NOVASTAR MORTGAGE FUNDING CORPORATION, as Depositor NOVASTAR MORTGAGE, INC., as Servicer and as Sponsor U.S. BANK NATIONAL ASSOCIATION as Custodian and DEUTSCHE BANK NATIONAL TRUST COMPANY as Trustee POOLING AND SERVICING AGREEMENT Dated as of...
Exhibit
4.1
NOVASTAR
MORTGAGE FUNDING CORPORATION,
as
Depositor
NOVASTAR
MORTGAGE, INC.,
as
Servicer and as Sponsor
U.S.
BANK
NATIONAL ASSOCIATION
as
Custodian
and
DEUTSCHE
BANK NATIONAL TRUST COMPANY
as
Trustee
Dated
as
of February 1, 2007
________________________________
NovaStar
Home Equity Loan Asset-Backed Certificates, Series 2007-1
TABLE
OF CONTENTS
|
ARTICLE
I DEFINITIONS
|
7
|
|
|
Section
1.01
|
Defined
Terms.
|
7
|
|
Section
1.02
|
Accounting.
|
7
|
|
Section
1.03
|
Allocation
of Certain Interest Shortfalls.
|
8
|
|
Section
1.04
|
Calculation
of Interest on Certificates.
|
8
|
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
|
8
|
|
|
Section
2.01
|
Establishment
of the Issuing Entity; Conveyance of Mortgage Loans and Other
Trust
Assets.
|
8
|
|
Section
2.02
|
Acceptance
of Mortgage Loans by Custodian, on behalf of the Trustee.
|
11
|
|
Section
2.03
|
Repurchase
or Substitution of Mortgage Loans by the Sponsor.
|
12
|
|
Section
2.04
|
Acknowledgement
of Trustee.
|
15
|
|
Section
2.05
|
Representations,
Warranties and Covenants of the Servicer.
|
15
|
|
Section
2.06
|
Representations
and Warranties of the Depositor.
|
16
|
|
Section
2.07
|
Issuance
of Certificates.
|
17
|
|
Section
2.08
|
[Reserved].
|
17
|
|
Section
2.09
|
Designation
Under REMIC Provisions.
|
17
|
|
ARTICLE
III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
|
17
|
|
|
Section
3.01
|
Servicer
to Assure Servicing.
|
17
|
|
Section
3.02
|
Subservicing
Agreements Between Servicer and Subservicers.
|
19
|
|
Section
3.03
|
Successor
Subservicers.
|
20
|
|
Section
3.04
|
Liability
of the Servicer.
|
20
|
|
Section
3.05
|
Assumption
or Termination of Subservicing Agreements by the Trustee.
|
21
|
|
Section
3.06
|
Collection
of Mortgage Loan Payments.
|
21
|
|
Section
3.07
|
Withdrawals
from the Collection Account.
|
24
|
|
Section
3.08
|
Collection
of Taxes, Assessments and Similar Items; Servicing
Accounts.
|
25
|
|
Section
3.09
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
26
|
|
Section
3.10
|
[Reserved].
|
27
|
|
Section
3.11
|
Maintenance
of Hazard Insurance and Fidelity Coverage.
|
27
|
|
Section
3.12
|
Due-on-Sale
Clauses; Assumption Agreements.
|
28
|
|
Section
3.13
|
Realization
Upon Defaulted Mortgage Loans.
|
29
|
|
Section
3.14
|
Custodian
to Cooperate; Release of Mortgage Files.
|
31
|
|
Section
3.15
|
Servicing
Compensation.
|
32
|
|
Section
3.16
|
Annual
Statements of Compliance.
|
32
|
|
Section
3.17
|
Assessments
of Compliance and Attestation Reports.
|
33
|
|
Section
3.18
|
Reports
filed with Securities and Exchange Commission.
|
34
|
|
Section
3.19
|
Optional
Purchase of Defaulted Mortgage Loans.
|
39
|
2
|
Section
3.20
|
Information
Required by the Internal Revenue Service Generally and Reports
of
Foreclosures and Abandonments of Mortgaged Property.
|
39
|
|
Section
3.21
|
[Reserved].
|
40
|
|
Section
3.22
|
[Reserved].
|
40
|
|
Section
3.23
|
Servicing
and Administration of the MI Policies.
|
40
|
|
Section
3.24
|
Determination
Date Reports.
|
41
|
|
Section
3.25
|
Advances.
|
42
|
|
Section
3.26
|
Compensating
Interest Payments.
|
42
|
|
Section
3.27
|
Advance
Facility.
|
42
|
|
Section
3.28
|
Servicer
Rights Facility.
|
45
|
|
ARTICLE
IV FLOW OF FUNDS
|
45
|
|
|
Section
4.01
|
Distributions.
|
45
|
|
Section
4.02
|
Distribution
Account.
|
53
|
|
Section
4.03
|
Statements.
|
54
|
|
Section
4.04
|
Supplemental
Interest Trust; Excess Cashflow; Reallocations.
|
58
|
|
Section
4.05
|
[Reserved].
|
62
|
|
Section
4.06
|
[Reserved].
|
62
|
|
Section
4.07
|
Allocation
of Realized Losses.
|
62
|
|
ARTICLE
V THE CERTIFICATES
|
63
|
|
|
Section
5.01
|
The
Certificates.
|
63
|
|
Section
5.02
|
Registration
of Transfer and Exchange of Certificates.
|
64
|
|
Section
5.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
68
|
|
Section
5.04
|
Persons
Deemed Owners.
|
69
|
|
Section
5.05
|
Appointment
of Paying Agent.
|
69
|
|
ARTICLE
VI THE SERVICER AND THE DEPOSITOR
|
69
|
|
|
Section
6.01
|
Liability
of the Servicer and the Depositor.
|
69
|
|
Section
6.02
|
Merger
or Consolidation of, or Assumption of the Obligations of, the
Servicer or
the Depositor.
|
69
|
|
Section
6.03
|
Limitation
on Liability of the Servicer and Others.
|
70
|
|
Section
6.04
|
Servicer
Not to Resign.
|
70
|
|
Section
6.05
|
Delegation
of Duties.
|
71
|
|
Section
6.06
|
Servicing
Rights Owner to Pay Trustee’s Fees and Expenses;
Indemnification.
|
71
|
|
ARTICLE
VII DEFAULT
|
72
|
|
|
Section
7.01
|
Servicing
Default.
|
72
|
|
Section
7.02
|
Trustee
to Act; Appointment of Successor.
|
74
|
|
Section
7.03
|
Waiver
of Defaults.
|
76
|
|
Section
7.04
|
Notification
to Certificateholders.
|
76
|
|
Section
7.05
|
Survivability
of Servicer Liabilities.
|
76
|
|
ARTICLE
VIII THE TRUSTEE
|
77
|
|
3
|
Section
8.01
|
Duties
of the Trustee.
|
77
|
|
Section
8.02
|
Rights
of Trustee.
|
78
|
|
Section
8.03
|
Individual
Rights of Trustee.
|
80
|
|
Section
8.04
|
Trustee’s
Disclaimer.
|
80
|
|
Section
8.05
|
Notice
of Servicing Default.
|
80
|
|
Section
8.06
|
[Reserved].
|
80
|
|
Section
8.07
|
Compensation.
|
80
|
|
Section
8.08
|
Replacement
of Trustee.
|
81
|
|
Section
8.09
|
Successor
Trustee by Merger.
|
81
|
|
Section
8.10
|
Appointment
of Co-Trustee or Separate Trustee.
|
82
|
|
Section
8.11
|
Eligibility;
Disqualification.
|
83
|
|
Section
8.12
|
[Reserved].
|
83
|
|
Section
8.13
|
Representations
and Warranties.
|
83
|
|
Section
8.14
|
Directions
to Trustee.
