan if the Trustee
and each Rating Agency have received an Opinion of Counsel, satisfactory in
form
and substance to the Trustee and each Rating Agency to the effect that the
recordation of such Assignments of Mortgage in any specific jurisdiction is
not
necessary to protect the Trust Fund’s interest in the related Mortgage Note. If
the Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
by
the Mortgage Loan Seller, at the expense of the Mortgage Loan Seller, to
“Deutsche Bank National Trust Company, as trustee under the Pooling and
Servicing Agreement dated as of February 1, 2006, for HSI Asset Securitization
Corporation Trust 2006-NC1”. In the event that any such Assignment of Mortgage
is lost or returned unrecorded because of a defect therein, the Mortgage Loan
Seller shall promptly cause to be delivered a substitute Assignment of Mortgage
to cure such defect and thereafter cause each such assignment to be duly
recorded at no expense to the Trust Fund.
In
the
event that such original or copy of any document submitted for recordation
to
the appropriate public recording office is not so delivered to the Trustee
within 180 days (or such other time period as may be required by any Rating
Agency) following the Closing Date, and in the event that the Mortgage Loan
Seller does not cure such failure within 30 days of discovery or receipt of
written notification of such failure from the Depositor, the related Mortgage
Loan shall, upon the request of the Depositor, be repurchased by the Mortgage
Loan Seller at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the Mortgage
Loan Seller cannot deliver such original or copy of any document submitted
for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided,
that
the Mortgage Loan Seller shall instead deliver a recording receipt of such
recording office or, if such recording receipt is not available, an officer’s
certificate of an officer of the Mortgage Loan Seller, confirming that such
document has been accepted for recording.
-49-
Notwithstanding
anything to the contrary contained in this Section 2.01, in those instances
where the public recording office retains or loses the original Mortgage or
assignment after it has been recorded, the obligations of the Mortgage Loan
Seller shall be deemed to have been satisfied upon delivery by the Mortgage
Loan
Seller to the Trustee, prior to the Closing Date of a copy of such Mortgage
or
assignment, as the case may be, certified (such certification to be an original
thereof) by the public recording office to be a true and complete copy of the
recorded original thereof.
(c) The
Depositor does hereby establish, pursuant to the further provisions of this
Agreement and the laws of the State of New York, an express trust (the
“Trust”)
to be
known, for convenience, as “HSI Asset Securitization Corporation Trust 2006-NC1”
and Deutsche Bank National Trust Company is hereby appointed as Trustee and
▇▇▇▇▇ Fargo Bank, N.A. is appointed as Securities Administrator in accordance
with the provisions of this Agreement. The parties hereto acknowledge and agree
that it is the policy and intention of the Trust to acquire only Mortgage Loans
meeting the requirements set forth in this Agreement, including without
limitation, the representations and warranties set forth in the Schedules
hereto.
(d) The
Trust
shall have the capacity, power and authority, and the Trustee on behalf of
the
Trust is hereby authorized, to accept the sale, transfer, assignment, set over
and conveyance by the Depositor to the Trust of all the right, title and
interest of the Depositor in and to the Trust Fund (including, without
limitation, the Mortgage Loans) pursuant to Section 2.01(a).
Section
2.02 Acceptance
by the Custodian of the Mortgage Loans.The
Custodian shall acknowledge, on the Closing Date, receipt by the Custodian
of
the documents identified in the Initial Certification in the form annexed hereto
as Exhibit E (“Initial
Certification”),
and
declares that it holds and will hold such documents and the other documents
delivered to it pursuant to Section 2.01, and that it holds or will hold
such other assets as are included in the Trust Fund, in trust for the exclusive
use and benefit of all present and future Certificateholders. The Custodian
shall maintain possession of the related Mortgage Notes in the State of
[California] unless otherwise permitted by the Rating Agencies.
In
connection with the Closing Date, the Custodian shall be required to deliver
via
facsimile (with original to follow the next Business Day) to the Depositor
an
Initial Certification prior to the Closing Date, or, as the Depositor agrees
on
the Closing Date, certifying receipt of a Mortgage Note and Assignment of
Mortgage for each Mortgage Loan. The Custodian shall not be responsible to
verify the validity, sufficiency or genuineness of any document in any Custodian
File.
Within
90 days after the Closing Date, the Custodian shall ascertain that all
documents identified in the Document Certification and Exception Report in
the
form attached hereto as Exhibit F are in its possession, and shall deliver
to the Depositor, the Mortgage Loan Seller and the Servicer a Document
Certification and Exception Report, in the form annexed hereto as
Exhibit F, to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception
and
not covered by such certification): (i) all documents identified in the
Document Certification and Exception Report and required to be reviewed by
it
are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based
on its examination and only as to the foregoing documents, the information
set
forth in items (1), (2), (3), (15), (18) and (22) of the Data Tape
Information respecting such Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither the Trustee nor the Custodian shall be responsible to verify
the validity, sufficiency or genuineness of any document in any Custodial
File.
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The
Custodian shall retain possession and custody of each Custodial File in
accordance with and subject to the terms and conditions set forth herein. The
Servicer shall promptly deliver to the Custodian, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting
the
Custodial File as come into the possession of the Servicer from time to
time.
The
Mortgage Loan Seller shall deliver to the Servicer copies of all trailing
documents required to be included in the Custodial File at the same time the
original or certified copies thereof are delivered to the Custodian, including
but not limited to such documents as the title insurance policy and any other
Mortgage Loan documents upon return from the public recording office. The
documents shall be delivered by the Mortgage Loan Seller at the Mortgage Loan
Seller’s expense to the Servicer.
Section
2.03 Representations,
Warranties and Covenants of the Mortgage Loan Seller and the Servicer; Remedies
for Breaches of Representations and Warranties with Respect to the Mortgage
Loans.
(a) JPMorgan, in its capacity as Servicer makes the representations and
warranties set forth in Schedule II
hereto,
to the Depositor, the Master Servicer, the Securities Administrator and the
Trustee as of the Closing Date.
(b) NC
Capital Corporation, in its capacity as Mortgage Loan Seller, makes the
representations and warranties set forth in Schedule III and Schedule IV
hereto, to the Depositor, the Master Servicer, the Securities Administrator
and
the Trustee as of the date specified therein.
(c) It
is
understood and agreed by the Servicer and the Mortgage Loan Seller that the
representations and warranties set forth in this Section 2.03 shall survive
the transfer of the Mortgage Loans by the Depositor to the Trustee on the
Closing Date, and shall inure to the benefit of the Depositor, the Trustee
and
the Trust Fund notwithstanding any restrictive or qualified endorsement on
any
Mortgage Note or Assignment of Mortgage or the examination or failure to examine
any Mortgage File. Upon discovery by the Mortgage Loan Seller, the Depositor,
the Securities Administrator, the Trustee, the Master Servicer or the Servicer
of a breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the
others.
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(d) Within
30 days of the earlier of either discovery by or notice to the Mortgage
Loan Seller that any Mortgage Loan does not conform to the requirements as
determined in the Custodian’s review of the related Custodial File or within
60 days of the earlier of either discovery by or notice to the Mortgage
Loan Seller of any breach of a representation or warranty referred to in
Section 2.03(b) that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Mortgage Loan Seller shall use its best efforts to cause to be remedied
a
material defect in a document constituting part of a Mortgage File or promptly
to cure such breach in all material respects and, if such defect or breach
cannot be remedied, the Mortgage Loan Seller shall, at the Depositor’s option as
specified in writing and provided to the Mortgage Loan Seller and the Trustee,
(i) if such 30- or 60-day period, as applicable, expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan (a
“Deleted
Mortgage Loan”)
from
the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in this Section 2.03; or
(ii) repurchase such Mortgage Loan at the Repurchase Price; provided,
however,
that
any such substitution pursuant to clause (i) above shall not be
effected prior to the delivery to the Custodian of a Request for Release
substantially in the form of Exhibit J, and the delivery of the Mortgage
File to the Custodian for any such Substitute Mortgage Loan. Notwithstanding
the
foregoing, a breach (i) which causes a Mortgage Loan not to constitute a
“qualified mortgage” within the meaning of Section 860G(a)(3) of the Code
or (ii) of any of the representations and warranties set forth in items number
(44), (45), (47), (54), (55), (56), (57), (58), (59), (60), (63) and (82)
of Schedule IV with respect to any Group I Mortgage Loan, will be deemed
automatically to materially and adversely affect the value of such Mortgage
Loan
and the interests of the Trustee and Certificateholders in such Mortgage Loan,
requiring the repurchase or substitution of such Mortgage Loan by the Mortgage
Loan Seller irrespective of the Mortgage Loan Seller’s actual knowledge of the
breach of such representation and warranty. In the event that the Trustee
receives notice of a breach by the Mortgage Loan Seller of any of the
representations and warranties described in the immediately preceding sentence,
the Trustee shall give notice of such breach to the Mortgage Loan Seller and
request the Mortgage Loan Seller to substitute such Mortgage Loan or to
repurchase such Mortgage Loan at the Repurchase Price within sixty
(60) days of the receipt of such notice. The Mortgage Loan Seller shall
repurchase each such Mortgage Loan within 60 days of the earlier of
discovery or receipt of notice with respect to each such Mortgage
Loan.
(e) With
respect to any Substitute Mortgage Loan or Loans, the Mortgage Loan Seller
shall
deliver to the Custodian for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and such other
documents and agreements as are required by Section 2.01, with the Mortgage
Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made with respect to any Distribution Date
after
the end of the related Prepayment Period. Scheduled Payments due with respect
to
Substitute Mortgage Loans in the Due Period of substitution shall not be part
of
the Trust Fund and will be retained by the Mortgage Loan Seller on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the Mortgage Loan Seller shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
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(f) The
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the
substitution of the Substitute Mortgage Loan or Loans and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Mortgage Loan Seller
shall be deemed to have made with respect to such Substitute Mortgage Loan
or
Loans, as of the date of substitution, the representations and warranties made
pursuant to Section 2.03(b) with respect to such Mortgage Loan. Upon any
such substitution and the deposit to the Collection Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Custodian shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Mortgage Loan Seller and the Trustee, upon receipt of
a
Request for Release certifying that all amounts required to be deposited in
accordance with this Section 2.03(f) have been deposited in the Collection
Account, shall execute and deliver at the Mortgage Loan Seller’s direction such
instruments of transfer or assignment prepared by the Mortgage Loan Seller
in
each case without recourse, as shall be necessary to vest title in the Mortgage
Loan Seller of the Trustee’s interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
(g) For
any
month in which the Mortgage Loan Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any) by which the aggregate unpaid principal balance
of
all such Substitute Mortgage Loans as of the date of substitution is less than
the aggregate unpaid principal balance of all such Deleted Mortgage Loans.
The
amount of such shortage plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans (collectively,
the “Substitution
Adjustment Amount”)
shall
be remitted by the Mortgage Loan Seller to the Servicer for deposit into the
Collection Account on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
(h) In
addition to the repurchase or substitution obligations referred to in
Section 2.03(d) above and Section 2.03 (k) below, the Mortgage Loan
Seller or the Sponsor, as applicable, shall indemnify the Depositor, any of
its
Affiliates, the Master Servicer, the Servicer, the Securities Administrator,
the
Trustee and the Trust and hold such parties harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses (including, without
limitation, any taxes payable by the Trust) resulting from any third party
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach by the Mortgage Loan Seller or the Sponsor, as applicable, of
any
of its representations and warranties or obligations contained in this
Agreement.
(i) The
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee, the
Custodian, the Master Servicer and the Securities Administrator.
(j) In
the
event that a Mortgage Loan shall have been repurchased pursuant to this
Agreement or the Purchase Agreement, the proceeds from such repurchase shall
be
deposited by the Servicer in the Collection Account pursuant to
Section 3.10 on or before the Remittance Date for the Distribution Date in
the month following the month during which the Mortgage Loan Seller or Sponsor
became obligated to repurchase or replace such Mortgage Loan and upon such
deposit of the Repurchase Price, and receipt of a Request for Release in the
form of Exhibit J hereto, the Custodian shall release the related Custodial
File held for the benefit of the Certificateholders to the Mortgage Loan Seller
or the Sponsor, as applicable, as directed by the Servicer, and the Trustee
shall execute and deliver at such Person’s direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. In accordance with
Section 12.05(a), the Securities Administrator shall promptly notify each
Rating Agency of a purchase of a Mortgage Loan pursuant to this
Section 2.03.
-53-
It
is
understood and agreed that the obligation of the Mortgage Loan Seller under
this
Agreement to cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is continuing, together
with any related indemnification obligations of the Mortgage Loan Seller set
forth in Section 2.03(h), shall constitute the sole remedies against such
Person respecting such breach available to Certificateholders, the Depositor
and
any of its Affiliates, or the Trustee on their behalf.
(k) The
Trustee acknowledges that, except as provided in Section 5 of the Purchase
Agreement, the Sponsor shall not have any obligation or liability with respect
to any breach of a representation or warranty made by it with respect to a
Mortgage Loan sold by it, provided
that
such representation or warranty was also made by the Mortgage Loan Seller with
respect to the related Mortgage Loan. It is understood and agreed that the
representations and warranties of the Sponsor set forth in Section 4 of the
Purchase Agreement and assigned to the Trustee by the Depositor hereunder shall
survive the transfer of the Mortgage Loans by the Depositor to the Trustee
on
the Closing Date, and shall inure to the benefit of the Trustee and the
Certificateholders notwithstanding any restrictive or qualified endorsement
on
any Mortgage Note or Assignment of Mortgage and shall continue throughout the
term of this Agreement. Upon the discovery by any of the Sponsor, the Depositor,
the Securities Administrator, the Trustee, the Master Servicer or the Servicer
of a breach of any of the Sponsor’s representations and warranties set forth in
Section 4 of the Purchase Agreement, the party discovering the breach shall
give
prompt written notice to the others. Within 30 days of the earlier of
either discovery by or notice to the Sponsor of any breach of any of the
foregoing representations or warranties that materially and adversely affects
the value of any Mortgage Loan or the interest of the Trustee or the
Certificateholders therein, the Sponsor shall use its best efforts to cure
such
breach in all material respects and, if such defect or breach cannot be
remedied, the Sponsor shall, at the Depositor’s instructions as specified in
writing and provided to the Sponsor and the Trustee, (i) if such 30-day
period expires prior to the second anniversary of the Closing Date, remove
such
Mortgage Loan from the Trust Fund and substitute in its place a Substitute
Mortgage Loan, in the same manner and subject to the same conditions set forth
in this Section 2.03 that apply to repurchases or substitutions of Mortgage
Loans by the Mortgage Loan Seller or (ii) repurchase such Mortgage Loan at
the Repurchase Price; provided,
however,
that
any such substitution pursuant to clause (i) above shall not be
effected prior to the delivery to the Custodian of a Request for Release
substantially in the form of Exhibit J, and the delivery of the Mortgage
File to the Custodian for any such Substitute Mortgage Loan. In the event of
any
such repurchase or substitution of a Mortgage Loan by the Sponsor, the
procedures set forth in Sections 2.03(e), (f), (g), (h), (i) and (j) shall
apply
to the Sponsor in the same manner and to the same extent that they are
applicable to the Mortgage Loan Seller. It is understood and agreed that the
obligations of the Sponsor under this Agreement to cure, repurchase or
substitute any Mortgage Loan as to which a breach of a representation and
warranty has occurred and is continuing, together with any related
indemnification obligations of the Sponsor set forth in Section 2.03(h), shall
constitute the sole remedies against the Sponsor available to the
Certificateholders, the Depositor and any of its affiliates, or the Trustee
on
their behalf.
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The
provisions of this Section 2.03 shall survive delivery of the respective
Custodial Files to the Custodian for the benefit of the
Certificateholders.
Section
2.04 Execution
and Delivery of Certificates.The
Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator
has
executed and delivered to, or upon the order of the Depositor, the Certificates
in authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates.
Section
2.05 REMIC
Matters.The
Preliminary Statement sets forth the designations for federal income tax
purposes of all interests created hereby. The “Startup
Day”
for
purposes of the REMIC Provisions shall be the Closing Date. The “latest
possible maturity date”
is
the
Distribution Date occurring in November 2039, which is the Distribution Date
in
the month following the month in which the latest Mortgage Loan maturity date
occurs.
Section
2.06 Representations
and Warranties of the Depositor.The
Depositor hereby represents, warrants and covenants to the other parties to
this
agreement that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The
Depositor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware;
(b) The
Depositor has the power and authority to convey the Mortgage Loans and to
execute, deliver and perform, and to enter into and consummate transactions
contemplated by, this Agreement;
(c) This
Agreement has been duly and validly authorized, executed and delivered by the
Depositor, all requisite company action having been taken, and, assuming the
due
authorization, execution and delivery hereof by the other parties hereto,
constitutes or will constitute the legal, valid and binding agreement of the
Depositor, enforceable against the Depositor in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless
of
whether such enforcement is considered in a proceeding in equity or at
law);
(d) No
consent, approval, authorization or order of, or registration or filing with,
or
notice to, any governmental authority or court is required for the execution,
delivery and performance of or compliance by the Depositor with this Agreement
or the consummation by the Depositor of any of the transactions contemplated
hereby, except as have been received or obtained on or prior to the Closing
Date;
-55-
(e) None
of
the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby or thereby, or the fulfillment of or compliance
with the terms and conditions of this Agreement, (i) conflicts or will
conflict with or results or will result in a breach of, or constitutes or will
constitute a default or results or will result in an acceleration under
(A) the charter or bylaws of the Depositor, or (B) of any term,
condition or provision of any material indenture, deed of trust, contract or
other agreement or instrument to which the Depositor or any of its subsidiaries
is a party or by which it or any of its subsidiaries is bound; (ii) results
or will result in a violation of any law, rule, regulation, order, judgment
or
decree applicable to the Depositor of any court or governmental authority having
jurisdiction over the Depositor or its subsidiaries; or (iii) results in
the creation or imposition of any lien, charge or encumbrance which would have
a
material adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans;
(f) There
are
no actions, suits or proceedings before or against or investigations of, the
Depositor pending, or to the knowledge of the Depositor, threatened, before
any
court, administrative agency or other tribunal, and no notice of any such
action, which, in the Depositor’s reasonable judgment, might materially and
adversely affect the performance by the Depositor of its obligations under
this
Agreement, or the validity or enforceability of this Agreement;
(g) The
Depositor is not in default with respect to any order or decree of any court
or
any order, regulation or demand of any federal, state, municipal or governmental
agency that would materially and adversely affect its performance hereunder;
and
(h) Immediately
prior to the transfer and assignment by the Depositor to the Trustee on the
Closing Date, the Depositor had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor
has
transferred all right, title and interest in each Mortgage Loan to the Trustee.
The transfer of the Mortgage Note and the Mortgage as and in the manner
contemplated by this Agreement is sufficient either (i) fully to transfer
to the Trustee, for the benefit of the Certificateholders, all right, title,
and
interest of the Depositor thereto as note holder and mortgagee or (ii) to
grant to the Trustee, for the benefit of the Certificateholders, the security
interest referred to in Section 12.04.
It
is
understood and agreed that the representations, warranties and covenants set
forth in this Section 2.06 shall survive delivery of the respective
Mortgage Files to the Custodian and shall inure to the benefit of the
Trustee.
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
MORTGAGE LOANS
Section
3.01 Servicer
to Service Mortgage Loans.(a) For
and on behalf of the Certificateholders, the Servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement
and
the respective Mortgage Loans and, to the extent consistent with such terms,
in
accordance with Accepted Servicing Practices, but without regard
to:
-56-
(i) any
relationship that the Servicer, any Subservicer or any Affiliate of the Servicer
or any Subservicer may have with the related Mortgagor;
(ii) the
ownership or non-ownership of any Certificate by the Servicer or any Affiliate
of the Servicer;
(iii) the
Servicer’s obligation to make P&I Advances or Servicing Advances;
or
(iv) the
Servicer’s or any Subservicer’s right to receive compensation for its services
hereunder or with respect to any particular transaction.
To
the
extent consistent with the foregoing, the Servicer shall seek to maximize the
timely and complete recovery of principal and interest on the Mortgage Notes.
Subject only to the above-described servicing standards and the terms of this
Agreement and of the respective Mortgage Loans, the Servicer shall have full
power and authority, acting alone or through Subservicers as provided in
Section 3.02, to do or cause to be done any and all things in connection
with such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices to execute and deliver any and
all
instruments of satisfaction or cancellation, or of partial or full release
or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings
or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall at its own expense be responsible for
preparing and recording all lien releases and mortgage satisfactions in
accordance with state and local regulations. The Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided
to
them thereby. The Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under
any
standard hazard insurance policy or any Primary Mortgage Insurance Policy (if
applicable). Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents provided to the Trustee as are necessary or appropriate to enable
the Servicer or any Subservicer to carry out their servicing and administrative
duties hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such duties
including a power of attorney to take title to Mortgaged Properties after
foreclosure on behalf of the Trustee. The Trustee shall execute a separate
power
of attorney, furnished to it by the Servicer, in favor of the Servicer for
the
purposes described herein to the extent necessary or desirable to enable the
Servicer to perform its duties hereunder. The Trustee shall not be liable for
the actions of the Servicer or any Subservicers under such powers of attorney.
Notwithstanding anything contained herein to the contrary, no Servicer or
Subservicer shall without the Trustee’s consent: (i) initiate any action, suit
or proceeding solely under the Trustee’s name without indicating the Servicer’s
or Subservicer’s, as applicable, representative capacity, or (ii) knowingly take
any action with the intent to, or which actually does cause, the Trustee to
be
registered to do business in any state.
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(b) Subject
to Section 3.09(b), in accordance with the standards of the preceding
paragraph, the Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the timely payment of taxes and assessments on
the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable
in
the first instance from the collection from the Mortgagors pursuant to
Section 3.09(b), and further as provided in Section 3.11. Any cost
incurred by the Servicer or by Subservicers in effecting the timely payment
of
taxes and assessments on a Mortgaged Property shall not be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
(c) Notwithstanding
anything in this Agreement to the contrary, the Servicer may not make any future
advances with respect to a Mortgage Loan (except as provided in
Section 4.01) and the Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that would change the Mortgage Rate, reduce
or
increase the principal balance (except for reductions resulting from actual
payments of principal) or change the final maturity date on such Mortgage Loan
(except for a reduction of interest payments resulting from the application
of
the Servicemembers Civil Relief Act or any similar state statutes) or
(ii) permit any modification, waiver or amendment of any term of any
Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause either
the Upper Tier REMIC or a Lower Tier REMIC to fail to qualify as a REMIC under
the Code or the imposition of any tax on “prohibited transactions” or
“contributions after the startup day” under the REMIC Provisions, or
(iii) except as provided in Section 3.07(a), waive any Prepayment
Charges.
(d) The
Servicer may delegate its responsibilities under this Agreement; provided,
however,
that no
such delegation shall release the Servicer from the responsibilities or
liabilities arising under this Agreement.
(e) As
of the
Closing Date, JPMorgan has engaged Chase Home Finance LLC (“CHF”) to act as
subservicer with respect to JPMorgan’s servicing obligations under this
Agreement. So long as JPMorgan is not a ranked servicer by any Rating Agency,
JPMorgan agrees that prior to replacing CHF as subservicer, other than with
an
affiliate of JPMorgan that is a ranked servicer, it will obtain written
confirmation from each Rating Agency that such replacement of CHF as subservicer
with respect to JPMorgan’s servicing obligations related to the Mortgage Loans
will not cause the current rating on the Certificates to be withdrawn or lowered
by such Rating Agency and agrees that any replacement subservicer shall agree
to
subservice in accordance with the terms of this Agreement, including but not
limited to the consideration of whether to waive a Prepayment Charge
thereunder.
Section
3.02 Subservicing
Agreements between Servicer and Subservicers; Use of
Subcontractors.(a)
The
Servicer may enter into a subservicing agreement with a Subservicer, for the
servicing and administration of the Mortgage Loans (“Subservicing
Agreement”)
without obtaining the prior consent of the Trustee, the Depositor, the Master
Servicer, Securities Administrator or other parties hereto to the utilization
of
any such Subservicer, provided the provisions of such Subservicing Agreement
comply with the requirements set forth of this Section 3.02. None of the
Trustee, the Master Servicer or the Depositor shall be required to review or
consent to such Subservicing Agreement and shall have no liability in connection
therewith.
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(b) Each
Subservicer shall be (i) authorized to transact business in the state or
states in which the related Mortgaged Properties it is to service are situated,
if and to the extent required by applicable law to enable the Subservicer
to
perform its obligations hereunder and under the Subservicing Agreement and
(ii)
a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. The Servicer shall
examine each Subservicing Agreement and will be familiar with the terms thereof.
The Servicer and the Subservicers may enter into and make amendments to the
Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided,
however,
that
any such amendments or different forms shall be consistent with and not violate
the provisions of this Agreement, and that no such amendment or different
form
shall be made or entered into which could be reasonably expected to be
materially adverse to the interests of the Trustee, the Depositor, the Master
Servicer or the Securities Administrator without their prior written consent.
The Servicer shall deliver to the Master Servicer and the Securities
Administrator copies of any additional Subservicing Agreements relating to
the
Mortgage Loans entered into after the Closing Date, and any and all
amendments thereto
promptly
upon the Servicer’s execution and delivery of such instruments.
(c) As
part
of its servicing activities hereunder, the Servicer (except as otherwise
provided in the last sentence of this paragraph) shall enforce the obligations
of each Subservicer under the related Subservicing Agreement, including, without
limitation, (i) any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement, (ii) the obligation to
establish Subservicing Accounts meeting the criteria of Section 3.08 and (iii)
the reporting obligations set forth under Section 3.22, 3.23, 3.24 and 3.30
hereof to the same extent as if such Subservicer were the Servicer and a party
to this Agreement. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Master Servicer, the Securities Administrator
and the Depositor (i) any servicer annual compliance statement required to
be
delivered by such Subservicer under Section 3.24(b); (ii) any report on
assessments and attestations of compliance with Relevant Servicing Criteria
required to be delivered by the Subservicer pursuant to Sections 3.22 and 3.23;
and (iii) any certifications required to be delivered under Section 3.24(a)
to
the Master Servicer or such other Person that will be responsible for signing
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification as and where required to be delivered
hereunder. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such
an
extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts
due
in respect of the related Mortgage Loans or (ii) from a specific recovery
of costs, expenses or attorneys’ fees against the party against whom such
enforcement is directed.
(d) It
shall
not be necessary for the Servicer to seek the consent of the Depositor, the
Trustee, the Master Servicer, the Securities Administrator or other parties
hereto to the utilization of a Subcontractor. The Servicer shall give prompt
written notice to the Master Servicer and the Depositor of the appointment
of
any Subcontractor and provide a written description (in form and substance
satisfactory to the Depositor) of the role and function of each Subcontractor
specifying (i) which, if any, of such Subcontractors are Servicing Function
Participants, (ii) which elements of the Servicing Criteria set forth under
Item
1122(d) of Regulation AB will be addressed in assessments and attestations
of
compliance with Relevant Servicing Criteria provided by such Subcontractor
identified pursuant to clause (i) of this paragraph.
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(e) As
a
condition to the utilization of any Subcontractor determined by the Servicer
to
be a Servicing Function Participant, the Servicer shall cause any such
Subcontractor used by the Servicer (or by any Subservicer) to comply with
the
provisions of Sections 3.22, 3.23, 3.24, 3.30, 6.05, 6.06, 7.01(i) and Exhibit
S
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 the Securities Administrator, the Master Servicer and the Depositor
any assessments and attestations of compliance required to be delivered by
such
Subcontractor pursuant to Sections 3.22 and 3.23, in each case as and when
required to be delivered.
Section
3.03 Successor
Subservicers.The
Servicer shall be entitled to terminate any Subservicing Agreement and the
rights and obligations of any Subservicer pursuant to any Subservicing Agreement
in accordance with the terms and conditions of such Subservicing Agreement.
In
the event of termination of any Subservicer, all servicing obligations of such
Subservicer shall be assumed simultaneously by the Servicer without any act
or
deed on the part of such Subservicer or Servicer, and the Servicer either shall
service directly the related Mortgage Loans or shall enter into a Subservicing
Agreement with a successor subservicer which qualifies under
Section 3.02.
Any
Subservicing Agreement shall include the provision that such agreement may
be
immediately terminated by the Master Servicer without fee, in accordance with
the terms of this Agreement, in the event that the Servicer shall, for any
reason, no longer be the Servicer (including termination due to an Event of
Default).
Section
3.04 Liability
of the Servicer.Notwithstanding
any subservicing agreement or the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer, Subcontractor
or other third party or reference to actions taken through a Subservicer, a
Subcontractor, another third party or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee and the Trust Fund for the
servicing and administering of the Mortgage Loans in accordance with the
provisions hereof without diminution of such obligation or liability by virtue
of any subservicing, subcontracting or other agreements or arrangements or
by
virtue of indemnification from a Subservicer, Subcontractor or a third party
and
to the same extent and under the same terms and conditions as if the Servicer
alone were servicing the Mortgage Loans, including with respect to compliance
with Item 1122 of Regulation AB. The Servicer shall be entitled to enter into
any agreement with a Subservicer, Subcontractor or other third party for
indemnification of the Servicer by such Subservicer, Subcontractor or third
party and nothing contained in the Agreement shall be deemed to limit or modify
such indemnification.
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Section
3.05 No
Contractual Relationship between Subservicers and the Master
Servicer.Any
Subservicing Agreement that may be entered into and any transactions or services
relating to the Mortgage Loans involving a Subservicer in its capacity as such
shall be deemed to be between the Subservicer and the Servicer alone, and none
of the Trustee, the Depositor, the Securities Administrator, or the Master
Servicer (nor any successor master servicer) shall be deemed a party thereto
and
shall have no claims, rights, obligations, duties or liabilities with respect
to
the Subservicer except as set forth in Section 3.06. The Servicer shall be
solely liable for all fees owed by it to any Subservicer, irrespective of
whether the Servicer’s compensation pursuant to this Agreement is sufficient to
pay such fees.
Section
3.06 Assumption
or Termination of Subservicing Agreements by Master ▇▇▇▇▇▇▇▇.▇▇
the
event the Servicer at any time shall for any reason no longer be the Servicer
(including by reason of the occurrence of an Event of Default), the Master
Servicer, or its designee or the successor servicer if the successor is not
the
Master Servicer, shall thereupon assume all of the rights and obligations of
the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Master Servicer or the successor
servicer if the successor is not the Master Servicer, prior to the Master
Servicer or the successor servicer if the successor is not the Master Servicer,
assuming such rights and obligations, unless the Master Servicer elects to
terminate any Subservicing Agreement in accordance with its terms as provided
in
Section 3.03.
Upon
such
assumption, the Master Servicer, its designee or the successor servicer shall
be
deemed, subject to Section 3.03, to have assumed all of the Servicer’s
interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement
had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of
the Trustee, the Depositor, the Master Servicer, the Securities Administrator,
their designees or any successor servicer shall be deemed to have assumed any
liability or obligation of the Servicer that arose before it ceased to be the
Servicer.
The
Servicer at its expense shall, upon request of the Master Servicer, its designee
or the successor servicer deliver to the assuming party all documents and
records relating to the Subservicing Agreement and the Mortgage Loans then
being
serviced and an accounting of amounts collected and held by or on behalf of
it,
and otherwise use its best efforts to effect the orderly and efficient transfer
of the Subservicing Agreements to the assuming party.
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Section
3.07 Collection
of Certain Mortgage Loan Payments.(a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as
it
would follow with respect to mortgage loans comparable to the Mortgage Loans
and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the
Scheduled Payments due on a Mortgage Note for a period of not greater than
180 days; provided,
that
any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Servicer shall make timely advances
on such Mortgage Loan during such extension pursuant to Section 4.01 and in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to
Section 4.01(d) pursuant to which the Servicer shall not be required to
make any such advances that are Nonrecoverable P&I Advances. Notwithstanding
the foregoing, in the event that any Mortgage Loan is in default or in the
judgment of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive,
modify or vary any term of such Mortgage Loan (including modifications that
would change the Mortgage Rate, forgive the payment of principal or interest,
extend the final maturity date of such Mortgage Loan or waive, in whole or
in
part, a Prepayment Charge), accept payment from the related Mortgagor of an
amount less than the Stated Principal Balance in final satisfaction of such
Mortgage Loan, or consent to the postponement of strict compliance with any
such
term or otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as “Forbearance”);
provided,
however,
that
the Servicer’s approval of a modification of a Due Date shall not be considered
a modification for purposes of this sentence; provided,
further,
that
the final maturity date of any Mortgage Loan may not be extended beyond the
Final Scheduled Distribution Date for the LIBOR Certificates. The Servicer’s
analysis supporting any Forbearance and the conclusion that any Forbearance
meets the standards of Section 3.01 shall be reflected in writing in the
Servicing File or on the Servicer’s servicing records. In addition,
notwithstanding the foregoing, the Servicer may also waive (or permit a
Subservicer to waive), in whole or in part, a Prepayment Charge if such waiver
would, in the Servicer’s judgment, maximize recoveries on the related Mortgage
Loan or if such Prepayment Charge is (i) not permitted to be collected by
applicable law, or the collection of the Prepayment Charge would be considered
“predatory” pursuant to written guidance published by any applicable federal,
state or local regulatory authority having jurisdiction over such matters,
or
(ii) the enforceability of such Prepayment Charge is limited (1) by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors’ rights or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If a Prepayment Charge is waived
other
than as permitted in this Section 3.07(a), then the Servicer is required to
pay the amount of such waived Prepayment Charge, for the benefit of the Holders
of the Class P Certificates, by depositing such amount into the Collection
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the Collection Account;
provided,
however,
that
the Servicer shall not have an obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result
of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect
at
such time. The Master Servicer shall have no responsibility for verifying the
accuracy of the amount of Prepayment Charges waived or remitted by the
Servicer.
(b) (i) The
Securities Administrator shall establish and maintain the Excess Reserve Fund
Account, on behalf of the Class X Certificateholders, to receive any Basis
Risk Payment and to secure their limited recourse obligation to pay to the
LIBOR
Certificateholders Basis Risk Carryover Amounts.
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(ii) On
each
Distribution Date, the Securities Administrator shall deposit the amount of
any
Basis Risk Payment for such date into the Excess Reserve Fund
Account.
(c) (i) On
each
Distribution Date on which there exists a Basis Risk Carryover Amount on any
Class of Certificates, the Securities Administrator shall (1) withdraw
from the Distribution Account and deposit in the Excess Reserve Fund Account,
as
set forth in Section 4.02(a)(iii)(C), the lesser of (x) the
Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk Payment (to the extent
remaining after the distributions specified in Sections 4.02(a)(iii)(A)
through (E)) and (y) the aggregate Basis Risk Carryover Amounts for such
Distribution Date and (2) withdraw from the Excess Reserve Fund Account
amounts necessary to pay to such Class or Classes of LIBOR Certificates the
Basis Risk Carryover Amount. Such payments shall be allocated to those Classes
on a pro rata
basis
based upon the amount of Basis Risk Carryover Amount owed to each such
Class and shall be paid in the priority set forth in
Sections 4.02(a)(iii)(D).
(ii) The
Securities Administrator shall account for the Excess Reserve Fund Account
as an
asset of a grantor trust under subpart E, Part I of subchapter J
of the Code and not as an asset of any REMIC created pursuant to this Agreement.
The beneficial owners of the Excess Reserve Fund Account are the Class X
Certificateholders. For all federal tax purposes, amounts transferred by the
Upper Tier REMIC to the Excess Reserve Fund Account shall be treated as
distributions by the Securities Administrator to the Class X
Certificateholders.
(iii) Any
Basis
Risk Carryover Amounts paid by the Securities Administrator to the LIBOR
Certificateholders shall be accounted for by the Securities Administrator as
amounts paid first to the Holders of the Class X Certificates and then to
the respective Class or Classes of LIBOR Certificates. In addition, the
Securities Administrator shall account for such Certificateholders’ rights to
receive payments of Basis Risk Carryover Amounts as rights in a limited recourse
notional principal contract written by the Class X Certificateholders in
favor of such Certificateholders.
(iv) Notwithstanding
any provision contained in this Agreement, the Securities Administrator shall
not be required to make any payments to and from the Excess Reserve Fund Account
except as expressly set forth in this Section 3.07(c) and
Sections 4.02(a)(iii)(C) and (D).
(d) The
Securities Administrator shall establish and maintain the Distribution Account
on behalf of the Certificateholders. The Master Servicer shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the
following:
(i) the
aggregate amount remitted by the Servicer to the Master Servicer pursuant to
Section 3.11;
(ii) any
amount deposited by the Servicer pursuant to Section 3.12(b) in connection
with any losses on Permitted Investments; and
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(iii) any
other
amounts deposited hereunder which are required to be deposited in the
Distribution Account.
In
the
event that the Servicer shall remit any amount not required to be remitted,
it
may at any time direct the Securities Administrator in writing to withdraw
such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to
the
Securities Administrator which describes the amounts deposited in error in
the
Distribution Account. All funds deposited in the Distribution Account shall
be
held by the Securities Administrator in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 4.02.
(e) The
Securities Administrator may invest the funds in the Distribution Account during
the Securities Administrator Float Period in one or more Permitted Investments
in accordance with Section 3.12. The Securities Administrator may withdraw
from the Distribution Account any income or gain earned from the investment
of
funds deposited therein for its own benefit.
(f) The
Servicer shall give notice to the Securities Administrator of any proposed
change of the location of the Collection Account not later than 30 days and
not more than 45 days prior to any change thereof and the Securities
Administrator shall forward such notice to each Rating Agency and the
Depositor.
(g) To
help
fight the funding of terrorism and money laundering activities, the Trustee
will
obtain, verify, and record information that identifies individuals or entities
that establish a relationship or open an account with the Trustee. The Trustee
will ask for the name, address, tax identification number and other information
that will allow the Trustee to identify the individual or entity who is
establishing the relationship or opening the account. The Trustee may also
ask
for formation documents such as articles of incorporation, an offering
memorandum, or other identifying documents to be provided.
Section
3.08 Subservicing
▇▇▇▇▇▇▇▇.▇▇
those
cases where a Subservicer is servicing a Mortgage Loan pursuant to a
Subservicing Agreement, the Subservicer will be required to establish and
maintain one or more segregated accounts (collectively, the “Subservicing
Account”).
The
Subservicing Account shall be an Eligible Account and shall otherwise be
acceptable to the Servicer. The Subservicer shall deposit in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Subservicer’s receipt thereof, all proceeds of
Mortgage Loans received by the Subservicer less its servicing compensation
to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such payments.
Funds in the clearing account and any Subservicing Account may, in the
discretion of the Servicer, be invested in Permitted Investments pending their
deposit in the Subservicing Account and the Collection Account, as applicable;
however, the Servicer shall be responsible for reimbursement of any losses
incurred on such investments.
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Section
3.09 Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
(a) The
Servicer shall enforce the obligations under each paid-in-full, life-of-the-loan
tax service contract in effect with respect to each Mortgage Loan (each, a
“Tax
Service Contract”).
Each
Tax Service Contract shall be transferred to a successor Servicer, at the
Servicer’s expense in the event that the Servicer is terminated for cause as
Servicer of the related Mortgage Loan; otherwise such expense will be borne
by
the successor servicer.
(b) To
the
extent that the services described in this paragraph (b) are not
otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such
functions. To the extent the related Mortgage provides for Escrow Payments,
the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more segregated accounts (the “Escrow
Accounts”),
which
shall be Eligible Accounts. The Servicer shall deposit in the clearing account
(which account must be an Eligible Account) in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage
loan
servicing activities on a daily basis, and in no event more than one Business
Day after the Servicer’s receipt thereof, all collections from the Mortgagors
(or related advances from Subservicers) for the payment of taxes, assessments,
hazard insurance premiums and comparable items for the account of the Mortgagors
(“Escrow
Payments”)
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business
Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items; (ii) reimburse the Servicer (or a Subservicer to the
extent provided in the related Subservicing Agreement) out of the collection
for
any advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages;
(iv) pay interest, if required and as described below, to Mortgagors on
balances in the Escrow Account; (v) clear and terminate the Escrow Account
at the termination of the Servicer’s obligations and responsibilities in respect
of the Mortgage Loans under this Agreement; or (vi) recover amounts
deposited in error. As part of its servicing duties, the Servicer or
Subservicers shall pay to the Mortgagors interest on funds in Escrow Accounts,
to the extent required by law and, to the extent that interest earned on funds
in the Escrow Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. To the extent that a Mortgage
does not provide for Escrow Payments, the Servicer shall determine whether
any
such payments are made by the Mortgagor in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure of
a tax
lien. The Servicer assumes full responsibility for the payment of all such
bills
within such time and shall effect payments of all such bills irrespective of
the
Mortgagor’s faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided,
however,
that
such advances are deemed to be Servicing Advances.
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Section
3.10 Collection
Account.
(a) On behalf of the Trustee, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more segregated
Eligible Accounts (such account or accounts, the “Collection
Account”),
held
in trust for the benefit of the Trustee. On behalf of the Trustee, the Servicer
shall deposit or cause to be deposited in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer’s receipt thereof, and shall thereafter deposit into the Collection
Account, in no event more than two Business Days after the deposit of such
funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee) on each
Mortgage Loan;
(iii) all
Insurance Proceeds and Condemnation Proceeds to the extent such Insurance
Proceeds and Condemnation Proceeds are not to be applied to the restoration
of
the related Mortgaged Property or released to the related Mortgagor in
accordance with the express requirements of law or in accordance with Accepted
Servicing Practices, Liquidation Proceeds and Subsequent
Recoveries;
(iv) any
amounts required to be deposited pursuant to Section 3.12 in connection
with any losses realized on Permitted Investments with respect to funds held
in
the Collection Account;
(v) any
amounts required to be deposited by the Servicer pursuant to the second
paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all
proceeds of any Mortgage Loan repurchased or purchased in accordance with this
Agreement; and
(vii) all
Prepayment Charges collected by the Servicer.
The
foregoing requirements for deposit in the Collection Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges, NSF fees,
reconveyance fees, assumption fees and other similar fees and charges need
not
be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
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(b) Funds
in
the Collection Account may be invested in Permitted Investments in accordance
with the provisions set forth in Section 3.12. The Servicer shall give
notice to the Securities Administrator, the Master Servicer, the Trustee and
the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof.