|
84
|
|
Section
8.15
|
The
Agents.
|
84
|
|
Section
8.16
|
Issuing
Entity Fiscal Year.
|
84
|
|
Section
8.17
|
Execution
of the Novation Agreements and Hedge Agreements.
|
84
|
|
ARTICLE
IX [RESERVED]
|
85
|
|
|
ARTICLE
X REMIC ADMINISTRATION
|
85
|
|
|
Section
10.01
|
REMIC
Administration.
|
85
|
|
Section
10.02
|
Prohibited
Transactions and Activities.
|
88
|
|
ARTICLE
XX XXXXXXXXXXX
|
00
|
|
|
Section
11.01
|
Termination.
|
88
|
|
Section
11.02
|
Additional
Termination Requirements.
|
90
|
|
ARTICLE
XII MISCELLANEOUS PROVISIONS
|
91
|
|
|
Section
12.01
|
Amendment.
|
91
|
|
Section
12.02
|
Recordation
of Agreement; Counterparts.
|
92
|
|
Section
12.03
|
Limitation
on Rights of Certificateholders.
|
93
|
|
Section
12.04
|
Compliance
with Regulation AB.
|
93
|
|
Section
12.05
|
Governing
Law; Jurisdiction.
|
94
|
|
Section
12.06
|
Notices.
|
94
|
|
Section
12.07
|
Severability
of Provisions.
|
96
|
|
Section
12.08
|
Article
and Section References.
|
97
|
|
Section
12.09
|
Further
Assurances.
|
97
|
|
Section
12.10
|
Benefits
of Agreement.
|
97
|
|
Section
12.11
|
Acts
of Certificateholders.
|
97
|
|
Section
12.12
|
Confidentiality.
|
98
|
APPENDIX
A
APPENDIX
B
4
EXHIBITS:
|
Exhibit
A-1
|
Form
of Class A-1A Certificates
|
|
Exhibit
A-2
|
Form
of Class A-2A1 Certificates
|
|
Exhibit
A-3
|
Form
of Class A-2A2 Certificates
|
|
Exhibit
A-4
|
Form
of Class A-2B Certificates
|
|
Exhibit
A-5
|
Form
of Class A-2C Certificates
|
|
Exhibit
A-6
|
Form
of Class A-2D Certificates
|
|
Exhibit
A-7
|
Form
of Class M-1 Certificates
|
|
Exhibit
A-8
|
Form
of Class M-2 Certificates
|
|
Exhibit
A-9
|
Form
of Class M-3 Certificates
|
|
Exhibit
A-10
|
Form
of Class M-4 Certificates
|
|
Exhibit
A-11
|
Form
of Class M-5 Certificates
|
|
Exhibit
A-12
|
Form
of Class M-6 Certificates
|
|
Exhibit
A-13
|
Form
of Class M-7 Certificates
|
|
Exhibit
A-14
|
Form
of Class M-8 Certificates
|
|
Exhibit
A-15
|
Form
of Class M-9 Certificates
|
|
Exhibit
A-16
|
Form
of Class M-10 Certificates
|
|
Exhibit
A-17
|
Form
of Class M-11 Certificates
|
|
Exhibit
A-18
|
Form
of Class I-1 Certificates
|
|
Exhibit
A-19
|
Form
of Class I-2 Certificates
|
|
Exhibit
A-20
|
Form
of Class I-3 Certificates
|
|
Exhibit
A-21
|
Form
of Class CA Certificates
|
|
Exhibit
A-22
|
Form
of Class CB Certificates
|
|
Exhibit
A-23
|
Form
of Class R Certificates
|
|
Exhibit
A-24
|
Form
of Class M-6 DSI Certificates
|
|
Exhibit
A-25
|
Form
of Class M-7 DSI Certificates
|
|
Exhibit
A-26
|
Form
of Class M-8 DSI Certificates
|
|
Exhibit
A-27
|
Form
of Class M-9 DSI Certificates
|
|
Exhibit
A-28
|
Form
of Class M-10 DSI Certificates
|
|
Exhibit
A-29
|
Form
of Class M-11 DSI Certificates
|
|
Exhibit
A-30
|
Form
of Class M-6N Certificates
|
|
Exhibit
A-31
|
Form
of Class M-7N Certificates
|
|
Exhibit
A-32
|
Form
of Class M-8N Certificates
|
|
Exhibit
A-33
|
Form
of Class M-9N Certificates
|
|
Exhibit
A-34
|
Form
of Class M-10N Certificates
|
|
Exhibit
A-35
|
Form
of Class M-11N Certificates
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C
|
[Reserved]
|
|
Exhibit
D
|
[Reserved]
|
|
Exhibit
E
|
Request
for Release
|
|
Exhibit
F-1
|
Form
of Custodian’s Initial
Certification
|
|
Exhibit
F-2
|
Form
of Custodian’s Final Certification
|
|
Exhibit
G
|
Form
of Investment Letter
|
|
Exhibit
H
|
Form
of Residual Certificate Transfer
Affidavit
|
|
Exhibit
I
|
Form
of Transferor’s Certificate
|
|
Exhibit
J
|
Form
of Designation Under REMIC
Provisions
|
5
|
Exhibit
K
|
Form
of Advance Facility Notice
|
|
Exhibit
L
|
Servicing
Criteria to be Addressed in Assessment of
Compliance
|
|
Exhibit
M
|
Form
10-D, Form 8-K and Form 10-K Reporting
Responsibility
|
|
Exhibit
N-1
|
Form
of Certification to Be Provided by the Depositor with Form
10-K
|
|
Exhibit
N-2
|
Form
of Certification to Be Provided to the Depositor by the
Trustee
|
|
Exhibit
O
|
Form
of Officer’s Certificate Regarding Annual Statement of
Compliance
|
|
Exhibit
P
|
Form
of Trustee Limited Power of
Attorney
|
|
Exhibit
Q
|
Form
of Reallocation Notice
|
6
This
Pooling and Servicing Agreement is dated as of February 1, 2007 (the
“Agreement”),
among
NOVASTAR MORTGAGE FUNDING CORPORATION, as depositor (the “Depositor”),
NOVASTAR MORTGAGE, INC., as servicer (the “Servicer”)
and as
sponsor (the “Sponsor”),
U.S.
BANK NATIONAL ASSOCIATION, as custodian (the “Custodian”)
and
DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the “Trustee”).
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
Whenever
used in this Agreement, except as otherwise expressly provided herein or
unless
the context otherwise requires, capitalized terms and phrases used herein
shall
have the meanings assigned to such terms and phrases in the definitions attached
hereto as Appendix A, which is incorporated herein by reference. Unless the
context otherwise requires:
(a)
a
term
has the meaning assigned to it;
(b)
an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time
to time;
(c)
“or”
is
not exclusive;
(d)
“including”
means including without limitation;
(e)
words
in
the singular include the plural and words in the plural include the
singular;
(f)
any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; and
(g)
references
to a Person are also to such Person’s permitted successors and
assigns.
Section
1.02 Accounting.
Unless
otherwise specified herein, for the purpose of any definition or calculation,
whenever amounts are required to be netted, subtracted or added or any
distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication
of
such functions.
7
Section
1.03 Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of the Monthly Interest Distributable
Amount
for the Class A Certificates and the Mezzanine Certificates, for any
Distribution Date, (1) the aggregate amount of any Net Prepayment Interest
Shortfalls and any Relief Act Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated first to the Excess Cashflow,
and second, on a pro-rata
basis
based on, and to the extent of, the gross Monthly Interest Distributable
Amount
for each such Class, among the Class A Certificates and the Mezzanine
Certificates and (2) the aggregate amount of any Available Funds Cap
Carryforward Amounts incurred for any Distribution Date shall be allocated
to
the Class CA and Class CB Certificates to the extent of the gross Monthly
Interest Distributable Amount for that Class, after deduction of any Net
Prepayment Interest Shortfalls and any Relief Act Shortfalls.