Section
3.11 Withdrawals
from the Collection Account.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account maintained by it for any of the following purposes or as
described in Section 4.01:
(i) on
or
prior to each Remittance Date, to remit to the Master Servicer (A) the
Master Servicing Fee with respect to such Distribution Date and (B) all
Available Funds in respect of the related Distribution Date together with all
amounts representing Prepayment Charges (payable to the Class P
Certificateholders) from the Mortgage Loans received during the related
Prepayment Period;
(ii) to
reimburse the Servicer for (A) P&I Advances, but only to the extent of
amounts received which represent Late Collections (net of the related Servicing
Fees) of Scheduled Payments on Mortgage Loans with respect to which such P&I
Advances were made by the Servicer in accordance with the provisions of
Section 4.01 and (B) any ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances to the extent of
funds held in the Collection Account for a future Distribution Date that were
not included in Available Funds for the preceding Distribution
Date;
(iii) to
pay
the Servicer or any Subservicer (A) any unpaid Servicing Fees or
(B) any unreimbursed Servicing Advances with respect to each Mortgage Loan,
but only to the extent of any Late Collections or other amounts as may be
collected by the Servicer from a Mortgagor, or otherwise received with respect
to such Mortgage Loan (or the related REO Property);
(iv) to
pay to
the Servicer as servicing compensation (in addition to the Servicing Fee) on
each Remittance Date any interest or investment income earned on funds deposited
in the Collection Account;
(v) to
pay to
the Mortgage Loan Seller, with respect to each Mortgage Loan that has previously
been repurchased or replaced pursuant to this Agreement, all amounts received
thereon subsequent to the date of purchase or substitution, as the case may
be;
(vi) to
reimburse the Servicer for (A) any P&I Advance or Servicing Advance
previously made which the Servicer has determined to be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance in accordance with the provisions
of
Section 4.01 and (B) any unpaid Servicing Fees to the extent not
recoverable from Late Collections or other amounts received with respect to
the
related Mortgage Loan under Section 3.11(a)(iii);
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(vii) to
pay,
or to reimburse the Servicer for Servicing Advances in respect of, expenses
incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to
reimburse the Master Servicer, the Servicer, the Depositor, the Securities
Administrator or the Trustee for expenses incurred by or reimbursable to the
Master Servicer, the Servicer, the Depositor, the Securities Administrator
or
the Trustee, as the case may be, pursuant to Section 6.03,
Section 7.02, Section 8.05, Section 9.13 or
Section 10.02;
(ix) to
reimburse the Master Servicer, the Servicer or the Trustee, as the case may
be,
for expenses reasonably incurred in respect of the breach or defect giving
rise
to the repurchase obligation of the Mortgage Loan Seller or the Sponsor under
this Agreement that were included in the Repurchase Price of the Mortgage Loan,
including any expenses arising out of the enforcement of the repurchase
obligation, to the extent not otherwise paid pursuant to the terms
hereof;
(x) to
withdraw any amounts deposited in the Collection Account in error;
and
(xi) to
clear
and terminate the Collection Account upon termination of this
Agreement.
(b) The
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix) above.
The Servicer shall provide written notification (as set forth in
Section 4.01(d)) to the Master Servicer, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the Collection Account
pursuant to subclause (a)(vi) above.
Section
3.12 Investment
of Funds in the Collection Account, Escrow Accounts and the Distribution
Account.
(a) The Servicer may invest the funds in the Collection Account
maintained by it and the Escrow Accounts (to the extent permitted by law and
the
related Mortgage Loan documents) and the Securities Administrator may invest
funds in the Distribution Account during the Securities Administrator’s Float
Period and shall invest such funds in the Distribution Account (for purposes
of
this Section 3.12, each such Account is referred to as an “Investment
Account”),
in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement; provided,
however,
that
any such Permitted Investment managed by or advised by the Securities
Administrator or any of its Affiliates may mature, unless payable on demand,
no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. All such Permitted Investments shall be
held
to maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Servicer or the Securities
Administrator, as applicable. The Servicer or the Securities Administrator,
as
applicable, shall be entitled to sole possession over each such investment,
and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Servicer or the Securities Administrator or its agent,
as applicable, together with any document of transfer necessary to transfer
title to such investment to the Servicer or the Securities Administrator or
its
agent, as applicable. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
Servicer or the Securities Administrator, as applicable, may:
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|
(x)
|
consistent
with any notice required to be given thereunder, demand that payment
thereon be made on the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of (1) all amounts
then payable thereunder and (2) the amount required to be withdrawn
on such date; and
|
|
(y)
|
demand
payment of all amounts due thereunder that such Permitted Investment
would
not constitute a Permitted Investment in respect of funds thereafter
on
deposit in an Investment Account.
|
(b) All
income and gain realized from the investment of funds deposited in the
Collection Account or Escrow Account, as applicable, held by or on behalf of
the
Servicer, shall be for the benefit of the Servicer and shall be subject to
its
withdrawal in the manner set forth in Section 3.11. The Servicer shall
deposit in the Collection Account or Escrow Account, as applicable, the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such
loss.
(c) All
income and gain realized from the investment of funds deposited in the
Distribution Account held by the Securities Administrator during the Securities
Administrator’s Float Period, shall be for the benefit of the Securities
Administrator, and shall be subject to the Securities Administrator’s withdrawal
in the manner set forth in Section 3.07(d). Notwithstanding anything in
this Section 3.12(c), the Securities Administrator shall be liable to the Trust
for any such loss on any funds it has invested under this Section 3.12(c) only
during the Securities Administrator Float Period, and the Securities
Administrator shall deposit in the Distribution Account the amount of any loss
of principal incurred in respect of any such Permitted Investment made with
funds in such account immediately upon realization of such loss.
(d) Except
as
otherwise expressly provided in this Agreement, if any default occurs in the
making of a payment due under any Permitted Investment of funds held in the
Escrow Account or any Collection Account, or if a default occurs in any other
performance required under any Permitted Investment of funds held in the Escrow
Account or any Collection Account, the Servicer or the Securities Administrator,
as applicable, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.
(e) The
Securities Administrator or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Securities Administrator’s
economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or sub-custodian with
respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not
be
considered an amount that is reimbursable for payable pursuant to this
Agreement.
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Section
3.13 Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in
an
amount which is at least equal to the least of (i) the outstanding
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case
in
an amount not less than such amount as is necessary to avoid the application
of
any coinsurance clause contained in the related hazard insurance policy.
The Servicer shall also cause to be maintained fire insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of
such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property. The Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to
be
collected by the Servicer under any such policies (other than amounts required
to be deposited in the Escrow Account and applied to the restoration or repair
of the property subject to the related Mortgage or amounts to be released to
the
Mortgagor in accordance with the procedures that the Servicer would follow
in
servicing loans held for its own account, subject to the terms and conditions
of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred
by the Servicer in maintaining any such insurance shall not, for the purpose
of
calculating distributions to the Master Servicer, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register
by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property
is
located is participating in such program).
In
the
event that the Servicer shall obtain and maintain a blanket policy with an
insurer having a general policy rating of A:VI or better in Best’s (or such
other rating that is comparable to such rating) insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and
there shall have been one or more losses which would have been covered by such
policy, deposit to the Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause.
In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself and
the
Trustee, claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
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(b) The
Servicer shall keep in force during the term of this Agreement a policy or
policies of insurance covering errors and omissions for failure in the
performance of the Servicer’s obligations under this Agreement, which, policy or
policies shall be in such form and amounts that would meet the requirements
of
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain
a
fidelity bond in the form and amounts that would meet the requirements of ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The Servicer shall provide the
Master Servicer with copies of any such insurance policies and fidelity bond.
The Servicer shall be deemed to have complied with this provision if an
Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days’ prior written notice to the Master Servicer. The Servicer
shall also cause each Subservicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such
requirements.
Section
3.14 Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether
by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under
the
“due-on-sale” clause, if any, applicable thereto; provided,
however,
that
the Servicer shall not exercise any such rights if prohibited by law from doing
so or if the exercise of such rights would impair or threaten to impair recovery
under the related Primary Mortgage Insurance Policy, if any. If the Servicer
believes it is unable under applicable law to enforce such “due-on-sale”
clause or if any of the other conditions set forth in the proviso to the
preceding sentence apply, the Servicer will enter into either (i) an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which
such
person becomes liable under the Mortgage Note and, to the extent permitted
by
applicable state law, the Mortgagor remains liable thereon or (ii) a
substitution agreement as provided in the succeeding sentence. The Servicer
is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability
and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided,
that no
such substitution shall be effective unless such person satisfies the
underwriting criteria of the Mortgage Loan Seller and has a credit risk rating
at least equal to that of the original Mortgagor. The Mortgage Loan, as assumed,
shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is
obtained. Any fee collected by the Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Servicer as
additional servicing compensation. In connection with any such assumption,
no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Scheduled Payment) may be amended or
modified, except as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Master Servicer that any such substitution,
modification or assumption agreement has been completed and shall forward to
the
Custodian the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as
all
other documents and instruments constituting a part thereof.
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Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the
Servicer shall not be deemed to be in default, breach or any other violation
of
its obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or by the terms of the Mortgage Note or any assumption which
the Servicer may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 3.14, the term “assumption” is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section
3.15 Realization
upon Defaulted Mortgage Loans.
The Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which
no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. The Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Securities Administrator,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that the Servicer shall not be
required to expend its own funds in connection with foreclosure or other
conversion, correction of a default on a senior mortgage or restoration of
any
property unless it shall determine in its sole discretion (i) that such
foreclosure, correction or restoration will increase the net Liquidation
Proceeds of the related Mortgage Loan to the Securities Administrator, after
reimbursement to itself for such expenses and (ii) that such expenses will
be recoverable by the Servicer through Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or Subsequent Recoveries from the related
Mortgaged Property, as contemplated in Section 3.11. The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided,
however,
that it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The
proceeds of any liquidation or REO Disposition, as well as any recovery
resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or Subsequent Recoveries or any income from
an
REO Property, will be applied in the following order of priority: first,
to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances, pursuant to Section 3.11 or 3.17; second,
to
reimburse the Servicer for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant
to Section 3.11; third,
to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at
the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the
Due
Date prior to the Remittance Date on which such amounts are to be distributed
if
not in connection with a liquidation or REO Disposition; and fourth,
as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will
be
allocated as follows: first,
to
unpaid Servicing Fees; and second,
as
interest at the Mortgage Rate (net of the Servicing Fee Rate). The portion
of
the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The portions
of the recovery so allocated to interest at the Mortgage Rate (net of the
Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied
as
follows: first,
to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second,
to the
Securities Administrator in accordance with the provisions of Section 4.02,
subject to paragraph (e) of Section 3.17 with respect to certain
excess recoveries from an REO Disposition.
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Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
received actual notice of, or has actual knowledge of the presence of, hazardous
or toxic substances or wastes on the related Mortgaged Property, or if the
Trustee or the Master Servicer otherwise requests, the Servicer shall cause
an
environmental inspection or review of such Mortgaged Property to be conducted
by
a qualified inspector. Upon completion of the inspection, the Servicer shall
promptly provide the Trustee, the Master Servicer and the Depositor with a
written report of the environmental inspection.
After
reviewing the environmental inspection report, the Servicer shall determine
consistent with Accepted Servicing Practices how to proceed with respect to
the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Servicer proceeds with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of
a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall
be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11. In the event the Servicer does not proceed with foreclosure
or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
from general collections for all Servicing Advances made with respect to the
related Mortgaged Property from the Collection Account pursuant to
Section 3.11. The Trustee shall not be responsible for any determination
made by the Servicer pursuant to this paragraph or otherwise.
Section
3.16 Release
of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will, within five
(5) Business Days of the payment in full, notify the Custodian by a
certification (which certification shall include a statement to the effect
that
all amounts received or to be received in connection with such payment which
are
required to be deposited in the Collection Account pursuant to Section 3.10
have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Custodial File by submitting a Request for Release, which
Request for Release may be in an electronic format in a form acceptable to
the
Custodian, to the Custodian. Upon receipt of such certification and Request
for
Release, the Custodian shall promptly release the related Custodial File to
the
Servicer within five (5) Business Days. No expenses incurred in connection
with
any instrument of satisfaction or deed of reconveyance shall be chargeable
to
the Collection Account.
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(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, including, for this purpose, collection under any Insurance Policy
relating to the Mortgage Loans, the Custodian shall, upon request of the
Servicer and delivery to the Custodian of a Request for Release, which Request
for Release may be in an electronic format in a form acceptable to the
Custodian, release the related Custodial File to the Servicer, and the Custodian
shall, at the direction of the Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Custodial File to the Custodian when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or
other
proceedings for the foreclosure of the Mortgaged Property either judicially
or
non-judicially, and the Servicer has delivered to the Custodian a certificate
of
a Servicing Officer certifying as to the name and address of the Person to
which
such Mortgage File or such document was delivered and the purpose or purposes
of
such delivery. Upon receipt of a certificate of a Servicing Officer stating
that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release shall be released
by the Custodian to the Servicer or its designee.
Upon
written certification of a Servicing Officer, the Trustee shall execute and
deliver to the Servicer copies of any court pleadings, requests for trustee’s
sale or other documents reasonably necessary to the foreclosure or trustee’s
sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain
a
deficiency judgment, or to enforce any other remedies or rights provided by
the
Mortgage Note or Mortgage or otherwise available at law or in equity, or shall
exercise and deliver to the Servicer a power of attorney sufficient to authorize
the Servicer to execute such documents on its behalf. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee’s
sale.
Section
3.17 Title,
Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the
account of the Trustee and shall not apply to any REO Property relating to
a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant
to
any provision hereof. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Trust, or
if
not permitted by law, to Deutsche Bank National Trust Company (or, if
applicable, the name of the successor Trustee) as Trustee for HSI Asset
Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through Certificates,
Series 2006-NC1, or to its nominee, for the benefit of the
Certificateholders.
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(b) The
Servicer shall manage, conserve, protect and operate each REO Property for
the Trustee solely for the purpose of its prompt disposition and sale. The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same
(and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Servicer deems
to
be in the best interest of the Trustee on behalf of the Certificateholders.
The
Servicer shall notify the Trustee from time to time as to the status of each
REO
Property.
(c) The
Servicer shall segregate and hold all funds collected and received in connection
with the operation of any REO Property separate and apart from its own funds
and
general assets and shall deposit such funds in the Collection
Account.
(d) The
Servicer shall deposit net of reimbursement to the Servicer for any related
outstanding Servicing Advances and unpaid Servicing Fees provided in
Section 3.11, or cause to be deposited in the Collection Account, in no
event later than two Business Days after the deposit of such funds into the
clearing account, all revenues received with respect to the related REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) The
Servicer, upon an REO Disposition, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances as well as any unpaid Servicing Fees
from proceeds received in connection with the REO Disposition, as further
provided in Section 3.11.
(f) Any
net
proceeds from an REO Disposition which are in excess of the unpaid principal
balance of the related Mortgage Loan plus all unpaid REO Imputed Interest
thereon through the date of the REO Disposition shall be retained by the
Servicer as additional servicing compensation.
(g) The
Servicer shall use Accepted Servicing Practices to sell, or cause the
Subservicer to sell, in accordance with Accepted Servicing Practices, any REO
Property as soon as possible, but in no event later than the conclusion of
the
third calendar year beginning after the year of its acquisition by the Lower
Tier REMIC unless (i) the Servicer applies for an extension of such period
from the Internal Revenue Service pursuant to the REMIC Provisions and Code
Section 856(e)(3), in which event such REO Property shall be sold within
the applicable extension period, or (ii) the Servicer obtains for the
Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the
Servicer, to the effect that the holding by the REMIC of such REO Property
subsequent to such period will not result in the imposition of taxes on
“prohibited transactions” as defined in Section 860F of the Code or cause
any REMIC created under this Agreement to fail to qualify as a REMIC under
the
REMIC Provisions or comparable provisions of relevant state laws at any time.
The Servicer shall manage, conserve, protect and operate each REO Property
for
the Trustee solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as “foreclosure
property” within the meaning of Section 860G(a)(8) or result in the receipt
by any REMIC created hereunder of any “income from non-permitted assets” within
the meaning of Section 860F(a)(2)(B) of the Code or any “net income from
foreclosure property” which is subject to taxation under Section 860G(a)(1)
of the Code. Pursuant to its efforts to sell such REO Property, the Servicer
shall either itself or through an agent selected by the Servicer protect and
conserve such REO Property in the same manner and to such extent as is customary
in the locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems
to
be in the best interest of the Trustee on behalf of the Certificateholders
for
the period prior to the sale of such REO Property; provided,
however,
that
any rent received or accrued with respect to such REO Property qualifies as
“rents from real property” as defined in Section 856(d) of the
Code.
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Section
3.18 Notification
of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall adjust
the Mortgage Rate on the related Adjustment Date and shall adjust the Scheduled
Payment on the related mortgage payment adjustment date, if applicable, in
compliance with the requirements of applicable law and the related Mortgage
and
Mortgage Note. In the event that an Index becomes unavailable or otherwise
unpublished, the Servicer shall select a comparable alternative index over
which
it has no direct control and which is readily verifiable. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law
and the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Rate and Scheduled Payment adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Master Servicer such notifications
and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by the Servicer
or the receipt of notice from the Master Servicer that the Servicer has failed
to adjust a Mortgage Rate or Scheduled Payment in accordance with the terms
of
the related Mortgage Note, the Servicer shall deposit in the Collection Account
from its own funds the amount of any interest loss caused as such interest
loss
occurs.
Section
3.19 Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
The Servicer shall provide, or cause the Subservicer to provide, to the
Depositor, the Trustee, the OTS or the FDIC and the examiners and supervisory
agents thereof, access to the documentation regarding the Mortgage Loans in
its
possession required by applicable regulations of the OTS. Such access shall
be
afforded without charge, but only upon 10 days (or, if an Event of Default
has
occurred and is continuing, 3 Business Days) prior written request and during
normal business hours at the offices of the Servicer or, if applicable, any
Subservicer. Nothing in this Section shall derogate from the obligation of
any
such party to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of any such party to provide access
as
provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
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Nothing
in this Section 3.19 shall require the Servicer to collect, create, collate
or
otherwise generate any information that it does not generate in its usual course
of business. The Servicer shall not be required to make copies of or to ship
documents to any Person who is not a party to this Agreement, and then only
if
provisions have been made for the reimbursement of the costs
thereof.
Section
3.20 Documents,
Records and Funds in Possession of the Servicer to Be Held for the
Trustee.
Not
later than 15 Business Days after the request of the Master Servicer, the
Servicer shall forward to the Trustee, the Master Servicer and the Securities
Administrator a statement prepared by the Servicer setting forth the status
of
the Collection Account as of the close of business on the last day of the
calendar month relating to such Distribution Date and showing, for the period
covered by such statement, the aggregate amount of deposits into and withdrawals
from the Collection Account of each category of deposit specified in
Section 3.10(a) and each category of withdrawal specified in
Section 3.11. Copies of such statement shall be provided by the Securities
Administrator to any Certificateholder and to any Person identified to the
Securities Administrator as a prospective transferee of a Certificate, upon
the
request and at the expense of the requesting party, provided such statement
is
delivered by the Servicer to the Securities Administrator.
Section
3.21 Servicing
Compensation.
(a) As compensation for its activities hereunder, the Servicer shall,
with respect to each Mortgage Loan, be entitled to retain from deposits to
the
Collection Account and from Liquidation Proceeds, Condemnation Proceeds,
Insurance related Proceeds, Subsequent Recoveries and REO Proceeds related
to
such Mortgage Loan, the Servicing Fee with respect to each Mortgage Loan (less
any portion of such amounts retained by any Subservicer). In addition, the
Servicer shall be entitled to recover unpaid Servicing Fees out of related
Late
Collections and as otherwise permitted under Section 3.11. The right to
receive the Servicing Fee may not be transferred in whole or in part except
in
connection with the transfer of all of the Servicer’s responsibilities and
obligations under this Agreement; provided,
however,
that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under
Section 3.02.
(b) Additional
servicing compensation in the form of assumption or modification fees, late
payment charges, NSF fees, reconveyance fees and other similar fees and charges
(other than Prepayment Charges) shall be retained by the Servicer only to the
extent such fees or charges are received by the Servicer. The Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the
Collection Account, as additional servicing compensation, interest or other
income earned on deposits therein. The Servicer shall also be entitled as
additional servicing compensation, to interest or other income earned on
deposits in the Escrow Account (to the extent permitted by law and the related
Mortgage Loan documents) in accordance with Section 3.12. The Servicer
shall also be entitled to retain net Prepayment Interest Excesses (to the extent
not required to offset Prepayment Interest Shortfalls), but only to the extent
such amounts are received by the Servicer.
(c) The
Servicer shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder (including payment of premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13,
servicing compensation of the Subservicer to the extent not retained by it
and
the fees and expenses of independent accountants and any agents appointed by
the
Servicer), and shall not be entitled to reimbursement therefor from the Trust
Fund except as specifically provided in Section 3.11.
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Section
3.22 Report
on Assessment of Compliance with Relevant Servicing Criteria.On
or
before March 4th
of each
calendar year, beginning with March 1, 2007, the Servicer shall deliver to
the
Master Servicer, the Securities Administrator and the Depositor a report
regarding its assessment of compliance with the Relevant Servicing Criteria
identified in Exhibit S attached hereto applicable to the Servicer, as of and
for the period ending the end of the calendar year prior to the year of delivery
of the report, with respect to asset-backed security transactions taken as
a
whole in which the Servicer is performing any of the Servicing Criteria
specified in Exhibit S and that are backed by the same asset type backing such
asset-backed securities. Each such report shall include (a) a statement of
the
party’s responsibility for assessing compliance with the Relevant Servicing
Criteria applicable to such party, (b) a statement that such party used the
criteria identified in Item 1122(d) of Regulation AB (§ 229.1122(d)) to assess
compliance with the Relevant Servicing Criteria, (c) disclosure of any material
instance of noncompliance identified by such party, 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, which
report shall be delivered by the Servicer as provided in Section 3.23 hereto.
In
addition, on or before March 1st
of each
calendar year, beginning with March 1, 2007, the Servicer shall, at its own
expense, furnish to the Master Servicer a report meeting the requirements set
forth above regarding the assessment of compliance of any Subservicer or
Subcontractor which is a Servicing Function Participant.
Promptly
after receipt of each such report on assessment of compliance, (i) the Depositor
may review each such report and, if applicable, consult with the Master
Servicer, the Securities Administrator, the Trustee 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
individually address the Relevant Servicing Criteria for each party as set
forth
on Exhibit S and on any similar exhibit set forth in any servicing or
sub-servicing agreement in respect of any Servicing Function Participant and
notify the Depositor of any exceptions.
The
Master Servicer shall enforce any obligation of the Servicer (and the Servicer
shall enforce any obligation of a Sub-Servicer or Subcontractor engaged by
such
Servicer) to cause to be delivered to the Securities Administrator an annual
report on assessment of compliance within the time frame set
forth
in this Section 3.22, and in such form and
substance required by this Agreement. The Master Servicer shall include any
such
annual report on assessment of compliance with its own assessment of
compliance to
be
submitted to the Depositor pursuant to Section 9.02.
Promptly
after receipt of such report from the Servicer, the Master Servicer, the
Securities Administrator or any Servicing Function Participant engaged by such
parties, (i) the Depositor shall review the report and, if applicable, consult
with such parties as to the nature of any defaults by such parties, in the
fulfillment of any of each such party’s obligations hereunder or under any other
applicable agreement, and (ii) the Securities Administrator shall confirm that
each assessment submitted pursuant to Section 3.22 is coupled with an
attestation meeting the requirements of this Section and notify the Depositor
of
any exceptions.
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The
Master Servicer shall enforce any obligation of the Servicer (and the Servicer
shall enforce any obligation of a Sub-Servicer or Subcontractor engaged by
such
Servicer) to cause to be delivered to the Master Servicer an attestation within
the time frame set forth in this Section 3.23, and in such form and substance
as
may be required by this Agreement. The Master Servicer shall include any such
attestations with its own attestations to be submitted to the Depositor pursuant
to Section 9.02.
Section
3.23 Report
on
Attestation of Compliance with Relevant Servicing Criteria. On
or
before March 4th
of each
calendar year, beginning with March 4, 2007, the Servicer shall, at its own
expense, cause a firm of independent public accountants (who may also render
other services to Servicer), which is a member of the American Institute of
Certified Public Accountants, to furnish to the Master Servicer, the Securities
Administrator and the Depositor (i) year-end audited (if available) financial
statements of the Servicer and (ii) a report to the effect that such firm
attests to, and reports on, the assessment made by such asserting party pursuant
to Section 3.22 above, which report shall be made in accordance with standards
for attestation engagements issued or adopted by the PCAOB. In addition, on
or
before March 4th of each calendar year, beginning with March 4, 2007, the
Servicer shall, at its own expense, furnish to the Master Servicer a report
meeting the requirements of clause (ii) above regarding the attestation of
any
Subservicer or Subcontractor which is a Servicing Function
Participant.
Promptly
after receipt of such report from the Servicer, the Master Servicer, the
Securities Administrator or any Servicing Function Participant engaged by such
parties, (i) the Depositor shall review the report and, if applicable, consult
with such parties as to the nature of any defaults by such parties, in the
fulfillment of any of each such party’s obligations hereunder or under any other
applicable agreement, and (ii) the Securities Administrator shall confirm that
each assessment submitted pursuant to Section 3.22 is coupled with an
attestation meeting the requirements of this Section and notify the Depositor
of
any exceptions.
The
Master Servicer shall enforce any obligation of the Servicer (and the Servicer
shall enforce any obligation of a Sub-Servicer or Subcontractor engaged by
such
Servicer) to cause to be delivered to the Master Servicer an attestation within
the time frame set forth in this Section 3.23, and in such form and substance
as
may be required by this Agreement. The Master Servicer shall include any such
attestations with its own attestations to be submitted to the Depositor pursuant
to Section 9.02.
Section
3.24 Annual
Officer’s Certificates.
(a)
Each
Form 10-K filed with the Commission shall include a certification (the
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification”)
executed by the Certifying Person, exactly as set forth in Exhibit L attached
hereto, required to be included therewith pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
The Servicer and the Securities Administrator shall, and shall cause any
Servicing Function Participant engaged by it, provide to the Master Servicer
or
any Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the “Certifying
Person”),
by
March 10 of each year in which the Trust 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”),
substantially 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. In the event the Master Servicer, the Securities Administrator,
the Trustee or any Servicing Function Participant engaged by parties is
terminated or resigns pursuant to the terms of this Agreement, or any applicable
sub-servicing agreement, as the case may be, such party shall provide a Back-Up
Certification to the Certifying Person pursuant to this Section 3.24 with
respect to the period of time it was subject to this Agreement or any applicable
sub-servicing agreement, as the case may be.
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(b) On
or
before March 4th
of each
year, beginning with March 4, 2007, the Servicer, at its own expense, will
deliver to the Securities Administrator and the Depositor with respect to
the
period ending on the immediately preceding December 31, a Servicing Officer’s
certificate in the form of Exhibit U hereto.
The
Master Servicer shall enforce any obligation of the Servicer (and the Servicer
shall enforce any obligations of an Additional Servicer engaged by the Servicer)
to cause to be delivered to the Master Servicer an annual statement of
compliance within the time frame set forth in this Section 3.24, and in such
form and substance as required by this Agreement. The Master Servicer shall
include any such annual statements of compliance with its own statement of
compliance to be submitted to the Depositor pursuant to Section
9.02.
(c) The
Servicer shall indemnify and hold harmless the Trustee, the Master Servicer,
the
Securities Administrator, the Depositor and their respective officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising solely out of or based upon
a
breach by the Servicer or any of its officers, directors, agents or affiliates
of its obligations under this Section 3.24 or the negligence, bad faith or
willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Trustee, the Master Servicer, the Securities Administrator and
the
Depositor, then the Servicer agrees that it shall contribute to the amount
paid
or payable by the Trustee, the Master Servicer, the Securities Administrator,
the Depositor or their respective officers, directors, agents or affiliates
as a
result of the losses, claims, damages or liabilities of any such party in such
proportion as is appropriate to reflect the relative fault of the such party
or
parties on the one hand and the Servicer on the other in connection with a
breach of the Servicer’s obligations under this Section 3.24 or the Servicer’s
negligence, bad faith or willful misconduct in connection
therewith.
Section
3.25 Master
Servicer to Act as Servicer.
(a) Subject to Section 7.02, in the event that the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason
of
an Event of Default), the Master Servicer or its successor shall thereupon
assume all of the rights and obligations of the Servicer hereunder arising
thereafter, except that the Master Servicer shall not be (i) liable for
losses of the predecessor Servicer pursuant to Section 3.10 or any acts or
omissions of the predecessor Servicer hereunder, (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03,
(iii) responsible for expenses of the predecessor Servicer pursuant to
Section 2.03 or (iv) deemed to have made any representations and
warranties of the Servicer hereunder. Any such assumption shall be subject
to
Section 7.02.
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(b) Every
Subservicing Agreement entered into by the Servicer shall contain a provision
giving the successor servicer the option to terminate such agreement in the
event a successor servicer is appointed.
(c) If
the
Servicer shall for any reason no longer be the Servicer (including by reason
of
any Event of Default), the Master Servicer (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Servicer under
any Subservicing Agreement in accordance with the terms thereof; provided,
that
the Master Servicer (or any other successor servicer) shall not incur any
liability or have any obligations in its capacity as successor servicer under
a
Subservicing Agreement arising prior to the date of such succession unless
it
expressly elects to succeed to the rights and obligations of the Servicer
thereunder; and the Servicer shall not thereby be relieved of any liability
or
obligations under the Subservicing Agreement arising prior to the date of such
succession.
(d) The
Servicer shall, upon request of the Master Servicer, but at the expense of
the
Servicer, deliver to the assuming party all documents and records relating
to
each Subservicing Agreement (if any) and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held by it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreement to the assuming party.
Section
3.26 Compensating
Interest.
The Servicer shall remit to the Master Servicer on each Remittance Date an
amount from its own funds equal to the Compensating Interest payable by the
Servicer for the related Distribution Date.
Section
3.27 Credit
Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(a) With respect to each Mortgage Loan serviced by it, the Servicer
agrees to fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on the primary borrower of such Mortgage Loan to Equifax,
Experian and TransUnion Credit Information Company (the three national credit
repositories) on a monthly basis.
(b) The
Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999
and all applicable regulations promulgated thereunder, relating to the Mortgage
Loans and the related borrowers and shall provide all required notices
thereunder.
Section
3.28 [Reserved]
Section
3.29 Obligations
of the Custodian; Indemnification. (a)
On or
before March 15th
of each
calendar year, beginning with March 15, 2007, the Custodian shall, at its
own
expense, cause a firm of independent public accountants (who may also render
other services to the Custodian), which is a member of the American Institute
of
Certified Public Accountants, to furnish to the Depositor a report to the
effect
that such firm that attests to, and reports on, the assessment made by such
asserting party pursuant paragraph (b) of this Section 3.29 below, which
report
shall be made in accordance with standards for attestation engagements issued
or
adopted by the PCAOB. No cure period shall be available to the Custodian
to
remedy a failure to deliver such report within the time period specified
in this
Section 3.29(a).
(b) On
or
before March 15th
of each
calendar year, beginning with March 15, 2007, the Custodian shall deliver
to the
Depositor and the Securities Administrator a report regarding its assessment
of
compliance with the Relevant Servicing Criteria identified in Exhibit S attached
hereto applicable to the Custodian, as of and for the period ending the end
of
the fiscal year ending no later than December 31 of the year prior to the
year
of delivery of the report, with respect to asset-backed security transactions
taken as a whole in which the Custodian is performing any of the Relevant
Servicing Criteria specified in Exhibit S and that are backed by the same
asset
type backing such asset-backed securities. Each such report shall include
(a) a
statement of the party’s responsibility for assessing compliance with the
Relevant Servicing Criteria applicable to such party, (b) a statement that
such
party used the Servicing Criteria identified in Item 1122(d) of Regulation
AB (§
229.1122(d)) to assess compliance with the Relevant Servicing Criteria, (c)
disclosure of any material instance of noncompliance identified by such party,
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, which report shall be delivered by the Custodian as provided
in Section 3.23. No cure period shall be available to the Custodian to remedy
a
failure to deliver such reports within the time period specified in this
Section
3.29(b).
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(c) The
Custodian has not and shall not engage any Subcontractor which is a “Servicing
Function Participant.”
(d) The
Custodian agrees to indemnify the Depositor and the Trustee, and each of their
respective directors, officers, employees and agents and the Trust Fund and
hold
each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses that any of them may sustain arising out of or based
upon the engagement of any Subcontractor in violation of Section 3.29(c) or
any
failure by the Custodian to deliver any information, report, certification,
accountants’ letter or other material when and as required under this Agreement,
including any report under Sections 3.29(a) or (b).
Section
3.30 Notifications
to Parties.The
Servicer, upon acquiring knowledge thereof exercising reasonable due diligence,
shall promptly notify the Trustee, the Securities Administrator, the Master
Servicer and the Depositor (i) of any legal proceedings pending against the
Servicer of the type described in Item 1117 (§ 229.1117) of Regulation AB and
(ii) if the Servicer shall become (but only to the extent not previously
disclosed to the Securities Administrator, the Master Servicer and the
Depositor) at any time an affiliate of any of the parties listed on Exhibit
T to
this Agreement. If so requested by the Trustee, the Securities Administrator,
the Master Servicer or the Depositor on any date following the date on which
information was first provided to the Trustee, the Master Servicer, the
Securities Administrator and the Depositor, pursuant to the preceding sentence,
the Servicer shall within seven Business Days following such request, confirm
in
writing the accuracy of the representations and warranties set forth in item
number (7) of Schedule
II
hereto,
or, the Servicer shall, if such a representation and warranty is not accurate
as
of the date of such request, provide reasonable adequate disclosure of the
pertinent facts, in writing, to the requesting party.
The
Servicer shall provide to the Securities Administrator, the Trustee, the Master
Servicer and the Depositor prompt notice of the occurrence of any of the
following: (i) any event of default under the terms of this Agreement; (ii)
any
merger, consolidation or sale of substantially all of the assets of the
Servicer; (iii) the Servicer’s engagement of any Subservicer or Subcontractor
(other than Chase Home Finance LLC); (iv) any material litigation involving
the
Servicer; and (v) any affiliation or other significant relationship between
the
Servicer and other transaction parties.
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Not
later
than the tenth calendar day of each month (or if such calendar day is not a
Business Day, the immediately preceding Business Day), the Servicer shall
provide to the Securities Administrator, the Trustee, the Master Servicer and
the Depositor notice of the occurrence of any material modifications, extensions
or waivers of terms, fees, penalties or payments relating to the Mortgage Loans
during the related Due Period or that have cumulatively become material over
time (see Item 1121(a)(11) of Regulation AB) along with all information, data,
and materials related thereto as may be required to be included in the related
Monthly Statement filed with the Commission on Form 10-D.
ARTICLE
IV
DISTRIBUTIONS
AND
ADVANCES
BY THE SERVICER
Section
4.01 Advances.
(a) The amount of P&I Advances to be made by the Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of
(i) the aggregate amount of Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee), due during the Due Period immediately
preceding such Remittance Date in respect of the Mortgage Loans, which Scheduled
Payments were not received as of the close of business on the related
Determination Date, plus (ii) with respect to each REO Property, which REO
Property was acquired during or prior to the related Prepayment Period and
as to
which such REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the Scheduled
Payments (with each interest portion thereof net of the related Servicing Fee)
that would have been due on the related Due Date in respect of the related
Mortgage Loans, over the net income from such REO Property transferred to the
Collection Account for distribution on such Remittance Date.
(b) On
each
Remittance Date, the Servicer shall remit in immediately available funds to
the
Master Servicer an amount equal to the aggregate amount of P&I Advances, if
any, to be made in respect of the Mortgage Loans and REO Properties for the
related Remittance Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records
of
the Collection Account that Amounts Held for Future Distribution have been,
as
permitted by this Section 4.01, used by it in discharge of any such P&I
Advance) or (iii) in the form of any combination of (i) and
(ii) aggregating the total amount of P&I Advances to be made by the
Servicer with respect to the Mortgage Loans and REO Properties. Any Amounts
Held
for Future Distribution and so used shall be appropriately reflected in the
Servicer’s records and replaced by the Servicer by deposit in the Collection
Account on or before any future Remittance Date to the extent
required.
(c) The
obligation of the Servicer to make such P&I Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
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(d) Notwithstanding
anything herein to the contrary, no P&I Advance or Servicing Advance shall
be required to be made hereunder by the Servicer if such P&I Advance or
Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance. The determination by the Servicer that it
has
made a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance or
that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Servicing
Advance, respectively, shall be evidenced by an Officer’s Certificate of the
Servicer delivered to the Master Servicer. In addition, the Servicer shall
not
be required to advance any Relief Act Interest Shortfalls.
(e) Except
as
otherwise provided herein, the Servicer shall be entitled to reimbursement
pursuant to Section 3.11 for Servicing Advances from recoveries from the
related Mortgagor or from all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds, Condemnation Proceeds and Subsequent
Recoveries) with respect to the related Mortgage Loan.
(f) On
each
Remittance Date, the Master Servicer shall deposit in the Distribution Account
all funds remitted to it by the Servicer pursuant to Sections 3.11(a)(i) and
3.26 and this Section 4.01. The Securities Administrator may retain or withdraw
from the Distribution Account, (i) the Master Servicing Fee, (ii) amounts
necessary to reimburse the Servicer for any previously unreimbursed Advances
and
any Advances the Servicer deems to be nonrecoverable from the related Mortgage
Loan proceeds, (iii) amounts necessary to reimburse the Master Servicer for
any
previously unreimbursed Advances and any Advances the Master Servicer deems
to
be nonrecoverable from the related Mortgage Loan proceeds, (iv) an amount to
indemnify the Master Servicer or the Servicer for amounts due in accordance
with
this Agreement, and (v) any other amounts that each of the Master Servicer
and
the Securities Administrator is entitled to receive hereunder for reimbursement,
indemnification or otherwise.
Section
4.02 Priorities
of Distribution.
(a) On each Distribution Date (or, in the case of deposits into the
Supplemental Interest Trust, on the Derivative Payment Date), the Securities
Administrator will make the disbursements and transfers from amounts then on
deposit in the Distribution Account and from amounts that are available for
payment to the Swap Counterparty, and shall allocate such amounts to the
interests issued in respect of each REMIC created pursuant to this Agreement
and
shall distribute such amounts in the following order of priority and to the
extent of the Available Funds remaining:
(i) to
the
Supplemental Interest Trust and the holders of each Class of LIBOR
Certificates in the following order of priority:
(A) from
the
Interest Remittance Amount, for deposit into the Supplemental Interest Trust
Account, the amount of any Net Derivative Payment or Swap Termination Payment
(other than a Swap Termination Payment caused by the Derivative Counterparty)
owed to the Derivative Counterparty, including any such amounts unpaid from
previous Distribution Dates;
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(B) concurrently:
(1)
from
the Interest Remittance Amount related to the Group I Mortgage Loans, to the
Class I-A Certificates, the related Senior Interest Payment Amount;
and
(2)
from
the Interest Remittance Amount related to the Group II Mortgage Loans, to the
Class II-A Certificates, the related Senior Interest Payment
Amount;
provided, that,
if the
Interest Remittance Amount for either Loan Group is insufficient to make the
related payments set forth in clauses (i)(B)(1)or (i)(B)(2) above, any Interest
Remittance Amount relating to the other Loan Group remaining after payment
of
the related Senior Interest Payment Amount will be available to cover that
shortfall; and
(C) from
any
remaining Interest Remittance Amounts related to either the Group I Mortgage
Loans or the Group II Mortgage Loans, sequentially, to each Class of Class
M
Certificates, in ascending order by numerical Class designation;
(ii) (A) on
each Distribution Date (or, in the case of deposits into the Supplemental
Interest Trust, on the Derivative Payment Date) (1) before the Stepdown
Date or (2) with respect to which a Trigger Event is in effect, to the
Supplemental Interest Trust and to the holders of the Class or Classes of
LIBOR Certificates then entitled to distributions of principal as set forth
below, from amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, an amount equal to,
in the aggregate, the Principal Payment Amount in the following amounts and
order of priority:
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(a) for
deposit into the Supplemental Interest Trust Account, any Net Derivative Payment
or Swap Termination Payment (other than a Swap Termination Payment caused by
the
Derivative Counterparty) owed to the Derivative Counterparty to the extent
unpaid pursuant to clause (i)(A) above;
(b) concurrently:
(1)
to
the Class I-A Certificates, the Group I Principal Payment Amount, until the
Class Certificate Balance of the Class I-A Certificates is reduced to zero;
and
(2)
to
the Group II-A Certificates, the Group II Principal Payment Amount, until the
Class Certificate Balance of the Class II-A Certificates is reduced to zero;
(c) sequentially,
to each Class of Class M Certificates, in ascending order by numerical
Class designation, until their respective Class Certificate Balances are
reduced to zero;
(B) on
each
Distribution Date (or, in the case of deposits into the Supplemental Interest
Trust, on the Derivative Payment Date) (1) on and after the Stepdown Date
and (2) as long as a Trigger Event is not in effect, to the Supplemental
Interest Trust and to the holders of the Class or Classes of LIBOR
Certificates then entitled to distribution of principal, from amounts remaining
on deposit in the Distribution Account after making distributions pursuant
to
clause (i) above, an amount equal to, in the aggregate, the Principal
Payment Amount in the following amounts and order of priority:
(a) for
deposit into the Supplemental Interest Trust Account, any Net Derivative Payment
or Swap Termination Payment (other than a Swap Termination Payment caused by
the
Derivative Counterparty) owed to the Derivative Counterparty to the extent
unpaid pursuant to clause (i)(A) above;
(b) concurrently:
(1)
to
the Class I-A Certificates, the Group I Senior Principal Payment Amount, until
the Class Certificate Balance of the Class I-A Certificates is reduced to
zero;
(2)
to
the Class II-A Certificates, the Group II Senior Principal Payment Amount,
until
the Class Certificate Balance of the Class II-A Certificates is reduced to
zero;
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(c) sequentially,
to each Class of Class M Certificates, in ascending order by numerical
Class designation, the Class M Principal Payment Amount for the related
Class of Class M certificates, until their respective
Class Certificate Balances are reduced to zero;
(iii) any
amounts remaining after the distributions in clauses (i) and (ii) above,
plus, as specifically indicated below, from amounts on deposit in the Excess
Reserve Fund Account, shall be distributed in the following order of
priority:
(A) to
the
Class A Certificates and the Class M Certificates, in the same order of priority
set forth in clauses (ii)(A)(b), (ii)(A)(c), (ii)(B)(b) and (ii)(B)(c) of this
Section 4.02 above, as applicable, the amount necessary to maintain the
Overcollateralization Target Amount for such Distribution Date;
(B) sequentially,
to the holders of the Class M Certificates, in ascending order by numerical
Class designation, first
any
Interest Carry Forward Amount for that Class, and second,
any
Unpaid Realized Loss Amount for that Class;
(C) to
the
Excess Reserve Fund Account, the amount of any Basis Risk Payment for such
Distribution Date;
(D) from
amounts on deposit in the Excess Reserve Fund Account with respect to such
Distribution Date, an amount equal to any unpaid Basis Risk Carryover Amount
with respect to the LIBOR Certificates for such Distribution Date, allocated
in
the same order and priority as set forth in clauses (a)(i)(B) and (a)(i)(C)
of
this Section 4.02, except that the Class A Certificates will be paid (a)
first,
pro rata,
based on
their respective Class Certificate Balances only with respect to those Class
A
Certificates with an outstanding Unpaid Basis Risk Carryover Amount and
second,
pro rata,
based on
any remaining unpaid Basis Risk Carryover Amounts;
(E) to
the
Derivative Counterparty, any Swap Termination Payment or Cap Termination Payment
caused by the Derivative Counterparty;
(F) to
the
holders of the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(E); and
(G) to
the
holders of the Class R Certificates, any remaining amount;
If
on any
Distribution Date, as a result of the foregoing allocation rules, any
Class of Class A Certificates does not receive in full the related
Interest Payment Amount or the related Interest Carry Forward Amount, if any,
then such shortfall will be allocated to the Holders of such Class, with
interest thereon, on future Distribution Dates, as Interest Carry Forward
Amounts, subject to the priorities described above.
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(b) On
each
Distribution Date, prior to any distributions on any other Class of
Certificates, all amounts representing Prepayment Charges from the Mortgage
Loans received during the related Prepayment Period shall be distributed by
the
Securities Administrator to the holders of the Class P
Certificates.
(c) Any
principal distributions to the holders of the Class A Certificates on any
Distribution Date prior to the Stepdown Date will be allocated to the Group
I
Certificates, on the one hand, and the Group II Certificates, on the other
hand,
based on the Group Principal Allocation Percentage for such Certificate Groups.
However, if the Class Certificate Balances of the Class A Certificates in either
Certificate Group are reduced to zero before the Stepdown Date, then the
remaining amount of principal distributions distributable to the Class A
Certificates on that Distribution Date, and the amount of those principal
distributions distributable on all subsequent Distribution Dates, will be
distributed to the holders of the Class A Certificates in the other Certificate
Group remaining outstanding, in accordance with the principal distribution
allocations described in this section, until their Class Certificate Balances
have been reduced to zero. Any distributions of principal to the Group I
Certificates will be made first from payments relating to Group I Mortgage
Loans, and any distributions of principal to the Group II Certificates will
be
made first from payments relating to the Group II Mortgage Loans. If the Class
Certificate Balances of the Class A Certificates in either Certificate Group
are
reduced to zero on or after the Stepdown Date, then the remaining amount of
principal distributions distributable to the Class A Certificates on that
Distribution Date will be distributed in accordance with Section
4.02(a)(ii)(A)(b).
(d) On
any
Distribution Date, any Relief Act Shortfalls and Net Prepayment Interest
Shortfalls for such Distribution Date shall be allocated by the Securities
Administrator as a reduction in the following order:
(1) First,
to the
amount of interest payable to the Class X Certificates; and
(2) Second,
pro
rata,
as a
reduction of the Interest Payment Amount for the Class A and Class M
Certificates, based on the amount of interest to which such Classes would
otherwise be entitled.
(e) On
any
Distribution Date, the Securities Administrator shall distribute the
Supplemental Interest Trust Amount for such date as follows:
(i) to
the
Derivative Counterparty, any Net Derivative Payment owed to the Derivative
Counterparty pursuant to the Swap Agreement for such Distribution Date to the
extent not previously paid in Sections 4.02(a)(i)(A), 4.02(a)(ii)(A)(a) or
4.02(a)(ii)(B)(a);
(ii) to
the
Derivative Counterparty, any Swap Termination Payment not due to a Derivative
Counterparty Trigger Event owned to the Derivative Counterparty pursuant to
the
Swap Agreement for such Distribution Date;
(iii) to
the
Class A Certificates and the Class M Certificates, the amount necessary to
maintain the Overcollateralization Target Amount for such Distribution Date
as
specified in clause (a)(iii)(A) of this Section 4.02, for application pursuant
to the priorities set forth in such clause, after giving effect to distributions
pursuant to such clause;
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(iv) to
the
extent not paid pursuant to clause (a)(iii)(B) of this Section 4.02,
sequentially, to the each Class of Class M Certificates, in ascending order
by
numerical Class designation, first,
any
Interest Carry Forward Amount for that Class, and second,
any
Unpaid Realized Loss Amount for that Class;
(v) to
the
extent not paid pursuant to clause (a)(iii)(C) of this Section 4.02, to the
Excess Reserve Fund Account, the amount of any Basis Risk Payment for such
Distribution Date;
(vi) to
the
extent not paid pursuant to clause (a)(iii)(D) of this Section 4.02, to the
Class A and Class M Certificates, any remaining unpaid Basis Risk Carryover
Amount with respect to such Certificates for that Distribution Date, allocated
in the same order and priority as set forth in such clause;
(vii) if
applicable, to the Swap Termination Receipts Account or Cap Termination Receipts
Account for application to the purchase of a replacement swap agreement or
replacement cap agreement pursuant to Section 4.08;
(viii) to
the
extent not paid pursuant to clause (a)(iii)(E) of this Section 4.02, to the
Derivative Counterparty, any Swap Termination Payment caused by the Derivative
Counterparty; and
(ix) to
the
extent not paid pursuant to clause (a)(iii)(F) of this Section 4.02, to the
holders of the Class X Certificates, the remainder of the Class X
Distributable Amount.
With
respect to each Distribution Date, the sum of all amounts distributed in
priorities (e)(iii) and (e)(iv) second
cannot
exceed the amount of cumulative Realized Losses incurred up to such Distribution
Date minus any distributions made on previous Distribution Dates pursuant to
such priorities.
Section
4.03 Monthly
Statements to Certificateholders.(a) Not
later than each Distribution Date, the Securities Administrator shall make
available to each Certificateholder, the Master Servicer, the Servicer, the
Depositor, the Trustee and each Rating Agency a statement, based on information
provided in part by the Servicer and in part by the Derivative Counterparty,
setting forth with respect to the related distribution:
(i) the
amount thereof allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments, Liquidation Proceeds and Subsequent
Recoveries;
(ii) the
amount thereof allocable to interest, any Interest Carry Forward Amounts
included in such distribution and any remaining Interest Carry Forward Amounts
after giving effect to such distribution, any Basis Risk Carryover Amount for
such Distribution Date and the amount of all Basis Risk Carryover Amount covered
by withdrawals from the Excess Reserve Fund Account on such Distribution
Date;
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(iii) if
the
distribution to the Holders of such Class of Certificates is less than the
full amount that would be distributable to such Holders if there were sufficient
funds available therefor, the amount of the shortfall and the allocation thereof
as between principal and interest, including any Basis Risk Carryover Amount
not
covered by amounts in the Excess Reserve Fund Account;
(iv) the
Class Certificate Balance of each Class of Certificates after giving
effect to the distribution of principal on such Distribution Date;
(v) the
Pool
Stated Principal Balance for the following Distribution Date;
(vi) the
amount of the Expense Fees (in the aggregate and separately stated) paid to
or
retained by the Servicer or Subservicer and the Master Servicer with respect
to
such Distribution Date;
(vii) the
Interest Rate for each such Class of Certificates with respect to such
Distribution Date;
(viii) the
amount of P&I Advances included in the distribution on such Distribution
Date and the aggregate amount of P&I Advances outstanding as of the close of
business on the Determination Date immediately preceding such Distribution
Date;
(ix) by
Loan
Group and in the aggregate, the number and aggregate outstanding principal
balances of Mortgage Loans (1) as to which the Scheduled Payment is
delinquent 31 to 60 days, 61 to 90 days and 91 or more days,
(2) that have become REO Property, (3) that are in foreclosure and
(4) that are in bankruptcy, in each case as of the close of business on the
last Business Day of the immediately preceding month;
(x) by
Loan
Group and in the aggregate, with respect to Mortgage Loans that became REO
Properties during the preceding calendar month, the number and the aggregate
Stated Principal Balance of such Mortgage Loans as of the close of business
on
the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) by
Loan
Group and the aggregate, the total number and aggregate principal balance of
any
REO Properties as of the close of business on the Determination Date preceding
such Distribution Date;
(xii) whether
a
Trigger Event has occurred and is continuing;
(xiii) the
amount on deposit in the Excess Reserve Fund Account (after giving effect to
distributions on such Distribution Date);
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(xiv) in
the
aggregate and for each Class of Certificates, the aggregate amount of
Applied Realized Loss Amounts incurred during the preceding calendar month
and
aggregate Applied Realized Loss Amounts through such Distribution
Date.;
(xv) the
amount of any Net Monthly Excess Cash Flow on such Distribution Date and the
allocation thereof to the Certificateholders with respect to Applied Realized
Loss Amounts and Interest Carry Forward Amounts;
(xvi) the
Overcollateralization Amount and Overcollateralization Target
Amount;
(xvii) Prepayment
Charges collected by the Servicer;
(xviii) the
Cumulative Loss Percentage; and
(xix) the
amount of any Net Derivative Payment made to the Supplemental Interest Trust
pursuant to Section 4.02, any Net Derivative Payment made to the Derivative
Counterparty pursuant to Section 4.02, any Swap Termination Payment made to
the
Supplemental Interest Trust pursuant to Section 4.02 and any Swap Termination
Payment made to the Swap Counterparty pursuant to Section 4.02.
(a) For
purposes of preparing the Monthly Statement, delinquencies shall be determined
and reported by the Master Servicer based on the so-called “OTS” methodology for
determining delinquencies on mortgage loans similar to the Mortgage Loans.
By
way of example, a Mortgage Loan would be delinquent with respect to a Scheduled
Payment due on a Due Date if such Scheduled Payment is not made by the close
of
business on the Mortgage Loan’s next succeeding Due Date, and a Mortgage Loan
would be more than 30-days Delinquent with respect to such Scheduled Payment
if
such Scheduled Payment were not made by the close of business on the Mortgage
Loan’s second succeeding Due Date.
(b) The
Securities Administrator’s responsibility for providing the above statement to
the Certificateholders, each Rating Agency, the Master Servicer, the Servicer,
the Trustee and the Depositor is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer and the Servicer.
The Securities Administrator will provide the above statement via the Securities
Administrator’s internet website. The Securities Administrator’s website will
initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇
and
assistance in using the website can be obtained by calling the Securities
Administrator’s customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable
to use the above distribution method are entitled to have a paper copy mailed
to
them via first Class mail by calling the customer service desk and indicating
such. The Securities Administrator shall have the right to change the manner
in
which the above statement is distributed in order to make such distribution
more
convenient and/or more accessible, and the Securities Administrator shall
provide timely and adequate notification to the Certificateholders and the
parties hereto regarding any such changes. A paper copy of the statement will
also be made available upon request.
(c) Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall, upon request, cause to be furnished to each Person who
at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vi)
of this Section 4.03 aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall have
previously been provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
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(d) On
the
10th
day of
each calendar month (or, if such 10th
day is
not a Business Day, then on the next succeeding Business Day), the Servicer
shall furnish to the Master Servicer (i) a monthly remittance advice in the
format set forth in Exhibit N-1 hereto, a monthly defaulted loan report in
the
format set forth in Exhibit N-2 hereto and a realized loss report in the format
set forth in Exhibit N-3 hereto (or in such other format mutually agreed to
between the Servicer and the Master Servicer) relating to the period ending
on
the last day of the preceding calendar month and (ii) all such information
required pursuant to clause (i) above on a magnetic tape or other similar media
reasonably acceptable to the Master Servicer. No later than three Business
Days
after the fifteenth day of each calendar month, the Servicer shall furnish
to
the Master Servicer a monthly report containing such information regarding
prepayments of Mortgage Loans during the applicable Prepayment Period and in
a
format as mutually agreed to between the Servicer and the Master
Servicer.
Such
monthly remittance advice shall also be accompanied by a supplemental report
provided to the Master Servicer which includes on an aggregate basis for the
previous calendar month (i) the amount of any insurance claims filed, (ii)
the
amount of any claim payments made and (iii) the amount of claims denied or
curtailed. The Master Servicer will convert such data into a format acceptable
to the Securities Administrator and provide monthly reports to the Securities
Administrator pursuant to this Agreement.
Section
4.04 Certain
Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with
the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full,
the
Securities Administrator will at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference
Banks
(after consultation with the Depositor). Each “Reference
Bank”
shall
be a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or
be
under common control with, the Securities Administrator and shall have an
established place of business in London. If any such Reference Bank should
be
unwilling or unable to act as such or if the Securities Administrator should
terminate its appointment as Reference Bank, the Securities Administrator shall
promptly appoint or cause to be appointed another Reference Bank (after
consultation with the Depositor). The Securities Administrator shall have no
liability or responsibility to any Person for (i) the selection of any
Reference Bank for purposes of determining LIBOR or (ii) any inability to
retain at least four Reference Banks which is caused by circumstances beyond
its
reasonable control.
The
Interest Rate for each Class of LIBOR Certificates for each Interest
Accrual Period shall be determined by the Securities Administrator on each
LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Securities Administrator shall not have any liability
or responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided
for
in this Section 4.04 and the definition of LIBOR. The establishment of
LIBOR and each Interest Rate for the LIBOR Certificates by the Securities
Administrator shall (in the absence of manifest error) be final, conclusive
and
binding upon each Holder of a Certificate and the Trustee.
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Section
4.05 Allocation
of Applied Realized Loss Amounts.
Any Applied Realized Loss Amounts shall be allocated by the Securities
Administrator to the most junior Class of Class M Certificates then
outstanding in reduction of the Class Certificate Balance
thereof.
Section
4.06 Supplemental
Interest Trust. (a)
A
separate trust is hereby established (the “Supplemental
Interest Trust”),
the
corpus of which shall be held by the securities administrator on behalf of
the
Trustee, as trustee of the Supplemental Interest Trust, for the benefit of
the
Class X Certificateholders. The Securities Administrator, acting in its capacity
as securities administrator of the Supplemental Interest Trust, shall establish
an account (the “Swap
Account”),
into
which the Depositor shall initially deposit $500. The Swap Account 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 monies, including, without
limitation, other monies of the Securities Administrator held pursuant to this
Agreement.
(b) In
addition, the Securities Administrator, acting in its capacity as securities
administrator of the Supplemental Interest Trust, shall establish an account
(the “Cap Account”), into which the Depositor shall initially deposit $500. The
Cap Account 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
monies, including, without limitation, other monies of the Securities
Administrator held pursuant to this Agreement
(c) The
Securities Administrator shall deposit into the Swap Account any Net Derivative
Payment required pursuant to Sections 4.02(a)(i)(A), 4.02(a)(ii)(A)(a) and
4.02(a)(ii)(B)(a), any Swap Termination Payment required pursuant to Sections
4.02(a)(i)(A), 4.02(a)(ii)(A)(a), 4.02(a)(ii)(B)(a) and 4.02(a)(iii)(E), and
any
amounts received from the Swap Counterparty under the Swap Agreement, and shall
distribute from the Supplemental Interest Trust Account any Net Derivative
Payment required pursuant to Section 4.02(e)(i) or any Swap Termination Payment
required pursuant to Sections 4.02(e)(ii) or 4.02(e)(viii), as
applicable.
(d) The
Securities Administrator shall deposit into the Cap Account any amounts received
from the Cap Counterparty under the Cap Agreement.
(e) Funds
in
the Swap Account shall be invested in Permitted Investments constituting time
deposits under clause (ii) of the definition thereof. Any earnings on such
amounts shall be distributed on each Distribution Date pursuant to Section
4.02(e). The Class X Certificates shall evidence ownership of the Swap Account
for federal income tax purposes and the Holder thereof shall direct the
Securities Administrator, in writing, as to investment of amounts on deposit
therein. The Sponsor shall be liable for any losses incurred on such
investments. In the absence of written instructions from the Class X
Certificateholders as to investment of funds on deposit in the Swap Account,
such funds shall be invested in the ▇▇▇▇▇ Fargo Advantage Prime Investment
Money
Market Fund or a comparable investment vehicle. Any amounts on deposit in the
Swap Account in excess of the Swap Amount on any Distribution Date shall be
held
for distribution pursuant to Section 4.02(e) on the following Distribution
Date.
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(f) Funds
in
the Cap Account shall be invested in Permitted Investments constituting time
deposits under clause (ii) of the definition thereof. Any earnings on such
amounts shall be distributed on each Distribution Date pursuant to Section
4.02(e). The Class X Certificates shall evidence ownership of the Cap Account
for federal income tax purposes and the Holder thereof shall direct the
Securities Administrator, in writing, as to investment of amounts on deposit
therein. The Sponsor shall be liable for any losses incurred on such
investments. In the absence of written instructions from the Class X
Certificateholders as to investment of funds on deposit in the Cap Account,
such
funds shall be invested in the ▇▇▇▇▇ Fargo Advantage Prime Investment Money
Market Fund or a comparable investment vehicle. Any amounts on deposit in the
Cap Account in excess of the Cap Amount on any Distribution Date shall be held
for distribution pursuant to Section 4.02(e) on the following Distribution
Date.
(g) Upon
termination of the Trust Fund, any amounts remaining in the Swap Account or
the
Cap Account shall be distributed pursuant to the priorities set forth in Section
4.02(e).
(h) It
is the
intention of the parties hereto that, for federal and state income and state
and
local franchise tax purposes, the Supplemental Interest Trust be disregarded
as
an entity separate from the holder of the Class X Certificates unless and until
the date when either (a) there is more than one Class X Certificateholder or
(b)
any Class of Certificates in addition to the Class X Certificates is
recharacterized as an equity interest in the Supplemental Interest Trust for
federal income tax purposes. Neither the Securities Administrator nor the
Trustee shall be responsible for any entity level tax reporting for the
Supplemental Interest Trust.
(i) To
the
extent that the Supplemental Interest Trust is determined to be a separate
legal
entity from the Trust, any obligation of the Securities Administrator under
the
Swap Agreement or Cap Agreement shall be deemed to be an obligation of the
Supplemental Interest Trust.
Section
4.07 Rights
of the Swap Counterparty. The
Swap
Counterparty shall be deemed a third-party beneficiary of this Agreement to
the
same extent as if it were a party hereto and shall have the right, upon
designation of an “Early Termination Date” (as defined in the Swap Agreement),
to enforce its rights under this Agreement, which rights include but are not
limited to the obligation of the Securities Administrator (A) to deposit any
Net
Derivative Payment required pursuant to Sections 4.02(a)(i)(A),
4.02(a)(ii)(A)(a) and 4.02(a)(ii)(B)(a), and any Swap Termination Payment
required pursuant to Sections 4.02(a)(i)(A), 4.02(a)(ii)(A)(a),
4.02(a)(ii)(B)(a) and 4.02(a)(iii)(E), into the Supplemental Interest Trust
Account (B) to pay any Net Derivative Payment required pursuant to Section
4.02(e)(i) or Swap Termination Payment required pursuant to Sections 4.02(e)(ii)
or Section 4.02(e)(viii), as applicable, to the Swap Counterparty and (C) to
establish and maintain the Swap Account, to make such deposits thereto,
investments therein and distributions therefrom as are required pursuant to
Section 4.06. For the protection and enforcement of the provisions of this
Section the Swap Counterparty shall be entitled to such relief as can be given
either at law or in equity.
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Section
4.08 Termination
Receipts.(a)(i)
In
the event of an “Early Termination Event” as defined under the Swap Agreement,
(a) any Swap Termination Payment made by the Swap Counterparty to the Swap
Account and paid pursuant to Section 4.02(e)(viii) (“Swap
Termination Receipts”)
will
be deposited in a segregated non-interest bearing account which shall be an
Eligible Account established by the Securities Administrator (the “Swap
Termination Receipts Account”)
and
(b) any amounts received from a replacement swap counterparty (“Swap
Replacement Receipts”)
will
be deposited in a segregated non-interest bearing account which shall be an
Eligible Account established by the Securities Administrator (the “Swap
Replacement Receipts Account”).
The
Securities Administrator shall invest, or cause to be invested, funds held
in
the Swap Termination Receipts Account and the Swap Replacement Receipts Account
in time deposits of the Securities Administrator as permitted pursuant to clause
(ii) of the definition of Permitted Investments or as otherwise directed in
writing by a majority of the Certificateholders. All such Permitted Investments
must be payable on demand or mature on a Distribution Date or such other date
as
directed by the Certificateholders. All such Eligible Investments will be made
in the name of the Trustee of the Supplemental Interest Trust (in its capacity
as such) or its nominee. All income and gain realized from any such investment
shall be deposited in the Termination Receipts Account or the Replacement
Receipts Account, as applicable, and all losses, if any, shall be borne by
the
related account.
(ii) Unless
otherwise permitted by the Rating Agencies as evidenced in a written
confirmation, the Depositor shall arrange for replacement swap agreement(s)
and
the Securities Administrator shall promptly, with the assistance and cooperation
of the Depositor, use amounts on deposit in the Swap Termination Receipts
Account, if necessary, to enter into replacement swap agreement(s) which shall
be executed and delivered by the Securities Administrator on behalf of the
Supplemental Interest Trust upon receipt of written confirmation from each
Rating Agency that such replacement swap agreement(s) will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency.
Amounts
on deposit in the Swap Replacement Receipts Account shall be held for the
benefit of the related Swap Counterparty and paid to such Swap Counterparty
if
the Supplemental Interest Trust is required to make a payment to such Swap
Counterparty following an event of default or termination event with respect
to
the Supplemental Interest Trust under the related Swap Agreement. Any amounts
not so applied shall, following the termination or expiration of such Swap
Agreement, be paid to the Class X Certificates.
(b) (i)
In
the event of an “Early Termination Event” as defined under the Cap Agreement,
(a) any Cap Termination Payment made by the Cap Counterparty to the Cap Account
and paid pursuant to Section 4.02(e)(vii) (“Cap Termination Receipts”) shall be
deposited in a segregated non-interest bearing account which shall be an
Eligible Account established by the Securities Administrator (the “Cap
Termination Receipts Account”) and (b) any amounts received from a replacement
cap counterparty (“Cap Replacement Receipts”) will be deposited in a segregated
non-interest bearing account which shall be an Eligible Account established
by
the Securities Administrator (the “Cap Replacement Receipts Account”). The
Securities Administrator shall invest, or cause to be invested, funds held
in
the Cap Termination Receipts Account in time deposits of the Securities
Administrator as permitted by clause (ii) of the definition of Permitted
Investments or as otherwise directed in writing by a majority of the
Certificateholders. All such Permitted Investments must be payable on demand
or
mature on a Cap Payment Date, a Distribution Date or such other date as directed
by the Certificateholders. All such Eligible Investments shall be made in the
name of the Trustee as trustee of the Supplemental Interest Trust (in its
capacity as such) or its nominee. All income and gain realized from any such
investment shall be deposited in the Cap Termination Receipts Account and all
losses, if any, shall be borne by such account.
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(ii) Unless
otherwise permitted by the Rating Agencies as evidenced in a written
confirmation, the Depositor shall arrange for replacement interest rate cap
agreement(s) and the Securities Administrator shall promptly, with the
assistance and cooperation of the Depositor, use amounts on deposit in the
Cap
Termination Receipts Account, if necessary, to enter into replacement interest
rate cap agreement(s) which shall be executed and delivered by the Securities
Administrator on behalf of the Supplemental Interest Trust upon receipt of
written confirmation from each Rating Agency that such replacement interest
rate
cap agreement(s) will not result in the reduction or withdrawal of the rating
of
any outstanding Class of Certificates with respect to which it is a Rating
Agency
ARTICLE
V
THE
CERTIFICATES
Section
5.01 The
Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount) and aggregate
denominations per Class set forth in the Preliminary
Statement.
The
Depositor hereby directs the Securities Administrator to register the
Class X and Class P Certificates in the name of the Depositor or its
designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and
Class P Certificates in the name of the NIM Trustee, or such other name or
names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to the NIM Trustee or to such other Person or Persons
as the Depositor shall request.
Subject
to Section 11.02 respecting the final distribution on the Certificates, on
each Distribution Date the Securities Administrator shall make distributions
to
each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder
at a
bank or other entity having appropriate facilities therefor, if such Holder
has
so notified the Securities Administrator at least five Business Days prior
to
the related Record Date or (y) by check mailed by first Class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register; provided,
however,
so long
as such Certificate is a Book-Entry Certificate, all distributions on such
Certificate will be made through the Depository or the Depository
Participant.
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The
Certificates shall be executed by manual or facsimile signature on behalf of
the
Securities Administrator by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that
such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to
any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
Section
5.02 Certificate
Register; Registration of Transfer and Exchange of Certificates.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe,
the Securities Administrator shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. Upon
surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At
the
option of a Certificateholder, Certificates may be exchanged for other
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to
be
exchanged at the office or agency of the Securities Administrator. Whenever
any
Certificates are so surrendered for exchange, the Securities Administrator
shall
execute, authenticate, and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by
a
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No
service charge to the Certificateholders shall be made for any registration
of
transfer or exchange of Certificates, but payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates may be required.
All
Certificates surrendered for registration of transfer or exchange shall be
cancelled and subsequently destroyed by the Securities Administrator in
accordance with the Securities Administrator’s customary
procedures.
(b) No
transfer of a Private Certificate shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act and
any
applicable state securities laws or is exempt from the registration requirements
under said Act and such state securities laws. In determining whether a transfer
is being made pursuant to an effective registration statement, the Securities
Administrator shall be entitled to rely solely upon a written notice to such
effect from the Depositor. Except with respect to (i) the transfer of the
Class X, Class P or Class R Certificates to the Depositor or an
Affiliate of the Depositor, (ii) the transfer
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of
the
Class X or Class P Certificates to the NIM Issuer or the NIM Trustee,
or (iii) a transfer of the Class X or Class P Certificates from
the NIM Issuer or the NIM Trustee to the Depositor or an Affiliate of the
Depositor, in the event that a transfer of a Private Certificate which is a
Physical Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer shall
certify to the Securities Administrator in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit H (the
“Transferor
Certificate”)
and
either (i) there shall be delivered to the Securities Administrator a
letter in substantially the form of Exhibit I (the “Rule 144A
Letter”)
or
(ii) there shall be delivered to the Securities Administrator at the
expense of the transferor an Opinion of Counsel stating that such transfer
may
be made without registration under the Securities Act. In the event that a
transfer of a Private Certificate which is a Book-Entry Certificate is to be
made in reliance upon an exemption from the Securities Act and such laws, in
order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such transfer will be deemed to have made
as of the transfer date each of the certifications set forth in the Transferor
Certificate in respect of such Certificate and the transferee will be deemed
to
have made as of the transfer date each of the certifications set forth in the
Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. As directed by the
Depositor, the Securities Administrator shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Depositor, the Master Servicer, the
Servicer and the Trustee shall cooperate with the Securities Administrator
in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Securities Administrator such information regarding
the Certificates, the Mortgage Loans and other matters regarding the Trust
Fund
as the Securities Administrator shall reasonably determine to meet its
obligation under the preceding sentence. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify
the
Securities Administrator, the Trustee, the Servicer, the Master Servicer and
the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
Except
with respect to (i) the transfer of the Class X, Class P or
Class R Certificates to the Depositor or an Affiliate of the Depositor,
(ii) the transfer of the Class X or Class P Certificates to the
NIM Issuer or the NIM Trustee, or (iii) a transfer of the Class X or
Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the Securities Administrator shall have
received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the
Securities Administrator (in the event such Certificate is a Private Certificate
or a Residual Certificate, such requirement is satisfied only by the Securities
Administrator’s receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of
ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
Federal, state or local law (“Similar
Law”)
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets
of
any such plan or arrangement to
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effect
such transfer, or (ii) in the case of an ERISA-Restricted Certificate other
than a Residual Certificate or a Class P Certificate that has been the
subject of an ERISA-Qualifying Underwriting, and the purchaser is an insurance
company, a representation that the purchaser is an insurance company that is
purchasing such Certificates with funds contained in an “insurance company
general account” (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption (“PTCE”)
95-60)
and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (iii) in the case of any such
ERISA-Restricted Certificate other than a Residual Certificate or Class P
Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan
or
any other person acting on behalf of any such plan or arrangement or using
such
plan’s or arrangement’s assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense
of
the Depositor, the Trustee, the Master Servicer, the Servicer, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator,
to
the effect that the purchase or holding of such ERISA-Restricted Certificate
will not constitute or result in a non-exempt prohibited transaction within
the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee, the Depositor, the Securities Administrator, the Master
Servicer or the Servicer to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a Physical
Certificate or a Residual Certificate, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Securities Administrator by the
transferee’s (including an initial acquirer’s) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate that
is a Physical Certificate, other than a Class P Certificate or Residual
Certificate, to or on behalf of an employee benefit plan subject to ERISA,
the
Code or Similar Law without the delivery to the Securities Administrator of
a
representation letter or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect and (b) any
purported transfer of a Class P Certificate or Residual Certificate to a
transferee that does not make the representation in clause (i) above
shall be void and of no effect.
None
of
the Class R or Class P Certificates may be sold to any employee
benefit plan subject to Title I of ERISA, any plan subject to
Section 4975 of the Code, or any plan subject to any Similar Law or any
person investing on behalf or with plan assets of such plan.
No
transfer of an ERISA-Restricted Derivative Certificate prior to the termination
of the Cap Agreement and the Swap Agreement shall be made unless the Securities
Administrator shall have received a representation letter from the transferee
of
such Certificate, substantially in the form set forth in Exhibit I, to the
effect that either (i) such transferee is neither an employee benefit plan
or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975
of
the Code or a plan subject to Similar Law nor a Person acting on behalf of
any
such Plan or using the assets of any such Plan to effect such transfer or (ii)
the acquisition and holding of the ERISA-Restricted Derivative Certificate
are
eligible for exemptive relief under ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 91-38, PTCE
95-60 or PTCE 96-23. Notwithstanding anything else to the contrary herein,
any
purported transfer of an ERISA-Restricted Derivative Certificate prior to the
termination of the Cap Agreement and the Swap Agreement on behalf of such Plan
without the delivery to the Securities Administrator of a representation letter
as described above shall be void and of no effect. If the ERISA-Restricted
Derivative Certificate is a Book-Entry Certificate, the transferee will be
deemed to have made a representation as provided in clause (i) or (ii) of this
paragraph, as applicable.
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If
any
ERISA-Restricted Derivative Certificate, or any interest therein, is acquired
or
held in violation of the provisions of the preceding paragraph, 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
an ERISA-Restricted Derivative Certificate, or interest therein, was effected
in
violation of the provisions of the preceding paragraph shall indemnify to the
extent permitted by law and hold harmless the Depositor, the Securities
Administrator, the Trustee, the Servicer and the Master Servicer from and
against any and all liabilities, claims, costs or expenses incurred by such
parties as a result of such acquisition or holding.
To
the
extent permitted under applicable law (including, but not limited to, ERISA),
the Securities Administrator shall be under no liability to any Person for
any
registration of transfer of any ERISA-Restricted Certificate or ERISA-Restricted
Derivative Certificate that is in fact not permitted by this
Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the
provisions of this Agreement so long as, in the case of a Physical Certificate,
the transfer was registered by the Securities Administrator in accordance with
the foregoing requirements.
(c) Each
Person who has or who acquires any Ownership Interest in a Residual Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest
to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(i) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status as a Permitted
Transferee;
(ii) No
Ownership Interest in a Residual Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a “Transfer
Affidavit”)
of the
initial owner or the proposed transferee in the form attached hereto as
Exhibit G;
(iii) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (A) to obtain a Transfer Affidavit from any other Person to
whom such Person attempts to Transfer its Ownership Interest in a Residual
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom
such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Residual Certificate and (C) not to Transfer its Ownership
Interest in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is a Non-Permitted Transferee;
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(iv) Any
attempted or purported Transfer of any Ownership Interest in a Residual
Certificate in violation of the provisions of this Section 5.02(c) shall be
absolutely null and void and shall vest no rights in the purported Transferee.
If any purported transferee shall become a Holder of a Residual Certificate
in
violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Securities Administrator shall be under no liability to any
Person for any registration of Transfer of a Residual Certificate that is in
fact not permitted by Section 5.02(a) and this Section 5.02(c) or for
making any payments due on such Certificate to the Holder thereof or taking
any
other action with respect to such Holder under the provisions of this Agreement
so long as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and the Rule 144A Letter. The Securities
Administrator shall be entitled but not obligated to recover from any Holder
of
a Residual Certificate that was in fact a Non-Permitted Transferee at the time
it became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after either
such time. Any such payments so recovered by the Securities Administrator shall
be paid and delivered by the Securities Administrator to the last preceding
Permitted Transferee of such Certificate; and
(v) The
Depositor shall use its best efforts to make available, upon receipt of written
request from the Securities Administrator, all information necessary to compute
any tax imposed under Section 860E(e) of the Code as a result of a Transfer
of an Ownership Interest in a Residual Certificate to any Holder who is a
Non-Permitted Transferee.
The
restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the
Trustee, the Securities Administrator or the Servicer, to the effect that the
elimination of such restrictions will not cause any REMIC created hereunder
to
fail to qualify as a REMIC at any time that the Certificates are outstanding
or
result in the imposition of any tax on the Trust Fund, a Certificateholder
or
another Person. Each Person holding or acquiring any Ownership Interest in
a
Residual Certificate hereby consents to any amendment of this Agreement which,
based on an Opinion of Counsel furnished to the Securities Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly
or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to
provide for a means to compel the Transfer of a Residual Certificate which
is
held by a Person that is a Non-Permitted Transferee to a Holder that is a
Permitted Transferee.
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(d) The
preparation and delivery of all certificates and opinions referred to above
in
this Section 5.02 in connection with transfer shall be at the expense of
the parties to such transfers.
(e) Except
as
provided below, the Book-Entry Certificates shall at all times remain registered
in the name of the Depository or its nominee and at all times:
(i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates;
(iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its
usual and customary fees, charges and expenses from its Depository Participants;
(v) the Securities Administrator shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of exercising
the
rights of holders under this Agreement, and requests and directions for and
votes of such representatives shall not be deemed to be inconsistent if they
are
made with respect to different Certificate Owners; and (vi) the Securities
Administrator may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners.
All
transfers by Certificate Owners of Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owner. Each Depository Participant
shall only transfer Book-Entry Certificates of Certificate Owners it represents
or of brokerage firms for which it acts as agent in accordance with the
Depository’s normal procedures.
If
(x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the
Securities Administrator or the Depositor is unable to locate a qualified
successor, or (y) the Depositor notifies the Depository (and the Securities
Administrator consents) of its intent to terminate the book-entry system through
the Depository and, upon receipt of notice of such intent from the Depository,
the Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully registered
Certificates (the “Definitive
Certificates”)
to
Certificate Owners requesting the same. Upon surrender to the Securities
Administrator of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Securities Administrator shall issue the Definitive Certificates. None of the
Servicer, the Depositor or the Securities Administrator shall be liable for
any
delay in delivery of such instruction and each may conclusively rely on, and
shall be protected in relying on, such instructions. The Depositor shall provide
the Securities Administrator with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon
and
performed by the Securities Administrator, to the extent applicable with respect
to such Definitive Certificates and the Securities Administrator shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder;
provided,
that
the Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
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(f) Each
Private Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer and
accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments)
or W-9 in form satisfactory to the Securities Administrator, duly executed
by
the Certificateholder or his attorney duly authorized in writing. Each
Certificate presented or surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Securities Administrator
in accordance with its customary practice. No service charge shall be made
for
any registration of transfer or exchange of Private Certificates, but the
Securities Administrator may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Private Certificates.
Section
5.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and
(b) there is delivered to the Depositor, the Securities Administrator and
the Trustee such security or indemnity as may be required by them to hold each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with
the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax
or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this
Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section
5.04 Persons
Deemed Owners.
The
Trustee, the Depositor, the Securities Administrator and any agent of the
Trustee, the Depositor or the Securities Administrator may treat the Person
in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for
all
other purposes whatsoever, and neither the Trustee, the Depositor, the
Securities Administrator nor any agent of the Trustee, the Depositor or the
Securities Administrator shall be affected by any notice to the
contrary.
Section
5.05 Access
to List of Certificateholders’ Names and Addresses.
If three or more Certificateholders (a) request such information in writing
from the Securities Administrator, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and (c) provide a copy of
the communication which such Certificateholders propose to transmit, or if
the
Depositor or the Servicer shall request such information in writing from the
Securities Administrator, then the Securities Administrator shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Servicer or such Certificateholders at such recipients’ expense the most recent
list of the Certificateholders of such Trust Fund held by the Securities
Administrator, if any. The Depositor and every Certificateholder, by receiving
and holding a Certificate, agree that the Securities Administrator shall not
be
held accountable by reason of the disclosure of any such information as to
the
list of the Certificateholders hereunder, regardless of the source from which
such information was derived.
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Section
5.06 Maintenance
of Office or Agency.
The Securities Administrator will maintain or cause to be maintained at its
expense an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange. The Securities
Administrator initially designates its offices located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Securities Administrator
shall give prompt written notice to the Certificateholders of any change in
such
location of any such office or agency.
ARTICLE
VI
THE
DEPOSITOR AND THE SERVICER
Section
6.01 Respective
Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance herewith
only
to the extent of the obligations specifically and respectively imposed upon
and
undertaken by them herein.
Section
6.02 Merger
or Consolidation of the Depositor or the Servicer.
(a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation, under the laws of the United
States or under the laws of one of the states thereof and will each obtain
and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect
the
validity and enforceability of this Agreement, or any of the Mortgage Loans
and
to perform its respective duties under this Agreement.
(b) The
Servicer is and shall continue to be an institution which is a ▇▇▇▇▇▇
▇▇▇-approved and ▇▇▇▇▇▇▇ Mac-approved seller/servicer, shall maintain a net
worth of at least $30,000,000 (as determined in accordance with generally
accepted accounting principles) and shall maintain its license to do business
or
service residential mortgage loans in any jurisdictions in which the Mortgaged
Properties are located.
(c) Any
Person into which the Depositor or the Servicer may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Depositor
or the Servicer shall be a party, or any person succeeding to the business
of
the Depositor or the Servicer, shall be the successor of the Depositor or the
Servicer, as the case may be, hereunder, without the execution or filing of
any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided,
however,
that
the successor or surviving Person to the Servicer shall make the covenant set
forth in Section 6.02(a) and (b).
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Section
6.03 Limitation
on Liability of the Depositor, the Servicer and Others. Neither
the Depositor, the Servicer, nor any of their respective directors, officers,
employees or agents, shall be under any liability to the Certificateholders
for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided,
however,
that
this provision shall not protect the Depositor, the Servicer or any such Person
against any breach of representations or warranties made by it herein or protect
the Depositor, the Servicer or any such Person from any liability which would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
(or gross negligence in the case of the Depositor) in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor, its Affiliates, the Servicer and any of their respective directors,
officers, employees or agents may rely in good faith on any document of any
kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, its Affiliates, the Servicer and any of their
respective directors, officers, employees or agents shall be indemnified by
the
Trust Fund and held harmless against any loss, liability or expense incurred
in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement
or
the Certificates other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or
expense shall be otherwise reimbursable pursuant to this Agreement and any
loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence (or gross negligence in the case of the Depositor) in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor the Servicer shall be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to
its
respective duties hereunder and which in its opinion may involve it in any
expense or liability; provided,
however,
that
the Depositor may in its discretion undertake any such action (or direct the
Trustee to undertake such actions pursuant to Section 2.03 for the benefit
of the Certificateholders) that it may deem necessary or desirable in respect
of
this Agreement and the rights and duties of the parties hereto and interests
of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall
be
expenses, costs and liabilities of the Trust Fund, and the Depositor and the
Servicer shall be entitled to be reimbursed therefor out of the Collection
Account.
Section
6.04 Limitation
on Resignation of the Servicer. Subject
to Section 7.01, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent
of
the Servicer, the Depositor, the Master Servicer and the Securities
Administrator with prior written notice to the Trustee or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such resignation shall
not
relieve the Servicer of responsibility for any of the obligations specified
in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer. Any such determination permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Depositor, the Securities Administrator and the Master Servicer
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor, the Securities Administrator and the Master Servicer. No such
resignation shall become effective until a successor shall have assumed the
Servicer’s responsibilities and obligations hereunder.