All
Net
Prepayment Interest Shortfalls and Relief Act Shortfalls shall be allocated
on
each Distribution Date among the Classes of each of REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V in the proportion that Net Prepayment Interest
Shortfalls and Relief Act Shortfalls are allocated to the related Master
REMIC
Regular Interests.
Section
1.04 Calculation
of Interest on Certificates.
Unless
otherwise specified, all calculations in respect of interest on the LIBOR
Certificates shall be made on the basis of the actual number of days elapsed
in
the related Accrual Period on the basis of a 360-day year and all other
calculations of interest described herein, including all calculations in
respect
of interest on the Class A-2A2 Certificates, shall be made on the basis of
a
360-day year consisting of twelve 30-day months.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL
ISSUANCE OF CERTIFICATES
Section
2.01 Establishment
of the Issuing Entity; Conveyance of Mortgage Loans and Other Trust
Assets.
The
parties do hereby create and establish a common law trust, pursuant to the
laws
of the State of New York and this Agreement, the Issuing Entity, which, for
convenience, shall be known as “NovaStar Mortgage Funding Trust, Series
2007-1.”
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse for the benefit of the Certificateholders all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to (i) each Mortgage Loan identified on
the
Mortgage Loan Schedule, including the related Cut-off Date Principal Balance,
all interest accruing thereon on and after the Cut-off Date and all collections
in respect of interest and principal due after the Cut-off Date; (ii) property
which secured each such Mortgage Loan and which has been acquired by foreclosure
or deed in lieu of foreclosure; (iii) its interest in any insurance policies
in
respect of the Mortgage Loans; (iv) its interest in the MI Policies; (v)
the
rights of the Depositor under the Purchase Agreement; (vi) its interest in
the
Hedge Agreements; (vii) all other assets included or to be included in the
Trust
Fund; and (viii) all proceeds of any of the foregoing. Such assignment includes
all interest and principal due to the Depositor or the Servicer after the
related Cut-off Date with respect to the Mortgage Loans.
8
In
connection with such transfer and assignment, the Sponsor, on behalf of the
Depositor, does hereby deliver to, and deposit with the Custodian, as the
designated agent holding on behalf of the Trustee, the following documents
or
instruments with respect to each Mortgage Loan so transferred and assigned
(with
respect to each Mortgage Loan, a “Mortgage
File”):
(i) the
original Mortgage Note endorsed to “Deutsche Bank National Trust Company, as
Trustee for the NovaStar Home Equity Loan Asset-Backed Certificates, Series
2007-1” or in blank;
(ii) the
original Mortgage with evidence of recording thereon, or, if the original
Mortgage has not yet been returned from the public recording office, a copy
of
the original Mortgage certified by the Sponsor or the public recording office
in
which such original Mortgage has been recorded, and if the Mortgage Loan
is
registered on the MERS System, such Mortgage shall include thereon a statement
that it is a MOM Loan and shall include the MIN for such Mortgage
Loan;
(iii) unless
the Mortgage Loan is registered on the MERS System, an original assignment
(which may be included in one or more blanket assignments if permitted by
applicable law) of the Mortgage endorsed to “Deutsche Bank National Trust
Company, as Trustee for the NovaStar Home Equity Loan Asset-Backed Certificates,
Series 2007-1”, and otherwise in recordable form;
(iv) originals
of any intervening assignments of the Mortgage showing an unbroken chain
of
title from the originator thereof to the Person assigning it to the Trustee
(or
to MERS, if the Mortgage Loan is registered on the MERS System), and noting
the
presence of a MIN (if the Mortgage Loan is registered on the MERS System),
with
evidence of recording thereon, or, if the original of any such intervening
assignment has not yet been returned from the public recording office, a
copy of
such original intervening assignment certified by the Sponsor or the public
recording office in which such original intervening assignment has been
recorded;
(v) the
original policy of title insurance (or a commitment for title insurance,
if the
policy is being held by the title insurance company pending recordation of
the
Mortgage); and
(vi) a
true
and correct copy of each assumption, modification, consolidation or substitution
agreement, if any, relating to the Mortgage Loan.
If
a
material defect in any Mortgage File is discovered which may materially and
adversely affect the value of the related Mortgage Loan, or the interests
of the
Trustee or the Certificateholders in such Mortgage Loan, including if any
document required to be delivered to the Custodian has not been delivered
(provided that a Mortgage File will not be deemed to contain a defect for
an
unrecorded assignment under clause (iii) above for 180 days following submission
of the assignment if the Sponsor has submitted such assignment for recording
pursuant to the terms of the following paragraph), the Sponsor shall cure
such
defect or repurchase the related Mortgage Loan at the Repurchase Price or
substitute an Eligible Substitute Mortgage Loan for the related Mortgage
Loan
upon the same terms and conditions set forth in Section 3.01 of the Purchase
Agreement for breaches of representations and warranties.
9
Promptly
after the Closing Date in the case of a Mortgage Loan, or after the date
of
transfer of any Eligible Substitute Mortgage Loan), the Sponsor at its own
expense shall complete and submit for recording in the appropriate public
office
for real property records each of the assignments referred to in clause (iii)
above, with such assignment completed in favor of the Trustee, excluding
any
Mortgage Loan that is registered on the MERS System, if MERS is identified
on
the Mortgage, or on a properly recorded assignment of Mortgage as the mortgagee
of record. While such assignment to be recorded is being recorded, the Custodian
shall retain a photocopy of such assignment. If any assignment is lost or
returned unrecorded to the Custodian because of any defect therein, the Sponsor
is required to prepare a substitute assignment or cure such defect, as the
case
may be, and the Sponsor shall cause such substitute assignment to be recorded
in
accordance with this paragraph.
In
instances where an original Mortgage or any original intervening assignment
of
Mortgage is not, in accordance with clause (ii) or (iv) above, delivered
by the
Sponsor to the Custodian, on behalf of the Trustee, prior to or on the Closing
Date in the case of a Mortgage Loan, the Sponsor will deliver or cause to
be
delivered the originals of such documents to the Custodian, on behalf of the
Trustee, promptly upon receipt thereof.
In
connection with the assignment of any Mortgage Loan registered on the MERS
System, promptly after the Closing Date in the case of a Mortgage Loan (or
after
the date of transfer of any Eligible Substitute Mortgage Loan), the Sponsor
further agrees that it will cause, at the Sponsor’s own expense, the MERS System
to indicate that such Mortgage Loan has been assigned by the Sponsor to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in its computer
files
(a) the applicable Trustee code in the field “Trustee” which identifies the
Trustee and (b) the code “NovaStar 2007-1” (or its equivalent) in the field
“Pool Field” which identifies the series of the Certificates issued in
connection with such Mortgage Loans. The Sponsor further agrees that it will
not, and will not permit the Servicer to, and the Servicer agrees that it
will
not, alter the codes referenced in this paragraph with respect to any such
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement.
Effective
on the Closing Date, the Trustee, on behalf of the Certificateholders, hereby
acknowledges its acceptance of all right, title and interest to the Mortgage
Loans and other property, existing on the Closing Date and thereafter created
and conveyed to it pursuant to this Section 2.01.
The
Trustee, as assignee or transferee of the Depositor, shall be entitled to
all
scheduled principal payments due after the Cut-off Date, all other payments
of
principal due and collected after the Cut-off Date, and all payments of interest
on the Mortgage Loans. No scheduled payments of principal due on or before
the
Cut-off Date and collected after the Cut-off Date shall belong to the Depositor
pursuant to the terms of the Purchase Agreement. Any late payment charges
collected in connection with a Mortgage Loan shall be paid to the Servicer
as
provided in Section 3.15(b) hereof.
10
The
parties hereto intend that the transactions set forth herein constitute a
sale
by the Depositor to the Issuing Entity on the Closing Date of all the
Depositor’s right, title and interest in and to the Mortgage Loans and other
property as and to the extent described above. In the event the transactions
set
forth herein shall be deemed not to be a sale, the Depositor hereby grants
to
the Trustee, on behalf of the Certificateholders, as of the Closing Date
a
security interest in all of the Depositor’s right, title and interest in, to and
under the Mortgage Loans and such other property, to secure all of the
Depositor’s obligations hereunder and this Agreement shall constitute a security
agreement under applicable law and in such event, the parties hereto acknowledge
that the Custodian, in addition to holding the Mortgage Loans on behalf of
the
Trustee for the benefit of the Certificateholders, holds the Mortgage Loans
as
designee of the Depositor. The Sponsor agrees to take or cause to be taken
such
actions and to execute such documents, including without limitation the filing
of all necessary UCC-1 financing statements in the State of Virginia (which
shall have been submitted for filing as of the Closing Date, any continuation
statements with respect thereto and any amendments thereto required to reflect
a
change in the name or corporate structure of the Sponsor or the filing of
any
additional UCC-1 financing statements due to the change in the state of
incorporation of the Sponsor, as are necessary to perfect and protect the
interests of the Issuing Entity and its assignees in each Mortgage Loan and
the
proceeds thereof.
Section
2.02 Acceptance
of Mortgage Loans by Custodian, on behalf of the Trustee.
(a)
The
Custodian, on behalf of the Trustee, acknowledges receipt of, subject to
the
review described below and any exceptions it notes pursuant to the procedures
described below, the documents (or certified copies thereof) referred to
in
Section 2.01 hereof and declares that it holds and will continue to hold
those
documents and any amendments, replacements or supplements thereto and all
other
assets of the Trust Fund in trust for the use and benefit of all present
and
future Certificateholders. No later than 45 days after the Closing Date (or,
with respect to any Eligible Substitute Mortgage Loan, within 5 Business
Days
after the receipt by the Custodian, on behalf of the Trustee, thereof and,
with
respect to any documents received beyond 45 days after the Closing Date,
promptly thereafter), the Custodian agrees, on behalf of the Trustee, for
the
benefit of the Certificateholders, to review each Mortgage File delivered
to it
and to execute and deliver, or cause to be executed and delivered, to the
Sponsor, the Depositor and the Trustee an initial certification in the form
annexed hereto as Exhibit F-1. In conducting such review, the Custodian will
ascertain whether all required documents described in Section 2.01 hereof
have
been executed and received and whether those documents relate, determined
on the
basis of the Mortgagor name, original principal balance and loan number,
to the
Mortgage Loans it has received, as identified in Exhibit B to this Agreement,
as
supplemented (provided, however, that with respect to those documents described
in subclause (vii) of such section, the Custodian’s obligations shall extend
only to documents actually delivered pursuant to such subclause). In performing
any such review, the Custodian may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. If the Custodian finds that any document constituting
part of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B or to appear to be
defective on its face, the Custodian, on behalf of the Trustee, shall promptly
notify the Sponsor and the Trustee of such finding and the Sponsor’s obligation
to cure such defect or repurchase or substitute for the related Mortgage
Loan.
11
(b)
No
later
than 180 days after the Closing Date, the Custodian, on behalf of the Trustee,
will review, for the benefit of the Certificateholders, the Mortgage Files
and
will execute and deliver or cause to be executed and delivered to the Sponsor
,the Depositor and the Trustee, a final certification in the form annexed
hereto
as Exhibit F-2. In conducting such review, the Custodian, on behalf of the
Trustee, will ascertain whether an original of each document described in
subclauses (ii)-(iv) of Section 2.01 hereof required to be recorded has been
returned from the recording office with evidence of recording thereon or
a
certified copy has been obtained from the recording office. If the Custodian
finds any document constituting part of the Mortgage File has not been received,
or to be unrelated, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans identified in Exhibit
B
or to appear defective on its face, the Custodian, on behalf of the Trustee,
shall promptly notify the Sponsor and the Trustee of such finding and the
Sponsor’s obligation to cure such defect or repurchase or substitute for the
related Mortgage Loan.
(c)
Upon
deposit of the Repurchase Price in the Collection Account and notification
of
the Trustee, by a certification signed by a Servicing Officer (which
certification shall include a statement to the effect that the Repurchase
Price
has been deposited in the Collection Account), upon receipt of a Request
for
Release the Custodian shall release to the Sponsor the related Mortgage File
and
the Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, furnished to it by the Sponsor as are necessary to vest
in the
Sponsor title to and rights under the related Mortgage Loan. Such purchase
shall
be deemed to have occurred on the date on which certification of the deposit
of
the Repurchase Price in the Distribution Account was received by the Trustee.
The Custodian, on behalf of the Trustee, shall amend the applicable Mortgage
Loan Schedule to reflect such repurchase and shall forward it to the Trustee.
The Trustee shall promptly notify the Servicer and the Rating Agencies of
such
amendment.
Section
2.03 Repurchase
or Substitution of Mortgage Loans by the Sponsor.
(a)
Upon
discovery or receipt of written notice of any materially defective document
in,
or that a document is missing from, a Mortgage File or of the breach by the
Sponsor of any representation, warranty or covenant under the Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value
of
such Mortgage Loan or the interest therein of the Certificateholders, the
party
making such discovery or receiving such notice shall promptly notify the
other
parties hereto, and the Sponsor shall thereupon be required to deliver such
missing document or cure such defect or breach no later than 90 days from
the
date of the discovery or receipt of written notice of such missing document,
defect or breach, and if the Sponsor does not deliver such missing document
or
cure such defect or breach in all material respects during such period, the
Custodian shall notify the Trustee and the Trustee shall enforce the Sponsor’s
obligation under the Purchase Agreement and cause the Sponsor to repurchase
such
Mortgage Loan from the Trust Fund at the Repurchase Price on or prior to
the
Determination Date following the expiration of such 90 day period.
12
(b)
The
Repurchase Price for the repurchased Mortgage Loan shall be deposited in
the
Collection Account and the Trustee, shall receive written certification from
the
Servicer of such deposit and upon receipt of a Request for Release the Custodian
shall release to the Sponsor the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Sponsor shall furnish to it and as shall be necessary
to vest in the Sponsor any Mortgage Loan released pursuant hereto and the
Trustee and the Custodian shall have no further responsibility with regard
to
such Mortgage File (it being understood that neither the Trustee nor the
Custodian shall have any responsibility for determining the sufficiency of
such
assignment for its intended purpose). In lieu of repurchasing any such Mortgage
Loan as provided above, the Sponsor may cause such Mortgage Loan to be removed
from the Trust Fund (in which case it shall become a Deleted Mortgage Loan)
and
substitute one or more Eligible Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood
and
agreed that the obligation of the Sponsor to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy against the Sponsor
respecting such omission, defect or breach available to the Trustee on behalf
of
the Certificateholders.
(c)
Within
90
days of the earlier of discovery by the Servicer or receipt of notice by
the
Servicer of the breach of any representation, warranty or covenant of the
Servicer set forth in Section 2.05 which materially and adversely affects
the
interests of the Certificateholders in any Mortgage Loan, the Servicer shall
cure such breach in all material respects.