Section
6.05 Additional
Indemnification by the Servicer; Third Party Claims. Notwithstanding
the limitations set forth in Section 6.03, the Servicer shall indemnify the
Depositor, the Master Servicer, the Securities Administrator, the Trustee,
the
Trust Fund and any Affiliate, director, officer, employee or agent of the
Depositor and hold each of them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments, and any other costs, fees and expenses that any
of
them may sustain (collectively, a “Loss”) in as a direct result of any breach by
the Servicer, of (i) any of its representations and warranties referred to
in Section 2.03(a), (ii) any error in any tax or information return
prepared by the Servicer, (iii) the failure of the Servicer to perform its
duties and service the Mortgage Loans in compliance with the terms of this
Agreement or (iv) any
failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification, accountants’ letter or other
material when and as required under this Agreement, including any report
under
Sections 3.22, 3.23, 3.24 and 3.30 or any failure by the Servicer to identify
pursuant to Section 3.02(c) any Subcontractor that is a Servicing Function
Participant. The Servicer immediately shall notify the Depositor, the Master
Servicer, the Securities Administrator and the Trustee if a claim is made
by a
third party with respect to this Agreement or the Mortgage Loans, assume
(with
the prior written consent of the Depositor and the Securities Administrator)
the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Depositor, the Securities
Administrator or the Trustee in respect of such claim. In
the
case of any failure of performance described in clause (iv) of this Section
6.05, the Servicer shall promptly reimburse the Trustee, the Master Servicer,
the Securities Administrator or the Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report required
to
be filed with the Commission with respect to the transaction relating to
this
Agreement, or for execution of a certification pursuant to Rule 13a-14(d)
or
Rule 15d-14(d) under the Exchange Act with respect to this transaction, for
all
costs reasonably incurred by each such party in order to obtain the information,
report, certification, accountants’ letter or other material not delivered as
required by the Servicer, any
Subservicer or any Subcontractor.
This
indemnity shall survive the termination of this Agreement and the earlier
resignation or removal of the Servicer and the parties indemnified by the
Servicer under this paragraph. Notwithstanding the provisions of this Section
6.05, the Servicer shall not be obligated to provide any indemnification
or
reimbursement hereunder to any party for any loss that any of them may sustain
which are indirect, consequential,
punitive or special in nature.
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Section
6.06 Compliance
with Regulation AB; Cooperation of Parties.
Notwithstanding any other provision of this Agreement, the Servicer acknowledges
and agrees that the purpose of Sections 3.02, 3.22, 3.23, 3.24, 3.30, 6.05
and
7.01(i) and Exhibit S of this Agreement is to facilitate compliance by the
Securities Administrator, the Master Servicer and the Depositor with the
provisions of Regulation AB. Therefore, the Servicer agrees that (a) the
obligations of the Servicer hereunder shall be interpreted in such a manner
as
to accomplish that purpose, (b) such obligations may change over time due to
interpretive advice or guidance of the Commission, 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 Servicer
shall agree to enter into such amendments to this Agreement as may be necessary,
in the judgment of the Servicer, the Depositor, the Master Servicer and the
Securities Administrator and their respective counsel, to comply with such
interpretive advice or guidance, convention, consensus, advice of counsel,
or
otherwise, (d) the Servicer shall otherwise comply with reasonable requests
made
by the Trustee, the Securities Administrator, the Master Servicer or the
Depositor, and mutually agreed upon by the Servicer, for delivery of additional
or different information reasonably available to the Servicer as such parties
may determine in good faith is necessary to comply with the provisions of
Regulation AB and (e) the
Servicer shall promptly
upon request provide to the Depositor or the Securities Administrator for
inclusion in any periodic report required to be filed under the Securities
Exchange Act, such items of information reasonably available to the Servicer
regarding this Agreement and matters related to the Servicer (collectively,
the
“Servicer Information”), provided
that
such
information shall be required to be provided by the Servicer only to the extent
that such shall be determined by the Depositor or the Master Servicer in its
sole discretion (or, in the case of information provided under clauses (c)
and
(d) of this Section 6.06, with the consent of the Servicer) and its counsel
to
be necessary or advisable to comply with any Commission and industry guidance
and convention.
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ARTICLE
VII
DEFAULT
Section
7.01 Events
of Default.“Event
of Default”,
wherever used herein, means any one of the following events:
(a) any
failure by the Servicer to remit to the Master Servicer any payment required
to
be made under the terms of this Agreement which continues unremedied for a
period of one Business Day after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Master Servicer, or to the Servicer, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
by
Certificateholders entitled to at least 25.00% of the Voting Rights in the
Certificates; or
(b) the
failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
set
forth in this Agreement which continues unremedied for a period of forty-five
days (except that such number of days shall be fifteen in the case of a failure
to pay any premium for any insurance policy required to be maintained under
this
Agreement and (y) such number of days shall be ten in the case of a failure
to
observe or perform any of the obligations set forth in Sections 3.02, 3.23,
3.24, 3.30 or 8.12), after the earlier of (i) the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to
the
Servicer by the Depositor or by the Master Servicer, or to the Servicer, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
by
Certificateholders entitled to at least 25.00% of the Voting Rights in the
Certificates and (ii) actual knowledge of such failure by a Servicing Officer
of
the Servicer; or
(c) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty
consecutive days; or
(d) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Servicer
or
of or relating to all or substantially all of its property; or
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(e) the
Servicer shall admit in writing its inability generally to pay its debts as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(f) any
failure of the Servicer to make any P&I Advance on any Remittance Date
required to be made from its own funds pursuant to Section 4.01 which
continues unremedied for one Business Day immediately following the Remittance
Date; or
(g) a
breach
of any representation and warranty of the Servicer referred to in
Section 2.03(a), which materially and adversely affects the interests of
the Certificateholders and which continues unremedied for a period of
thirty days after the date upon which written notice of such breach is
given to the Servicer by the Master Servicer or by the Depositor, or to the
Servicer, the Master Servicer, the Depositor, the Securities Administrator
and
the Trustee by Certificateholders entitled to at least 25.00% of the Voting
Rights in the Certificates; or
(h) Fitch
reduces its primary subprime servicer rating of the Servicer to “RPS3-“ or
lower, ▇▇▇▇▇’▇ reduces its primary subprime servicer rating of the Servicer to
“SQ3” or lower, or Standard & Poor’s reduces its primary subprime servicer
rating of the Servicer to “Average” or lower, and any such downgrade continues
unremedied for a period of ninety days; or
If
an
Event of Default described in clauses (a) through (h) of this
Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Master Servicer may,
or
at the direction of a majority of the Voting Rights the Master Servicer shall,
by notice in writing to the Servicer related to such Event of Default (with
a
copy to each Rating Agency and the Derivative Counterparty), terminate all
of
the rights and obligations of the Servicer under this Agreement and in and
to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided,
however,
that
the Master Servicer shall not be required to give written notice to the Servicer
of the occurrence of an Event of Default described in clauses (b) through
(h) of this Section 7.01 unless and until a Responsible Officer of the
Master Servicer has actual knowledge of the occurrence of such an event;
provided further,
that
the Depositor shall give written notice to the Servicer and the Master Servicer
of the occurrence of an Event of Default described in clause (h) of
this Section 7.01 upon obtaining actual knowledge of the occurrence of such
an event. In the event that a Responsible Officer of the Master Servicer has
actual knowledge of the occurrence of an event of default described in
clause (a) of this Section 7.01, the Master Servicer shall give
written notice to the Servicer of the occurrence of such an event within one
Business Day of the first day on which such Responsible Officer obtains actual
knowledge of such occurrence. On and after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether
with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the
Master Servicer. Subject to Section 7.02, the Master Servicer is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer,
as
attorney-in-fact or otherwise, any and all documents and other instruments,
and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Master Servicer in
effecting the termination of the Servicer’s responsibilities and rights
hereunder, including, without limitation, the transfer to the Master Servicer
of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans.
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Notwithstanding
any termination of the activities of the Servicer hereunder, the Servicer shall
be entitled to receive from the Trust Fund, prior to transfer of its servicing
obligations hereunder, payment of all accrued and unpaid Servicing Fees and
reimbursement for all outstanding P&I Advances and Servicing
Advances.
Section
7.02 Master
Servicer to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination pursuant
to
Section 3.25 or Section 7.01, the Master Servicer shall, subject to
and to the extent provided in Section 3.05, and subject to the rights of
the Master Servicer to appoint a successor servicer pursuant to this Section
7.02, be the successor to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances and Servicing Advances,
pursuant to Section 3.25 or Section 7.01. It is understood and
acknowledged by the parties hereto that there will be a period of transition
before the transfer of servicing obligations is fully effective. Notwithstanding
the foregoing, the Master Servicer will have a period (not to exceed
90 days) to complete the transfer of all servicing data and correct or
manipulate such servicing data as may be required by the Master Servicer to
correct any errors or insufficiencies in the servicing data or otherwise enable
the Master Servicer to service the Mortgage Loans in accordance with Accepted
Servicing Practices. As compensation therefor, the Master Servicer shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Collection Account which the Servicer would be entitled to receive.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to the Servicer in accordance with Section 7.01, the Master Servicer may,
if it shall be unwilling to so act, or shall, if it is prohibited by applicable
law from making P&I Advances and Servicing Advances pursuant to
Section 4.01, if it is otherwise unable to so act or at the written request
of Certificateholders entitled to at least a majority of the Voting Rights,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all
or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the Servicer shall make the covenant set forth
in
Section 6.02(b). Any successor to the Servicer shall be an institution
which is willing to service the Mortgage Loans and which executes and delivers
to the Depositor and the Master Servicer an agreement accepting such delegation
and assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer (other
than liabilities of the Servicer under Section 6.03 incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided,
that
each Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced, as a result of such assignment and delegation. Pending appointment
of a
successor to the Servicer hereunder, the Master Servicer, unless the Master
Servicer is prohibited by law from so acting, shall, subject to
Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Master Servicer may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided,
however,
that no
such compensation shall be in excess of the Servicing Fee Rate and amounts
paid
to the Servicer from investments. The Master Servicer and such successor
servicer shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Master Servicer nor
any
other successor to the Servicer shall be deemed to be in default hereunder
by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused
by
the failure of the Servicer to deliver or provide, or any delay in delivering
or
providing, any cash, information, documents or records to it.
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Notwithstanding
the foregoing, the parties hereto agree that the Master Servicer, in its
capacity as successor servicer, immediately shall assume all of the obligations
of the Servicer to make Advances and the Master Servicer will assume the other
duties of the Servicer as soon as practicable, but in no event later than 90
days after the Master Servicer becomes successor servicer pursuant to the
preceding paragraph. Notwithstanding the foregoing, the Master Servicer, in
its
capacity as successor servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable
efforts.
In
the
event that the Servicer is terminated pursuant to Section 7.01, the
terminated Servicer shall provide notices to the Mortgagors, transfer the
Servicing Files to a successor servicer and pay all of its own out-of-pocket
costs and expenses at its own expense. In addition, in the event that the
Servicer is terminated pursuant to Section 7.01, the terminated Servicer
shall pay all reasonable out-of-pocket costs and expenses of a servicing
transfer incurred by parties other than the terminated Servicer promptly upon
presentation of reasonable documentation of such costs. If the Master Servicer
is the terminated Servicer (except in the case where the Master Servicer in
its
role as successor servicer is being terminated pursuant to Section 7.01 by
reason of an Event of Default caused solely by the Master Servicer as the
successor servicer and not by the predecessor Servicer’s actions or omissions),
such costs shall be paid by the prior terminated Servicer promptly upon
presentation of reasonable documentation of such costs. If the terminated
Servicer defaults in its obligation to pay such costs and expenses, the same
shall be paid by the successor servicer or the Master Servicer, in which case
the successor servicer or the Master Servicer, as applicable, shall be entitled
to reimbursement therefor from the Trust Fund.
Any
successor to the Servicer as servicer shall give notice to the Mortgagors of
such change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to Section 3.13.
Section
7.03 Notification
to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Securities Administrator shall give prompt written notice thereof
to Certificateholders, each Rating Agency and the Derivative
Counterparty.
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(b) Within
60 days after the occurrence of any Event of Default, the Securities
Administrator shall transmit by mail to all Certificateholders, each Rating
Agency and the Derivative Counterparty notice of each such Event of Default
hereunder known to the Securities Administrator, unless such event shall have
been cured or waived.
ARTICLE
VIII
CONCERNING
THE TRUSTEE
Section
8.01 Duties
of the Trustee.
The Trustee, before the occurrence of a Master Servicer Event of Default and
after the curing of all Master Servicer Events of Default that may have
occurred, shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement. In case a Master Servicer Event of
Default has occurred and remains uncured, the Trustee shall exercise such of
the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under
the circumstances in the conduct of such person’s own affairs.
The
Trustee, upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee that
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are in the form required
by this Agreement. The Trustee shall not be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order, or other instrument.
No
provision of this Agreement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or
its
own willful misconduct.
Unless
an
Event of Default known to the Trustee has occurred and is
continuing:
(a) the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of the duties and obligations specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee, and the Trustee may conclusively rely, as to the truth
of
the statements and the correctness of the opinions expressed therein, upon
any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believes in good faith to be genuine
and
to have been duly executed by the proper authorities respecting any matters
arising hereunder;
(b) the
Trustee shall not be liable for an error of judgment made in good faith by
a
Responsible Officer or Responsible Officers of the Trustee, unless it is finally
proven that the Trustee was negligent in ascertaining the pertinent facts;
and
(c) the
Trustee shall not be liable with respect to any action taken, suffered, or
omitted to be taken by it in good faith in accordance with the direction of
the
Holders of Certificates evidencing not less than 25.00% of the Voting Rights
of
Certificates relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or
power conferred upon the Trustee under this Agreement.
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Section
8.02 Certain
Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) the
Trustee may rely upon and shall be protected in acting or refraining from acting
upon any resolution, Officer’s Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and the
Trustee shall have no responsibility to ascertain or confirm the genuineness
of
any signature of any such party or parties;
(b) the
Trustee may consult with counsel, financial advisers or accountants and the
advice of any such counsel, financial advisers or accountants and any Opinion
of
Counsel shall be full and complete authorization and protection in respect
of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) the
Trustee shall not be liable for any action taken, suffered or omitted by it
in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(d) the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of Certificates evidencing
not less than 25.00% of the Voting Rights allocated to each Class of
Certificates;
(e) the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, accountants, custodians,
nominees or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the
Trustee shall not be required to risk or expend its own funds or otherwise
incur
any financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers hereunder if it shall have reasonable
grounds for believing that repayment of such funds or indemnity satisfactory
to
it against such risk or liability is not assured to it;
(g) the
Trustee shall not be liable for any loss on any investment of funds pursuant
to
this Agreement;
(h) unless
a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
a
Master Servicer Event of Default or an Event of Default, the Trustee shall
not
be deemed to have knowledge of a Master Servicer Event of Default or an Event
of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof;
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(i) the
Trustee shall be under no obligation to exercise any of the trusts, rights
or
powers vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction
of
any of the Certificateholders, pursuant to this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred therein or thereby;
(j) if
the
Trustee, in its role as successor master servicer under this Agreement, assumes
the servicing or master servicing with respect to any of the Mortgage Loans,
it
shall not assume liability for the representations and warranties of the
Servicer or Master Servicer, as applicable, or for any errors or omissions
of
the Servicer or Master Servicer, as applicable;
(k) the
Trustee in its capacity as Custodian shall be entitled to the same rights,
protections, immunities and indemnities extended to the Trustee
hereunder.
Section
8.03 Trustee
Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Cap Agreement, the Swap Agreement, or of
the
Certificates or of any Mortgage Loan or related document. The Trustee shall
not
be accountable for the use or application by the Depositor, the Master Servicer,
the Servicer, the Securities Administrator or the Derivative Counterparty of
any
funds paid to the Depositor, the Master Servicer, the Servicer, the Securities
Administrator or the Derivative Counterparty in respect of the Mortgage Loans
or
deposited in or withdrawn from the Collection Account, the Distribution Account
or any other fund or account with respect to the Certificates by the Depositor,
the Master Servicer, the Servicer, the Securities Administrator or the
Derivative Counterparty.
The
Trustee shall have no responsibility for filing or recording any financing
or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder.
Section
8.04 Trustee
May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it were not
the
Trustee.
Section
8.05 Trustee’s
Fees Indemnification and Expenses.
(a) As compensation for its activities under this Agreement, the Trustee
shall be paid its fee by the Master Servicer from the Master Servicer’s own
funds pursuant to a separate agreement. The Trustee shall have no lien on the
Trust Fund for the payment of such fees.
(b) The
Trustee shall be entitled to be reimbursed, from funds on deposit in the
Distribution Account, amounts sufficient to indemnify and hold harmless the
Trustee and any director, officer, employee, or agent of the Trustee against
any
loss, liability, or expense (including reasonable attorneys’ fees) incurred in
connection with any claim or legal action relating to:
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(i) this
Agreement,
(ii) the
Certificates, or
(iii) the
performance of any of the Trustee’s duties under this Agreement,
other
than any loss, liability, or expense (i) resulting from any breach of the
Servicer’s obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to
Section 6.05, (ii) resulting from any breach of the Mortgage Loan
Seller’s obligations in connection with this Agreement for which the Mortgage
Loan Seller has performed its obligation to indemnify the Trustee pursuant
to
Section 2.03(h), (iii) resulting from any breach of the Master
Servicer’s obligation hereunder for which the Master Servicer has performed its
obligation to indemnify the Trustee pursuant to this Agreement or
(iv) incurred because of willful misconduct, bad faith, or negligence in
the performance of any of the Trustee’s duties under this Agreement. Without
limiting the foregoing, except as otherwise agreed upon in writing by the
Depositor and the Trustee, and except for any expense, disbursement, or advance
arising from the Trustee’s negligence, bad faith, or willful misconduct, the
Trust Fund shall pay or reimburse the Trustee for all reasonable expenses,
disbursements, and advances incurred or made by the Trustee in accordance with
this Agreement with respect to:
(A) the
reasonable compensation, expenses, and disbursements of its counsel not
associated with the closing of the issuance of the Certificates,
and
(B) the
reasonable compensation, expenses, and disbursements of any accountant,
engineer, or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage them to perform services under this
Agreement.
The
Trustee’s right to indemnity and reimbursement under this Section 8.05(b) shall
survive the termination of this Agreement and the resignation or removal of
the
Trustee under this Agreement.
Except
as
otherwise provided in this Agreement or a separate letter agreement between
the
Trustee and the Depositor, the Trustee shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by the Trustee in the
ordinary course of its duties as Trustee under this Agreement or for any other
routine expenses incurred by the Trustee; provided,
further,
that no
expense shall be reimbursed hereunder if it would not constitute an
“unanticipated expense incurred by the REMIC” within the meaning of the REMIC
Provisions.
Section
8.06 Eligibility
Requirements for the Trustee.
The
Trustee hereunder shall at all times be a corporation or association organized
and doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to
time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with this Section 8.06,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 8.07. The entity serving as Trustee may have normal banking and
trust relationships with the Depositor and its affiliates, the Master Servicer,
the Securities Administrator or the Servicer and its affiliates; provided,
however,
that
such entity cannot be an affiliate of the Depositor or the Servicer other than
the Trustee in its role as successor to the Master Servicer.
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Section
8.07 Resignation
and Removal of the Trustee.
The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice of resignation to the Depositor, the Master Servicer,
the Securities Administrator and each Rating Agency not less than 60 days
before the date specified in such notice, when, subject to Section 8.08,
such resignation is to take effect and acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in
Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after
the giving of such notice or resignation, the resigning Trustee may petition
any
court of competent jurisdiction for the appointment of a successor
trustee.
If
at any
time the Trustee shall cease to be eligible in accordance with Section 8.06
and shall fail to resign after written request thereto by the Depositor, or
if
at any time the Trustee shall become incapable of acting, or shall be adjudged
as bankrupt or insolvent, or a receiver of the Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation
or
liquidation, or a tax is imposed with respect to the Trust Fund by any state
in
which the Trustee or the Trust Fund is located and the imposition of such tax
would be avoided by the appointment of a different trustee, then the Depositor
or the Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in triplicate, one copy of which shall be delivered to
the
Trustee, one copy to the Servicer and one copy to the successor
trustee.
The
Holders of Certificates entitled to at least a majority of the Voting Rights
may
at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which shall be delivered
by the successor Trustee to the Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. The successor
trustee shall notify each Rating Agency of any removal of the
Trustee.
Any
resignation or removal of the Trustee and appointment of a successor trustee
pursuant to this Section 8.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in
Section 8.08.
Section
8.08 Successor
Trustee.
Any
successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee and
the
Servicer an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its
predecessor hereunder, with like effect as if originally named as trustee
herein. The Depositor, the Servicer and the predecessor trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties, and obligations.
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No
successor trustee shall accept appointment as provided in this Section 8.08
unless at the time of its acceptance, the successor trustee is eligible under
Section 8.06 and its appointment does not adversely affect then the current
rating of the Certificates.
Upon
acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section
8.09 Merger
or Consolidation of the Trustee.
Any
corporation into which the Trustee may be merged or converted or with which
it
may be consolidated or any corporation resulting from any merger, conversion
or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided,
that
such corporation shall be eligible under Section 8.06 without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section
8.10 Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for
the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and
be
continuing, the Trustee alone shall have the power to make such appointment.
No
co-trustee or separate trustee hereunder shall be required to meet the terms
of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
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Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(a) To
the
extent necessary to effectuate the purposes of this Section 8.10, all
rights, powers, duties and obligations conferred or imposed upon the Trustee,
except for the obligation of the Trustee (as successor Master Servicer) under
this Agreement to advance funds on behalf of the Master Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether
as
Trustee hereunder or as successor to the Master Servicer hereunder), the
Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event
such rights, powers, duties and obligations (including the holding of title
to
the applicable Trust Fund or any portion thereof in any such jurisdiction)
shall
be exercised and performed singly by such separate trustee or co-trustee,
but
solely at the direction of the Trustee;
(b) No
trustee hereunder shall be held personally liable because of any act or omission
of any other trustee hereunder and such appointment shall not, and shall not
be
deemed to, constitute any such separate trustee or co-trustee as agent of the
Trustee;
(c) The
Trustee may at any time accept the resignation of or remove any separate trustee
or co-trustee; and
(d) The
Trust
Fund, and not the Trustee, shall be liable for the payment of reasonable
compensation, reimbursement and indemnification to any such separate trustee
or
co-trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee
or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating
to
the conduct of, affecting the liability of, or affording protection and
indemnity to, the Trustee. Every such instrument shall be filed with the Trustee
and a copy thereof given to the Master Servicer and the Depositor.
Any
separate trustee or co-trustee may, at any time, constitute the Trustee its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section
8.11 Tax
Matters.
It is
intended that the assets with respect to which any REMIC election pertaining
to
the Trust Fund is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, a “real estate mortgage investment conduit”
as defined in and in accordance with the REMIC Provisions. In furtherance of
such intention, the Securities Administrator covenants and agrees that it shall
act as agent (and the Securities Administrator is hereby appointed to act as
agent) on behalf of each REMIC created hereunder and that in such capacity
it
shall:
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(a) prepare
and file in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
(REMIC) Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service), which return the Trustee shall sign upon receipt
from
the Securities Administrator, and the Securities Administrator shall prepare
and
file with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect
to each REMIC hereunder containing such information and at the times and
in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required
thereby;
(b) within
thirty days of the Closing Date, apply for an employer identification
number from the Internal Revenue Service via Form SS-4 or any other
acceptable method for all tax entities and shall also furnish to the Internal
Revenue Service, on Form 8811 or as otherwise may be required by the Code,
the name, title, address, and telephone number of the person that the holders
of
the Certificates may contact for tax information relating thereto, together
with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the
Code;
(c) make
an
election that each REMIC created hereunder be treated as a REMIC on the federal
tax return for its first taxable year (and, if necessary, under applicable
state
law);
(d) prepare
and forward to the Certificateholders and to the Internal Revenue Service and,
if necessary, state tax authorities, all information returns and reports as
and
when required to be provided to them in accordance with the REMIC Provisions,
including the calculation of any original issue discount using the prepayment
assumption (as described in the Prospectus Supplement);
(e) provide
information necessary for the computation of tax imposed on the transfer of
a
Residual Certificate to a Person that is a Non-Permitted Transferee, or an
agent
(including a broker, nominee or other middleman) of a Non-Permitted Transferee,
or a pass-through entity in which a Non-Permitted Transferee is the record
holder of an interest (the reasonable cost of computing and furnishing such
information may be charged to the Person liable for such tax);
(f) to
the
extent that they are under its control, conduct matters relating to such assets
at all times that any Certificates are outstanding so as to maintain the status
of each REMIC created hereunder as a REMIC under the REMIC
Provisions;
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(g) not
knowingly or intentionally take any action or omit to take any action that
would
cause the termination of the REMIC status of any of the REMICs created
hereunder;
(h) pay,
from
the sources specified in the last paragraph of this Section 8.11, the
amount of any federal or state tax, including prohibited transaction taxes
as
described below, imposed on each REMIC created hereunder before its termination
when and as the same shall be due and payable (but such obligation shall
not
prevent the Securities Administrator or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent
the
Securities Administrator from withholding payment of such tax, if permitted
by
law, pending the outcome of such proceedings);
(i) cause
federal, state or local income tax or information returns to be signed by the
Securities Administrator or, if required by applicable tax law, the Trustee
or
such other person as may be required to sign such returns by the Code or state
or local laws, regulations or rules; and
(j) maintain
records relating to each REMIC created hereunder, including the income,
expenses, assets, and liabilities thereof on a calendar year basis and on the
accrual method of accounting and the adjusted basis of the assets determined
at
such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information.
The
Holder of the largest Percentage Interest of the Class R Certificates shall
act as Tax Matters Person for each REMIC created hereunder, within the meaning
of Treasury Regulations Section 1.860F-4(d), and the Securities
Administrator is hereby designated as agent of such Certificateholder for such
purpose (or if the Securities Administrator is not so permitted, such Holder
shall be the Tax Matters Person in accordance with the REMIC Provisions). In
such capacity, the Securities Administrator shall, as and when necessary and
appropriate, represent each REMIC created hereunder in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year
of
each REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of each REMIC created hereunder, and otherwise act on behalf of each
REMIC in relation to any tax matter or controversy involving it.
The
Securities Administrator shall treat the beneficial owners of the Certificates
(other than the Class P, Class X and Class R Certificates) as having entered
into a notional principal contract with the beneficial owners of the Class
X
Certificates. Pursuant to each such notional principal contract, all beneficial
owners of the LIBOR Certificates shall be treated as having agreed to pay,
on
each Distribution Date, to the beneficial owners 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 interest in the Upper Tier REMIC corresponding to
such
Class of Certificates over (ii) the amount payable on such Class of Certificates
on such Distribution Date (such excess, a “Class I Shortfall”). A Class I
Shortfall payable from interest collections shall be allocated to each Class
of
Certificates to the extent that interest accrued on such Class for the related
Interest Accrual Period at the Interest Rate for a Class, computed by
substituting “REMIC 2 Net Funds Cap” for “Group I Available Funds Cap,” “Group
II Available Funds Cap,” or “Class M Available Funds Cap,” as applicable in the
definition thereof, exceeds the amount of interest accrued for the related
Interest Accrual Period based on the applicable Available Funds Cap, and a
Class
I Shortfall payable from principal collections shall be allocated to the most
subordinate Class of Certificates with an outstanding principal balance to
the
extent of such balance. In addition, pursuant to such notional principal
contract, the beneficial owner of the Class X Certificates shall be treated
as
having agreed to pay Basis Risk Carryover Amounts to the Owners of the LIBOR
Certificates in accordance with the terms of this Agreement. Any
payments to the Certificates in light of the foregoing 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 of a Class I
Shortfall shall be treated for tax purposes as having been received by the
beneficial
owners
of such
Certificates in respect of their Interests in the Upper Tier REMIC and as having
been paid by such beneficial
owners
to the
Supplemental Interest Trust pursuant to the notional principal
contract. Thus,
each Certificate (other than a Class P and Class R Certificate) shall be treated
as representing not only ownership of regular interests in the Upper Tier REMIC,
but also ownership of an interest in (and obligations with respect to) a
notional principal contract. For tax purposes, the notional principal contract
shall be deemed to have a value in favor of the Certificates entitled to receive
Basis Risk Carryover Amounts of $10,000 as of the Closing Date.
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Notwithstanding
the priority and sources of payments set forth in Article IV hereof or
otherwise, the Securities Administrator shall account for all distributions
on
the Certificates as set forth in this Section 8.11. In no event shall any
payments of Basis Risk Carryover Amounts provided for in this Section 8.11
be
treated as payments
with respect to a “regular interest” in a REMIC within the meaning of Code
Section 860G(a)(1). The
Securities Administrator shall file or cause to be filed with the IRS together
with Form 1041 or such other form as may be applicable and shall furnish or
cause to be furnished, to the Class P Certificateholders, the Class X
Certificateholders, the LIBOR Certificateholders, the respective amounts
described above that are received, in the time or times and in the manner
required by the Code.
To
enable
the Securities Administrator to perform its duties under this Agreement, the
Depositor shall provide to the Securities Administrator within ten days
after the Closing Date all information or data that the Securities Administrator
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including the price, yield,
prepayment assumption, and projected cash flows of the Certificates and the
Mortgage Loans. Moreover, the Depositor shall provide information to the
Securities Administrator concerning the value to each Class of Certificates
of the right to receive Basis Risk Carryover Amounts from the Excess Reserve
Fund Account. Unless otherwise advised by the Depositor, for federal income
tax
purposes, the Securities Administrator is hereby directed to assign a value
of
zero to the right of each Holder allocating the purchase price of an initial
Offered Certificateholder between such right and the related Upper Tier Regular
Interest. Thereafter, the Depositor shall provide to the Securities
Administrator promptly upon written request therefor any additional information
or data that the Securities Administrator may, from time to time, reasonably
request to enable the Securities Administrator to perform its duties under
this
Agreement; provided,
however,
that
the Depositor shall not be required to provide any information regarding the
Mortgage Loans that the Servicer is required to provide to the Securities
Administrator pursuant to this Agreement. The Depositor hereby indemnifies
the
Securities Administrator for any losses, liabilities, damages, claims, or
expenses of the Securities Administrator arising from any errors or
miscalculations of the Securities Administrator that result from any failure
of
the Depositor to provide, pursuant to this paragraph, accurate information
or
data to the Securities Administrator on a timely basis.
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None
of
the Master Servicer, the Securities Administrator or the Trustee shall (i)
permit the creation of any interests in any REMIC other than the regular
and
residual interests set forth in the Preliminary Statement, (ii) receive any
amount representing a fee or other compensation for services (except as
otherwise permitted by this Agreement or the related Mortgage Loan documents)
or
(iii) otherwise knowingly or intentionally take any action, cause the Trust
Fund
to take any action or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as
the
case may be, could (i) endanger the status of any REMIC as a REMIC or (ii)
result in the imposition of a tax upon any REMIC or the Trust Fund (including
but not limited to the tax on “prohibited transactions” as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in
Section 860G(d) of the Code, or the tax on “net income from foreclosure
property”) unless the Securities Administrator receives an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party
fails
to pay such expense, and the Securities Administrator determines that taking
such action is in the best interest of the Trust Fund and the
Certificateholders, at the expense of the Trust Fund, but in no event at
the
expense of the Securities Administrator) to the effect that the contemplated
action will not, with respect to the Trust Fund or any REMIC created hereunder,
endanger such status or result in the imposition of such a
tax).
If
any
tax is imposed on “prohibited transactions” of a REMIC created hereunder as
defined in Section 860F(a)(2) of the Code, on the “net income from
foreclosure property” of any Lower Tier REMIC as defined in Section 860G(c)
of the Code, on any contribution to either of the Lower Tier REMIC or Upper
Tier
REMIC after the Startup Day pursuant to Section 860G(d) of the Code, or any
other tax is imposed, including any minimum tax imposed on either REMIC pursuant
to Sections 23153 and 24874 of the California Revenue and Taxation Code, if
not paid as otherwise provided for herein, the tax shall be paid by (i) the
Master Servicer, the Trustee, or the Securities Administrator, as applicable,
if
such tax arises out of or results from negligence of the Master Servicer, the
Trustee or the Securities Administrator, as applicable, in the performance
of
any of its obligations under this Agreement, (ii) the Mortgage Loan Seller
if
such tax arises out of or results from the Mortgage Loan Seller’s obligation to
repurchase a Mortgage Loan pursuant to Section 2.03, (iii) the Sponsor, if
such
tax arises out of or results from the Sponsor’s obligation to repurchase a
Mortgage Loan pursuant to Section 2.03(k), (iv) the Servicer, in the case of
any
such minimum tax, and otherwise if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement, or
(v) in all other cases, or if the Master Servicer, the Trustee, the
Securities Administrator or the Servicer fails to honor its obligations under
the preceding clause (i) or (ii), any such tax will be paid with
amounts otherwise to be distributed to the Certificateholders, as provided
in
Section 4.02(a).
Section
8.12 Commission
Reporting.
(a) The
Securities Administrator shall, in accordance with industry standards, prepare
and file with the Commission, via ▇▇▇▇▇, the following reports in respect of
the
Trust as and to the extent required under the Exchange Act:
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(i) (A)
Within 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 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. Any disclosure in addition to the Monthly Statement that is required
to
be included on Form 10-D (“Additional Form 10-D Disclosure”) 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 Additional Form 10-D
Disclosure, except as set forth in the next paragraph.
(B)
As
set forth on Exhibit V hereto, within 5 calendar days after the related
Distribution Date, (i) certain parties (as specified in Exhibit V hereto),
shall
be required to provide to the Securities Administrator and the Depositor, to
the
extent known, in ▇▇▇▇▇-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, if applicable, and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case
may
be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Depositor shall 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.
(C)
Upon
request, after preparing any Form 10-D which contains any Additional Form 10-D
Disclosure, the Securities Administrator shall forward electronically a draft
copy of the Form 10-D to the Depositor and the Master Servicer for review.
No
later than 2 Business Days prior to the 15th
calendar
day after the related Distribution Date, a duly authorized officer of the
Depositor shall sign the Form 10-D and return an electronic or fax copy of
such
signed Form 10-D (with an original executed hard copy to follow by overnight
mail) to the Securities Administrator. 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 paragraph (d) of this
Section 8.12. Promptly (but no later than 1 Business Day) after filing with
the
Commission, the Securities Administrator will make available on its internet
website (located ay ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a final executed copy of each Form 10-D.
The signing party at the Depositor can be contacted at the address set forth
in
Section 12.05 for notices to the Depositor. Each party to this Agreement
acknowledges that the performance by the Securities Administrator of its duties
under this Section 8.12(a)(i) related to the timely preparation and filing
of
Form 10-D is contingent, in part, upon such parties strictly observing all
applicable deadlines in the performance of their duties under this Section
8.12(a)(i). The Securities Administrator shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file such Form 10-D, where such failure results from
the
Securities Administrator’s inability or failure to 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.
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(ii) (A)
On or
before 90 days after the end of each fiscal year of the Trust or such earlier
date as may be required by the Exchange Act (the “10-K
Filing Deadline”)
(it
being understood that the fiscal year for the Trust Fund ends on December
31st
of each
year), commencing in March 2007, the Securities Administrator shall prepare
and
file on behalf of the Trust a Form 10-K, in form and substance as required
by
the Exchange Act. Each such Form 10-K shall include the following items,
in each
case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (i) an annual
compliance statement for the Servicer, each Additional Servicer (if any),
the
Master Servicer and the Securities Administrator (each, a “Reporting
Servicer”)
as
described under Section 3.24(b), (ii)(A) the annual reports on assessment
of
compliance with Servicing Criteria for each Reporting Servicer, as described
under Section 3.22, and (B) if each Reporting Servicer’s report on assessment of
compliance with Servicing Criteria described under Section 3.22 identifies
any
material instance of noncompliance, disclosure identifying such instance
of
noncompliance, or if each Reporting Servicer’s report on assessment of
compliance with Servicing Criteria described under Section 3.22 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 Reporting Servicer, as described
under Section 3.23, and (B) if any registered public accounting firm attestation
report described under Section 3.23 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or
if any
such registered public accounting firm attestation report is not included
as an
exhibit to such Form 10-K, disclosure that such report is not included and
an
explanation why such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification as described in Section 3.24. Any disclosure or information
in
addition to (i) through (iv) above that is required to be included on Form
10-K
(“Additional
Form 10-K Disclosure”)
shall
be 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 Additional
Form
10-K Disclosure, except as set forth in the next paragraph.
(B)
As
set forth on Exhibit W hereto, no later than March 1st
(with a
5 calendar day cure period) of each year that the Trust Fund is subject to
the
Exchange Act reporting requirements, commencing in 2007, (i) certain parties
hereto (as specified in Exhibit W) shall be required to provide to the
Securities Administrator and the Depositor, to the extent known, in
▇▇▇▇▇-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, if applicable, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. 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 Section 8.12 (a) (ii)
(B).
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(C)
Upon
request, after preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Master Servicer
for
review. No later than the close of business New York City time on the
4th
Business
Day prior to the 10-K Filing Deadline, an authorized officer of the Depositor
shall sign the Form 10-K and return an electronic or fax copy of such signed
Form 10-K (with an original executed hard copy to follow by overnight mail)
to
the Securities Administrator. If a Form 10-K cannot be filed on time or if
a
previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in paragraph (d) of this Section 8.12.
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 10-K. The signing party at the Depositor can be
contacted at the address set forth in Section 12.05 for notices to the
Depositor. The parties to this Agreement acknowledge that the performance
by the
Securities Administrator of its duties under this Section 8.12(a)(ii) related
to
the timely preparation and filing of Form 10-K is contingent, in part, upon
such
parties (and any Additional Servicer or Servicing Function Participant) strictly
observing all applicable deadlines in the performance of their duties under
this
Section 8.12(a)(ii) and Sections 3.22, 3.23 and 3.24. The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare and/or
timely
file such Form 10-K, where such failure results from the Securities
Administrator’s inability or failure to 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.
(iii) (A)
Within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable
Event”),
if
directed by the Depositor and to the extent it receives the Form 8-K Disclosure
Information described below, 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 (“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 this Section
8.12
(a) (iii).
(B)
As
set forth on Exhibit X hereto, for so long as the Trust is subject to the
Exchange Act reporting requirements, no later than Noon New York City time
on
the 2nd Business Day after the occurrence of a Reportable Event (i) certain
parties hereto as set forth in Exhibit X shall be required to provide to the
Securities Administrator, to the extent known, in ▇▇▇▇▇-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,
if
applicable, and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor 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.
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(C)
Upon
request, after preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Master Servicer
for
review. No later than Noon New York City time on the 4th
Business
Day after the Reportable Event, a duly authorized officer of the Depositor
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 paragraph
(d) of this Section 8.12. Promptly (but no later than 1 Business Day) after
filing with the Commission, the Securities Administrator will make available
on
its internet website (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a final executed copy of
each
Form 8-K. The signing party at the Depositor can be contacted at the address
specified in Section 12.05 for notices to the Master Servicer. The parties
to
this Agreement acknowledge that the performance by the Securities Administrator
of its duties under this Section 8.12(d)(iii) related to the timely preparation
and filing of Form 8-K is contingent, in part, upon such parties strictly
observing all applicable deadlines in the performance of their duties under
this
Section 8.12(d)(iii). The Securities Administrator shall have no liability
for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 8-K, where such failure results
from the Securities Administrator’s inability or failure to 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.
(b) The
Depositor acknowledges and agrees that the Securities Administrator may include
in any Exchange Act report all relevant information, data, and exhibits as
the
Securities Administrator may receive in connection with such report irrespective
of any provision or Regulation AB that may permit the exclusion of such
material. By the way of example, the Securities Administrator may file all
assessments of compliance, attestation reports and compliance statements timely
received from any Item 1122 Servicing Function Participant irrespective of
any
applicable minimum pool asset percentage requirement for disclosure related
to
such Servicing Function Participant.
(c) The
Depositor agrees to furnish promptly to the Securities Administrator, from
time
to time upon request, such additional information, data, reports, documents,
and
financial statements within the Depositor’s possession or control as the
Securities Administrator reasonably requests as necessary or appropriate to
prepare and file the foregoing reports. The Securities Administrator shall
make
available to the Depositor copies of all Exchange Act reports filed
hereunder.
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(d)
(i) On
or
before January 30th
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
relating to the automatic suspension of reporting in respect of the Trust
under
the Exchange Act.
(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. In the case of Form 10-D and 10-K, the parties
to
this Agreement will cooperate to prepare and file a Form 12b-25 and a 10-DA
and
10-KA 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 (to the extent such amendment is a reportable
event) or 10-K needs to be amended, the Securities Administrator will notify
the
Depositor and such other parties to this Agreement that are affected by this
amendment and such parties will cooperate to prepare any necessary 8-KA, 10-DA
or 10-KA. Any Form 15, From 12b-25 or any amendment to Form 8-K, 10-D or 10-K
shall be signed by a duly authorized officer of the Depositor in charge of
the
master servicing function. The parties to this Agreement acknowledge that the
performance by the Securities Administrator of its duties under this Section
8.12(d) related to the timely preparation and filing of Form 15, a Form 12b-25
or any amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Section. The Securities Administrator shall
have no liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file any such Form
15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure
results from the Securities Administrator’s inability or failure to obtain or
receive, on a timely basis, any information 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. The Depositor shall be responsible for all
costs and expenses of the Securities Administrator related to the preparation
and filing of any such amendment. Notwithstanding the foregoing, if any Form
10-D needs to be amended solely to change the information contained in the
Monthly Statement, the Securities Administrator shall not be required to notify
the Depositor of such amendment.
(e) Other
than the Exchange Act reports specified above, the Securities Administrator
shall have no responsibility to file any items or reports with the Commission
under the Exchange Act or otherwise; provided,
however,
the
Securities Administrator and Master Servicer will cooperate with the Depositor
in connection with any additional filings with respect to the Trust as the
Depositor deems necessary under the Exchange Act.
(f) The
Depositor shall pay all costs and expenses of the Securities Administrator
related to the preparation and filing of any Current Report on Form 8-K, any
Distribution Report on Form 10-D (other than the costs and expense of the
Securities Administrator associated with the preparation and filing of the
Monthly Statement), or any amendment to any Exchange Act report. Except as
otherwise provided herein, all expenses incurred by the Securities Administrator
in connection with its preparation and filing of Exchange Act reports hereunder
shall not be reimbursable from the Trust.
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(g) Any
notice required under Section 8.12 may be given by facsimile or by electronic
mail.
Section
8.13 Tax
Classification of the Excess Reserve Fund Account and the Supplemental Interest
Trust.
For
federal income tax purposes, the Securities Administrator shall treat the
Excess
Reserve Fund Account and the Supplemental Interest Trust as beneficially
owned
by the holders of the Class X Certificates and shall treat such portion of
the Trust Fund as a grantor trust, within the meaning of subpart E,
Part I of subchapter J of the Code. The Securities Administrator shall
treat the rights that each Class of LIBOR Certificates has to receive
payments of Basis Risk Carryover Amounts from the Excess Reserve Fund Account
as
rights to receive payments under a notional principal contract written by
the
Class X Certificateholders in favor of each such Class and
beneficially owned by each such Class through the grantor trust.
Accordingly, each Class of Certificates (excluding the Class X,
Class P and Class R Certificates) will be comprised of two components
- an Upper Tier REMIC Regular Interest and an interest in a notional principal
contract, and the Class X Certificates will be comprised of two components
- an Upper Tier REMIC Regular Interest and an interest in the Excess Reserve
Fund Account, subject to obligation to pay Basis Risk Carryover Amounts.
The
Securities Administrator shall allocate the issue price for a Class of
Certificates among the respective components for purposes of determining
the
issue price of the Upper Tier REMIC Regular Interest component based on
information received from the Depositor.
ARTICLE
IX
ADMINISTRATION
OF THE MORTGAGE LOANS
BY
THE MASTER SERVICER
Section
9.01 Duties
of the Master Servicer; Enforcement of Servicer Obligations. (a)
The Master Servicer, on behalf of the Trustee, the Securities Administrator,
the
Depositor and the Certificateholders, shall monitor the performance of the
obligations of the Servicer under this Agreement, and (except as set forth
below) shall use its reasonable good faith efforts to cause the Servicer to
duly
and punctually perform its duties and obligations hereunder. Upon the occurrence
of an Event of Default of which a Responsible Officer of the Master Servicer
has
actual knowledge, the Master Servicer shall promptly notify the Securities
Administrator and the Trustee and shall specify in such notice the action,
if
any, the Master Servicer plans to take in respect of such default. So long
as an
Event of Default shall occur and be continuing, the Master Servicer shall take
the actions specified in Article VII.
If
(i) the Servicer reports a delinquency on a monthly report and
(ii) the Servicer, by 11 a.m. (New York Time) on the related
Remittance Date, neither makes an Advance nor provides the Securities
Administrator and the Master Servicer with an Officer’s Certificate certifying
that such an Advance would be a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance, then the Master Servicer shall deposit in the Distribution
Account not later than the Business Day immediately preceding the related
Distribution Date an Advance in an amount equal to the difference between
(x) with respect to each Monthly Payment due on a Mortgage Loan that is
delinquent (other than Relief Act Interest Shortfalls) and for which the
Servicer was required to make an Advance pursuant to this Agreement and
(y) amounts deposited in the Collection Account to be used for Advances
with respect to such Mortgage Loan, except to the extent the Master Servicer
determines any such Advance to be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance. Subject to the foregoing and
Section 7.02, the Master Servicer shall continue to make such Advances for
so long as the Servicer is required to do so under this Agreement. If
applicable, on the Business Day immediately preceding the Distribution Date,
the
Master Servicer shall deliver an Officer’s Certificate to the Trustee stating
that the Master Servicer elects not to make an Advance in a stated amount and
detailing the reason(s) it deems the Advance to be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance. Any amounts deposited by the Master
Servicer pursuant to this Section 9.01 shall be net of the Servicing Fee
for the related Mortgage Loans.
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(b) The
Master Servicer shall pay the costs of monitoring the Servicer as required
hereunder (including costs associated with (i) termination of the Servicer,
(ii) the appointment of a successor servicer or (iii) the transfer to
and assumption of, the servicing by the Master Servicer) and shall, to the
extent permitted hereunder, seek reimbursement therefor initially from the
terminated Servicer. In the event the full costs associated with the transition
of servicing responsibilities to the Master Servicer are not paid for by the
predecessor or successor servicer (provided such successor servicer is not
the
Master Servicer), the Master Servicer may be reimbursed therefor by the Trust
for all costs incurred by the Master Servicer associated with any such transfer
of servicing duties from the Servicer to the Master Servicer or any other
successor servicer.
(c) If
the
Master Servicer assumes the servicing with respect to any of the Mortgage Loans,
it will not assume liability for the representations and warranties of the
Servicer it replaces or for any errors or omissions of the
Servicer.
(d) Neither
the Depositor nor the Securities Administrator shall consent to the assignment
by the Servicer of the Servicer’s rights and obligations under this Agreement
without the prior written consent of the Master Servicer, which consent shall
not be unreasonably withheld.
Section
9.02 Assessment,
Attestation Annual Statement as to Compliance of the Master
Servicer.
The
Master Servicer will deliver or cause to be delivered to the Depositor and
the
Securities Administrator, on or before March 15th
of each
calendar year, commencing in 2007, the assessment of compliance, attestation
report and annual statement of compliance required of a Servicing Function
Participant under Item 1122 of Regulation AB.
Section
9.03 [Reserved].
Section
9.04 Maintenance
of Fidelity Bond and Errors and Omissions Insurance. The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with
respect to all directors, officers, directors, employees and other Persons
acting on such Master Servicer’s behalf, and covering errors and omissions in
the performance of the Master Servicer’s obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
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Section
9.05 Representations
and Warranties of the Master Servicer.
(a) The
Master Servicer hereby represents and warrants to the Depositor, the Securities
Administrator and the Trustee, for the benefit of the Certificateholders,
as of
the Closing Date that:
(i) it
is a
national banking association validly existing and in good standing under
the
laws of the United States of America, and as Master Servicer has full power
and
authority to transact any and all business contemplated by this Agreement
and to
execute, deliver and comply with its obligations under the terms of this
Agreement, the execution, delivery and performance of which have been duly
authorized by all necessary corporate action on the part of the Master
Servicer;
(ii) the
execution and delivery of this Agreement by the Master Servicer and its
performance and compliance with the terms of this Agreement will not
(A) violate the Master Servicer’s charter or bylaws, (B) violate any
law or regulation or any administrative decree or order to which it is subject
or (C) constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach of,
any material contract, agreement or other instrument to which the Master
Servicer is a party or by which it is bound or to which any of its assets are
subject, which violation, default or breach would materially and adversely
affect the Master Servicer’s ability to perform its obligations under this
Agreement;
(iii) this
Agreement constitutes, assuming due authorization, execution and delivery hereof
by the other respective parties hereto, a legal, valid and binding obligation
of
the Master Servicer, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors’ rights in general, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(iv) the
Master Servicer is not in default with respect to any order or decree of any
court or any order or regulation of any federal, state, municipal or
governmental agency to the extent that any such default would materially and
adversely affect its performance hereunder;
(v) the
Master Servicer is not a party to or bound by any agreement or instrument or
subject to any charter provision, bylaw or any other corporate restriction
or
any judgment, order, writ, injunction, decree, law or regulation that may
materially and adversely affect its ability as Master Servicer to perform its
obligations under this Agreement or that requires the consent of any third
person to the execution of this Agreement or the performance by the Master
Servicer of its obligations under this Agreement;
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(vi) no
litigation is pending or, to the best of the Master Servicer’s knowledge,
threatened against the Master Servicer which would prohibit its entering
into
this Agreement or performing its obligations under this Agreement;
(vii) no
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of or compliance by the Master Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement, except for
such
consents, approvals, authorizations and orders (if any) as have been obtained;
and
(viii) the
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Master Servicer.
(b) It
is
understood and agreed that the representations and warranties set forth in
this
Section shall survive the execution and delivery of this Agreement. The Master
Servicer shall indemnify the Depositor, the Servicer, Securities Administrator,
the Trustee and the Trust and hold them harmless against any loss, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and other reasonable costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from,
a
material breach of the Master Servicer’s representations and warranties
contained in Section 9.05(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer set forth in this
Section 9.05 to indemnify the Depositor, the Servicer, Securities
Administrator, the Trustee and the Trust constitutes the sole remedy of the
Depositor and the Trustee, respecting a breach of the foregoing representations
and warranties. Such indemnification shall survive any termination of the Master
Servicer as Master Servicer hereunder, any termination of this Agreement and
resignation or removal of the Trustee.
Any
cause
of action against the Master Servicer relating to or arising out of the breach
of any representations and warranties made in this Section shall accrue upon
discovery of such breach by either the Depositor, the Master Servicer,
Securities Administrator or the Trustee or notice thereof by any one of such
parties to the other parties.
Section
9.06 Master
Servicer Events of Default.
Each of
the following shall constitute a “Master
Servicer Event of Default”:
(a) any
failure by the Master Servicer to deposit in the Distribution Account any
payment received by it from the Servicer to make any P&I Advance or required
to be made by the Master Servicer under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by any other party
hereto;
(b) failure
by the Master Servicer to duly observe or perform, in any material respect,
any
other covenants, obligations or agreements of the Master Servicer as set forth
in this Agreement which failure continues unremedied for a period of thirty
(30) days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and Trustee by the holders of Certificates
evidencing at least 25.00% of the Voting Rights;
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(c) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall
have been entered against the Master Servicer and such decree or order shall
have remained in force, undischarged or unstayed for a period of sixty
(60) days;
(d) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or relating to all or substantially all of its
property;
(e) the
Master Servicer shall admit in writing its inability to pay its debts as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations for three (3) Business
Days;
(f) Except
as
otherwise set forth herein, the Master Servicer attempts to assign this
Agreement or its responsibilities hereunder or to delegate its duties hereunder
(or any portion thereof) without the consent of the Securities Administrator
and
the Depositor;
(g) the
indictment of the Master Servicer for the taking of any action by the Master
Servicer, any Affiliate or any director or employee thereof that constitutes
fraud or criminal activity in the performance of its obligations under this
Agreement, in each case, where such indictment materially and adversely affects
the ability of the Master Servicer to perform its obligations under this
Agreement (subject to the condition that such indictment is not dismissed within
ninety (90) days); or
(h) failure
of the Master Servicer to timely provide the Depositor with the Assessment,
Attestation and Annual Statement of Compliance required by Item 1122 of
Regulation AB in accordance with Section 9. 02.
In
each
and every such case, so long as a Master Servicer Event of Default shall not
have been remedied, in addition to whatever rights the Trustee may have at
law
or equity to damages, including injunctive relief and specific performance,
the
Trustee, by notice in writing to the Master Servicer, may, and upon the request
of the Holders of Certificates representing at least 51.00% of the Voting Rights
shall, terminate with cause all the rights and obligations of the Master
Servicer under this Agreement.
Upon
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, shall pass to and be vested in
any
successor master servicer appointed hereunder which accepts such appointments.
Upon written request from the Trustee or the Depositor, the Master Servicer
shall prepare, execute and deliver to the successor entity designated by the
Trustee any and all documents and other instruments related to the performance
of its duties hereunder as the Master Servicer and, place in such successor’s
possession all such documents with respect to the master servicing of the
Mortgage Loans and do or cause to be done all other acts or things necessary
or
appropriate to effect the purposes of such notice of termination, at the Master
Servicer’s sole expense. The Master Servicer shall cooperate with the Trustee
and such successor master servicer in effecting the termination of the Master
Servicer’s responsibilities and rights hereunder, including without limitation,
the transfer to such successor master servicer for administration by it of
all
cash amounts which shall at the time be credited to the Distribution Account
or
are thereafter received with respect to the Mortgage Loans.
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Section
9.07 Waiver
of Default. By
a
written notice, the Trustee may at the direction of Holders of Certificates
evidencing at least 51.00% of the Voting Rights waive any default by the
Master
Servicer in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and
any
Master Servicer Event of Default arising therefrom shall be deemed to have
been
remedied for every purpose of this Agreement. No such waiver shall extend
to any
subsequent or other default or impair any right consequent thereon except
to the
extent expressly so waived.
Section
9.08 Successor
to the Master Servicer. Upon
termination of the Master Servicer’s responsibilities and duties under this
Agreement, the Trustee shall appoint a successor, which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Master Servicer under this Agreement prior to the termination of the Master
Servicer. Any successor shall be a ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac approved servicer
in good standing and acceptable to the Depositor and the Rating Agencies. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided,
however,
that in
no event shall the master servicing fee paid to such successor master servicer
exceed that paid to the Master Servicer hereunder. In the event that the Master
Servicer’s duties, responsibilities and liabilities under this Agreement are
terminated, the Master Servicer shall continue to discharge its duties and
responsibilities hereunder until the effective date of such termination with
the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement and shall take no action whatsoever that might impair or
prejudice the rights of its successor. The termination of the Master Servicer
shall not become effective until a successor shall be appointed pursuant hereto
and shall in no event (i) relieve the Master Servicer of responsibility for
the representations and warranties made pursuant to Section 9.05(a) hereof
and the remedies available to the Trustee under Section 9.05(b) hereof, it
being understood and agreed that the provisions of Section 9.05 hereof
shall be applicable to the Master Servicer notwithstanding any such sale,
assignment, resignation or termination of the Master Servicer or the termination
of this Agreement; or (ii) affect the right of the Master Servicer to
receive payment and/or reimbursement of any amounts accruing to it hereunder
prior to the date of termination (or during any transition period in which
the
Master Servicer continues to perform its duties hereunder prior to the date
the
successor master servicer fully assumes its duties).
If
no
successor Master Servicer has accepted its appointment within 90 days of
the time the Trustee receives the resignation of the Master Servicer, the
Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances; provided,
however,
that
any failure to perform any duties or responsibilities caused by the Master
Servicer’s failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee’s capacity as
such successor, the Trustee shall have the same limitations on liability herein
granted to the Master Servicer. Notwithstanding anything herein to the contrary,
the Trustee in its role as successor Master Servicer shall have no obligation
to
monitor or supervise the Servicer, shall only have the obligation to make
Advances if it terminates the Servicer pursuant to Section 7.01 (in its role
as
successor Master Servicer), and shall make such Advances only pursuant to
Section 7.02. As compensation therefor, the Trustee shall be entitled to receive
the compensation, reimbursement and indemnities otherwise payable to the Master
Servicer, including the fees and other amounts payable pursuant to
Section 9.09 hereof.
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Any
successor master servicer appointed as provided herein, shall execute,
acknowledge and deliver to the Master Servicer and to the Trustee an instrument
accepting such appointment, wherein the successor shall make the representations
and warranties set forth in Section 9.05 hereof, and whereupon such
successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with
like
effect as if originally named as a party to this Agreement. Any termination
or
resignation of the Master Servicer or termination of this Agreement shall
not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer’s actions or failure to act prior to any such
termination or resignation or in connection with the Trustee’s assumption of
such obligations, duties and responsibilities.
Upon
a
successor’s acceptance of appointment as such, the Master Servicer shall notify
by mail the Trustee of such appointment.
Section
9.09 Compensation
of the Master Servicer. As
compensation for its activities under this Agreement, the Master Servicer shall
be paid the Master Servicing Fee.
Section
9.10 Merger
or Consolidation. Any
Person into which the Master Servicer may be merged or consolidated, or any
Person resulting from any merger, conversion, other change in form or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor to
the
Master Servicer hereunder, without the execution or filing of any paper or
any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided,
however,
that
the successor or resulting Person to the Master Servicer shall (i) be a
Person (or have an Affiliate) that is qualified and approved to service mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac (provided further
that a
successor Master Servicer that satisfies subclause (i) through an
Affiliate agrees to service the Mortgage Loans in accordance with all applicable
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac guidelines) and (ii) have a net worth of not
less than $25,000,000.
Section
9.11 Resignation
of the Master Servicer. Except
as
otherwise provided in Sections 9.08 and 9.10 hereof, the Master Servicer
shall not resign from the obligations and duties hereby imposed on it unless
the
Master Servicer’s duties hereunder are no longer permissible under applicable
law or are in material conflict by reason of applicable law with any other
activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be independent to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee shall
have
assumed, or a successor master servicer satisfactory to the Trustee and the
Depositor shall have assumed, the Master Servicer’s responsibilities and
obligations under this Agreement. Notice of such resignation shall be given
promptly by the Master Servicer and the Depositor to the Trustee.
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If
at any
time, ▇▇▇▇▇ Fargo, as Master Servicer, resigns under this Section 9.11, or
is removed as Master Servicer pursuant to Section 9.06, then at such time
▇▇▇▇▇ Fargo shall also resign (and shall be entitled to resign) as Securities
Administrator under this Agreement.
Section
9.12 Assignment
or Delegation of Duties by the Master Servicer. Except
as
expressly provided herein, the Master Servicer shall not assign or transfer
any
of its rights, benefits or privileges hereunder to any other Person, or delegate
to or subcontract with, or authorize or appoint any other Person to perform
any
of the duties, covenants or obligations to be performed by the Master Servicer;
provided,
however,
that
the Master Servicer shall have the right with the prior written consent of
the
Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency
to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out
any
duties, covenants or obligations to be performed and carried out by the Master
Servicer hereunder. Notice of such permitted assignment shall be given promptly
by the Master Servicer to the Depositor and the Trustee. If, pursuant to
any
provision hereof, the duties of the Master Servicer are transferred to a
successor master servicer, the entire compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer but in no event shall the fee payable to the successor master servicer
exceed that payable to the predecessor master servicer.
Section
9.13 Limitation
on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents
of
the Master Servicer shall be under any liability to the Trustee or the
Certificateholders for any action taken or for refraining from the taking of
any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided,
however,
that
this provision shall not protect the Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful malfeasance,
bad faith or negligence in the performance of its duties or by reason of
reckless disregard for its obligations and duties under this Agreement. The
Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The Master
Servicer shall be under no obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties as Master Servicer with
respect to the Mortgage Loans under this Agreement and that in its opinion
may
involve it in any expenses or liability; provided,
however,
that
the Master Servicer may in its sole discretion undertake any such action that
it
may deem necessary or desirable in respect to this Agreement and the rights
and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom, shall be liabilities of the Trust, and the Master
Servicer shall be entitled to be reimbursed therefor out of the Distribution
Account in accordance with the provisions of Section 9.09 and
Section 9.14.
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The
Master Servicer shall not be liable under this Agreement for any acts or
omissions of the Servicer except to the extent that damages or expenses are
incurred as a result of such act or omissions and such damages and expenses
would not have been incurred but for the negligence, willful malfeasance,
bad
faith or recklessness of the Master Servicer in supervising, monitoring and
overseeing the performance of the obligations of the Servicer as required
under
this Agreement.
Section
9.14 Indemnification;
Third Party Claims. The
Master Servicer agrees to indemnify the Depositor, the Servicer, Securities
Administrator, the Trustee, and the Trust and hold them harmless against
any and
all claims, losses, penalties, fines, forfeitures, legal fees and related
costs,
judgments, and any other costs, liability, fees and expenses that the Depositor,
the Securities Administrator, the Trustee or the Trust may sustain as a result
of the Master Servicer’s (a) willful malfeasance, bad faith or negligence in the
performance of its duties hereunder, (b) reckless disregard for its obligations
and duties under this Agreement or (c) failure to provide the assessment,
attestation and annual statement of compliance in accordance with Section
9.02.
The Depositor, the Servicer, the Securities Administrator and the Trustee
shall
immediately notify the Master Servicer if a claim is made by a third party
with
respect to this Agreement or the Mortgage Loans which would entitle the
Depositor, the Servicer, the Securities Administrator, the Trustee or the
Trust
to indemnification under this Section 9.14, whereupon the Master Servicer
shall assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy
any
judgment or decree which may be entered against it or them in respect of
such
claim.
The
Master Servicer agrees to indemnify and hold harmless the Trustee from and
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liability, fees and expenses
(including reasonable attorneys’ fees) that the Trustee may sustain as a result
of such liability or obligations of the Master Servicer and in connection with
the Trustee’s assumption (not including the Trustee’s performance, except to the
extent that costs or liability of the Trustee are created or increased as a
result of negligent or wrongful acts or omissions of the Master Servicer prior
to its replacement as Master Servicer) of the Master Servicer’s obligations,
duties or responsibilities under such agreement.
The
Trust
will indemnify the Master Servicer and hold it harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liabilities, fees and expenses that the Master
Servicer may incur or sustain in connection with, arising out of or related
to
this Agreement or the Certificates, except to the extent that any such loss,
liability or expense is related to (i) a material breach of the Master
Servicer’s representations and warranties in this Agreement, (ii) the
Master Servicer’s willful malfeasance, bad faith or negligence or by reason of
its reckless disregard of its duties and obligations under this Agreement or
(iii) failure to provide the assessment, attestation and annual statement of
compliance in accordance with Section 9.02; provided that any such loss,
liability or expense constitutes an “unanticipated expense incurred by the
REMIC” within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
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ARTICLE
X
CONCERNING
THE SECURITIES ADMINISTRATOR
Section
10.01 Duties
of Securities Administrator. The
Securities Administrator shall undertake to perform such duties and only
such
duties as are specifically set forth in this Agreement.
The
Securities Administrator, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Securities Administrator that are specifically required to be furnished
pursuant to any provision of this Agreement shall examine them to determine
whether they are in the form required by this Agreement; provided,
however,
that
the Securities Administrator shall not be responsible for the accuracy or
content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument. If any such instrument is found not
to
conform in any material respect to the requirements of this Agreement, the
Securities Administrator shall notify the Certificateholders of such non
conforming instrument in the event the Securities Administrator, after so
requesting, does not receive a satisfactorily corrected
instrument.
No
provision of this Agreement shall be construed to relieve the Securities
Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided,
however,
that:
(i) the
duties and obligations of the Securities Administrator shall be determined
solely by the express provisions of this Agreement, the Securities Administrator
shall not be liable except for the performance of such duties and obligations
as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Securities
Administrator and the Securities Administrator may conclusively rely, as to
the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Securities Administrator
and
conforming to the requirements of this Agreement which it believed in good
faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the
Securities Administrator shall not be liable for an error of judgment made
in
good faith by a Responsible Officer or Responsible Officers of the Securities
Administrator, unless it shall be conclusively determined by a court of
competent jurisdiction, such determination no longer subject to appeal, that
the
Securities Administrator was negligent in ascertaining the pertinent
facts;
(iii) the
Securities Administrator shall not be liable with respect to any action or
inaction taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not less
than 25.00% of the Voting Rights of Certificates relating to the time, method
and place of conducting any proceeding for any remedy available to the
Securities Administrator, or exercising or omitting to exercise any trust or
power conferred upon the Securities Administrator under this Agreement;
and
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(iv) the
Securities Administrator shall not be accountable, shall have no liability
and
makes no representation as to any acts or omissions hereunder of the Master
Servicer or the Trustee.
Section
10.02 Certain
Matters Affecting the Securities Administrator.Except
as
otherwise provided in Section 10.01:
(i) the
Securities Administrator may request and conclusively rely upon and shall
be
fully protected in acting or refraining from acting upon any resolution,
Officer’s Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to
have been signed or presented by the proper party or parties and the Securities
Administrator shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the
Securities Administrator may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(iii) the
Securities Administrator shall not be liable for any action or inaction taken,
suffered or omitted by it in good faith and believed by it to be authorized
or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) the
Securities Administrator shall not be bound to make any investigation into
the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by Holders of Certificates
evidencing not less than 25.00% of the Voting Rights allocated to each
Class of Certificates; provided,
however,
that if
the payment within a reasonable time to the Securities Administrator of the
costs, expenses or liabilities likely to be incurred by it in the making of
such
investigation is, in the opinion of the Securities Administrator, not reasonably
assured to the Securities Administrator by the security afforded to it by the
terms of this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so proceeding.
Nothing in this clause (iv) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors, provided that the Master Servicer shall
have no liability for disclosure required by this Agreement;
(v) the
Securities Administrator may execute any of the trusts or powers hereunder
or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and the Securities Administrator shall not be
responsible for any misconduct or negligence on the part of any such agent,
attorney or custodian appointed by the Securities Administrator with due
care;
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(vi) the
Securities Administrator shall not be required to risk or expend its own
funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it
shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it, and none of
the
provisions contained in this Agreement shall in any event require the Securities
Administrator to perform, or be responsible for the manner of performance
of,
any of the obligations of the Master Servicer or the Trustee under this
Agreement;
(vii) the
Securities Administrator shall be under no obligation to exercise any of
the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct
or defend any litigation hereunder or in relation hereto at the request,
order
or direction of any of the Certificateholders, pursuant to the provisions
of
this Agreement, unless such Certificateholders shall have offered to the
Securities Administrator reasonable security or indemnity satisfactory to
the
Securities Administrator against the costs, expenses and liabilities which
may
be incurred therein or thereby; and
(viii) the
Securities Administrator shall have no obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties hereunder and
which
in its opinion may involve it in any expense or liability; provided,
however,
that in
the event of a breach or default by the Derivative
Counterparty
under
the Cap Agreement or the Swap Agreement, the Securities Administrator shall
pursue all legal remedies available against the Derivative
Counterparty
under
the Cap Agreement or the Swap Agreement, as applicable, in consultation with
the
Depositor; provided,
further,
that
the Securities Administrator may in its discretion undertake any such action
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and the interests of the Trustee, the
Securities Administrator and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Securities Administrator shall be entitled to be reimbursed therefor out of
the
Collection Account.
The
Securities Administrator shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein
or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any lien
or
encumbrance of any kind owing with respect to, assessed or levied against,
any
part of the Trust Fund other than from funds available in the Distribution
Account.
Section
10.03 Securities
Administrator Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor or the transferor, as the case may be, and the
Securities Administrator assumes no responsibility for their correctness. The
Securities Administrator makes no representations as to the validity or
sufficiency of this Agreement, the Cap Agreement, the Swap Agreement, or of
the
Certificates or of any Mortgage Loan or related document other than with respect
to the Securities Administrator’s execution and authentication of the
Certificates. The Securities Administrator shall not be accountable for the
use
or application by the Depositor, the Trustee, the Master Servicer, or the
Derivative Counterparty of any funds paid to the Depositor, the Trustee, the
Master Servicer or the Derivative Counterparty in respect of the Mortgage Loans
or deposited in or withdrawn from the Collection Account or any other fund
or
account with respect to the Certificates by the Depositor, the Trustee, the
Master Servicer or the Derivative Counterparty.
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The
Securities Administrator executes the Certificates not in its individual
capacity but solely as Securities Administrator of the Trust Fund created
by
this Agreement, in the exercise of the powers and authority conferred and
vested
in it by this Agreement. Each of the undertakings and agreements made on
the
part of the Securities Administrator on behalf of the Trust Fund in the
Certificates is made and intended not as a personal undertaking or agreement
by
the Securities Administrator but is made and intended for the purpose of
binding
only the Trust Fund.
Section
10.04 Securities
Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become
the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were
not
the Securities Administrator.
Section
10.05 Securities
Administrator’s Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned
on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or “control person” within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended (“Control
Person”),
of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney’s fees)
(i) incurred in connection with any claim or legal action relating to
(a) this Agreement, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason
of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator’s duties hereunder, (ii) incurred in connection
with the performance of any of the Securities Administrator’s duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Securities
Administrator’s duties hereunder or (iii) incurred by reason of any action
of the Securities Administrator taken at the direction of the
Certificateholders, provided that any such loss, liability or expense
constitutes an “unanticipated expense incurred by the REMIC” within the meaning
of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity shall
survive the termination of this Agreement or the resignation or removal of
the
Securities Administrator hereunder. Without limiting the foregoing, and except
for any such expense, disbursement or advance as may arise from the Securities
Administrator’s negligence, bad faith or willful misconduct, or which would not
be an “unanticipated expense” within the meaning of the second preceding
sentence, the Securities Administrator shall be reimbursed by the Trust for
all
reasonable expenses, disbursements and advances incurred or made by the
Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses
and disbursements of its counsel not associated with the closing of the issuance
of the Certificates, (B) the reasonable compensation, expenses and
disbursements of any accountant, engineer, appraiser or other agent that is
not
regularly employed by the Securities Administrator, to the extent that the
Securities Administrator must engage such Persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates. The Trust shall fulfill its obligations
under this paragraph from amounts on deposit from time to time in the
Distribution Account.
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The
Securities Administrator shall be required to pay all expenses incurred by
it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section
10.06 Eligibility
Requirements for Securities Administrator. The
Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States
of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with
a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
In
case at any time the Securities Administrator shall cease to be eligible
in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any
successor securities administrator (i) may not be the Mortgage Loan Seller,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless such successor securities administrator’s functions are
operated through an institutional trust department of the Securities
Administrator, (ii) must be authorized to exercise corporate trust powers
under the laws of its jurisdiction of organization, and (iii) must be rated
at least “A/F1” by Fitch, if Fitch is a Rating Agency and if rated by Fitch, or
the equivalent rating by Standard & Poor’s or ▇▇▇▇▇’▇. If no successor
securities administrator shall have been appointed and shall have accepted
appointment within 60 days after the Securities Administrator ceases to be
the Securities Administrator pursuant to Section 10.07, then the Trustee
may (but shall not be obligated to) become the successor securities
administrator. The Depositor shall appoint a successor to the Securities
Administrator in accordance with Section 10.07. The Trustee shall notify
the Rating Agencies of any change of Securities Administrator.
Section
10.07 Resignation
and Removal of Securities Administrator. The
Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor and the Trustee and each Rating Agency not less
than 60 days before the date specified in such notice when, subject to
Section 10.08, such resignation is to take effect, and acceptance by a
successor securities administrator in accordance with Section 10.08 meeting
the qualifications set forth in Section 10.06. If no successor securities
administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Securities Administrator may petition
any court of competent jurisdiction for the appointment of a successor
securities administrator.
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If
at any
time the Securities Administrator shall cease to be eligible in accordance
with
the provisions of Section 10.06 hereof and shall fail to resign after
written request thereto by the Depositor, or if at any time the Securities
Administrator shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent, or a receiver of the Securities Administrator or of its property
shall be appointed, or any public officer shall take charge or control of
the
Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect
to
the Trust Fund by any state in which the Securities Administrator or the
Trust
Fund is located and the imposition of such tax would be avoided by the
appointment of a different securities administrator, then the Depositor may
remove the Securities Administrator and appoint a successor securities
administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of
which
shall be delivered to the Master Servicer and one copy to the successor
securities administrator.
The
Holders of Certificates entitled to at least 51.00% of the Voting Rights may
at
any time remove the Securities Administrator and appoint a successor securities
administrator by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys in fact duly authorized, one complete set of
which instruments shall be delivered by the successor securities administrator
to the Trustee, one complete set to the Securities Administrator so removed
and
one complete set to the successor so appointed. Notice of any removal of the
Securities Administrator shall be given to each Rating Agency by the successor
securities administrator.
Any
resignation or removal of the Securities Administrator and appointment of a
successor securities administrator pursuant to any of the provisions of this
Section 10.07 shall become effective upon acceptance by the successor
securities administrator of appointment as provided in Section 10.08
hereof.
If
at any
time, ▇▇▇▇▇ Fargo, as Securities Administrator, resigns under this
Section 10.07, or is removed as Securities Administrator pursuant to this
Section 10.07, then at such time ▇▇▇▇▇ Fargo shall also resign (and shall
be entitled to resign) as Master Servicer under this Agreement.
Section
10.08 Successor
Securities Administrator. Any
successor securities administrator (which may be the Trustee) appointed as
provided in Section 10.07 hereof shall execute, acknowledge and deliver to
the Depositor and to its predecessor Securities Administrator and the Trustee
an
instrument accepting such appointment hereunder and thereupon the resignation
or
removal of the predecessor Securities Administrator shall become effective
and
such successor securities administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Securities Administrator herein. The Depositor, the Trustee, the Master
Servicer and the predecessor Securities Administrator shall execute and deliver
such instruments and do such other things as may reasonably be required for
more
fully and certainly vesting and confirming in the successor securities
administrator all such rights, powers, duties, and obligations.
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No
successor securities administrator shall accept appointment as provided in
this
Section 10.08 unless at the time of such acceptance such successor
securities administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon
acceptance by a successor securities administrator of appointment as provided
in
this Section 10.08, the Depositor shall mail notice of the succession of
such Securities Administrator hereunder to all Holders of Certificates. If
the
Depositor fails to mail such notice within 10 days after acceptance by the
successor securities administrator of appointment, the successor securities
administrator shall cause such notice to be mailed at the expense of the
Depositor.
Section
10.09 Merger
or Consolidation of Securities Administrator. Any
corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation
or
other entity resulting from any merger, conversion or consolidation to which
the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of
Section 10.06 hereof, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to
the
contrary notwithstanding.
Section
10.10 Assignment
or Delegation of Duties by the Securities Administrator. Except
as
expressly provided herein, the Securities Administrator shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed
by
the Securities Administrator; provided,
however,
that
the Securities Administrator shall have the right with the prior written consent
of the Depositor (which shall not be unreasonably withheld or delayed), and
upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency
to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out
any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall
be
given promptly by the Securities Administrator to the Depositor and the Trustee.
If, pursuant to any provision hereof, the duties of the Securities Administrator
are transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the
fee
payable to the successor securities administrator exceed that payable to the
predecessor securities administrator.
Section
10.11 Attestation,
Annual Statement of Compliance of the Securities Administrator.
The
Securities Administrator will deliver or cause to be delivered to the Depositor,
on or before March 15th
of each
calendar year, commencing in 2007, the assessment of compliance with the
Relevant Servicing Criteria identified in Exhibit S hereto applicable to
the
Securities Administrator, attestation report and annual statement of compliance
required of a Servicing Function Participant under Item 1122 of Regulation
AB.
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ARTICLE
XI
TERMINATION
Section
11.01 Termination
upon Liquidation or Purchase of the Mortgage Loans.
Subject
to Section 11.03, the obligations and responsibilities of the Depositor,
the Master Servicer, the Servicer, the Securities Administrator and the Trustee
created hereby with respect to the Trust Fund shall terminate upon the earlier
of (a) the exercise of an Option to Purchase, on or after the Optional
Termination Date, in the aggregate of all Mortgage Loans (and REO Properties)
at
the price (the “Termination
Price”)
equal
to the sum of (i) 100.00% of the unpaid principal balance of each Mortgage
Loan (other than in respect of REO Property) plus accrued and unpaid interest
thereon at the applicable Mortgage Rate, (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Servicer
at
the expense of that Trust Fund and (y) the unpaid principal balance of each
Mortgage Loan related to any REO Property, in each case plus accrued and
unpaid
interest thereon at the applicable Mortgage Rate, (iii) all ▇▇▇▇▇▇▇▇▇▇▇▇
▇&▇ Advances, Servicing Advances and indemnification payments payable to the
Servicer (iv) any unreimbursed indemnification payments payable to the
Trustee, the Securities Administrator, the Master Servicer or the Depositor
under this Agreement and (v) any Swap Termination Payments payable to the
Swap
Counterparty as a result of a termination pursuant to this Section 11.01
and
(b) the later of (i) the maturity or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund
and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to
this Agreement. In no event shall the trusts created hereby continue beyond
the
expiration of 21 years from the death of the survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court
of
St. James’s, living on the date hereof.
Notwithstanding
anything to the contrary contained herein, no such purchase by the Master
Servicer (either upon instruction from the Depositor or voluntarily) shall
be
permitted unless (i) after distribution of the proceeds thereof to the
Certificateholders (other than the Holders of the Class X, Class P and
Residual Certificates and any other Classes of Certificates which constitute
NIM
Securities) pursuant to Section 11.02, the distribution of the remaining
proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the
NIM
Securities, to the extent the NIM Securities are then outstanding, or
(ii) prior to such purchase, the Master Servicer, remits to the Securities
Administrator an amount that, together with such remaining proceeds, will be
sufficient to pay the outstanding principal amount of, and accrued and unpaid
interest on, the NIM Securities, to the extent the NIM Securities are then
outstanding.
Section
11.02 Final
Distribution on the Certificates.
If on
any Remittance Date, the Master Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in any Collection Account, the Master Servicer shall direct
the
Securities Administrator promptly to send a Notice of Final Distribution to
each
Certificateholder and to the Swap Counterparty. If the Master Servicer (upon
instruction from the Depositor or voluntarily) elects to exercise their option
to purchase the Mortgage Loans pursuant to clause (a) of
Section 11.01, at least 20 days prior to the date the Notice of Final
Distribution is to be mailed to the affected Certificateholders, the Master
Servicer shall notify the Depositor, the Swap Counterparty and the Securities
Administrator of (a) the date on which the Servicer intends to exercise
such purchase option and (b) the Termination Price.
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A
Notice
of Final Distribution, specifying the Distribution Date on which
Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution.
Any
such Notice of Final Distribution shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the
amount of such final distribution, (c) the location of the office or agency
at which such presentation and surrender must be made and (d) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Securities Administrator
will
give such Notice of Final Distribution to the Swap Counterparty and to each
Rating Agency at the time such Notice of Final Distribution is given to
Certificateholders.
In
the
event such Notice of Final Distribution is given, the Servicer shall cause
all
funds in the Collection Account to be remitted to the Master Servicer for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of
the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Custodian of a Request for Release therefor, the Custodian shall
promptly release to the Servicer the Custodial Files for the Mortgage
Loans.
Upon
presentation and surrender of the Certificates, the Securities Administrator
shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicer, the Master
Servicer, the Securities Administrator, the Depositor, the Trustee and the
Swap
Counterparty hereunder), in each case on the final Distribution Date and in
the
order set forth in Section 4.02, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class,
up
to an amount equal to (i) as to each Class of Regular Certificates
(except the Class X Certificates), the Certificate Balance thereof plus for
each such Class and the Class X Certificates accrued interest thereon
in the case of an interest-bearing Certificate and all other amounts to which
such Classes are entitled pursuant to Section 4.02 and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In
the
event that any affected Certificateholders shall not surrender Certificates
for
cancellation within six months after the date specified in the Notice of Final
Distribution, the Securities Administrator shall give a second written notice
to
the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after such second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Securities Administrator may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates,
and
the cost thereof shall be paid out of the funds and other assets which remain
a
part of the Trust Fund. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
of
the Trust Fund which remain subject hereto.
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Section
11.03 Additional
Termination Requirements.
In the
event an Option to Purchase is exercised with respect to the Mortgage Loans
as
provided in Section 11.01, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been supplied
with an Opinion of Counsel, at the expense of the party upon whose instruction
causes the exercise of an Option to Purchase, to the effect that the failure
to
comply with the requirements of this Section 11.03 will not (i) result
in the imposition of taxes on “prohibited transactions” as defined in
Section 860F of the Code on any REMIC formed hereby or (ii) cause
either the Lower Tier REMIC or the Upper Tier REMIC to fail to qualify as
a
REMIC at any time that any Certificates are outstanding:
(a) The
Securities Administrator on behalf of the Trustee shall sell all of the assets
of the Trust Fund to the party exercising the Option to Purchase, and, within
90 days of such sale, shall distribute to the Certificateholders the
proceeds of such sale in complete liquidation of each REMIC formed hereby;
and
(b) The
Securities Administrator shall attach a statement to the final federal income
tax return for each REMIC formed hereby stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation
period for each such REMIC was the date on which the Securities Administrator
on
behalf of the Trustee sold the assets of the Trust Fund to the
Servicer.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Amendment.
This
Agreement may be amended from time to time by the Depositor, the Mortgage Loan
Seller, the Master Servicer, the Servicer, the Securities Administrator and
the
Trustee, without the consent of any of the Certificateholders or the Derivative
Counterparty (except to the extent that the rights or obligations of the
Derivative Counterparty under the Cap Agreement or the Swap Agreement are
affected thereby, and except to the extent that the ability of the Securities
Administrator to perform fully and timely its obligations under the Cap
Agreement or the Swap Agreement is adversely affected, in which case prior
written consent of the Derivative Counterparty is required) (i) to cure any
ambiguity or mistake, (ii) to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor, the Master
Servicer, the Servicer, the Securities Administrator or the Trustee,
(iv) to add any other provisions with respect to matters or questions
arising hereunder or (v) to modify, alter, amend, add to or rescind any of
the terms or provisions contained in this Agreement; provided,
that
any action pursuant to clause (iv) or (v) above shall not, as
evidenced by an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer, the Securities Administrator or
the
Trust Fund), adversely affect in any material respect the interests of any
Certificateholder; provided,
further,
that
any such action pursuant to clause (iv) or (v) above shall not be
deemed to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.
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The
Trustee, the Depositor, the Master Servicer, the Mortgage Loan Seller, the
Servicer and the Securities Administrator also may at any time and from time
to
time amend this Agreement, but without the consent of the Certificateholders
or
the Derivative Counterparty (except to the extent that the rights or obligations
of the Derivative Counterparty hereunder or under the Cap Agreement or the
Swap
Agreement are affected thereby, and except to the extent that the ability of
the
Securities Administrator to perform fully and timely its obligations under
the
Cap Agreement or the Swap Agreement is adversely affected, in which case prior
written consent of the Derivative Counterparty is required) to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or helpful
to (i) maintain the qualification of each REMIC created hereunder under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on any
REMIC created hereunder pursuant to the Code that would be a claim at any time
prior to the final redemption of the Certificates or (iii) comply with any
other requirements of the Code; provided, that the Trustee and the Master
Servicer have been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification,
(ii) avoid or minimize the risk of the imposition of such a tax or
(iii) comply with any such requirements of the Code.
This
Agreement may also be amended from time to time by the Depositor, the Master
Servicer, the Servicer, the Mortgage Loan Seller, the Securities Administrator
and the Trustee, but with the consent of the Holders of Certificates evidencing
Percentage Interests aggregating not less than 662/3%
of each
Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided,
however,
that no
such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (i), without the consent of
the Holders of Certificates of such Class evidencing, as to such Class,
Percentage Interests aggregating not less than 662/3%,
(iii) reduce the aforesaid percentages of Certificates the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding or (iv) adversely affect
the
rights or obligations of the Derivative Counterparty hereunder or under the
Cap
Agreement or the Swap Agreement or the rights of the Securities Administrator
to
fully and timely perform its obligations under the Cap Agreement or the Swap
Agreement without obtaining the prior written consent of the Derivative
Counterparty.
Notwithstanding
any contrary provision of this Agreement, the Trustee and the Master Servicer
shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee, the Master Servicer or the Trust Fund, to the effect that such
amendment will not cause the imposition of any tax on any REMIC created
hereunder or the Certificateholders or cause any such REMIC to fail to qualify
as a REMIC or the grantor trust to fail to qualify as a grantor trust at any
time that any Certificates are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a
copy
of such notice to the Trustee and the Master Servicer) of such amendment,
stating the provisions of the Agreement to be amended.