(d)
Any
substitution of Eligible Substitute Mortgage Loans for Deleted Mortgage Loans
made pursuant to Section 2.03(a) must be effected prior to the last Business
Day
that is within two years after the Closing Date. As to any Deleted Mortgage
Loan
for which the Sponsor substitutes an Eligible Substitute Mortgage Loan or
Loans,
such substitution shall be effected by the Sponsor delivering to the Custodian,
for such Eligible Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers’ Certificate providing that each such Eligible
Substitute Mortgage Loan satisfies the definition thereof and specifying
the
Substitution Adjustment Amount (as described below), if any, in connection
with
such substitution. The Custodian shall acknowledge receipt for such Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
shall review such documents as specified in Section 2.02 and deliver to the
Servicer and the Trustee, with respect to such Eligible Substitute Mortgage
Loan
or Loans, a certification substantially in the form attached hereto as Exhibit
F-1, with any applicable exceptions noted thereon. Within one year of the
date
of substitution, the Custodian shall deliver to the Servicer and the Trustee
a
certification substantially in the form of Exhibit F-2 hereto with respect
to
such Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Eligible Substitute Mortgage
Loans in the month of substitution are not part of the Trust Fund and will
be
retained by the Sponsor. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect
of
such Deleted Mortgage Loan in the Due Period preceding the month of substitution
and the Sponsor shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Sponsor shall give
or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement
and
the substitution of the Eligible Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Custodian and
the
Trustee. Upon such substitution by the Sponsor, such Eligible Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall
be
subject in all respects to the terms of this Agreement and the Purchase
Agreement, including all applicable representations and warranties thereof
included in the Purchase Agreement as of the date of substitution.
13
For
any
month in which the Sponsor substitutes one or more Eligible Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Servicer will determine
the
amount (the “Substitution
Adjustment Amount”),
if
any, by which the aggregate Repurchase Price of all such Deleted Mortgage
Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan,
of the
principal balance thereof as of the date of substitution, together with one
month’s interest on such principal balance at the applicable Net Mortgage Rate.
On the date of such substitution, the Sponsor will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account an amount
equal
to the Substitution Adjustment Amount, if any, and the Custodian, upon receipt
of the related Eligible Substitute Mortgage Loan or Loans and certification
by
the Servicer of such deposit (which shall be delivered to the Trustee and
the
Custodian), shall release to the Sponsor the related Mortgage File or Files
and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Sponsor shall deliver to
it
and as shall be necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
In
addition, the Sponsor shall obtain at its own expense and deliver to the
Trustee
an Opinion of Counsel to the effect that such substitution will not cause
(a)
any federal tax to be imposed on the Issuing Entity, including without
limitation, any federal tax imposed on “prohibited transactions” under Section
860F(a)(l) of the Code or on “contributions after the startup date” under
Section 860G(d)(l) of the Code, or (b) any REMIC created hereunder to fail
to
qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only
be
effected at such time as the required Opinion of Counsel can be
given.
(e)
Upon
discovery by the Sponsor, the Servicer, the Custodian or the Trustee that
any
Mortgage Loan does not constitute a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code, the party discovering such fact shall within
two
Business Days give written notice thereof to the other parties. In connection
therewith, the Sponsor or the Depositor, as the case may be, shall repurchase
or, subject to the limitations set forth in Section 2.03(d), substitute one
or
more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within
90
days of the earlier of discovery or receipt of such notice with respect to
such
affected Mortgage Loan. Such repurchase or substitution shall be made by
the
Sponsor. Any such repurchase or substitution shall be made in the same manner
as
set forth in Section 2.03(a). The Trustee shall reconvey to the Sponsor,
the
Mortgage Loan to be released pursuant hereto in the same manner, and on the
same
terms and conditions, as it would a Mortgage Loan repurchased for breach
of a
representation or warranty.
14
Section
2.04 Acknowledgement
of Trustee.
The
Trustee acknowledges that in the event that any transfer of the Mortgage
Loans
and the MI Policies from the Sponsor to the Depositor, or from the Depositor
to
the Trustee on behalf of the Certificateholders, is determined to constitute
a
financing, or from the Depositor to the Trustee on behalf of the
Certificateholders, is determined to constitute a financing, then in each
case
the Custodian, on behalf of the Trustee, will hold the Mortgage Loans and
the MI
Policies as the designee and bailee of the Depositor subject, however, in
each
case, to a prior lien in favor of the Certificateholders pursuant to the
terms
of this Agreement.
Section
2.05 Representations,
Warranties and Covenants of the Servicer.
The
Servicer hereby represents, warrants and covenants to the Trustee, for the
benefit of each of the Trustee and the Certificateholders, and to the Depositor
that as of the Closing Date or as of such date specifically provided
herein:
(i) The
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Virginia and has the corporate power to own
its
assets and to transact the business in which it is currently engaged. The
Servicer is duly qualified to do business as a foreign corporation and is
in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such qualification
and in which the failure to so qualify would have a material adverse effect
on
the business, properties, assets, or condition (financial or other) of the
Servicer or the validity or enforceability of the Mortgage Loans;
(ii) The
Servicer has the corporate power and authority to make, execute, deliver
and
perform this Agreement and all of the transactions contemplated under this
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with its terms, except
as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;
(iii) The
Servicer is not required to obtain the consent of any other Person or any
consent, license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
15
(iv) The
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby by the Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court applicable
to the
Servicer or any provision of the certificate of incorporation or bylaws of
the
Servicer, or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Servicer is a party or by which the Servicer
may
be bound;
(v) No
litigation or administrative proceeding of or before any court, tribunal
or
governmental body is currently pending, or to the knowledge of the Servicer
threatened, against the Servicer or any of its properties or with respect
to
this Agreement or the Certificates which, to the knowledge of the Servicer,
has
a reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;
(vi) The
Servicer is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS; and
(vii) With
respect to the Group I Mortgage Loans, the Servicer will accurately and fully
report its borrower credit files to the three largest credit repositories
in a
timely manner.
The
foregoing representations and warranties shall survive any termination of
the
Servicer hereunder.
Section
2.06 Representations
and Warranties of the Depositor.
The
Depositor represents and warrants to the Issuing Entity and the Trustee on
behalf of the Certificateholders as follows:
(a)
The
Depositor is duly organized and validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority
to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(b)
The
Depositor is duly qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its property or the conduct
of
its business shall require such qualifications and in which the failure to
so
qualify would have a material adverse effect on the business, properties,
assets
or condition (financial or other) of the Depositor and the ability of the
Depositor to perform hereunder.
(c)
The
Depositor has the power and authority to execute and deliver this Agreement
and
to carry out its terms; the Depositor has full power and authority to purchase
the property to be purchased from the Sponsor and the Depositor has duly
authorized such purchase by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been duly authorized by the
Depositor by all necessary corporate action. When executed and delivered,
this
Agreement will constitute the legal, valid and binding obligation of the
Depositor enforceable in accordance with its terms, except as enforcement
of
such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally and by the availability of
equitable remedies.
16
(d)
The
consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach
of
any of the terms and provisions of, or constitute (with or without notice
or
lapse of time) a default under, the articles of incorporation or bylaws of
the
Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the creation
or
imposition of any Lien upon any of its properties pursuant to the terms of
any
such indenture, agreement or other instrument (other than pursuant to the
Basic
Documents); nor violate any law or, to the best of the Depositor’s knowledge,
any order, rule or regulation applicable to the Depositor of any court or
of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
Section
2.07 Issuance
of Certificates.
The
Trustee acknowledges the assignment to the Trustee of the Mortgage Loans
and the
delivery to the Custodian, on behalf of the Trustee of the Mortgage Files,
subject to the provisions of Sections 2.01 and 2.02, together with the
assignment to it of all other assets included in the Trust Fund, receipt
of
which is hereby acknowledged. Concurrently with such assignment and delivery
and
in exchange therefor, the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed, and
authenticated and delivered to or upon the order of the Depositor, the
Certificates in authorized denominations. The interests evidenced by the
Certificates, constitute the entire beneficial ownership interest in the
Trust
Fund.
Section
2.08 [Reserved].
Section
2.09 Designation
Under REMIC Provisions.
The
Trustee shall comply with the provisions set forth in Exhibit J.