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Notwithstanding
the foregoing provisions of this Section 12.01, with respect to any
amendment that significantly modifies the permitted activities of the Trustee
or
the Servicer, any Certificate beneficially owned by the Depositor shall be
deemed not to be outstanding (and shall not be considered when determining
the
percentage of Certificateholders consenting or when calculating the total
number
of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 12.01 have been
obtained.
Promptly
after the execution of any amendment to this Agreement requiring the consent
of
Certificateholders, the Trustee shall furnish written notification of the
substance or a copy of such amendment to each Certificateholder and each Rating
Agency.
It
shall
not be necessary for the consent of Certificateholders under this
Section 12.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing
in this Agreement shall require the Trustee, the Master Servicer or the
Securities Administrator to enter into an amendment without receiving an Opinion
of Counsel (which opinion shall not be an expense of the Trustee, the Master
Servicer, the Securities Administrator or the Trust Fund), satisfactory to
the
Trustee, the Master Servicer and the Securities Administrator, as applicable,
that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with and (ii) either (A) the amendment does not adversely
affect in any material respect the interests of any Certificateholder or
(B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this
Section 12.01.
Notwithstanding
the foregoing, the consent of Mortgage Loan Seller shall not be required to
enter into any amendment to this Agreement unless the effect of such amendment
would potentially have a material and adverse effect on the rights or
obligations of the Mortgage Loan Seller under this Agreement.
Section
12.02 Recordation
of Agreement; Counterparts.
This
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the direction and expense of the Depositor, but
only
upon receipt of an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the
Certificateholders.
-147-
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any
number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
Section
12.03 Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES
HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH
LAWS.
Section
12.04 Intention
of Parties.
(a) It
is intended that the conveyance of the Depositor’s right, title and interest in
and to property constituting the Trust Fund pursuant to this Agreement shall
constitute, and shall be construed as, a sale of such property and not a grant
of a security interest to secure a loan. However, if such conveyance is deemed
to be in respect of a loan, it is intended that: (1) the rights and obligations
of the parties shall be established pursuant to the terms of this Agreement;
(2)
the Depositor hereby grants to the Trustee for the benefit of the Holders of
the
Certificates a first priority security interest to secure repayment of an
obligation in an amount equal to the aggregate Class Principal Amount of the
Certificates in all of the Depositor’s right, title and interest in, to and
under, whether now owned or hereafter acquired, the Trust Fund and the
Supplemental Interest Trust and all proceeds of any and all property
constituting the Trust Fund and the Supplemental Interest Trust to secure
payment of the Certificates (such security interest being, to the extent of
the
assets that constitute the Supplemental Interest Trust, pari
passu
with the
security interest as provided in clause (4) below); (3) this Agreement shall
constitute a security agreement under applicable law; and (4) the Derivative
Counterparty shall be deemed, during the term of such agreement and while such
agreement is the property of the Trustee, to have a security interest in all
of
the assets that constitute the Supplemental Interest Trust, but only to the
extent of such Derivative Counterparty’s right to payment under the Derivative
Agreements (such security interest being pari
passu
with the
security interest as provided in clause (2) above). If such conveyance is deemed
to be in respect of a loan and the trust created by this Agreement terminates
prior to the satisfaction of the claims of any Person holding any Certificate,
the security interest created hereby shall continue in full force and effect
and
the Trustee shall be deemed to be the collateral agent for the benefit of such
Person, and all proceeds shall be distributed by the Securities Administrator
as
herein provided.
(b) The
Depositor shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the other
property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and shall
be
maintained as such throughout the term of this Agreement. The Depositor shall,
at its own expense, make all initial filings on or about the Closing Date and
shall forward a copy of such filing or filings to the Trustee. Without limiting
the generality of the foregoing, the Depositor shall prepare and forward for
filing, or shall cause to be forwarded for filing, at the expense of the
Depositor, all filings necessary to maintain the effectiveness of any original
filings necessary under the relevant UCC to perfect the Trustee’s security
interest in or lien on the Mortgage Loans, including without limitation (x)
continuation statements, and (y) such other statements as may be occasioned
by
(1) any change of name of the Sponsor, the Depositor or the Trustee, (2) any
change of location of the jurisdiction of organization of the Sponsor or the
Depositor, (3) any transfer of any interest of the Sponsor or the Depositor
in
any Mortgage Loan or (4) any change under the relevant UCC or other applicable
laws. Neither the Sponsor nor the Depositor shall organize under the law of
any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice
of
such action to its immediate and intermediate transferee, including the Trustee.
Before effecting such change, the Sponsor or the Depositor proposing to change
its jurisdiction of organization shall prepare and file in the appropriate
filing office any financing statements or other statements necessary to continue
the perfection of the interests of its immediate and intermediate transferees,
including the Trustee, in the Mortgage Loans. In connection with the
transactions contemplated by this Agreement, each of the Sponsor and the
Depositor authorizes its immediate or intermediate transferee to file in any
filing office any initial financing statements, any amendments to financing
statements, any continuation statements, or any other statements or filings
described in this paragraph (b).
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Section
12.05 Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any
material change or amendment to this Agreement;
2. The
occurrence of any Event of Default that has not been cured;
3. The
resignation or termination of the Servicer, the Master Servicer, the Securities
Administrator or the Trustee and the appointment of any successor;
4. The
repurchase or substitution of Mortgage Loans pursuant to Section 2.03;
and
5. The
final
payment to Certificateholders.
(b) In
addition, the Securities Administrator shall promptly make available on its
internet website to each Rating Agency copies of the following:
1. Each
report to Certificateholders described in Section 4.03; and
2. Any
notice of a purchase of a Mortgage Loan pursuant to
Section 2.03.
(c) All
directions, demands, consents and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
(i) in
the
case of the Depositor,
HSI
Asset Securitization Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Head MBS Principal Finance, or such other
address as may be hereafter furnished to the other parties by the Depositor
in
writing;
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(ii) in
the
case of the Servicer,
to
JPMorgan Chase Bank, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ Dunks (with a copy to ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel), or such other
address as may be hereafter furnished to the other parties by JPMorgan
Chase
Bank, National Association in writing;
(iii) in
the
case of ▇▇▇▇▇ Fargo,
to ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (HASCO) Attention: Client Service
Manager HASCO 2006-NC1, or such other address as may be hereafter furnished
to
the to the other parties by ▇▇▇▇▇ Fargo in writing;
(iv) in
the
case of the Trustee,
to the
Corporate Trust Office (Attention: HB0601), or such other address as may be
hereafter furnished to the to the other parties by the Trustee in
writing;
(v) in
the
case of the Derivative Counterparty,
to Bear
▇▇▇▇▇▇▇ Financial Products Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: DPC Manager, HASCO 2006-NC1, with a copy to Bear ▇▇▇▇▇▇▇ Financial
Products Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Derivative Operations 7th
Floor,
HASCO 2006-NC1, or such other address as may be hereafter furnished to the
to
the other parties by the Derivative Counterparty in writing,
(vi) in
the
case of the Mortgage Loan Seller,
to NC
Capital Corporation, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention General Counsel, or such other address as may be herein furnished
to
the other party by NC Capital Corporation in writing.
(vii) in
the
case of each of the Rating Agencies,
the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section
12.06 Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
Section
12.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as provided
in
Section 6.02, this Agreement may not be assigned by the Servicer without
the prior written consent of the Trustee and Depositor; provided,
however,
that
the Servicer may pledge its interest in any reimbursements for P&I Advances
or Servicing Advances hereunder.
Section
12.08 Limitation
on Rights of Certificateholders.
The
death or incapacity of any Certificateholder shall not operate to terminate
this
Agreement or the trust created hereby, nor entitle such Certificateholder’s
legal representative or heirs to claim an accounting or to take any action
or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities
of
the parties hereto or any of them.
-150-
No
Certificateholder shall have any right to vote (except as provided herein)
or in
any manner otherwise control the operation and management of the Trust Fund,
or
the obligations of the parties hereto, nor shall anything herein set forth
or
contained in the terms of the Certificates be construed so as to constitute
the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third party
by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as herein provided, and unless the
Holders of Certificates evidencing not less than 25.00% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute
any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself
or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek
to obtain priority over or preference to any other such Holder or to enforce
any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement
of
the provisions of this Section 12.08, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law
or in
equity.
Section
12.09 Inspection
and Audit Rights.
The
Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Servicer’s normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss
its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often
as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor or the Trustee of any right under this
Section 12.09 shall be borne by the Servicer.
Section
12.10 Certificates
Nonassessable and Fully Paid.
It is
the intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
-151-
Section
12.11 Rule of
Construction.
Article
and section headings are for the convenience of the reader and shall not
be
considered in interpreting this Agreement or the intent of the parties
hereto.
Section
12.12 Waiver
of Jury Trial.
EACH
PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT
PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF
ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH
DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
[SIGNATURE
PAGE FOLLOWS]
-152-
IN
WITNESS WHEREOF, the Depositor, the Trustee, ▇▇▇▇▇ Fargo, NC Capital Corporation
and JPMorgan have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above
written.
|
HSI
ASSET
SECURITIZATION CORPORATION,
as Depositor |
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Vice President
|
||
|
DEUTSCHE
BANK
NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual capacity |
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Vice President
|
||
|
DEUTSCHE
BANK
NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual capacity |
||
| |
|
|
| By: | /s/ Hang ▇▇▇ | |
|
Name:
Hang ▇▇▇
Title:
Authorized Signatory
|
||
|
▇▇▇▇▇
FARGO BANK,
N.A.,
as Master Servicer |
||
| |
|
|
| By: | /s/ ▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇ ▇▇▇▇▇
Title:
Vice President
|
||
|
▇▇▇▇▇
FARGO BANK,
N.A.,
as Securities Administrator |
||
| |
|
|
| By: | /s/ ▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇ ▇▇▇▇▇
Title:
Vice President
|
||
|
DEUTSCHE
BANK
NATIONAL TRUST COMPANY,
solely as Custodian and not in its individual capacity |
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Vice President
|
||
|
DEUTSCHE
BANK
NATIONAL TRUST COMPANY,
solely as Custodian and not in its individual capacity |
||
| |
|
|
| By: | /s/ Hang ▇▇▇ | |
|
Name:
Hang ▇▇▇
Title:
Authorized Signatory
|
||
| JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Servicer | ||
| |
|
|
| By: | /s/ ▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name:
▇▇▇ ▇▇▇▇▇▇▇
Title:
Assistant Vice President
|
||
| NC
CAPITAL CORPORATION, as Mortgage Loan Seller |
||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
President
|
||
|
ACKNOWLEDGED
BY HSBC BANK USA,
NATIONAL
ASSOCIATION,
as
Sponsor, solely for the purposes of Section 2.03(k).
|
||
| |
|
|
| By: | /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
|
Name:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
Managing Director #14311
|
||
SCHEDULE
I
Mortgage
Loan Schedule
[To
be
retained in a separate closing binder entitled “HASCO 2006-NC1 Mortgage Loan
Schedules” at the Washington, D.C. offices of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP]
SCH.
I-1
SCHEDULE
II
HSI
Asset
Securitization Corporation Trust, 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Representations
and Warranties of JPMorgan, as Servicer
▇▇
▇▇▇▇▇▇, as Servicer, hereby makes the representations and warranties set forth
in this Schedule II to the Sponsor, the Depositor, the Securities
Administrator, the Master Servicer and the Trustee, as of the Closing
Date.
(1) ▇▇
▇▇▇▇▇▇
▇▇▇▇▇ Bank, National Association is duly organized, validly existing and in
good
standing as a national banking association and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be conducted
by the Servicer in any state in which a Mortgaged Property securing a Mortgage
Loan is located or is otherwise not required under applicable law to effect
such
qualification and, in any event, is in compliance with the doing business laws
of any such State, to the extent necessary to ensure its ability to enforce
each
Mortgage Loan and to service each Mortgage Loan in accordance with the terms
of
this Agreement;
(2) The
Servicer has the full power and authority to service each Mortgage Loan, and
to
execute, deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of the Servicer the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the Depositor, the Mortgage Loan Seller, the Securities
Administrator, the Master Servicer, the Sponsor and the Trustee, constitutes
a
legal, valid and binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(3) The
execution and delivery of this Agreement by the Servicer, the servicing of
the
Mortgage Loans by the Servicer hereunder, the consummation by the Servicer
of
any other of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which the Servicer is
a
party or by which it may be bound, or any statute, order or regulation
applicable to the Servicer of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Servicer; and the Servicer
is
not a party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which materially and adversely affects or,
to
the Servicer’s knowledge, would in the future materially and adversely affect,
(x) the ability of the Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or assets of the Servicer taken as a whole;
SCH.
II-1
(4) The
Servicer is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ and an approved servicer
for ▇▇▇▇▇▇▇ Mac in good standing;
(5) No
litigation is pending against the Servicer (or any Subservicer) that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Servicer (or any Subservicer) to service
the Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(6) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Servicer
of,
or compliance by the Servicer with, this Agreement or the consummation by the
Servicer of the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(7) Except
as
disclosed in writing to the Master Servicer, the Depositor, the Trustee, and
the
Securities Administrator, prior to the Closing Date: (i) the Servicer is not
aware and has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization due
to
any act or failure to act of the Servicer; (ii) the Servicer has not been
terminated as servicer in a residential mortgage loan securitization, either
due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the relevant servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Servicer as servicer has been disclosed or reported by the Servicer; (iv)
no
material changes to the Servicer’s policies or procedures with respect to the
servicing function it will perform under this Agreement for mortgage loans
of a
type similar to the Mortgage Loans have occurred during the three-year period
immediately preceding the Closing Date; (v) there are no aspects of the
Servicer’s financial condition that could have a material adverse effect on the
performance by the Servicer’s financial condition that could have a material
adverse effect on the performance by the Servicer of its servicing obligations
under this Agreement and (vi) there are no affiliations, relationships or
transactions relating to the Servicer or any Subservicer with any party listed
on Exhibit T hereto.
(8) The
Servicer has the facilities, procedures and experienced personnel necessary
for
the sound servicing of mortgage loans of the same type as the Mortgage Loans;
and
SCH.
II-2
(9) With
respect to each Mortgage Loan, to the extent the Servicer serviced such Mortgage
Loan and to the extent the Servicer provided monthly reports to the three credit
repositories, the Servicer has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (i.e., favorable and unfavorable) on its borrower credit files
to
Equifax, Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis.
SCH.
II-3
SCHEDULE
III
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Representations
and Warranties of NC Capital Corporation, as Mortgage Loan
Seller
NC
Capital Corporation, as Mortgage Loan Seller, hereby makes the representations
and warranties set forth in this Schedule III to the Sponsor, Depositor and
the Trustee, as of the Closing Date.
(1) The
Mortgage Loan Seller is a corporation duly organized, validly existing and
in
good standing under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state wherein it owns or leases any
material properties or where a Mortgaged Property is located, if the laws of
such state require licensing or qualification in order to conduct business
of
the type conducted by the Mortgage Loan Seller, and in any event the Mortgage
Loan Seller is in compliance with the laws of any such state to the extent
necessary; the Mortgage Loan Seller has the full corporate power, authority
and
legal right to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement by the
Mortgage Loan Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Mortgage Loan Seller,
regardless of whether such enforcement is sought in a proceeding in equity
or at
law; and all requisite corporate action has been taken by the Mortgage Loan
Seller to make this Agreement and all agreements contemplated hereby valid
and
binding upon the Mortgage Loan Seller in accordance with their
terms;
(2) Neither
the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Mortgage Loan Seller’s
charter or by-laws or any legal restriction or any agreement or instrument
to
which the Mortgage Loan Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Mortgage Loan Seller or its property is subject, or result in
the
creation or imposition of any lien, charge or encumbrance that would have an
adverse effect upon any of its properties pursuant to the terms of any mortgage,
contract, deed of trust or other instrument;
(3) There
is
no action, suit, proceeding or investigation pending or threatened against
the
Mortgage Loan Seller, before any court, administrative agency or other tribunal
asserting the invalidity of this Agreement, seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or which, either
in
any one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of the
Mortgage Loan Seller, or in any material impairment of the right or ability
of
the Mortgage Loan Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Mortgage Loan Seller,
or which would draw into question the validity of this Agreement or of any
action taken or to be taken in connection with the obligations of the Mortgage
Loan Seller contemplated herein, or which would be likely to impair materially
the ability of the Mortgage Loan Seller to perform under the terms of this
Agreement; and
SCH.
III-1
(4) No
consent, approval, authorization or order of, or registration or filing with,
or
notice to any court or governmental agency or body including HUD, the FHA or
the
VA is required for the execution, delivery and performance by the Mortgage
Loan
Seller of or compliance by the Mortgage Loan Seller with this Agreement or
the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date.
SCH.
III-2
SCHEDULE
IV
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Representations
and Warranties of NC Capital Corporation
as
to
the Individual Mortgage Loans
The
Mortgage Loan Seller hereby makes the representations and warranties set forth
in this Schedule IV as to the Mortgage Loans, to the Depositor, the
Securities Administrator, the Master Servicer and the Trustee as of the Initial
Sale Date or such other date as may be specified below. Capitalized terms used
but not otherwise defined in this Agreement (including this Schedule IV) shall
have the meanings ascribed thereto in the MLPISA.
(1) The
information set forth in the related Mortgage Loan Schedule is complete, true
and correct in all material respects as of the Cut-Off Date, unless another
date
is set forth in the Mortgage Loan Schedule;
(2) The
Mortgage Loan is in compliance with all requirements set forth in the related
Confirmation, and the characteristics of the related Mortgage Loan Package
as
set forth in the related Confirmation are true and correct.
(3) All
payments required to be made up to the close of business on the Closing Date
for
such Mortgage Loan under the terms of the Mortgage Note have been made; neither
the Mortgage Loan Seller nor the Interim Servicer has advanced funds, or
induced, solicited or knowingly received any advance of funds from a party
other
than the owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Note or Mortgage (except
for
interest accruing from the date of the Mortgage Note or the date of disbursement
of the Mortgage proceeds, whichever is greater, to the day which precedes by
one
month the Due Date of the first installment of principal and interest); and
there has been no delinquency in excess of thirty (30) days, exclusive of any
period of grace, in any payment by the Mortgagor thereunder since the
origination of the Mortgage Loan;
(4) There
are
no delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(5) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, recorded, or in the
process of being recorded, in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have been
delivered or will be delivered to the Custodian on behalf of the Purchaser;
the
substance of any such waiver, alteration or modification has been approved
by
the title insurer, to the extent required by the related policy, and is
reflected on the related Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Custodian and the terms of which
are reflected in the related Mortgage Loan Schedule;
SCH.
IV-1
(6) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole
or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(7) All
buildings upon the Mortgaged Property are insured by an insurer acceptable
to
FNMA and FHLMC against loss by fire, hazards of extended coverage and such
other
hazards as are customary in the area where the Mortgaged Property is located,
in
an amount not less than the greatest of (i) 100% of the replacement cost of
all
improvements to the Mortgaged Property, (ii) either (A) the outstanding
principal balance of the Mortgage Loan with respect to each first lien Mortgage
Loan or (B) with respect to each second lien Mortgage Loan, the sum of the
outstanding principal balance of the related first lien mortgage loan and the
outstanding principal balance of the second lien Mortgage Loan, (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect
to
the Mortgaged Property, or (iv) the amount necessary to fully compensate for
any
damage or loss to the improvements that are a part of such property on a
replacement cost basis. All such insurance policies contain a standard mortgagee
clause naming the Interim Servicer, its successors and assigns as mortgagee
and
all premiums thereon have been paid. If the Mortgaged Property is in an area
identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to the requirements of the Underwriting
Guidelines. The Mortgage obligates the Mortgagor thereunder to maintain all
such
insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor’s cost and expense and to seek reimbursement therefor from the
Mortgagor;
(8) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures,
predatory and abusive lending, consumer credit protection, equal credit
opportunity, fair housing or disclosure laws applicable to the origination
and
servicing of mortgage loans of a type similar to the Mortgage Loans have been
complied with;
(9) The
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission
or
release;
SCH.
IV-2
(10) The
Mortgage (including any Negative Amortization which may arise thereunder) is
a
valid, existing and enforceable first or second (as indicated on the Mortgage
Loan Schedule) lien on the Mortgaged Property, including all improvements on
the
Mortgaged Property subject only to (a) the lien of current real property taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as
of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender’s title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, (c) to the extent the
Mortgage Loan is a second lien Mortgage Loan, the related first lien on the
Mortgaged Property; and (d) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with
the
Mortgage Loan establishes and creates a valid, existing and enforceable first
or
second (as indicated on the Mortgage Loan Schedule) lien and first or second
(as
indicated on the Mortgage Loan Schedule) priority security interest on the
property described therein and the Mortgage Loan Seller has full right to sell
and assign the same to the Purchaser. The Mortgaged Property was not, as of
the
date of origination of the Mortgage Loan, subject to a mortgage, deed of trust,
deed to secure debt or other security instrument creating a lien subordinate
to
the lien of the Mortgage;
(11) The
Mortgage Note and the related Mortgage are genuine and each is the legal, valid
and binding obligation of the maker thereof, enforceable in accordance with
its
terms, except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of
creditors’ rights generally and by law;
(12) All
parties to the Mortgage Note and the Mortgage had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed
by
such parties. The Mortgagor is a natural person;
(13) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage;
(14) Immediately
prior to the transfer and assignment herein contemplated, the Mortgage Loan
Seller was the sole legal, beneficial and equitable owner of the Mortgage Note
and the Mortgage. Mortgage Loan Seller has full right to transfer and sell
the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest;
SCH.
IV-3
(15) All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all applicable
“doing business” and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(16) The
Mortgage Loan is covered by an American Land Title Association (“ALTA”) lender’s
title insurance policy (which, in the case of an Adjustable Rate Mortgage Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
issued by a title insurer acceptable to the Underwriting Guidelines and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (x)(a) and (b) and
with respect to any second lien Mortgage Loan (c) above) the Mortgage Loan
Seller, its successors and assigns as to the first or second (as indicated
on
the related Mortgage Loan Schedule) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan (including, if the Mortgage
Loan
provides for amortization, the maximum amount of Negative Amortization in
accordance with the Mortgage) and, with respect to any Adjustable Rate Mortgage
Loan, against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for adjustment
in
the Mortgage Interest Rate and Monthly Payment and Negative Amortization
provisions of the Mortgage Note. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Interim Servicer is the sole insured of such lender's
title insurance policy, and such lender’s title insurance policy is in full
force and effect and will be in full force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Mortgage Loan Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(17) There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and, to Mortgage Loan Seller’s or Interim
Servicer’s knowledge, no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration, and the Mortgage Loan Seller has
not
waived any default, breach, violation or event of acceleration. With respect
to
each second lien Mortgage Loan (i) the first lien mortgage loan is in full
force
and effect, (ii) there is no default, breach, violation or event of acceleration
existing under such first lien mortgage or the related mortgage note, (iii)
no
event which, with the passage of time or with notice and the expiration of
any
grace or cure period, would constitute a default, breach, violation or event
of
acceleration thereunder, (iv) either (A) the first lien mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under
the
second lien Mortgage Loan to receive notice of, and affords such mortgagee
an
opportunity to cure any default by payment in full or otherwise under the first
lien mortgage, (v) the related first lien does not provide for or permit
negative amortization under such first lien Mortgage Loan, and (vi) either
no
consent for the Mortgage Loan is required by the holder of the first lien or
such consent has been obtained and is contained in the Mortgage
File;
SCH.
IV-4
(18) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under law could give rise to
such lien) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(19) As
of the
date of origination of the Mortgage Loan, all improvements which were considered
in determining the Appraised Value of the related Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property;
(20) The
Mortgage Loan was originated by the Interim Servicer or by a savings and loan
association, a savings bank, a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved as such by the Secretary of HUD;
(21) Principal
payments on the Mortgage Loan shall commence (with respect to newly originated
Mortgage Loans) or commenced no more than sixty days after the proceeds of
the
Mortgage Loan were disbursed. The Mortgage Loan bears interest at the Mortgage
Interest Rate. With respect to each Mortgage Loan which is not a Negative
Amortization Loan, the Mortgage Note is payable on the first day of each month
in Monthly Payments, which, in the case of a Fixed Rate Mortgage Loans, are
sufficient to fully amortize the original principal balance over the original
term thereof (other than with respect to a Mortgage Loan identified on the
related Mortgage Loan Schedule as an interest-only Mortgage Loan during the
interest-only period or a Mortgage Loan which is identified on the related
Mortgage Loan Schedule as a Balloon Mortgage Loan) and to pay interest at the
related Mortgage Interest Rate, and, in the case of an Adjustable Rate Mortgage
Loan, are changed on each Adjustment Date, and in any case, are sufficient
to
fully amortize the original principal balance over the original term thereof
(other than with respect to a Mortgage Loan identified on the related Mortgage
Loan Schedule as an interest-only Mortgage Loan during the interest-only period
or a Mortgage Loan which is identified on the related Mortgage Loan Schedule
as
a Balloon Mortgage Loan) and to pay interest at the related Mortgage Interest
Rate. With respect to each Negative Amortization Mortgage Loan, the related
Mortgage Note requires a Monthly Payment which is sufficient during the period
following each Payment Adjustment Date, to fully amortize the outstanding
principal balance as of the first day of such period (including any Negative
Amortization) over the then remaining term of such Mortgage Note and to pay
interest at the related Mortgage Interest Rate; provided, that the Monthly
Payment shall not increase to an amount that exceeds 107.5% of the amount of
the
Monthly Payment that was due immediately prior to the Payment Adjustment Date;
provided, further, that the payment adjustment cap shall not be applicable
with
respect to the adjustment made to the Monthly Payment that occurs in a year
in
which the Mortgage Loan has been outstanding for a multiple of 5 years and
in
any such year the Monthly Payment shall be adjusted to fully amortize the
Mortgage Loan over the remaining term. With respect to each Mortgage Loan
identified on the Mortgage Loan Schedule as an interest-only Mortgage Loan,
the
interest-only period shall not exceed ten (10) years (or such other period
specified on the Mortgage Loan Schedule) and following the expiration of such
interest-only period, the remaining Monthly Payments shall be sufficient to
fully amortize the original principal balance over the remaining term of the
Mortgage Loan. With respect to each Balloon Mortgage Loan, the Mortgage Note
requires a monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate and requires a final Monthly Payment
substantially greater than the preceding monthly payment which is sufficient
to
repay the remained unpaid principal balance of the Balloon Mortgage Loan as
the
Due Date of such monthly payment. The Index for each Adjustable Rate Mortgage
Loan is as defined in the related Confirmation. No Mortgage Loan is a
Convertible Mortgage Loan;
SCH.
IV-5
(22) The
origination, servicing and collection practices used by the Interim Servicer
with respect to each Mortgage Note and Mortgage including, without limitation,
the establishment, maintenance and servicing of the Escrow Accounts and Escrow
Payments, if any, since origination, have been in all respects legal, proper,
prudent and customary in the mortgage origination and servicing industry. The
Mortgage Loan has been serviced by the Interim Servicer and any predecessor
servicer in accordance with the terms of the Mortgage Note. With respect to
escrow deposits and Escrow Payments (other than with respect to each Mortgage
Loan which is indicated by the Interim Servicer to be a second lien Mortgage
Loan and for which the mortgagee under the first lien is collecting Escrow
Payments), if any, all such payments are in the possession of, or under the
control of, the Interim Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or Escrow Payments or other charges or payments due
the
Interim Servicer have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are being held
by
the Interim Servicer for any work on a Mortgaged Property which has not been
completed;
(23) The
Mortgaged Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;
(24) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for
the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage designated as a
deed
of trust, by trustee’s sale, and (b) otherwise by judicial or non-judicial
foreclosure. The Mortgaged Property has not been subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not filed for
protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor that would materially interfere with the
right to sell the Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and rights of redemption. The Mortgagor
has
not notified the Mortgage Loan Seller and the Mortgage Loan Seller has no
knowledge of any relief requested by the Mortgagor under the Servicemembers
Civil Relief Act;
SCH.
IV-6
(25) The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time the Mortgage Loan was originated; and the Mortgage Note
and
Mortgage are on forms acceptable to prudent mortgage lending institutions in
the
secondary market;
(26) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(x) above;
(27) The
Mortgage File contains an appraisal of the related Mortgaged Property which
was
on appraisal form 1004 or form 2055 with an interior inspection and was made
and
signed, prior to the approval of the Mortgage Loan application, by a qualified
appraiser, duly appointed by the Mortgage Loan Seller or the Interim Servicer,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan
made on the security thereof, whose compensation is not affected by the approval
or disapproval of the Mortgage Loan and who met the minimum qualifications
of
FNMA and FHLMC. Each appraisal of the Mortgage Loan was made in accordance
with
the relevant provisions of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989;
(28) In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(29) No
Mortgage Loan contains provisions pursuant to which Monthly Payments are (a)
paid or partially paid with funds deposited in any separate account established
by the Mortgage Loan Seller, the Interim Servicer, the Mortgagor, or anyone
on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or
(c)
contains any other similar provisions which may constitute a “buydown”
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(30) The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans, and
adjustable rate mortgage loans in the case of Adjustable Rate Mortgage Loans
and
rescission materials with respect to Refinanced Mortgage Loans, and such
statement is and will remain in the Mortgage File;
(31) No
Mortgage Loan was made in connection with (a) the construction or rehabilitation
of a Mortgaged Property or (b) facilitating the trade-in or exchange of a
Mortgaged Property;
(32) Neither
the Mortgage Loan Seller nor the Interim Servicer has knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected
to cause the Mortgage Loan to be an unacceptable investment, or cause the
Mortgage Loan to become delinquent, in each instance, taking into account the
relative Underwriting Guidelines applicable to the related
Mortgagor;
SCH.
IV-7
(33) No
Mortgage Loan had an LTV or CLTV at origination in excess of 100%;
(34) As
of the
related Closing Date, the Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(35) No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to the origination, modification or amendment of a Mortgage Loan has
taken place on the part of any person, including without limitation the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;
(36) The
Assignment of Mortgage is in recordable form, except for the name of the
assignee which is blank, and is acceptable for recording under the laws of
the
jurisdiction in which the Mortgaged Property is located;
(37) Any
principal advances made to the Mortgagor after the date of origination of the
Mortgage Loan but prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second (as indicated on the Mortgage Loan Schedule)
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable
to
FNMA or FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan plus any Negative
Amortization;
(38) If
the
Residential Dwelling on the Mortgaged Property is a condominium unit or a unit
in a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets the eligibility
requirements of the Underwriting Guidelines;
(39) To
the
extent required by the Underwriting Guidelines, the source of the down payment
with respect to each Mortgage Loan has been fully verified by the Mortgage
Loan
Seller or Interim Servicer;
(40) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
SCH.
IV-8
(41) The
Mortgaged Property is in material compliance with all applicable environmental
laws pertaining to environmental hazards including, without limitation,
asbestos, and neither the Mortgage Loan Seller, the Interim Servicer nor, to
the
Mortgage Loan Seller’s or the Interim Servicer’s knowledge, the related
Mortgagor, has received any notice of any violation or potential violation
of
such law;
(42) The
Mortgage Loan Seller shall, at its own expense, cause each Mortgage Loan to
be
covered by a Tax Service Contract which is assignable to the Purchaser or its
designee; provided however, that if the Mortgage Loan Seller fails to purchase
such Tax Service Contract, the Mortgage Loan Seller shall be required to
reimburse the Purchaser for all costs and expenses incurred by the Purchaser
in
connection with the purchase of any such Tax Service Contract;
(43) Each
Mortgage Loan is covered by a Flood Zone Service Contract which is assignable
to
the Purchaser or its designee or, for each Mortgage Loan not covered by such
Flood Zone Service Contract, the Mortgage Loan Seller agrees to purchase such
Flood Zone Service Contract;
(44) As
of the
related Closing Date, no Mortgage Loan is (a) subject to the provisions of
the
Homeownership and Equity Protection Act of 1994 as amended (“HOEPA”), (b) a
“high cost” mortgage loan, “covered” mortgage loan, “high risk home” mortgage
loan or “predatory” mortgage loan or any other comparable term, no matter how
defined under any federal, state or local law, or (c) subject to any comparable
federal, state or local statutes or regulations, or any other statute or
regulation providing for heightened regulatory scrutiny or assignee liability
to
holders of such mortgage loans, or (d) a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then applicable Standard &
Poor’s LEVELS® Glossary Revised, Appendix E);
(45) No
predatory, abusive or deceptive lending practices, including but not limited
to,
the extension of credit to a mortgagor without regard for the mortgagor’s
ability to repay the Mortgage Loan and the extension of credit to a mortgagor
which has no apparent benefit to the mortgagor, were employed in connection
with
the origination of the Mortgage Loan;
(46) The
debt-to-income ratio of the related Mortgagor was not greater than 55% at the
origination of the related Mortgage Loan;
(47) No
Mortgagor was required to purchase any credit insurance product (e.g., life,
mortgage, disability, accident, unemployment or health insurance product) or
debt cancellation agreement as a condition of obtaining the extension of credit.
No Mortgagor obtained a prepaid single premium credit life, mortgage,
disability, accident, unemployment or health insurance product in connection
with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan
were used to purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage
Loan;
SCH.
IV-9
(48) The
Mortgage Loans were not selected from the outstanding one to four-family
mortgage loans in the Mortgage Loan Seller’s portfolio at the related Closing
Date as to which the representations and warranties set forth in this Agreement
could be made in a manner so as to affect adversely the interests of the
Purchaser;
(49) The
Mortgage contains a provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder;
(50) The
Mortgage Loan complies with all applicable consumer credit statutes and
regulations, including, without limitation, the respective Uniform Consumer
Credit Code laws in effect in Alabama, Colorado, Idaho, Indiana, Iowa, Kansas,
Maine, Oklahoma, South Carolina, Utah, West Virginia and Wyoming, has been
originated by a properly licensed entity, and in all other respects, complies
with all of the material requirements of any such applicable laws;
(51) The
information set forth in the Prepayment Charge Schedule is complete, true and
correct in all material respects and, subject to applicable federal and state
law, each Prepayment Charge is permissible, enforceable and
collectable;
(52) The
Mortgage Loan was not prepaid in full prior to the Closing Date and neither
the
Mortgage Loan Seller nor the Interim Servicer has received notification from
a
Mortgagor that a prepayment in full shall be made after the Closing
Date;
(53) No
Mortgage Loan is secured by cooperative housing, commercial property or mixed
use property;
(54) Except
as
set forth on the related Mortgage Loan Schedule, none of the Mortgage Loans
are
subject to a prepayment penalty. For any Mortgage Loan originated prior to
October 1, 2002 that is subject to a prepayment penalty, such prepayment penalty
does not extend beyond five years after the date of origination. For any
Mortgage Loan originated on or following October 1, 2002 that is subject to
a
prepayment penalty, such prepayment penalty does not extend beyond three years
after the date of origination. With respect to any Mortgage Loan that contains
a
provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the Mortgage Loan’s origination, the Mortgagor agreed to
such premium in exchange for a monetary benefit, including but not limited
to a
rate or fee reduction, (ii) prior to the Mortgage Loan’s origination, the
Mortgagor was offered the option of obtaining a Mortgage Loan that did not
require payment of such a premium, (iii) the prepayment premium is disclosed
to
the Mortgagor in the loan documents pursuant to applicable state and federal
law, and (iv) notwithstanding any state or federal law to the contrary, the
Interim Servicer shall not impose such prepayment premium in any instance when
the mortgage debt is accelerated as the result of the Mortgagor’s default in
making the loan payments;
SCH.
IV-10
(55) The
Mortgage Loan Seller and the Interim Servicer have complied with all applicable
anti-money laundering laws and regulations, including without limitation the
USA
Patriot Act of 2001 (collectively, the “Anti-Money
Laundering Laws”);
the
Mortgage Loan Seller and the Interim Servicer have established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws,
have conducted the requisite due diligence in connection with the origination
of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable Mortgagor and the origin of
the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. No Mortgage Loan
is
subject to nullification pursuant to Executive Order 13224 (the “Executive
Order”)
or the
regulations promulgated by the Office of Foreign Assets Control of the United
States Department of the Treasury (the “OFAC
Regulations”)
or in
violation of the Executive Order or the OFAC Regulations, and no Mortgagor
is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a “blocked person” for purposes of the OFAC Regulations;
(56) No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan Seller or Interim Servicer which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan’s origination, such Mortgagor did not qualify taking into account credit
history and debt to income ratios for a lower cost credit product then offered
by the Mortgage Loan Seller or any affiliate of the Mortgage Loan Seller. If,
at
the time of loan application, the Mortgagor may have qualified for a for a
lower
cost credit product then offered by any mortgage lending affiliate of the
Mortgage Loan Seller, the Mortgage Loan Seller referred the Mortgagor’s
application to such affiliate for underwriting consideration;
(57) The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the Mortgagor’s income,
assets, liabilities and/or credit history to the proposed payment and such
underwriting methodology does not rely on the extent of the Mortgagor’s equity
in the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan;
(58) With
respect to each Mortgage Loan, the Interim Servicer has fully and accurately
furnished complete information on the related borrower credit files to Equifax,
Experian and Trans Union Credit Information Company, in accordance with the
Fair
Credit Reporting Act and its implementing regulations, on a monthly basis and
the Interim Servicer for each Loan will furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information on its borrower credit files to Equifax, Experian, and Trans Union
Credit Information Company, on a monthly basis;
(59) All
points and fees related to each Mortgage Loan were disclosed in writing to
the
related Borrower in accordance with applicable state and federal laws and
regulations. 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 related Borrower was charged “points and fees” (whether or not
financed) in an amount greater than 8% of the principal amount of such loan,
and
the amount of any such “points and fees” were in accordance with applicable
state laws. 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 such Mortgage Loan were disclosed in writing
to the related Mortgagor in accordance with applicable state and federal laws
and regulations;
SCH.
IV-11
(60) The
Interim Servicer will transmit full-file credit reporting data for each Mortgage
Loan and for each Mortgage Loan, Interim 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;
(61) No
Mortgage Loan is a “manufactured housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is a “High-Cost
Home Loan” or a refinanced “Covered Home Loan,” in each case, as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22
et
seq.);
(62) Each
Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1);
(63) No
Mortgage Loan is secured by real property or secured by a manufactured home
located in the state of Georgia unless (x) such Mortgage Loan was originated
prior to October 1, 2002 or after March 6, 2003, or (y) the property securing
the Mortgage Loan is not, nor will be, occupied by the Mortgagor as the
Mortgagor’s principal dwelling. No Mortgage Loan is a “High Cost Home Loan” as
defined in the Georgia Fair Lending Act, as amended (the “Georgia
Act”).
Each
Mortgage Loan that is a “Home Loan” under the Georgia Act complies with all
applicable provisions of the Georgia Act. No Mortgage Loan secured by owner
occupied real property or an owner occupied manufactured home located in the
State of Georgia was originated (or modified) on or after October 1, 2002
through and including March 6, 2003;
(64) No
Mortgage Loan is a “High-Cost” loan as defined under the New York Banking Law
Section 6-1, effective as of April 1, 2003;
(65) No
Mortgage Loan (a) is secured by property located in the State of New York;
(b)
had an unpaid principal balance at origination of $300,000 or less, and (c)
has
an application date on or after April 1, 2003, the terms of which Mortgage
Loan
equal or exceed either the APR or the points and fees threshold for “high-cost
home loans”, as defined in Section 6-1 of the New York State Banking
Law;
(66) No
Mortgage Loan is a “High Cost Home Loan” as defined in the Arkansas Home Loan
Protection Act effective July 16, 2003 (Act 1340 or 2003);
(67) No
Mortgage Loan is a “High Cost Home Loan” as defined in the Kentucky high-cost
loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
SCH.
IV-12
(68) No
Mortgage Loan secured by property located in the State of Nevada is a “home
loan” as defined in the Nevada Assembly ▇▇▇▇ No. 284;
(69) No
Mortgage Loan is a “manufactured housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is a “High-Cost
Home Loan” or a refinanced “Covered Home Loan,” in each case, as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22
et
seq.);
(70) No
Mortgage Loan is a subsection 10 mortgage under the Oklahoma Home Ownership
and
Equity protection Act;
(71) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004 (N.M. Stat. ▇▇▇. §§ 58-21A-1 et
seq.);
(72) No
Mortgage Loan is a “High-Risk Home Loan” as defined in the Illinois High-Risk
Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(73) No
Loan
that is secured by property located within the State of Maine meets the
definition of a (i) “high-rate, high-fee” mortgage loan under Article VIII,
Title 9-A of the Maine Consumer Credit Code or (ii) “High-Cost Home Loan” as
defined under the Maine House ▇▇▇▇ 383 ▇.▇. 494, effective as of September
13,
2003;
(74) With
respect to any Loan for which a mortgage loan application was submitted by
the
Mortgagor after April 1, 2004, no such Loan secured by Mortgaged Property in
the
State of Illinois which has a Loan Interest Rate in excess of 8.0% per annum
has
lender-imposed fees (or other charges) in excess of 3.0% of the original
principal balance of the Loan;
(75) No
Mortgage Loan secured by a Mortgaged Property located in the Commonwealth of
Massachusetts was made to pay off or refinance an existing loan or other debt
of
the related borrower (as the term “borrower” is defined in the regulations
promulgated by the Massachusetts Secretary of State in connection with
Massachusetts House ▇▇▇▇ 4880 (2004)) unless either (1) (a) the related Mortgage
Interest Rate (that would be effective once the introductory rate expires,
with
respect to Adjustable Rate Mortgage Loans) did or would not exceed by more
than
2.25% the yield on United States Treasury securities having comparable periods
of maturity to the maturity of the related Mortgage Loan as of the fifteenth
day
of the month immediately preceding the month in which the application for the
extension of credit was received by the related lender or (b) the Mortgage
Loan
is an “open-end home loan” (as such term is used in the Massachusetts House ▇▇▇▇
4880 (2004)) and the related Mortgage Note provides that the related Mortgage
Interest Rate may not exceed at any time the Prime rate index as published
in
The Wall Street Journal plus a margin of one percent, or (2) such Mortgage
Loan
is in the “borrower's interest,” as documented by a “borrower's interest
worksheet” for the particular Mortgage Loan, which worksheet incorporates the
factors set forth in Massachusetts House ▇▇▇▇ 4880 (2004) and the regulations
promulgated thereunder for determining “borrower's interest,” and otherwise
complies in all material respects with the laws of the Commonwealth of
Massachusetts;
SCH.
IV-13
(76)
No Loan
is a “High Cost Home Loan” governed by the Indiana Home Loan Practices Act, Ind.
Code ▇▇▇. §§ 24-9-1-1 et seq.;
(77) The
Mortgagor has not made or caused to be made any payment in the nature of an
“average” or “yield spread premium” to a mortgage broker or a like Person which
has not been fully disclosed to the Mortgagor;
(78) The
sale
or transfer of the Mortgage Loan by the Mortgage Loan Seller complies with
all
applicable federal, state, and local laws, rules, and regulations governing
such
sale or transfer, including, without limitation, the Fair and Accurate Credit
Transactions Act (“FACT Act”) and the Fair Credit Reporting Act, each as may be
amended from time to time, and the Mortgage Loan Seller has not received any
actual or constructive notice of any identity theft, fraud, or other
misrepresentation in connection with such Mortgage Loan or any party
thereto;
(79) With
respect to each MOM Loan, a MIN has been assigned by MERS and such MIN is
accurately provided on the Mortgage Loan Schedule. The related Assignment of
Mortgage to MERS has been duly and properly recorded, or has been delivered
for
recording to the applicable recording office;
(80) With
respect to each MOM Loan, Mortgage Loan Seller has not received any notice
of
liens or legal actions with respect to such Mortgage Loan and no such notices
have been electronically posted by MERS;
(81) With
respect to each Mortgage Loan, (i) if the related first lien provides for
negative amortization, the CLTV was calculated at the maximum principal balance
of such first lien that could result upon application of such negative
amortization feature, and (ii) either no consent for the Mortgage Loan is
required by the holder of the first lien or such consent has been obtained
and
is contained in the Mortgage File; and
(82) No
Mortgagor was required to submit to arbitration to resolve any dispute arising
out of or relating in any way to the Mortgage Loan transaction.
(83) No
Mortgage Loan that was originated on or after October 31, 2004, is subject
to
mandatory arbitration except when the terms of the arbitration also contain
a
waiver provision that provides that in the event of a sale or transfer of the
Mortgage Loan or interest in the Mortgage Loan to ▇▇▇▇▇▇ Mae, the terms of
the
arbitration are null and void and cannot be reinstated;
(84)
No
Mortgage Loan is secured by a lien on a “condo hotel;”
(85) With
respect to any Mortgage Loan insured by PMI:
such
Mortgage Loan is an Eligible Loan;
SCH.
IV-14
(B) the
description of each Mortgage Loan contained in the Mortgage Loan Schedule
submitted to Purchaser on the related Closing Date is true and correct in all
material respects;
(C) such
Mortgage Loan has not been past due with respect to any scheduled installment
payment during the twelve (12) months immediately preceding the related Closing
Date, nor has such Mortgage Loan ever been sixty (60) days or more past due
with
respect to any scheduled installment payment;
(D) an
appraisal (and not an automated valuation model) was obtained in connection
with
such Mortgage Loan, unless the use of an alternative evaluation methodology
was
disclosed to Purchaser;
(E) such
Mortgage Loan was originated in compliance with the originator’s underwriting
guidelines;
(F) such
Mortgage Loan has not been in foreclosure at any time prior to the related
Closing Date, nor has any borrower on such Mortgage Loan been a party to any
foreclosure action within twelve (12) months prior to the origination of such
Mortgage Loan unless a reasonable exception to the originator’s underwriting
guidelines was made and documented in the origination file; and
(G) multiple
loans to one borrower have been disclosed to the Purchaser in the related
Mortgage Loan Schedule, or a separate file sent by the Company.
SCH.
IV-15
EXHIBIT
A
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE
OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND
CERTAIN OTHER ASSETS.
PRIOR
TO
THE TERMINATION OF THE SWAP AGREEMENT AND THE CAP AGREEMENT, NO TRANSFER OF
THIS
CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE RECEIVED A
REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT
THAT
EITHER (I) SUCH TRANSFEREE IS NEITHER AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO SECTION 406 OF ERISA AND/OR SECTION
4975 OF THE CODE OR ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE SUCH PLAN’S OR
ARRANGEMENT’S ASSETS BY REASON OF THEIR INVESTMENT IN THE ENTITY (A “PLAN”) NOR
A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH
PLAN
TO EFFECT SUCH TRANSFER OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE
ARE ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION
(“PTCE”) ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23. ANY PURPORTED
TRANSFER OF THIS CERTIFICATE PRIOR TO THE TERMINATION OF THE SWAP AGREEMENT
AND
THE CAP AGREEMENT TO OR ON BEHALF OF A PLAN WITHOUT THE DELIVERY TO THE TRUSTEE
OF A REPRESENTATION LETTER AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
IF
THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE TRANSFEREE WILL BE DEEMED
TO
HAVE MADE A REPRESENTATION AS PROVIDED IN CLAUSE (I) OR (II) OF THIS PARAGRAPH,
AS APPLICABLE.
EXHIBIT
A-1
|
Certificate
No:
|
1
|
|
|
Cut-off
Date:
|
January
1, 2006
|
|
|
First
Distribution Date:
|
February
27, 2006
|
|
|
Initial
Certificate Balance of this Certificate (“Denomination”):
|
$[
]
|
EXHIBIT
A-2
|
Initial
Certificate Balances of all Certificates of this Class:
|
I-A
|
$ |
119,285,000
|
|
II-A
|
$ |
146,131,000
|
|
|
M-1
|
$ |
11,504,000
|
|
|
M-2
|
$ |
10,353,000
|
|
|
M-3
|
$ |
6,409,000
|
|
|
M-4
|
$ |
5,587,000
|
|
|
M-5
|
$ |
5,423,000
|
|
|
M-6
|
$ |
4,930,000
|
|
|
M-7
|
$ |
4,601,000
|
|
|
M-8
|
$ |
3,779,000
|
|
|
M-9
|
$ |
2,958,000
|
|
|
M-10
|
$ |
2,300,000
|
|
|
M-11
|
$ |
3,286,000
|
|
|
CUSIP:
|
▇-▇
|
▇▇▇▇▇▇
▇▇ ▇
|
|
|
▇▇-▇
|
▇▇▇▇▇▇
ER 5
|
||
|
M-1
|
40430H
ES 3
|
||
|
M-2
|
40430H
ET 1
|
||
|
M-3
|
40430H
EU 8
|
||
|
M-4
|
40430H
EV 6
|
||
|
M-5
|
40430H
EW 4
|
||
|
M-6
|
40430H
EX 2
|
||
|
M-7
|
40430H
EY 0
|
||
|
M-8
|
40430H
EZ 7
|
||
|
M-9
|
40430H
FA 1
|
||
|
M-10
|
40430H
FB 9
|
||
|
M-11
|
40430H
FC 7
|
||
|
ISIN:
|
I-A
|
US40430HEQ74
|
|
|
II-A
|
US40430HER57
|
||
|
M-1
|
US40430HES31
|
||
|
M-2
|
US40430HET14
|
||
|
M-3
|
US40430HEU86
|
||
|
M-4
|
US40430HEV69
|
||
|
M-5
|
US40430HEW43
|
||
|
M-6
|
US40430HEX26
|
||
|
M-7
|
US40430HEY09
|
||
|
M-8
|
US40430HEZ73
|
||
|
M-9
|
US40430HFA14
|
||
|
M-10
|
US40430HFB96
|
||
|
M-11
|
US40430HFC79
|
EXHIBIT
A-3
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
[Class
[I-][II-][A[-__][Class M-__]
evidencing
a percentage interest in the distributions allocable to the Certificates of
the
above-referenced Class.
Principal
in respect of this Certificate is distributable monthly as set forth herein.
Accordingly, the Certificate Balance at any time may be less than the
Certificate Balance as set forth herein. This Certificate does not evidence
an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Trustee or any other party to the Agreement referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or
instrumentality.
This
certifies that [____________]is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the denomination of this
Certificate by the aggregate of the denominations of all Certificates of the
Class to which this Certificate belongs) in certain monthly distributions
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the “Agreement”)
among
HSI Asset Securitization Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference
is hereby made to the further provisions of this Certificate set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
This
Certificate shall not be entitled to any benefit under the Agreement or be
valid
for any purpose unless manually authenticated by an authorized signatory of
the
Securities Administrator.
* * *
EXHIBIT
A-4
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
|
Dated:
|
|
Dated:
|
||
|
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity, but solely as
Securities Administrator |
||
| |
|
|
| By: | ||
|
|
||
| Authenticated: | ||||
| By: | ||||
|
Authorized
Signatory of
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity,
but
solely as Securities Administrator
|
||||
EXHIBIT
A-5
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates
This
Certificate is one of a duly authorized issue of Certificates designated as
HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the “Certificates”),
and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely
to the
funds on deposit in the Distribution Account or Supplemental Interest Trust
Account for payment hereunder and that neither the Trustee nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced thereby, and the rights, duties and immunities
of the Trustee.
Pursuant
to the terms of the Agreement, a distribution will be made on the 25th day
of
each month or, if such day is not a Business Day, the Business Day immediately
following (the “Distribution
Date”),
commencing on the first Distribution Date specified on the face hereof, to
the
Person in whose name this Certificate is registered at the close of business
on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement. The Record Date applicable
to
each Distribution Date is the Business Day immediately preceding such
Distribution Date.
Distributions
on this Certificate shall be made by wire transfer of immediately available
funds to the account of the Holder hereof at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or,
if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment
and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders
of
this Certificate and of any Certificate issued upon the transfer hereof or
in
exchange therefor or in lieu hereof whether or not notation of such consent
is
made upon this Certificate. The Agreement also permits the amendment thereof,
in
certain limited circumstances, without the consent of the Holders of any of
the
Certificates.
EXHIBIT
A-6
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
of
the Securities Administrator upon surrender of this Certificate for registration
of transfer at the offices designated by the Securities Administrator for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by the holder hereof or such
holder’s attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The
Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made for any such registration of transfer or exchange,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The
Trustee, the Depositor and the Securities Administrator and any agent of the
Trustee, the Depositor or the Securities Administrator may treat the Person
in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Depositor, the Securities Administrator nor any
such agent shall be affected by any notice to the contrary.
The
Master Servicer, upon the instruction of the Depositor, shall purchase the
Mortgage Loans and therefore cause the termination of the Trust on the initial
Optional Termination Date, which is the Distribution Date following the month
in
which the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date and on
any
Distribution Date thereafter; provided,
however,
the
Servicer may exercise the option to purchase the Mortgage Loans and thereby
cause the termination of the Trust on the Distribution Date following the month
in which the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period is less than or equal to 5% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, if the
Depositor has not previously provided instructions to the Master Servicer to
exercise such option on the Depositor’s behalf on such Distribution Date;
provided,
further,
that
the Master Servicer may in its own right exercise the option to purchase the
Mortgage Loans if the Servicer fails to exercise its option as described in
the
immediately preceding proviso.
EXHIBIT
A-7
The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any
term
used herein that is defined in the Agreement shall have the meaning assigned
in
the Agreement, and nothing herein shall be deemed inconsistent with that
meaning.
EXHIBIT
A-8
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please
print or typewrite name and address including postal zip code of
assignee)
the
Percentage Interest evidenced by the within Certificate and hereby authorizes
the transfer of registration of such Percentage Interest to assignee on the
Certificate Register of the Trust Fund.
I
(We)
further direct the Securities Administrator to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
|
Signature by or on behalf of assignor |
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately available funds
to
___________________________________________________,
____________________________________________________, for the account of
_________________, account number __________, or, if mailed by check, to
_________________________________________.
Applicable
statements should be mailed to ________________________________,
_____________________________________________
This
information is provided by _____________________________________________,
the
assignee named above, or _______________________________, as its agent.
EXHIBIT
A-9
EXHIBIT
B
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER IN
THE
FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER
(I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF
EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, STATING THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER
TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”),
OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (“SIMILAR
LAW”)
OR A
PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO
A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO
SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON
ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY
SUCH
PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND
OF
NO EFFECT.
|
Certificate
No.
|
:
|
1
|
|
Cut-off
Date
|
:
|
February
1, 2006
|
|
First
Distribution Date
|
:
|
March
25, 2006
|
|
Percentage
Interest of this Certificate
|
:
|
[___]%
|
|
CUSIP
|
:
|
40430H
FD 5
|
|
ISIN
|
:
|
40430HFD52
|
EXHIBIT
B-1
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Class
P
evidencing
a percentage interest in the distribution of Prepayment Charges allocable to
the
Certificates of the above-referenced Class.
Distributions
in respect of this Certificate are distributable monthly as set forth herein.
This Certificate does not evidence an obligation of, or an interest in, and
is
not guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This
certifies that HSBC SECURITIES (USA) INC. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions of Prepayment Charges pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the “Agreement”)
among
HSI Asset Securitization Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This
Certificate does not have an Interest Rate and will solely be entitled to
receive distributions of Prepayment Charges to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purpose, or such other location specified in the notice to
Certificateholders.
No
transfer of a Certificate of this Class shall be made unless such disposition
is
exempt from the registration requirements of the Securities Act of 1933, as
amended (the “1933 Act”),
and
any applicable state securities laws or is made in accordance with the 1933
Act
and such laws. In the event of any such transfer, the Securities Administrator
shall require the transferor to execute a transferor certificate (in
substantially the form attached to the Agreement) and deliver either (i) a
Rule 144A Letter, in either case substantially in the form attached to the
Agreement, or (ii) a written Opinion of Counsel to the Securities
Administrator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the 1933 Act
or
is being made pursuant to the 1933 Act, which Opinion of Counsel shall be an
expense of the transferor.
EXHIBIT
B-2
No
transfer of a Certificate of this Class shall be made unless the Securities
Administrator shall have received a representation letter from the transferee
of
such Certificate, acceptable to and in form and substance satisfactory to the
Securities Administrator, to the effect that such transferee is not an employee
benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
or any materially similar provisions of applicable federal, state or local
law
(“Similar
Law”),
or a
person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Securities
Administrator.
Reference
is hereby made to the further provisions of this Certificate set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
This
Certificate shall not be entitled to any benefit under the Agreement or be
valid
for any purpose unless manually authenticated by an authorized signatory of
the
Securities Administrator.
* * *
EXHIBIT
B-3
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
|
Dated:
|
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity, but solely as
Securities
Administrator
|
|
| |
|
|
| By: | ||
|
|
||
| Authenticated: | ||||
| By: | ||||
|
Authorized
Signatory of
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity,
but
solely as Securities Administrator
|
||||
EXHIBIT
B-4
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates
This
Certificate is one of a duly authorized issue of Certificates designated as
HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the “Certificates”),
and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely
to the
funds on deposit in the Distribution Account or constituting Prepayment Charges
for payment hereunder and that neither the Trustee nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced thereby, and the rights, duties and immunities
of the Trustee.
Pursuant
to the terms of the Agreement, a distribution will be made on the 25th day
of
each month or, if such day is not a Business Day, the Business Day immediately
following (the “Distribution
Date”),
commencing on the first Distribution Date specified on the face hereof, to
the
Person in whose name this Certificate is registered at the close of business
on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement. The Record Date applicable
to
each Distribution Date is the last Business Day of the month next preceding
the
month of such Distribution Date.
Distributions
on this Certificate shall be made by wire transfer of immediately available
funds to the account of the Holder hereof at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or,
if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment
and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders
of
this Certificate and of any Certificate issued upon the transfer hereof or
in
exchange therefor or in lieu hereof whether or not notation of such consent
is
made upon this Certificate. The Agreement also permits the amendment thereof,
in
certain limited circumstances, without the consent of the Holders of any of
the
Certificates.
EXHIBIT
B-5
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
of
the Securities Administrator upon surrender of this Certificate for registration
of transfer at the offices designated by the Securities Administrator for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by the holder hereof or such
holder’s attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The
Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made for any such registration of transfer or exchange,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The
Trustee, the Depositor and the Securities Administrator and any agent of the
Trustee, the Depositor or the Securities Administrator may treat the Person
in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Depositor, the Securities Administrator nor any
such agent shall be affected by any notice to the contrary.
The
Master Servicer, upon the instruction of the Depositor, shall purchase the
Mortgage Loans and therefore cause the termination of the Trust on the initial
Optional Termination Date, which is the Distribution Date following the month
in
which the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date and on
any
Distribution Date thereafter; provided,
however,
the
Master Servicer in its own right may exercise the option to purchase the
Mortgage Loans and thereby cause the termination of the Trust on the
Distribution date following the month in which the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
is
less than or equal to 5% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, if the Depositor has not previously
provided instructions to the Master Servicer to exercise such option on the
Depositor’s behalf on such Distribution Date; provided,
further,
that
the Master Servicer in its own right may exercise the option to purchase the
Mortgage Loan if the Servicer fails to exercise its option in accordance with
the immediately preceding proviso.
EXHIBIT
B-6
The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any
term
used herein that is defined in the Agreement shall have the meaning assigned
in
the Agreement, and nothing herein shall be deemed inconsistent with that
meaning.
EXHIBIT
B-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)
the
Percentage Interest evidenced by the within Certificate and hereby authorizes
the transfer of registration of such Percentage Interest to assignee on the
Certificate Register of the Trust Fund.
I
(We)
further direct the Securities Administrator to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
|
Signature by or on behalf of assignor |
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately available
funds to
___________________________________________________,
____________________________________________________, for the account
of
_________________, account number __________, or, if mailed by check,
to
_________________________________________.
Applicable
statements should be mailed to ________________________________,
_____________________________________________
This
information is provided by _____________________________________________,
the
assignee named above, or _________________________________, as its agent.
EXHIBIT
B-8
EXHIBIT
C
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST”
IN TWO “REAL ESTATE MORTGAGE INVESTMENT CONDUITS,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER AFFIDAVIT IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A PERSON
OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF THE
AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS
NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”),
OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (“SIMILAR
LAW”)
OR A
PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO
A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO
SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON
ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY
SUCH
PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND
OF
NO EFFECT.
|
Certificate
No.
|
:
|
R-1
|
|
Cut-off
Date
|
:
|
February
1, 2006
|
|
First
Distribution Date
|
:
|
March
25, 2006
|
|
Percentage
Interest of this Certificate
|
:
|
100.00%
|
|
CUSIP
|
:
|
40430H
FF 0
|
|
ISN
|
:
|
40430HFF01
|
EXHIBIT
C-1
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Class
R
evidencing
a percentage interest in the distributions allocable to the Certificates of
the
above-referenced Class.
Distributions
in respect of this Certificate are distributable monthly as set forth herein.
This Class R Certificate has no Certificate Balance and is not entitled to
distributions in respect of principal or interest. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below
or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or
instrumentality.
This
certifies that [HSBC SECURITIES (USA) INC.] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the “Agreement”)
among
HSI Asset Securitization Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any
distribution of the proceeds of any remaining assets of the Trust will be made
only upon presentment and surrender of this Class R Certificate at the
offices designated by the Securities Administrator for such purpose, or such
other location specified in the notice to Certificateholders.
No
transfer of a Class R Certificate shall be made unless the Securities
Administrator shall have received a representation letter from the transferee
of
such Certificate, acceptable to and in form and substance satisfactory to the
Securities Administrator, to the effect that such transferee is not an employee
benefit plan or arrangement subject to Section 406 of ERISA, a plan or
arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Depositor, the Master Servicer or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject
to Section 4975 of the Code or a plan subject to Similar Law, or a person
acting on behalf of any such plan or arrangement or using the assets of any
such
plan or arrangement, such attempted transfer or acquisition shall be void and
of
no effect.
EXHIBIT
C-2
Each
Holder of this Class R Certificate shall be deemed by the acceptance or
acquisition an Ownership Interest in this Class R Certificate to have
agreed to be bound by the following provisions, and the rights of each Person
acquiring any Ownership Interest in this Class R Certificate are expressly
subject to the following provisions: (i) each Person holding or acquiring
any Ownership Interest in this Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Securities Administrator of any change
or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the
Closing Date or thereafter transferred, and the Securities Administrator shall
not register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have
been furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement,
(iii) each Person holding or acquiring any Ownership Interest in this
Class R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its Ownership
Interest this Class R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or agent
in
connection with any Transfer of this Class R Certificate, (C) not to
cause income with respect to the Class R Certificate to be attributable to
a foreign permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of such Person or any other U.S. Person and
(D) not to Transfer the Ownership Interest in this Class R Certificate
or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person
is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of
the Ownership Interest in this Class R Certificate in violation of the
provisions herein shall be absolutely null and void and shall vest no rights
in
the purported Transferee.
Reference
is hereby made to the further provisions of this Certificate set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
This
Certificate shall not be entitled to any benefit under the Agreement or be
valid
for any purpose unless manually authenticated by an authorized signatory of
the
Securities Administrator.
* * *
EXHIBIT
C-3
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
|
Dated:
|
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity, but solely as
Securities
Administrator
|
|
| |
|
|
| By: | ||
|
|
||
| Authenticated: | ||||
| By: | ||||
|
Authorized
Signatory of
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity,
but
solely as Securities Administrator
|
||||
EXHIBIT
C-4
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates
This
Certificate is one of a duly authorized issue of Certificates designated as
HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the “Certificates”),
and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely
to the
funds on deposit in the Distribution Account or Supplemental Interest Trust
Account for payment hereunder and that neither the Trustee nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced thereby, and the rights, duties and immunities
of the Trustee.
Pursuant
to the terms of the Agreement, a distribution will be made on the 25th day
of
each month or, if such day is not a Business Day, the Business Day immediately
following (the “Distribution
Date”),
commencing on the first Distribution Date specified on the face hereof, to
the
Person in whose name this Certificate is registered at the close of business
on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement. The Record Date applicable
to
each Distribution Date is the last Business Day of the month next preceding
the
month of such Distribution Date.
Distributions
on this Certificate shall be made by wire transfer of immediately available
funds to the account of the Holder hereof at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or,
if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment
and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purpose, or such other location specified in the notice
to Certificateholders of such final distribution.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders
of
this Certificate and of any Certificate issued upon the transfer hereof or
in
exchange therefor or in lieu hereof whether or not notation of such consent
is
made upon this Certificate. The Agreement also permits the amendment thereof,
in
certain limited circumstances, without the consent of the Holders of any of
the
Certificates.
EXHIBIT
C-5
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
of
the Securities Administrator upon surrender of this Certificate for registration
of transfer at the offices designated by the Securities Administrator for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by the holder hereof or such
holder’s attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The
Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made for any such registration of transfer or exchange,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The
Trustee, the Depositor and the Securities Administrator and any agent of the
Trustee, the Depositor or the Securities Administrator may treat the Person
in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Depositor, the Securities Administrator nor any
such agent shall be affected by any notice to the contrary.
The
Master Servicer, upon the instruction of the Depositor, shall purchase the
Mortgage Loans and therefore cause the termination of the Trust on the initial
Optional Termination Date, which is the Distribution Date following the month
in
which the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date and on
any
Distribution Date thereafter; provided,
however,
the
Servicer may exercise the option to purchase the Mortgage Loans and thereby
cause the termination of the Trust on the Distribution Date following the month
in which the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period is less than or equal to 5% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, if the
Depositor has not previously provided instructions to the Master Servicer to
exercise such option on the Depositor’s behalf on such Distribution Date;
provide,
further,
the
Master Servicer in its own right may exercise the option to purchase the
Mortgage Loan if the Servicer fails to exercise its option in accordance with
the immediately preceding proviso.
EXHIBIT
C-6
The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any
term
used herein that is defined in the Agreement shall have the meaning assigned
in
the Agreement, and nothing herein shall be deemed inconsistent with that
meaning.
EXHIBIT
C-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)
the
Percentage Interest evidenced by the within Certificate and hereby authorizes
the transfer of registration of such Percentage Interest to assignee on the
Certificate Register of the Trust Fund.
I
(We)
further direct the Securities Administrator to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
|
Signature by or on behalf of assignor |
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately available
funds to
___________________________________________________,
____________________________________________________, for the account
of
_________________, account number __________, or, if mailed by check,
to
_________________________________________.
Applicable
statements should be mailed to ________________________________,
_____________________________________________
This
information is provided by ____________________________________________,
the
assignee named above, or _________________________________, as its agent.
EXHIBIT
C-8
EXHIBIT
D
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
AND
CERTAIN OTHER ASSETS.
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER IN
THE
FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER
(I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF
EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED (“ERISA”),
OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE
FEDERAL, STATE OR LOCAL LAW (“SIMILAR
LAW”)
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF SUCH
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING AND THE
TRANSFEREE IS AN INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING
THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES
ADMINISTRATOR, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN
THE
MEANING OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW AND WILL NOT SUBJECT
THE TRUSTEE, THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER
OR
THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN
THE
AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE
OR
SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY
TO THE SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
EXHIBIT
D-1
|
Certificate
No.
|
:
|
X-1
|
|
Cut-off
Date
|
:
|
February
1, 2006
|
|
First
Distribution Date
|
:
|
March
25, 2006
|
|
Percentage
Interest of this Certificate
|
:
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[___]%
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CUSIP
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:
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40430H
FE 3
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ISIN
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:
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40430HFE36
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EXHIBIT
D-2
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
Class
X
evidencing
a percentage interest in the distributions allocable to the Certificates of
the
above-referenced Class.
Distributions
in respect of this Certificate are distributable monthly as set forth herein.
This Certificate does not evidence an obligation of, or an interest in, and
is
not guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This
certifies that [____________________]is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination
of
this Certificate by the aggregate of the denominations of all Certificates
of
the Class to which this Certificate belongs) in certain monthly distributions
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the “Agreement”)
among
HSI Asset Securitization Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This
Certificate does not have a Certificate Balance or an Interest Rate and will
be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purpose, or such
other location specified in the notice to Certificateholders.
No
transfer of a Certificate of this Class shall be made unless such disposition
is
exempt from the registration requirements of the Securities Act of 1933, as
amended (the “1933 Act”),
and
any applicable state securities laws or is made in accordance with the 1933
Act
and such laws. In the event of any such transfer, the Securities Administrator
shall require the transferor to execute a transferor certificate (in
substantially the form attached to the Agreement) and deliver either (i) a
Rule 144A Letter, in either case substantially in the form attached to the
Agreement, or (ii) a written Opinion of Counsel to the Securities
Administrator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the 1933 Act
or
is being made pursuant to the 1933 Act, which Opinion of Counsel shall be an
expense of the transferor.
EXHIBIT
D-3
No
transfer of a Certificate of this Class shall be made unless the Securities
Administrator shall have received either (i) a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or
Section 4975 of the Code or any materially similar provisions of applicable
Federal, state or local law (“Similar
Law”)
or a
person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Securities Administrator,
or (ii) if such Certificate has been the subject of an ERISA-Qualifying
Underwriting and the transferee is an insurance company, a representation letter
that it is purchasing such Certificates with the assets of its general account
and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject
to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of
any
such plan or arrangement or using such plan’s or arrangement’s assets, an
Opinion of Counsel satisfactory to the Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator,
to
the effect that the purchase or holding of such Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the
Depositor, the Securities Administrator or the Servicer to any obligation in
addition to those expressly undertaken in the Agreement or to any
liability.
Reference
is hereby made to the further provisions of this Certificate set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
This
Certificate shall not be entitled to any benefit under the Agreement or be
valid
for any purpose unless manually authenticated by an authorized signatory of
the
Securities Administrator.
* * *
EXHIBIT
D-4
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
|
Dated:
|
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity, but solely as
Securities
Administrator
|
|
| |
|
|
| By: | ||
|
|
||
| Authenticated: | ||||
| By: | ||||
|
Authorized
Signatory of
▇▇▇▇▇
FARGO BANK, N.A.,
not
in its individual capacity,
but
solely as Securities Administrator
|
||||
EXHIBIT
D-5
HSI
ASSET
SECURITIZATION CORPORATION
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates
This
Certificate is one of a duly authorized issue of Certificates designated as
HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the “Certificates”),
and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The
Certificateholder, by its acceptance of this Certificate, agrees that it will
look solely
to the
funds on deposit in the Distribution Account or Supplemental Interest Trust
Account for payment hereunder and that neither the Trustee nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights and limitations of rights, benefits,
obligations and duties evidenced thereby, and the rights, duties and immunities
of the Trustee.
Pursuant
to the terms of the Agreement, a distribution will be made on the 25th day
of
each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the “Distribution
Date”),
commencing on the first Distribution Date specified on the face hereof, to
the
Person in whose name this Certificate is registered at the close of business
on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement. The Record Date applicable
to
each Distribution Date is the last Business Day of the month next preceding
the
month of such Distribution Date.
Distributions
on this Certificate shall be made by wire transfer of immediately available
funds to the account of the Holder hereof at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Securities Administrator in writing at least five Business Days
prior to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or,
if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment
and
surrender of such Certificate at the offices designated by the Securities
Administrator for such purposes or such other location specified in the notice
to Certificateholders of such final distribution.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders
of
this Certificate and of any Certificate issued upon the transfer hereof or
in
exchange therefor or in lieu hereof whether or not notation of such consent
is
made upon this Certificate. The Agreement also permits the amendment thereof,
in
certain limited circumstances, without the consent of the Holders of any of
the
Certificates.
EXHIBIT
D-6
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
of
the Securities Administrator upon surrender of this Certificate for registration
of transfer at the offices designated by the Securities Administrator for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by the holder hereof or such
holder’s attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The
Certificates are issuable only as registered Certificates without coupons in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No
service charge will be made for any such registration of transfer or exchange,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The
Trustee, the Depositor and the Securities Administrator and any agent of the
Trustee, the Depositor or the Securities Administrator may treat the Person
in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Depositor, the Securities Administrator nor any
such agent shall be affected by any notice to the contrary.
The
Master Servicer, upon the instruction of the Depositor, shall purchase the
Mortgage Loans and therefore cause the termination of the Trust on the initial
Optional Termination Date, which is the Distribution Date following the month
in
which the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date and on
any
Distribution Date thereafter; provided,
however,
the
Servicer may exercise the option to purchase the Mortgage Loans and thereby
cause the termination of the Trust on the Distribution Date following the month
in which the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period is less than or equal to 5% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, if the
Depositor has not previously provided instructions to the Master Servicer to
exercise such option on the Depositor’s behalf on such Distribution Date;
provide,
further,
the
Master Servicer in its own right may exercise the option to purchase the
Mortgage Loan if the Servicer fails to exercise its option in accordance with
the immediately preceding proviso.
EXHIBIT
D-7
The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any
term
used herein that is defined in the Agreement shall have the meaning assigned
in
the Agreement, and nothing herein shall be deemed inconsistent with that
meaning
EXHIBIT
D-8
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please
print or typewrite name and address including postal zip code of
assignee)
the
Percentage Interest evidenced by the within Certificate and hereby authorizes
the transfer of registration of such Percentage Interest to assignee on the
Certificate Register of the Trust Fund.
I
(We)
further direct the Securities Administrator to issue a new Certificate of a
like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
|
Dated:
|
|
Signature by or on behalf of assignor |
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately available
funds to
___________________________________________________,
____________________________________________________, for the account
of
_________________, account number __________, or, if mailed by check,
to
_________________________________________.
Applicable
statements should be mailed to ________________________________,
_____________________________________________
This
information is provided by _____________________________________________,
the
assignee named above, or _________________________________, as its agent.
EXHIBIT
D-9
EXHIBIT
E
FORM
OF
INITIAL CERTIFICATION OF CUSTODIAN
[date]
|
HSI
Asset Securitization Corporation
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Deutsche
Bank National Trust Company (as Trustee)
▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
Re:
|
HSI
Asset Securitization Corporation Trust, Series
2006-NC1
|
Ladies
and Gentlemen:
In
accordance with Section 2.02 of the Pooling and Servicing Agreement (the
“Pooling
and Servicing Agreement”)
dated
as of February 1, 2006 among HSI Asset Securitization Corporation, as depositor
(the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian (the “Custodian”),
for
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan listed in the attached schedule), it has received:
(i) the
original Mortgage Note, endorsed as provided in the following form: “Pay to the
order of ________, without recourse”; and
(ii) a
duly
executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments).
Based
on
its review and examination and only as to the foregoing documents, such
documents appear regular on their face and related to such Mortgage
Loan.
The
Custodian has made no independent examination of any documents contained in
each
Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage
Loan.
EXHIBIT
E-1
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the Pooling and Servicing Agreement.
|
DEUTSCHE
BANK
NATIONAL TRUST
COMPANY, as Custodian |
|||
| |
|
|
|
| By: | |||
| Name: | |||
| Title: | |||
EXHIBIT
E-2
EXHIBIT
F
FORM
OF
DOCUMENT CERTIFICATION
AND
EXCEPTION REPORT OF CUSTODIAN
______,
20___
|
HSI
Asset Securitization Corporation
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Deutsche
Bank National Trust Company (as Trustee)
▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
NC
Capital Corporation
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Re:
|
HSI
Asset Securitization Corporation, Series
2006-NC1
|
Ladies
and Gentlemen:
In
accordance with Section 2.02 of the Pooling and Servicing Agreement (the
“Pooling
and Servicing Agreement”)
dated
as of February 1, 2006 among HSI Asset Securitization Corporation, as depositor
(the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian (the “Custodian”),
hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or listed on the attached
Document Exception Report) it has received:
(i) The
original Mortgage Note, endorsed in the form provided in Section 2.01 of
the Pooling and Servicing Agreement, with all intervening endorsements showing
a
complete chain of endorsement from the Mortgage Loan Seller to the last
endorsee.
(ii) The
original recorded Mortgage.
(iii) A
duly
executed assignment of the Mortgage in the form provided in Section 2.01 of
the Pooling and Servicing Agreement; or, if the Mortgage Loan Seller has
certified or the Custodian otherwise knows that the related Mortgage has not
been returned from the applicable recording office, a copy of the assignment
of
the Mortgage (excluding information to be provided by the recording
office).
EXHIBIT
F-1
(iv) The
original or duplicate original recorded assignment or assignments of the
Mortgage showing a complete chain of assignment from the Mortgage Loan Seller
to
the last endorsee.
(v) The
original or duplicate original lender’s title policy and all riders thereto or,
any one of an original title binder, an original preliminary title report or
an
original title commitment, or a copy thereof certified by the title
company.
Based
on
its review and examination and only as to the foregoing documents, (a) such
documents appear regular on their face and related to such Mortgage Loan, and
(b) the information set forth in items (1), (2), (3), (15), (18) and
(22) of the Data Tape Information accurately reflects information set forth
in
the Custodial File.
The
Custodian has made no independent examination of any documents contained in
each
Mortgage File beyond the review of the Custodial File specifically required
in
the Pooling and Servicing Agreement. The Custodian makes no representation
as
to: (i) the validity, legality, sufficiency, enforceability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness, priority, perfection or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether
(i) any endorsement is sufficient to transfer all right, title and interest
of the party so endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the Pooling and Servicing Agreement.
|
DEUTSCH
BANK NATIONAL TRUST
COMPANY, as Custodian |
|||
| |
|
|
|
| By: | |||
| Name: | |||
| Title: | |||
EXHIBIT
F-2
EXHIBIT
G
FORM
OF
RESIDUAL TRANSFER AFFIDAVIT
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates, Series 2006-NC1
|
STATE
OF
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF
|
)
|
The
undersigned, being first duly sworn, deposes and says as follows:
1. The
undersigned is an officer of ___________________, the proposed Transferee of
an
Ownership Interest in a Class R Certificate (the “Certificate”)
issued
pursuant to the Pooling and Servicing Agreement (the “Agreement”),
relating to the above-referenced Series, dated as of February 1, 2006 among
HSI
Asset Securitization Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor, the Securities Administrator and the
Trustee.
2. The
Transferee is, as of the date hereof, and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate for its own account. The Transferee has no knowledge
that any such affidavit is false.
3. The
Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are Non-Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman)
for
a Person that is a Non-Permitted Transferee, on the agent; and (iii) the
Person otherwise liable for the tax shall be relieved of liability for the
tax
if the subsequent Transferee furnished to such Person an affidavit that such
subsequent Transferee is a Permitted Transferee and, at the time of Transfer,
such Person does not have actual knowledge that the affidavit is
false.
4. The
Transferee has been advised of, and understands that a tax will be imposed
on a
“pass-through entity” holding the Certificate if at any time during the taxable
year of the pass-through entity a Person that is a Non-Permitted Transferee
is
the record holder of an interest in such entity. The Transferee understands
that
such tax will not be imposed for any period with respect to which the record
holder furnishes to the pass-through entity an affidavit that such record holder
is a Permitted Transferee and the pass-through entity does not have actual
knowledge that such affidavit is false. (For this purpose, a “pass-through
entity” includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives
and, except as may be provided in Treasury Regulations, persons holding
interests in pass-through entities as a nominee for another
Person.)
EXHIBIT
G-1
5. The
Transferee has reviewed the provisions of Section 5.02(c) of the Agreement
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions
on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide
by
the provisions of Section 5.02(c) of the Agreement and the restrictions
noted on the face of the Certificate. The Transferee understands and agrees
that
any breach of any of the representations included herein shall render the
Transfer to the Transferee contemplated hereby null and void.
6. The
Transferee agrees to require a Transfer Affidavit from any Person to whom the
Transferee attempts to Transfer its Ownership Interest in the Certificate,
and
in connection with any Transfer by a Person for whom the Transferee is acting
as
nominee, trustee or agent, and the Transferee will not Transfer its Ownership
Interest or cause any Ownership Interest to be Transferred to any Person that
the Transferee knows is a Non-Permitted Transferee. In connection with any
such
Transfer by the Transferee, the Transferee agrees to deliver to the Securities
Administrator a certificate substantially in the form set forth as
Exhibit H to the Agreement (a “Transferor
Certificate”)
to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted
Transferee.
7. The
Transferee does not have the intention to impede the assessment or collection
of
any tax legally required to be paid with respect to the Certificate. The
Transferee has historically paid its debts as they have come due and intends
to
pay its debts as they come due in the future. The Transferee intends to pay
all
taxes due with respect to the Certificate as they become due.
8. The
Transferee’s taxpayer identification number is __________.
9. The
Transferee is not a Disqualified Non-U.S. Person as defined in the
Agreement.
10. The
Transferee is aware that the Certificate may be a “noneconomic residual
interest” within the meaning of proposed Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
11. The
Transferee will not cause income from the Residual Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other
U.S.
Person.
EXHIBIT
G-2
12. Check
the
applicable paragraph:
¨ The
present value of the anticipated tax liabilities associated with holding the
Certificate, as applicable, does not exceed the sum of:
(i) the
present value of any consideration given to the Transferee to acquire such
Certificate;
(ii) the
present value of the expected future distributions on such Certificate;
and
(iii) the
present value of the anticipated tax savings associated with holding such
Certificate as the related REMIC generates losses.
For
purposes of this calculation, (i) the Transferee is assumed to pay tax at
the highest rate currently specified in Section 11(b) of the Code (but the
tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the highest
rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the
compounding period used by the Transferee.
¨ The
transfer of the Certificate complies with U.S. Treasury Regulations Sections
1.860E-1(c)(5) and (6) and, accordingly,
(i) the
Transferee is an “eligible corporation,” as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), as to which income from the Certificate will only
be
taxed in the United States;
(ii) at
the
time of the transfer, and at the close of the Transferee’s two fiscal years
preceding the year of the transfer, the Transferee had gross assets for
financial reporting purposes (excluding any obligation of a person related
to
the Transferee within the meaning of U.S. Treasury Regulations Section
1.860E-1(c)(6)(ii)) in excess of $100 million and net assets in excess of
$10 million;
(iii) the
Transferee will transfer the Certificate only to another “eligible corporation,”
as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), in a
transaction that satisfies the requirements of Sections 1.860E-1(c)(4)(i),
(ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
and
(iv) the
Transferee determined the consideration paid to it to acquire the Certificate
based on reasonable market assumptions (including, but not limited to, borrowing
and investment rates, prepayment and loss assumptions, expense and reinvestment
assumptions, tax rates and other factors specific to the Transferee) that it
has
determined in good faith.
¨ None
of
the above.
EXHIBIT
G-3
13. The
Transferee is not an employee benefit plan that is subject to Title I of
ERISA or a plan that is subject to Section 4975 of the Code or a plan
subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is
not acting on behalf of or investing plan assets of such a plan.
* * *
IN
WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its
behalf, pursuant to authority of its Board of Directors, by its duly authorized
officer and its corporate seal to be hereunto affixed, duly attested, this
___
day of _______, 20__.
| Print Name of Transferee | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
[Corporate
Seal]
ATTEST:
[Assistant]
Secretary
Personally
appeared before me the above-named __________, known or proved to me to be
the
same person who executed the foregoing instrument and to be the ___________
of
the Transferee, and acknowledged that he executed the same as his free act
and
deed and the free act and deed of the Transferee.
Subscribed
and sworn before me this ___ day of _______, 20__.
| |
NOTARY
PUBLIC
|
|
| My Commission expires the
__ day
of _________, 20__ |
||
EXHIBIT
G-4
EXHIBIT
H
FORM
OF
TRANSFEROR CERTIFICATE
__________,
20__
HSI
Asset
Securitization Corporation
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Head MBS Principal Finance
▇▇▇▇▇
Fargo Bank, N.A.,
as
Securities Administrator
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Services - HASCO 2006-NC1
| Re: |
HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage
Pass-Through Certificates, Series 2006-NC1, Class [__] |
Ladies
and Gentlemen:
In
connection with our disposition of the above Certificates we certify that
(a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the “Act”),
and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates
to, or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that
would be deemed, or taken any other action which would result in, a violation
of
Section 5 of the Act and (c) to the extent we are disposing of a
Residual Certificate, (i) we have no knowledge the Transferee is a
Non-Permitted Transferee, (ii) after conducting a reasonable investigation
of the financial condition of the Transferee, we have no knowledge and no reason
to believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (iii) we have no reason to
believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee’s Residual Transfer Affidavit are false.