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
THE MORTGAGE LOANS
Section
3.01 Servicer
to Assure Servicing.
(a)
The
Servicer shall supervise, or take such actions as are necessary to ensure,
the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with all applicable requirements of the Servicing Criteria, with
this
Agreement and with its normal servicing practices, which generally shall
conform
to the standards of an institution prudently servicing mortgage loans for
its
own account and shall have full authority to do anything it reasonably deems
appropriate or desirable in connection with such servicing and administration.
The Servicer may perform its responsibilities relating to servicing through
other agents or independent contractors, but shall not thereby be released
from
any of its responsibilities as hereinafter set forth. Subject to Section
3.06(b), the authority of the Servicer, in its capacity as Servicer, and
any
Subservicer acting on its behalf, shall include, without limitation, the
power
to (i) consult with and advise any Subservicer regarding administration of
a
related Mortgage Loan, (ii) approve any recommendation by a Subservicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf
of the
insured Person thereunder as shall be reasonably necessary to prevent the
denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion
of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings,
the
collection of deficiency judgments, the acceptance of compromise proposals
and
any other matter pertaining to a delinquent Mortgage Loan. The authority
of the
Servicer shall include, in addition, the power on behalf of the
Certificateholders, the Trustee, or any of them to (i) execute and deliver
customary consents or waivers and other instruments and documents, (ii) consent
to transfer of any related Mortgaged Property and assumptions of the related
Mortgage Notes and Mortgages (in the manner provided in this Agreement) and
(iii) collect any Insurance Proceeds and Liquidation Proceeds. Without limiting
the generality of the foregoing, the Servicer and any Subservicer acting
on its
behalf may, and is hereby authorized, and empowered by the Trustee when the
Servicer believes it is reasonably necessary in its best judgment in order
to
comply with its servicing duties hereunder, to execute and deliver, on behalf
of
itself, the Certificateholders, the Trustee, or any of them, any instruments
of
satisfaction, cancellation, partial or full release, discharge and all other
comparable instruments, with respect to the related Mortgage Loans, the
insurance policies and the accounts related thereto, and the Mortgaged
Properties. The Servicer may exercise this power in its own name or in the
name
of a Subservicer.
17
The
Servicer, in such capacity, may not consent to the placing of a lien senior
to
that of the Mortgage on the related Mortgaged Property.
The
relationship of the Servicer (and of any successor to the Servicer as servicer
under this Agreement) to the Issuing Entity and the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not
that
of a joint venturer, partner or agent.
The
Servicer shall perform all of its obligations under the Backup Servicing
Agreement, as though it were a direct party thereto.
(b)
Notwithstanding
the provisions of Subsection 3.01(a), the Servicer shall not take any action
inconsistent with the interests of the Trustee, or the Certificateholders
or
with the rights and interests of the Trustee, or the Certificateholders under
this Agreement.
(c)
The
Trustee shall furnish the Servicer with any powers of attorney in the form
of
Exhibit P and other documents in form as provided to it necessary or appropriate
to enable the Servicer to service and administer the related Mortgage Loans
and
REO Property and the Trustee shall not be liable for the actions of or the
use
or misuse by the Servicer or any Subservicers under such powers of
attorney.
18
(d)
The
Servicer further is authorized and empowered by the Trustee, on behalf of
the
Certificateholders and the Trustee, when the Servicer believes it is appropriate
in its best judgment to register any Mortgage Loan on the MERS System, or
cause
the removal from the registration of any Mortgage Loan on the MERS System,
to
execute and deliver, on behalf of the Trustee and the Certificateholders
or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name
of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Servicer with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS System, it becomes necessary
to
remove any Mortgage Loan from registration on the MERS System and to arrange
for
the assignment of the related Mortgages to the Trustee, then any related
expenses shall be reimbursable to the Servicer by the Issuing
Entity.
Section
3.02 Subservicing
Agreements Between Servicer and Subservicers.
(a)
The
Servicer may enter into Subservicing Agreements with Subservicers for the
servicing and administration of the Mortgage Loans and for the performance
of
any and all other activities of the Servicer hereunder. Each Subservicer
shall
be either (i) an institution the accounts of which are insured by the FDIC
or
(ii) another entity that engages in the business of originating or servicing
mortgage loans comparable to the Mortgage Loans, and in either case shall
be
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. Any Subservicing Agreement
entered into by the Servicer shall include the provision that such Agreement
may
be immediately terminated (i) (x) with cause and without any termination
fee by
the Servicer hereunder and/or (y) without cause, in which case the Servicer
shall be solely responsible for any termination fee or penalty resulting
therefrom and (ii) at the option of the Trustee upon the termination or
resignation of the Servicer hereunder, in which case the Servicer shall be
solely responsible for any termination fee or penalty resulting therefrom.
In
addition, each Subservicing Agreement shall provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer
and the
Subservicers may enter into Subservicing Agreements and make amendments to
the
Subservicing Agreements or enter into different forms of Subservicing Agreements
providing for, among other things, the delegation by the Servicer to a
Subservicer of additional duties regarding the administration of the Mortgage
Loans; 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
Certificateholders, without the consent of the Certificateholders holding
at
least 51% of the aggregate Voting Rights.
(b)
As
part
of its servicing activities hereunder, the Servicer, for the benefit of the
Trustee, and the Certificateholders, shall enforce the obligations of each
Subservicer under the related Subservicing Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination
of
Subservicing Agreements and the pursuit of other appropriate remedies, shall
be
in such form and carried out to such an extent and at such time as the Servicer,
in its good faith business judgment, would require were it the owner of the
related Mortgage Loans. The Servicer shall pay the costs of such enforcement
at
its own expense, but shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement only to the extent, if any, that
such
recovery exceeds all amounts due in respect of the related Mortgage Loan
or (ii)
from a specific recovery of costs, expenses or attorneys’ fees against the party
against whom such enforcement is directed.
19
(c)
The
Servicer shall not permit a Subservicer, subcontractor or Servicing Function
Participant to perform any servicing function hereunder with respect to the
Mortgage Loans unless such Servicing Function Participant first agrees in
writing with the Servicer to deliver an Assessment of Compliance and an
Attestation Report in such manner and at such time that permits the Servicer
to
comply with Section 3.17 hereof.
Section
3.03 Successor
Subservicers.
The
Servicer shall be entitled to terminate any Subservicing Agreement that may
exist in accordance with the terms and conditions of such Subservicing Agreement
and without any limitation by virtue of this Agreement; provided, however,
that
upon termination, the Servicer shall either act as servicer of the related
Mortgage Loans or enter into an appropriate contract with a successor
Subservicer reasonably acceptable to the Depositor (and with written notice
to
the Trustee), pursuant to which such successor Subservicer will be bound
by all
relevant terms of the related Subservicing Agreement pertaining to the servicing
of such Mortgage Loans.
Section
3.04 Liability
of the Servicer.
(a)
Notwithstanding
any Subservicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall under
all circumstances remain obligated and primarily liable to the Trustee and
the
Certificateholders for the servicing and administering of the Mortgage Loans
and
any REO Property in accordance with this Agreement. The obligations and
liability of the Servicer shall not be diminished by virtue of Subservicing
Agreements or by virtue of indemnification of the Servicer by any Subservicer,
or any other Person. The obligations and liability of the Servicer shall
remain
of the same nature and under the same terms and conditions as if the Servicer
alone were servicing and administering the related Mortgage Loans. The Servicer
shall, however, be entitled to enter into indemnification agreements with
any
Subservicer or other Person and nothing in this Agreement shall be deemed
to
limit or modify such indemnification. For the purposes of this Agreement,
the
Servicer shall be deemed to have received any payment on a Mortgage Loan
on the
date the Subservicer received such payment.
(b)
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
and not as an originator shall be deemed to be between the Subservicer and
the
Servicer alone, and the Custodian, the Trustee and the Certificateholders
shall
not be deemed parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the Subservicer, except as set forth
in
Section 3.05.
20
Section
3.05 Assumption
or Termination of Subservicing Agreements by the Successor
Servicer.
(a)
If
the
Back-up Servicer, Trustee or its designee as the successor Servicer, shall
assume the servicing obligations of the Servicer in accordance with Section
7.02
below, the Back-up Servicer, the Trustee or its designee as the successor
Servicer, to the extent necessary to carry out the provisions of Section
7.02
with respect to the Mortgage Loans, shall succeed to all of the rights and
obligations of the Servicer under each of the Subservicing Agreements. In
such
event, the Back-up Servicer, the Trustee or its designee as the successor
Servicer shall be deemed to have assumed all of the Servicer’s rights and
obligations therein and to have replaced the Servicer as a party to such
Subservicing Agreements to the same extent as if such Subservicing Agreements
had been assigned to the Back-up Servicer, the Trustee or its designee as
a
successor Servicer, except that the Back-up Servicer, the Trustee or its
designee as a successor Servicer shall not be deemed to have assumed any
obligations or liabilities of the Servicer arising prior to such assumption
or
as a result of the Back-up Servicer's, the Trustee’s or its designee’s
terminating any Subservicer upon the Trustee or its designee becoming successor
Servicer and the Servicer shall not thereby be relieved of any liability
or
obligations under such Subservicing Agreements arising prior to such assumption
or as a result of the Back-up Servicer's, the Trustee’s or its designee’s
terminating any Subservicer upon the Back-up Servicer, the Trustee or its
designee becoming successor Servicer.
(b)
The
Back-up Servicer, the Trustee or its designee as the successor Servicer may
terminate any Subservicer upon becoming successor Servicer. Any termination
fees
will be paid by the terminated Subservicer.
(c)
In
the
event that the Back-up Servicer, the Trustee or its designee as successor
Servicer assumes the servicing obligations of the Servicer under Section
7.02,
upon the request of the Back-up Servicer, the Trustee or such designee as
successor Servicer, the Servicer shall at its own expense deliver to the
Back-up
Servicer, the Trustee, or at the Trustee's written request to such designee,
originals or, if originals are not available, photocopies of all documents,
files and records, electronic or otherwise, relating to the Subservicing
Agreements and the related Mortgage Loans or REO Property then being serviced
and an accounting of amounts collected and held by it, if any, and will
otherwise cooperate and use its reasonable efforts to effect the orderly
and
efficient transfer of the Subservicing Agreements, or responsibilities hereunder
to the Back-up Servicer, the Trustee, or at its written request to such
designee, as successor Servicer.
Section
3.06 Collection
of Mortgage Loan Payments.
(a)
The
Servicer will coordinate and monitor remittances by Subservicers to it with
respect to the Mortgage Loans in accordance with this Agreement.
(b)
The
Servicer shall make its best reasonable efforts to collect or cause to be
collected all payments required under the terms and provisions of the Mortgage
Loans and shall follow, and use its best reasonable efforts to cause
Subservicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their
own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Servicer or the related Subservicer may
in
its discretion (i) waive or permit to be waived any late payment charge,
prepayment charge, assumption fee, or any penalty interest in connection
with
the prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to
be
suspended or reduced regular monthly payments for a period of up to six months,
or arrange or permit an arrangement with a Mortgagor for a scheduled liquidation
of delinquencies; provided, however, that the Servicer or the related
Subservicer may permit the foregoing only if it believes, in good faith,
that
recoveries of Monthly Payments will be maximized; provided further, however,
with respect to Mortgage Loans insured by an MI Policy, that the Servicer
may
not without the prior written consent of the MI Insurer permit any waiver,
modification or variance which would (a) reduce or eliminate the coverage
provided under the MI Policy (b) change the loan rate, (c) forgive any payment
of principal or interest, (d) lessen the lien priority or (e) extend the
final
maturity date of a Mortgage Loan past 12 months after the original maturity
date
on such Mortgage Loan. In the event the Servicer or related Subservicer shall
consent to the deferment of the due dates for payments due on a Mortgage
Note,
the Servicer shall nonetheless make an Advance or shall cause the related
Subservicer to make an advance to the same extent as if such installment
were
due, owing and delinquent and had not been deferred through liquidation of
the
Mortgaged Property; provided, however, that the obligation of the Servicer
or
the related Subservicer to make an Advance shall apply only to the extent
that
the Servicer believes, in good faith, that such advances are not Nonrecoverable
Advances. The Servicer shall pay the amount of any waived prepayment charge
at
the time of payoff if such prepayment charge was waived for a reason other
than
that specified in this Section 3.06(b).
21
(c)
Within
five Business Days after the Servicer has determined that all amounts which
it
expects to recover from or on account of a Liquidated Mortgage Loan have
been
recovered and that no further Liquidation Proceeds will be received in
connection therewith, the Servicer shall provide to the Trustee a certificate
of
a Servicing Officer that such Mortgage Loan became a Liquidated Mortgage
Loan as
of the date of such determination.
(d)
The
Servicer shall establish a segregated account (the “Collection
Account”),
which
shall be an Eligible Account, which shall be titled “Collection Account,
Deutsche Bank National Trust Company, as Trustee for the registered holders
of
NovaStar Mortgage Funding Trust 2007-1, Home Equity Loan Asset-Backed
Certificates, Series 2007-1”, in which the Servicer shall deposit or cause to be
deposited any amounts representing payments on and any collections in respect
of
the Mortgage Loans received by it after the Cut-off Date (other than in respect
of the payments referred to in the following paragraph) within two Business
Days
following receipt thereof, including the following payments and collections
received or made by it (without duplication):
(i) all
payments of principal or interest on the Mortgage Loans received by the Servicer
directly from Mortgagors or from the respective Subservicer;
(ii) the
aggregate Repurchase Price of the Mortgage Loans purchased by the Servicer
pursuant to Section 3.19;
(iii) Net
Liquidation Proceeds;
22
(iv) all
proceeds of any Mortgage Loans repurchased by the Sponsor pursuant to the
Purchase Agreement, and all Substitution Adjustment Amounts required to be
deposited in connection with the substitution of an Eligible Substitute Mortgage
Loan pursuant to the Purchase Agreement;
(v) Insurance
Proceeds, other than Net Liquidation Proceeds, and MI Insurance Proceeds
resulting from any insurance policy maintained on a Mortgaged
Property;
(vi) any
Advance and any Compensating Interest payments; and
(vii) any
other
amounts received by the Servicer, including all Foreclosure Profits, assumption
fees, prepayment penalties and any other fees that are required to be deposited
in the Collection Account pursuant to this Agreement;
provided,
however, that with respect to each Due Period, the Servicer shall be permitted
to retain from payments actually collected in respect of interest on the
Mortgage Loans, the Servicing Fee for such Due Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive,
it
being understood that, without limiting the generality of the foregoing,
the
Servicer need not deposit in the Collection Account late payment charges
payable
by Mortgagors, as further described in Section 3.15, or amounts received
by the
Subservicer for the accounts of Mortgagors for application towards the payment
of taxes, insurance premiums, assessments and similar items. In the event
any
amount not required to be deposited in the Collection Account is so deposited,
the Servicer may at any time (prior to being terminated under this Agreement)
withdraw such amount from the Collection Account, any provision herein to
the
contrary notwithstanding. The Servicer shall keep records that accurately
reflect the funds on deposit in the Collection Account that have been identified
by it as being attributable to the Mortgage Loans and shall hold all collections
in the Collection Account for the benefit of the Trustee, and the
Certificateholders, as their interests may appear.