EXHIBIT
H-1
| Very truly yours, | ||
| Print Name of Transferor | ||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
EXHIBIT
H-2
EXHIBIT
I
FORM
OF
RULE 144A LETTER
____________,
20__
HSI
Asset
Securitization Corporation
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Head MBS Principal Finance
▇▇▇▇▇
Fargo Bank, N.A.,
as
Securities Administrator
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Services - HASCO 2006-NC1
|
Re:
|
HSI
Asset Securitization Corporation Trust 2006-NC1
|
| Mortgage Pass-Through Certificates, Series 2006-NC1, Class [__] |
Ladies
and Gentlemen:
In
connection with our acquisition of the above Certificates we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the “Act”),
or
any state securities laws and are being transferred to us in a transaction
that
is exempt from the registration requirements of the Act and any such laws,
(b) we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the Depositor concerning the purchase of the Certificates
and all matters relating thereto or any additional information deemed necessary
to our decision to purchase the Certificates, (d) either we are purchasing
a Class I-A, Class II-A, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5
Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 or Class M-11 Certificate
or we are not an employee benefit plan that is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue
Code of 1986, as amended, or a plan subject to materially similar provisions
of
applicable federal, state or local law, nor are we acting on behalf of any
such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such acquisition or, with respect to a Class X Certificate, such
Certificate has been the subject of an ERISA-Qualifying Underwriting and the
purchaser is an insurance company that is purchasing this certificate with
funds
contained in an “insurance company general account” (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption (“PTCE”)
95-60)
and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, (e) in the case of an
ERISA-Restricted Derivative Certificate, either (i) we are not an employee
benefit plan that is subject to Title I of ERISA, or a
EXHIBIT
I-1
plan
or
arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, nor a person acting on behalf of any such plan, nor are we
using the assets of any such plan to effect such transfer or (ii) our
acquisition and holding of the ERISA-Restricted Derivative Certificate is
eligible for exemptive relief under ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 91-38, PTCE
95-60 or PTCE 96-23, (f) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will act, nor
has
authorized or will authorize any person to act, in such manner with respect
to
the Certificates, and (g) we are a “qualified institutional buyer” as that
term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. We are aware that the sale to us is being made in
reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that
such Certificates may be resold, pledged or transferred only (i) to a
person reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Securities Act.
EXHIBIT
I-2
ANNEX
1 TO EXHIBIT I
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees Other Than Registered Investment Companies]
The
undersigned (the “Buyer”)
hereby
certifies as follows to the parties listed in the Rule 144A Transferee
Certificate to which this certification relates with respect to the Certificates
described therein:
1. As
indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the Buyer.
2. In
connection with purchases by the Buyer, the Buyer is a “qualified institutional
buyer” as that term is defined in Rule 144A under the Securities Act of
1933, as amended (“Rule 144A”),
because (i) the Buyer owned and/or invested on a discretionary basis
$________1
in
securities (except for the excluded securities referred to below) as of the
end
of the Buyer’s most recent fiscal year (such amount being calculated in
accordance with Rule 144A and (ii) the Buyer satisfies the criteria in
the category marked below.
|
____
|
Corporation,
etc.
The Buyer is a corporation (other than a bank, savings and loan
association or similar institution), Massachusetts or similar business
trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
|
|
____
|
Bank.
The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia,
the
business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official
or is a
foreign bank or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached
hereto.
|
|
____
|
Savings
and Loan.
The Buyer (a) is a savings and loan association, building and loan
association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its
latest
annual financial statements, a copy of which is attached
hereto.
|
|
____
|
Broker-dealer.
The Buyer is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
|
1 Buyer
must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or
invest on a discretionary basis at least $10,000,000 in
securities.
EXHIBIT
I-3
|
____
|
Insurance
Company.
The Buyer is an insurance company whose primary and predominant business
activity is the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject to supervision
by
the insurance commissioner or a similar official or agency of a State,
territory or the District of
Columbia.
|
|
____
|
State
or Local Plan.
The Buyer is a plan established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
|
|
____
|
ERISA
Plan.
The Buyer is an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of
1974.
|
|
____
|
Investment
Advisor.
The Buyer is an investment advisor registered under the Investment
Advisors Act of 1940.
|
|
____
|
Small
Business Investment Company.
Buyer is a small business investment company licensed by the U.S.
Small
Business Administration under Section 301(c) or (d) of the Small
Business
Investment Act of 1958.
|
|
____
|
Business
Development Company.
Buyer is a business development company as defined in Section 202(a)(22)
of the Investment Advisors Act of
1940.
|
3. The
term
“securities”
as
used
herein does
not include
(i) securities of issuers that are affiliated with the Buyer,
(ii) securities that are part of an unsold allotment to or subscription by
the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iv) bank deposit notes and
certificates of deposit, (v) loan participations, (vi) repurchase
agreements, (vii) securities owned but subject to a repurchase agreement
and (viii) currency, interest rate and commodity swaps.
4. For
purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred
to in
the preceding paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their market value, and
(ii) no current information with respect to the cost of those securities
has been published. If clause (ii) in the preceding sentence applies, the
securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer’s direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer
is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The
Buyer
acknowledges that it is familiar with Rule 144A and understands that the
seller to it and other parties related to the Certificates are relying and
will
continue to rely on the statements made herein because one or more sales to
the
Buyer may be in reliance on Rule 144A.
EXHIBIT
I-4
6. Until
the
date of purchase of the Rule 144A Securities, the Buyer will notify each of
the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer’s
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is
a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they
become available.
| Print Name of Transferee | ||
| |
|
|
| By: | ||
| Name: Title: |
||
| Date: | ||
EXHIBIT
I-5
ANNEX
2 TO EXHIBIT I
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees That Are Registered Investment Companies]
The
undersigned (the “Buyer”)
hereby
certifies as follows to the parties listed in the Rule 144A Transferee
Certificate to which this certification relates with respect to the Certificates
described therein:
1. As
indicated below, the undersigned is the President, Chief Financial Officer
or
Senior Vice President of the Buyer or, if the Buyer is a “qualified
institutional buyer” as that term is defined in Rule 144A under the
Securities Act of 1933, as amended (“Rule 144A”),
because Buyer is part of a Family of Investment Companies (as defined below),
is
such an officer of the Adviser.
2. In
connection with purchases by Buyer, the Buyer is a “qualified institutional
buyer” as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Buyer alone, or the Buyer’s Family
of Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer’s most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer’s Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer’s Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with
respect to the cost of those securities has been published. If clause (ii)
in the preceding sentence applies, the securities may be valued at
market.
|
____
|
The
Buyer owned $_______ in securities (other than the excluded securities
referred to below) as of the end of the Buyer’s most recent fiscal year
(such amount being calculated in accordance with
Rule 144A).
|
|
____
|
The
Buyer is part of a Family of Investment Companies which owned in
the
aggregate $_______ in securities (other than the excluded securities
referred to below) as of the end of the Buyer’s most recent fiscal year
(such amount being calculated in accordance with
Rule 144A).
|
3. The
term
“Family
of Investment Companies”
as
used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the
other).
4. The
term
“securities”
as
used
herein does not include (i) securities of issuers that are affiliated with
the Buyer or are part of the Buyer’s Family of Investment Companies,
(ii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
EXHIBIT
I-6
5. The
Buyer
is familiar with Rule 144A and understands that the parties listed in the
Rule 144A Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made herein because one
or
more sales to the Buyer will be in reliance on Rule 144A. In addition, the
Buyer will only purchase for the Buyer’s own account.
6. Until
the
date of purchase of the Certificates, the undersigned will notify the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates of any changes in the information and conclusions herein. Until such
notice is given, the Buyer’s purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
| Print Name of Transferee | ||
| |
|
|
| By: | ||
| Name: Title: |
||
| IF AN ADVISER: | ||
| Print Name of Transferee | ||
| |
|
|
| Date: | ||
EXHIBIT
I-7
EXHIBIT
J
FORM
OF
REQUEST FOR RELEASE
(for
Custodian)
|
To:
|
Deutsche
Bank National Trust Company
▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
|
||
|
Re:
|
Pooling
and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as
of February 1, 2006 among HSI Asset Securitization Corporation,
as
depositor (the “Depositor”),
▇▇ ▇▇▇▇▇▇ Chase Bank, National Association, as servicer, NC Capital
Corporation, as mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as
master
servicer, (in such capacity, the “Master
Servicer”)
and securities administrator (in such capacity, the “Securities
Administrator”)
and Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and custodian
|
||
In
connection with the administration of the Mortgage Loans held by you as the
Custodian on behalf of the Certificateholders, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor’s
Name, Address & Zip Code:
Mortgage
Loan Number:
Send
Custodial File to:
Delivery
Method (check one)
|
____1.
|
Regular
mail
|
|
____2.
|
Overnight
courier (Tracking information:
)
|
If
neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason
for Requesting Documents
(check
one)
|
____1.
|
Mortgage
Loan Paid in Full.
(The Servicer hereby certifies that all amounts received in connection
therewith have been credited to the Collection Account as provided
in the
Pooling and Servicing Agreement.)
|
|
____2.
|
Mortgage
Loan Repurchase Pursuant to Subsection 2.03 of the Pooling and
Servicing
Agreement.
(The Servicer hereby certifies that the repurchase price has been
credited
to Collection Account as provided in the Pooling and Servicing
Agreement.)
|
EXHIBIT
J-1
|
____3.
|
Mortgage
Loan Liquidated by _________________. (The Servicer hereby certifies
that
all proceeds of foreclosure, insurance, condemnation or other liquidation
have been finally received and credited to the Collection Account
pursuant
to the Pooling and Servicing
Agreement.)
|
|
____4.
|
Mortgage
Loan in Foreclosure.
|
|
____5.
|
Other
(explain).
_________________________________________________________
|
If
box 1,
2 or 3 above is checked, and if all or part of the Custodial File was previously
released to us, please release to us our previous request and receipt on file
with you, as well as any additional documents in your possession relating to
the
specified Mortgage Loan.
If
box 4
or 5 above is checked, upon our return of all of the above documents to you
as
the Trustee, please acknowledge your receipt by signing in the space indicated
below, and returning this form if requested by us.
| [JPMORGAN CHASE BANK, N.A.] | ||
| |
|
|
| By: | ||
|
Name:
Title:
Date:
|
||
ACKNOWLEDGED
AND AGREED:
[DEUTSCHE
BANK, NATIONAL TRUST COMPANY]
By:
Name:
Title:
Date:
EXHIBIT
J-2
EXHIBIT
K
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Depositor and
which shall be retained by the Servicer or delivered to and retained by the
Custodian:
(a) The
documents or instruments set forth as items (i) to (ix) in Section 2.01(b)
of the Pooling and Servicing Agreement.
(b) Residential
loan application.
(c) Mortgage
Loan closing statement.
(d) Verification
of employment and income.
(e) Verification
of acceptable evidence of source and amount of downpayment.
(f) Credit
report on Mortgagor.
(g) Residential
appraisal report.
(h) Photograph
of the Mortgaged Property.
(i) Survey
of
the Mortgaged Property.
(j) Copy
of
each instrument necessary to complete identification of any exception set forth
in the exception schedule in the title policy, i.e., map or plat, restrictions,
easements, sewer agreements, home association declarations, etc.
(k) All
required disclosure statements and statement of Mortgagor confirming receipt
thereof.
(l) If
available, termite report, structural engineer’s report, water potability and
septic certification.
(m) Sales
contract, if applicable.
(n) Hazard
insurance policy.
(o) Tax
receipts, insurance premium receipts, ledger sheets, payment history from date
of origination, insurance claim files, correspondence, current and historical
computerized data files, and all other processing, underwriting and closing
papers and records which are customarily contained in a mortgage loan file
and
which are required to document the Mortgage Loan or to service the Mortgage
Loan.
EXHIBIT
K-1
(p) Amortization
schedule, if available.
(q) Payment
history for Mortgage Loans that have been closed for more than 90
days.
EXHIBIT
K-2
EXHIBIT
L
FORM
OF
▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION TO BE
PROVIDED
BY MASTER SERVICER (OR OTHER
CERTIFICATION
PARTY) WITH FORM 10-K
HSI
Asset
Securitization Corporation Trust 2006-NC1
Mortgage
Pass-Through Certificates
Series
2006-NC1
This
Certification is being made pursuant to Section 3.24 and Section 8.12 of
the Pooling and Servicing Agreement (the “Pooling
and Servicing Agreement”)
relating to the above-referenced Series, among HSI Asset Securitization
Corporation, as depositor (the “Depositor”),
▇▇
▇▇▇▇▇▇ Chase Bank, National Association, as servicer, NC Capital Corporation,
as
mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, (in such
capacity, the “Master
Servicer”)
and
securities administrator (in such capacity, the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian. Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
I,
[identify the certifying individual], certify that:
|
1.
|
I
have reviewed this annual report on Form 10-K (the “Annual
Report”),
and all reports on Form 10-D containing distribution date reports
(collectively with this Annual Report, the “Reports”)
filed in respect of periods included in the year covered by this
Annual
Report, of the Trust;
|
|
2.
|
Based
on my knowledge, the information in the Reports, taken as a whole,
does
not contain any untrue statement of a material fact or omit to state
a
material fact necessary to make the statements made, in light of
the
circumstances under which such statements were made, not misleading
as of
the last day of the period covered by this Annual
Report;
|
|
3.
|
Based
on my knowledge, all of the distributions, servicing and other information
required to be provided to the Securities Administrator by the Master
Servicer under the Pooling and Servicing Agreement for inclusion
in the
Reports is included in the Reports;
|
|
4.
|
I
am responsible for reviewing the activities performed by [JPMorgan
Chase
Bank, National Association] under the Pooling and Servicing Agreement
and
based upon my knowledge and the annual compliance review required
under
the Pooling and Servicing Agreement, and except as disclosed in the
Reports, [JPMorgan Chase Bank, National Association] has fulfilled
its
obligations under the Pooling and Servicing Agreement;
and
|
EXHIBIT
L-1
|
5.
|
The
Reports disclose all significant deficiencies relating to [JPMorgan
Chase
Bank, National Association]’s compliance with the minimum servicing
standards based upon the report provided by an independent public
accountant, after conducting a review in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar procedure
as
set forth in the Pooling and Servicing Agreement, that is included
in the
Reports.
|
In
giving
the certifications above, I have reasonably relied on information provided
to me
by the following unaffiliated party: [▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National
Association].
|
▇▇▇▇▇
Fargo Bank, N.A.
as
Master Servicer
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| Date: | ||
EXHIBIT
L-2
EXHIBIT
M
FORM
OF
SERVICER (OR SERVICING FUNCTION
PARTICIPANT)
BACK-UP CERTIFICATION
▇▇▇▇▇
Fargo Bank, N.A.,
as
Master
Servicer
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Services
|
Re:
|
HSI
Asset Securitization Corporation Trust
2006-NC1
|
JPMorgan
Chase Bank National Association (the “Company”)
hereby
certifies to the Depositor, the Master Servicer, the Trustee and the Securities
Administrator, and each of their officers, directors and affiliates
that:
(1) The
Company has the servicer compliance statement of the [●] provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’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 the 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 [●] during 200[ ]
that were delivered by [●] to any of the Depositor, the Master Servicer, the
Securities Administrator, and the Trustee pursuant to the Agreement
(collectively, the “Company Servicing Information”);
(2) Based
on
the Company’s knowledge, the Company 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 Company Servicing Information;
(3) Based
on
the Company’s knowledge, the Company Servicing Information required to be
provided by the Company under the Agreement has been provided to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee;
(4) Based
on
the Company’s knowledge and 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 [directly or
through its Subservicers, if any] has fulfilled its obligations under the
Agreement in all material respects; and
EXHIBIT
M-1
(5) The
Compliance Statement required to be delivered by [[●]]
pursuant
to this Agreement, and the Servicing Assessment and Attestation Report required
to be provided by [●] and [[by
any
Subservicer or Subcontractor]]
pursuant
to the Agreement, have been provided to the Depositor, the Master Servicer,
the
Securities Administrator and the Trustee. Any material instances of
noncompliance described in such reports have been disclosed to the Depositor,
the Master Servicer, the Securities Administrator and the Trustee. Any material
instance of noncompliance with the Servicing Criteria has been disclosed in
such
reports.
Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Pooling Servicing Agreement, dated as of February 1, 2006 (the “Pooling
and Servicing Agreement”),
among
HSI Asset Securitization Corporation, as depositor (the “Depositor”),
JPMorgan Chase Bank, National Association, as servicer, NC Capital Corporation,
as mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer (in such
capacity the “Master
Servicer”)
and
securities administrator (in such capacity the “Securities
Administrator”)
and
Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and
custodian.
| [●] | |
|
as
[●]
|
|
| By: | |
|
Name:
|
|
|
Title:
|
|
|
Date:
|
EXHIBIT
M-2
EXHIBIT
N-1
FORM
OF MONTHLY REMITTANCE ADVICE
|
FIELD
NAME
|
DESCRIPTION
|
FORMAT
|
|
INVNUM
|
INVESTOR
LOAN NUMBER
|
Number
no decimals
|
|
SERVNUM
|
SERVICER
LOAN NUMBER, REQUIRED
|
Number
no decimals
|
|
BEGSCHEDBAL
|
BEGINNING
SCHEDULED BALANCE FOR SCHED/SCHED BEGINNING TRAIL BALANCE FOR
ACTUAL/ACTUAL, REQUIRED
|
Number
two decimals
|
|
SCHEDPRIN
|
SCHEDULED
PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED ACTUAL PRINCIPAL COLLECTED
FOR
ACTUAL/ACTUAL, REQUIRED, .00 IF NO COLLECTIONS
|
Number
two decimals
|
|
CURT1
|
CURTAILMENT
1 ▇▇▇▇▇▇,
.▇▇
IF NOT APPLICABLE
|
Number
two decimals
|
|
CURT1DATE
|
CURTAILMENT
1 DATE, BLANK IF NOT APPLICABLE
|
DD-MM-YY
|
|
CURTIADJ
|
CURTAILMENT
1 ADJUSTMENT,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
CURT2
|
CURTAILMENT
2 ▇▇▇▇▇▇,
.▇▇
IF NOT APPLICABLE
|
Number
two decimals
|
|
CURT2DATE
|
CURTAILMENT
2 DATE,
BLANK
IF NOT APPLICABLE
|
DD-MM-YY
|
|
CURT2ADJ
|
CURTAILMENT
2 ADJUSTMENT,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
LIQPRIN
|
PAYOFF,
LIQUIDATION PRINCIPAL,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
OTHPRIN
|
OTHER
PRINCIPAL,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
PRINREMIT
|
TOTAL
PRINCIPAL REMITTANCE AMOUNT,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
INTREMIT
|
NET
INTEREST REMIT, INCLUDE PAYOFF INTEREST,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
TOTREMIT
|
TOTAL
REMITTANCE AMOUNT,
.00
IF NOT APPLICABLE
|
Number
two decimals
|
|
ENDSCHEDBAL
|
ENDING
SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED
ENDING
TRIAL BALANCE FOR ACTUAL/ACTUAL
.00
IF PAID OFF, LIQUIDATED OR FULL CHARGE OFF
|
Number
two decimals
|
|
ENDACTBAL
|
ENDING
TRIAL BALANCE
.00
IF PAID OFF, LIQUIDATED OR FULL CHARGE OFF
|
Number
two decimals
|
|
ENDDUEDATE
|
ENDING
ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT
|
DD-MM-YY
|
|
ACTCODE
|
60
IF PAID OFF, BLANK IF NOT APPLICABLE
|
Number
no decimals
|
|
ACTDATE
|
ACTUAL
PAYOFF DATE, BLANK IF NOT APPLICABLE
|
DD-MM-YY
|
|
INTRATE
|
INTEREST
RATE, REQUIRED
|
Number
seven decimals
Example
.0700000 for 7.00%
|
|
SFRATE.
|
SERVICING
ADMINISTRATION FEE RATE, REQUIRED
|
Number
seven decimals
Example
.0025000 for .25.00%
|
|
PTRATE
|
PASS
THRU RATE, REQUIRED
|
Number
seven decimals
Example
.0675000 for 6.75%
|
|
PIPMT
|
P&I
CONSTANT, REQUIRED .00 IF PAID OFF
|
Number
two decimals
|
EXHIBIT
N-1-1
EXHIBIT
N-2
STANDARD
LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
1. Deal
Identifier by Loan
2. SBO
Loan
Number
3. Loan
Number
4. Investor
Loan Number
5. Street
Address
6. City
7. State
8. Zip
Code
9. Original
Loan Amount
10. Origination
Date
11. First
Payment Date
12. Current
Loan Amount
13. Current
Interest Rate
14. Current
P&I Payment Amount
15. [Reserved]
16. [Reserved]
17. Next
Rate
Adjustment Date
18. Next
Payment Adjustment Date
19. Loan
Term
20. Loan
Type
21. [Reserved]
22. Product
Type
23. Property
Type
24. Ownership
Code
25. Actual
Due Date
26. Delinquency
Status
27. [Reserved]
28. FC
Flag
29. Date
Loan
Reinstated
30. FC
Suspended Date
31. Reason
Suspended
32. FC
Start
Date (referral date)
33. Actual
Notice of Intent Date
34. Actual
First Legal Date
35. [Reserved]
36. Date
F/C
Sale Scheduled
37. Foreclosure
Actual Sale Date
38. Actual
Redemption End Date
39. Occupancy
Status
40. Occupancy
Status Date
41. Actual
Eviction Start Date
42,
Actual Eviction Complete Date
43. Loss
Mit
Workstation Status
EXHIBIT
N-2-1
44. Loss
Mit
Flag
45. Loss
Mit
Type
46. Loss
Mit
Start Date
47. Loss
Mit
Approval Date
48. Loss
Mit
Removal Date
49. REO
Flag
50. Actual
REO Start Date
51. REO
List
Date
52. REO
List
Price
53. Date
REO
Offer Received
54. Date
REO
Offer Accepted
55. REO
Scheduled Close Date
56. REO
Actual Closing Date
57. REO
Net
Sales proceeds
58. REO
Sales
Price
59. Paid
Off
Code
60. Paid
in
Full Date
61. MI
Certificate Number
62. [Reserved]
63. [Reserved]
64. [Reserved]
65. [Reserved]
66. [Reserved]
67. [Reserved]
68. [Reserved]
69. [Reserved]
70. [Reserved]
71. [Reserved]
72. Actual
Claim Filed Date
73.
Actual Claim Amount Filed
74.
Claim
Amount Paid
75.
Claim
Funds Received Date
76.
Realized Gain or Loss
77.
BK
Flag
78.
Bankruptcy Chapter
79.
Actual Bankruptcy Start Date
80.
Actual Payment Plan Start Date
81. Actual
Payment Plan End Date
82. Date
POC
Filed
83. Date
Filed Relief/Dismissal
84. Relief/Dismissal
Hearing Date
85. Date
Relief/Dismissal Granted
86. Post
Petition Due Date
87. Prepayment
Flag
88. Prepayment
Waived
89. Prepayment
Premium Collected
EXHIBIT
N-2-2
90. Partial
Prepayment Amount Collected
91. Prepayment
Expiration Date
92. Origination
Value Date
93. Origination
Value Source
94. Original
Value Amount
95. FC
Valuation Amount
96. FC
Valuation Source
97. FC
Valuation Date
98. REO
Value
Source
99. REO
Value(As-is)
100.
REO
Repaired Value
101.
REO
Value Date
102.
Investor/Security Billing Date Sent
|
Table:
Delinquency
|
|||||
|
Name
|
Type
|
Max
Character Size
|
|||
|
Servicer
Loan #
|
Number
|
10
|
|||
|
Investor
Loan #
|
Number
|
10
|
|||
|
Servicer
Investor #
|
Text
|
3
|
|||
|
Borrower
Name
|
Text
|
20
|
|||
|
▇▇▇▇▇▇▇
|
▇▇▇▇
|
▇▇
|
|||
|
▇▇▇▇▇
|
▇▇▇▇
|
▇
|
|||
|
▇▇▇
|
▇▇▇▇
|
5
|
|||
|
Due
Date
|
Date/Time
|
8
|
|||
|
Loan
Type
|
Text
|
8
|
|||
|
BK
Filed Date
|
Date/Time
|
8
|
|||
|
BK
Chapter
|
Text
|
6
|
|||
|
BK
Case Number
|
Text
|
30
Maximum
|
|||
|
Post
Petition Due
|
Date/Time
|
8
|
|||
|
Motion
for Relief
|
Date/Time
|
8
|
|||
|
Lift
of Stay
|
Date/Time
|
8
|
|||
|
BK
Discharge/Dismissal Date
|
Date/Time
|
8
|
|||
|
Loss
Mit Approval Date
|
Date/Time
|
8
|
|||
|
Loss
Mit Type
|
Text
|
5
|
|||
|
Loss
Mit Code
|
Number
|
2
|
|||
|
Loss
Mit Estimated Completion Date
|
Date/Time
|
8
|
|||
|
Loss
Mit Actual Completion Date
|
Date/Time
|
8
|
|||
|
FC
Approval Date
|
Date/Time
|
8
|
|||
|
File
Referred to Attorney
|
Date/Time
|
8
|
|||
|
NOD
|
Date/Time
|
8
|
|||
|
Complaint
Filed
|
Date/Time
|
8
|
|||
|
Scheduled
Sale Date
|
Date/Time
|
8
|
|||
|
Actual
Sale Date
|
Date/Time
|
8
|
|||
|
F/C
Sale Amount
|
Currency
|
8
|
|||
|
Eviction
Start Date
|
Date/Time
|
8
|
EXHIBIT
N-2-3
|
Eviction
Completed Date
|
Date/Time
|
8
|
|||
|
List
Price
|
Currency
|
8
|
|||
|
List
Date
|
Date/Time
|
8
|
|||
|
Accepted
Offer Price
|
Currency
|
8
|
|||
|
Accepted
Offer Date
|
Date/Time
|
8
|
|||
|
Estimated
REO Closing Date
|
Date/Time
|
8
|
|||
|
Actual
REO Sale Date
|
Date/Time
|
8
|
|||
|
Occupant
Code
|
Text
|
10
|
|||
|
Property
Condition Code
|
Text
|
2
|
|||
|
Property
Inspection Date
|
Date/Time
|
8
|
|||
|
Property
Value Date
|
Date/Time
|
8
|
|||
|
Current
Property Value
|
Currency
|
8
|
|||
|
Repaired
Property Value
|
Currency
|
8
|
|||
|
Current
LTV
|
Currency
|
8
|
|||
|
FNMA
Delinquent Status Code
|
Text
|
2
|
|||
|
FNMA
Delinquent Reason Code
|
Text
|
3
|
|
If
applicable:
|
|||||
|
MI
Cancellation Date
|
Date/Time
|
8
|
|||
|
MI
Claim Filed Date
|
Date/Time
|
8
|
|||
|
MI
Claim Amount
|
Currency
|
8
|
|||
|
MI
Claim Reject Date
|
Date/Time
|
8
|
|||
|
MI
Claim Resubmit Date
|
Date/Time
|
8
|
|||
|
MI
Claim Paid Date
|
Date/Time
|
8
|
|||
|
MI
Claim Amount Paid
|
Currency
|
8
|
|||
|
Pool
Claim Filed Date
|
Date/Time
|
8
|
|||
|
Pool
Claim Amount
|
Currency
|
8
|
|||
|
Pool
Claim Reject Date
|
Date/Time
|
8
|
|||
|
Pool
Claim Paid Date
|
Date/Time
|
8
|
|||
|
Pool
Claim Amount Paid
|
Currency
|
8
|
|||
|
Pool
Claim Resubmit Date
|
Date/Time
|
8
|
|||
|
FHA
Part A Claim Filed Date
|
Date/Time
|
8
|
|||
|
FHA
Part A Claim Amount
|
Currency
|
8
|
|||
|
FHA
Part A Claim Paid Date
|
Date/Time
|
8
|
|||
|
FHA
Part A Claim Paid Amount
|
Currency
|
8
|
|||
|
FHA
Part B Claim Filed Date
|
Date/Time
|
8
|
|||
|
FHA
Part B Claim Amount
|
Currency
|
8
|
|||
|
FHA
Part B Claim Paid Date
|
Date/Time
|
8
|
|||
|
FHA
Part B Claim Paid Amount
|
Currency
|
8
|
|||
|
VA
Claim Filed Date
|
Date/Time
|
8
|
|||
|
VA
Claim Paid Date
|
Date/Time
|
8
|
|||
|
VA
Claim Paid Amount
|
Currency
|
8
|
The
Loss
Mit Type field should show the approved Loss Mitigation arrangement. The
following are acceptable:
EXHIBIT
N-2-4
|
•
|
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
|
[Master
Servicer and Trust Administrator] will accept alternative Loss Mitigation Types
to those above, provided that they are consistent with industry standards.
If
Loss Mitigation Types other than those above are used, the Servicer must supply
[Master Servicer and Trust Administrator] with a description of each of the
Loss
Mitigation Types prior to sending the file.
The
Occupant Code field should show the current status of the property. The
acceptable codes are:
• Mortgagor
• Tenant
• Unknown
• Vacant
The
Property Condition field should show the last reported condition of the
property. The acceptable codes are:
• Damaged
• Excellent
• Fair
• Gone
• Good
• Poor
• Special
Hazard
• Unknown
EXHIBIT
N-2-5
The
FNMA
Delinquent Reason Code field should show the Reason for Default. The following
FNMA Delinquency Reason Codes to be used are below.
|
Delinquency
Code
|
Delinquency
Description
|
|
|
001
|
FNMA-Death
of principal mortgagor
|
|
|
002
|
FNMA-Illness
of principal mortgagor
|
|
|
003
|
FNMA-Illness
of mortgagor’s family member
|
|
|
004
|
FNMA-Death
of mortgagor’s family member
|
|
|
005
|
FNMA-Marital
difficulties
|
|
|
006
|
FNMA-Curtailment
of income
|
|
|
007
|
FNMA-Excessive
Obligation
|
|
|
008
|
FNMA-Abandonment
of property
|
|
|
009
|
FNMA-Distant
employee transfer
|
|
|
011
|
FNMA-Property
problem
|
|
|
012
|
FNMA-Inability
to sell property
|
|
|
013
|
FNMA-Inability
to rent property
|
|
|
014
|
FNMA-Military
Service
|
|
|
015
|
FNMA-Other
|
|
|
016
|
FNMA-Unemployment
|
|
|
017
|
FNMA-Business
failure
|
|
|
019
|
FNMA-Casualty
loss
|
|
|
022
|
FNMA-Energy
environment costs
|
|
|
023
|
FNMA-Servicing
problems
|
|
|
026
|
FNMA-Payment
adjustment
|
|
|
027
|
FNMA-Payment
dispute
|
|
|
029
|
FNMA-Transfer
of ownership pending
|
|
|
030
|
FNMA-Fraud
|
|
|
031
|
FNMA-Unable
to contact borrower
|
|
|
INC
|
FNMA-Incarceration
|
EXHIBIT
N-2-6
The
FNMA
Delinquent Status Code field should show the Status of Default. The following
FNMA Delinquency Status Codes to be used are below.
|
Status
Code
|
Status
Description
|
|
|
09.
|
Forbearance
|
|
|
17
|
Pre-foreclosure
Sale Closing Plan Accepted
|
|
|
24
|
Government
Seizure
|
|
|
26
|
Refinance
|
|
|
27
|
Assumption
|
|
|
28
|
Modification
|
|
|
29
|
Charge-Off
|
|
|
30
|
Third
Party Sale
|
|
|
31
|
Probate
|
|
|
32
|
Military
Indulgence
|
|
|
43
|
Foreclosure
Started
|
|
|
44
|
Deed-in-Lieu
Started
|
|
|
49
|
Assignment
Completed
|
|
|
61
|
Second
Lien Considerations
|
|
|
62
|
Veteran’s
Affairs-No Bid
|
|
|
63
|
Veteran’s
Affairs-Refund
|
|
|
64
|
Veteran’s
Affairs-Buydown
|
|
|
65
|
Chapter
7 Bankruptcy
|
|
|
66
|
Chapter
11 Bankruptcy
|
|
|
67
|
Chapter
13 Bankruptcy
|
EXHIBIT
N-2-7
EXHIBIT
N-3
FORM
332 REALIZED LOSS REPORT
▇▇▇▇▇
FARGO BANK, N.A.
Purpose
To
provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Mortgage Loan having been foreclosed and
Liquidated.
Distribution
The
Servicer will prepare the form in duplicate and send the original together
with
evidence of conveyance of title and appropriate supporting documentation to
the
Master Servicer with the Monthly Accounting Reports which supports the Mortgage
Loan’s removal from the Mortgage Loan Activity Report. The Servicer will retain
the duplicate for its own records.
Due
Date
With
respect to any liquidated Mortgage Loan, the form will be submitted to the
Master Servicer no later than the date on which statements are due to the Master
Servicer under Section 4.02 of this Agreement (the “Statement Date”) in the
month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if
such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage
Loan,
then the form will be submitted on the first Statement Date occurring after
the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation
Instructions
The
numbers on the form correspond with the numbers listed below.
|
1.
|
The
actual Unpaid Principal Balance of the Mortgage
Loan.
|
|
2.
|
The
Total Interest Due less the aggregate amount of servicing fee that
would
have been earned if all
delinquent payments had been made as
agreed.
|
|
3-7.
|
Complete
as necessary. All line entries must be supported by copies of appropriate
statements, vouchers, receipts, canceled checks, etc., to document
the
expense. Entries not properly documented will not be reimbursed to
the
Servicer.
|
|
8.
|
Accrued
Servicing Fees based upon the Stated Principal Balance of the Mortgage
Loan as calculated on a monthly
basis.
|
|
9.
|
The
total of lines 1 through 8.
|
EXHIBIT
N-3-1
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.
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.
|
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
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
EXHIBIT
N-3-2
|
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 ( ).
|
EXHIBIT
N-3-3
Exhibit
3A: Calculation
of Realized Loss/Gain Form 332
Prepared
by: __________________ Date:
________________
Phone:
______________________ Email Address:_____________________
|
Servicer
Loan No.
|
Servicer
Name
|
Servicer
Address
|
▇▇▇▇▇
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)
|
||||
|
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
|
||||
EXHIBIT
N-3-4
|
________________
|
(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)
|
||||
EXHIBIT
N-3-5
Escrow
Disbursement Detail
|
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of
Coverage |
Total
Paid
|
Base
Amount |
Penalties
|
Interest
|
EXHIBIT
N-3-6
EXHIBIT
O
FORM
OF SWAP AGREEMENT
EXHIBIT
O-1
EXHIBIT
P
FORM
OF CAP AGREEMENT
EXHIBIT
P-1
EXHIBIT
Q
FORM
OF AMENDED AND RESTATED MASTER MORTGAGE
LOAN
PURCHASE AND INTERIM SERVICING AGREEMENT
EXHIBIT
Q-1
EXHIBIT
R
[RESERVED]
EXHIBIT
R-1
EXHIBIT
S
SERVICING
CRITERIA TO BE ADDRESSED IN REPORT ON ASSESSMENT OF COMPLIANCE
Where
there are multiple checks for criteria the attesting party will identify in
their management assertion that they are attesting only to the portion of the
distribution chain they are responsible for in the related transaction
agreements. Capitalized terms used herein but not defined herein shall have
the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
February 1, 2006 (the “Pooling and Servicing Agreement”), by and among
Structured Asset Securities Corporation, as Depositor, U.S. Bank National
Association, as Trustee, Aurora Loan Services LLC, as Master Servicer, ▇▇▇▇▇
Fargo Bank, N.A., as Securities Administrator, and ▇▇▇▇▇▇▇ Fixed Income Services
Inc., as Credit Risk Manager.
|
Reg
AB
Reference |
Servicing
Criteria
|
Custodian
|
Master
Servicer
|
Securities
Administrator
|
Servicer*
|
|
General Servicing
Considerations
|
|||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
X
|
||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
X
|
||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the pool assets are maintained.
|
|
X
|
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
X
|
X
|
X
|
|
Cash Collection and Administration
|
|||||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
EXHIBIT
S-1
|
Reg
AB
Reference |
Servicing
Criteria
|
Custodian
|
Master
Servicer
|
Securities
Administrator
|
Servicer*
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
X
|
||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
X
|
X
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
X
|
X
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
X
|
X
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
X
|
||
|
Investor
Remittances and Reporting
|
|||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of pool assets serviced by the Servicer.
|
X
|
X
|
X
|
EXHIBIT
S-2
|
Reg
AB
Reference |
Servicing
Criteria
|
Custodian
|
Master
Servicer
|
Securities
Administrator
|
Servicer*
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
X
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
||
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
X
|
X
|
|
|
Pool
Asset Administration
|
|||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
|
|
X
|
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
||
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
|
X
|
||
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance with
the
related pool asset documents.
|
X
|
EXHIBIT
S-3
|
Reg
AB
Reference |
Servicing
Criteria
|
Custodian
|
Master
Servicer
|
Securities
Administrator
|
Servicer*
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
|
X
|
||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
|
X
|
||
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
|||
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents and
state
laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
EXHIBIT
S-4
|
Reg
AB
Reference |
Servicing
Criteria
|
Custodian
|
Master
Servicer
|
Securities
Administrator
|
Servicer*
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
|
X
|
||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
|
X
|
||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
|
X
|
||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
||
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
|
*
The
Relevant Servicing Criteria applicable to the Servicer as indicated above
will
be performed by either or both JPMorgan Chase Bank, National Association
or
Chase Home Finance LLC.
EXHIBIT
S-5
EXHIBIT
T
Trustee:
Deutsche Bank National Trust Company
Securities
Administrator:
▇▇▇▇▇
Fargo Bank, N.A.
Master
Servicer:
▇▇▇▇▇
Fargo Bank, N.A.
Derivative
Counterparty:
Bear
▇▇▇▇▇▇▇ Financial Products Inc.
Servicer:
▇▇
▇▇▇▇▇▇ Chase Bank, National Association
Mortgage
Loan Seller:
NC
Capital Corporation
Custodian:
Deutsche Bank National Trust Company.
Sponsor:
HSBC
Bank USA, National Association
EXHIBIT
T-1
EXHIBIT
U
FORM
OF ANNUAL COMPLIANCE CERTIFICATE
Via
Overnight Delivery
[DATE]
To:
[Master
Servicer]
| RE: |
Annual
officer’s certificate delivered pursuant to Section 3.24 of that certain
Pooling Servicing Agreement, dated as of January 1, 2006 (the
“Pooling
and Servicing Agreement”),
among HSI Asset Securitization Corporation, as depositor (the
“Depositor”),
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, National Association, as servicer, NC Capital
Corporation, as mortgage loan seller, ▇▇▇▇▇ Fargo Bank, N.A., as
master
servicer, (in such capacity, the “Master
Servicer”)
and securities administrator (in such capacity, the “Securities
Administrator”)
and Deutsche Bank National Trust Company, as trustee (the “Trustee”)
and custodian
|
[_______],
the undersigned, a duly authorized [_______] of [the Servicer][Name of
Subservicer], does hereby certify the following for the [calendar year][identify
other period] ending on December 31, 20[__]:
|
1.
|
A
review of the activities of the Servicer during the preceding calendar
year (or portion thereof) and of its performance under the Agreement
for
such period has been made under my
supervision.
|
|
2.
|
To
the best of my knowledge, based on such review, the Servicer has
fulfilled
all of its obligations under the Agreement in all material respects
throughout such year (or applicable portion thereof), or, if there
has
been a failure to fulfill any such obligation in any material respect,
I
have specifically identified to the Master Servicer, the Depositor
and the
Trustee each such failure known to me and the nature and status thereof,
including the steps being taken by the Servicer to remedy such
default.
|
Certified
By:
______________________________
Name:
Title:
EXHIBIT
U-1
EXHIBIT
V
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 this Agreement (as to themselves), (ii) the Securities
Administrator and Servicer as to the issuing entity, (iii) the Depositor
as to the sponsor, any 1110(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
|
|
|
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
|
EXHIBIT
V-1
EXHIBIT
W
ADDITIONAL
FORM 10-K DISCLOSURE
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Item
on Form 10-K
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Party
Responsible
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Item
1B: Unresolved Staff Comments
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Depositor
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Item
9B: Other Information
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Any
party responsible for disclosure items on Form 8-K
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Item
15: Exhibits, Financial Statement Schedules
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Securities
Administrator
Depositor
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Additional
Item:
Disclosure
per Item 1117 of Reg AB
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(i)
All parties to this Agreement (as to themselves), (ii) the Securities
Administrator and Master Servicer as to the issuing entity, (iii)
the
Depositor as to the sponsor, any 1100(b) originator, any 1100(d)(1)
party
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Additional
Item:
Disclosure
per Item 1119 of Reg AB
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(i)
All parties to the Pooling and Servicing Agreement as to themselves
with
respect to such party’s affiliations, if any, (ii) the Depositor as to the
sponsor, originator, significant obligor, enhancement or support
provider
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Additional
Item:
Disclosure
per Item 1112(b) of Reg AB
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Depositor
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Additional
Item:
Disclosure
per Items 1114(b) and 1115(b) of Reg AB
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Depositor
Securities
Administrator
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EXHIBIT
W-1
EXHIBIT
X
FORM
8-K DISCLOSURE INFORMATION
|
Item
on Form 8-K
|
Party
Responsible
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|
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Item
1.01- Entry into a Material Definitive Agreement
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All
parties (other than the Trustee or the Custodian)
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Item
1.02- Termination of a Material Definitive Agreement
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All
parties (other than the Trustee or the Custodian)
|
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Item
1.03- Bankruptcy or Receivership
|
Depositor
|
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Item
2.04- Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement
|
Depositor
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Item
3.03- Material Modification to Rights of Security Holders
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Securities
Administrator
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Item
5.03- Amendments of Articles of Incorporation or Bylaws; Change of
Fiscal
Year
|
Depositor
|
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Item
6.01- ABS Informational and Computational Material
|
Depositor
|
|
|
Item
6.02- Change of Servicer or Securities Administrator
|
Servicer,
Securities Administrator
|
|
|
Item
6.03- Change in Credit Enhancement or External Support
|
Depositor/Securities
Administrator
|
|
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Item
6.04- Failure to Make a Required Distribution
|
Securities
Administrator
|
|
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Item
6.05- Securities Act Updating Disclosure
|
Depositor
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Item
7.01- Reg FD Disclosure
|
Depositor
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Item
8.01
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Depositor
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Item
9.01
|
Depositor
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EXHIBIT
X-1