Funds
in
the Collection Account may be invested in Eligible Investments with a maturity
date no later than the Business Day immediately preceding the Servicer
Remittance Date, but shall not be commingled with the Servicer’s own funds or
general assets or with funds respecting payments on mortgage loans or with
any
other funds not related to the Certificates. All such investments shall be
made
in the name of the Trustee for the benefit of the Certificateholders, provided,
however, that income earned on such Eligible Investments shall be for the
account of the Servicer. The Servicer shall be obligated to cover losses
on such
Eligible Investments.
(e)
The
Servicer will require each Subservicer to hold all funds constituting
collections on the Mortgage Loans, pending remittance thereof to the Servicer,
in one or more accounts in the name of the Trustee meeting the requirements
of
an Eligible Account, and such funds shall not be invested. The Subservicer
shall
segregate and hold all funds collected and received pursuant to each Mortgage
Loan separate and apart from any of its own funds and general assets and
any
other funds. Each Subservicer shall make remittances to the Servicer no later
than one Business Day following receipt thereof and the Servicer shall deposit
into the Collection Account any such remittances received from any Subservicer
within one Business Day following receipt by the Servicer.
23
Section
3.07 Withdrawals
from the Collection Account.
(a)
The
Servicer shall, from time to time as provided herein, make withdrawals from
the
Collection Account of amounts on deposit therein pursuant to Section 3.06
that
are attributable to the Mortgage Loans for the following purposes (without
duplication):
(i) to
deposit in the Distribution Account, by the Servicer Remittance Date prior
to
each Distribution Date, all collections on the Mortgage Loans required to
be
distributed from the Distribution Account on a Distribution Date;
(ii) to
the
extent deposited to the Collection Account, to reimburse itself or the related
Subservicer for Servicing Advances paid to maintain individual insurance
policies pursuant to Section 3.11, or Liquidation Expenses, paid pursuant
to
Section 3.13, such withdrawal right being limited to amounts received on
particular Mortgage Loans (other than any Repurchase Price in respect thereof)
which represent late recoveries of the payments for which such expenses were
paid, or from related Liquidation Proceeds;
(iii) to
pay to
itself out of each payment received on account of interest on a Mortgage
Loan as
contemplated by Section 3.15, an amount equal to the related Servicing Fee
(to
the extent not retained pursuant to Section 3.06);
(iv) to
pay to
itself or the Sponsor, with respect to any Mortgage Loan or property acquired
in
respect thereof that has been purchased by the Sponsor, the Servicer or other
entity, all amounts received thereon and not required to be distributed to
Certificateholders as of the date on which the related Repurchase Price is
determined;
(v) to
reimburse the Servicer or any Subservicer for any unreimbursed Advance or
Servicing Advance of its own funds or any unreimbursed advance of such
Subservicer’s own funds, the right of the Servicer or a Subservicer to
reimbursement pursuant to this subclause (v) being limited to amounts received
on a particular Mortgage Loan (including, for this purpose, the Repurchase
Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
payments or recoveries of the principal of or interest on such Mortgage Loan
respecting which such Advance, Servicing Advance or advance was
made;
(vi) to
reimburse the Servicer or any Subservicer from Insurance Proceeds or Liquidation
Proceeds relating to a particular Mortgage Loan for Servicing Advances expended
by the Servicer or such Subservicer pursuant to Section 3.13: (x) in good
faith
in connection with the restoration of the related Mortgaged Property which
was
damaged by the uninsured cause, (y) in connection with the liquidation of
such
Mortgage Loan, or (z) with respect to an MI Claim Payment Advance made by
the
Servicer with respect to such Mortgage Loan;
24
(vii) to
reimburse the Servicer or any Subservicer for any unreimbursed Nonrecoverable
Advance previously made, and to reimburse any successor Servicer for any
Servicing Transfer Costs, including any legal fees or expenses relating to
any
such transfer, in each case not paid by the transferring Servicer, in each
case
otherwise not reimbursed pursuant to this Section 3.07(a);
(viii) to
withdraw any other amount deposited in the Collection Account that was not
required to be deposited therein pursuant to Section 3.06;
(ix) to
reimburse the Servicer for costs associated with the environmental report
handling the presence of any toxic or hazardous substance on a Mortgaged
Property as set forth in Section 3.13(c);
(x) to
clear
and terminate the Collection Account upon a termination pursuant to Section
7.08;
(xi) to
pay to
the Servicer income earned on Eligible Investments in the Collection
Account;
(xii) to
pay to
the MI Insurer the monthly MI Premiums due under each MI Policy from payments
received (or Advances made) on account of interest due on the related Mortgage
Loan; and
(xiii) to
make
an Advance with respect to a Mortgage Loan that is Delinquent from funds
held in
the Collection Account as contemplated by Section 3.25, provided that the
amount
withdrawn for such an Advance is immediately deposited into the Distribution
Account.
Withdrawals
made pursuant to clause (xii) shall be made on a first priority basis. In
connection with withdrawals pursuant to clauses (ii), (iii), (iv), (v) and
(vi),
the Servicer’s entitlement thereto is limited to collections or other recoveries
on the related Mortgage Loan, and 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 pursuant to such clauses.
(b)
Notwithstanding
the provisions of this Section 3.07, the Servicer may, but is not required
to,
allow the Subservicers to deduct from amounts received by them or from the
related account maintained by a Subservicer, prior to deposit in the Collection
Account, any portion to which such Subservicers are entitled as reimbursement
of
any reimbursable Advances made by such Subservicers.
Section
3.08 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
(a)
The
Servicer shall establish and maintain or cause the related Subservicer to
establish and maintain, one or more Servicing Accounts. The Servicer or a
Subservicer will deposit and retain therein all collections from the Mortgagors
for the payment of taxes, assessments, insurance premiums, or comparable
items
as agent of the Mortgagors.
25
(b)
The
deposits in the Servicing Accounts shall be held in trust by the Servicer
or a
Subservicer (and its successors and assigns) in the name of the Trustee.
Such
Servicing Accounts shall be Eligible Accounts and, if permitted by applicable
law, invested in Eligible Investments held in trust by the Servicer or a
Subservicer as described above and maturing, or be subject to redemption
or
withdrawal, no later than the date on which such funds are required to be
withdrawn, and in no event later than 45 days after the date of investment;
withdrawals of amounts from the Servicing Accounts may be made only to effect
timely payment of taxes, assessments, insurance premiums, or comparable items,
to reimburse the Servicer or a Subservicer for any advances made with respect
to
such items, to refund to any Mortgagors any sums as may be determined to
be
overages, to pay interest, if required, to Mortgagors on balances in the
Servicing Accounts or to clear and terminate the Servicing Accounts at or
any
time after the termination of this Agreement. Amounts received from Mortgagors
for deposit into the Servicing Accounts shall be deposited in the Servicing
Accounts by the Servicer within two days of receipt. The Servicer shall advance
from its own funds amounts needed to pay items payable from the Servicing
Accounts if the Servicer reasonably believes that such amounts are recoverable
from the related Mortgagor. The Servicer shall comply with all laws relating
to
the Servicing Accounts, including laws relating to payment of interest on
the
Servicing Accounts. If interest earned by the Servicer on the Servicing Accounts
is not sufficient to pay required interest on the Servicing Accounts, the
Servicer shall pay the difference from its own funds. The Servicing Accounts
shall not be the property of the Issuing Entity.
Section
3.09 Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
The
Servicer shall provide, and shall cause any Subservicer to provide, to the
Trustee, access to the documentation regarding the related Mortgage Loans
and
REO Property and to the Certificateholders or Certificate Owners, the FDIC,
and
the supervisory agents and examiners of the FDIC (to which the Custodian
and
Trustee shall also provide) access to the documentation regarding the related
Mortgage Loans required by applicable regulations, such access being afforded
without charge but only upon reasonable request and during normal business
hours
at the offices of the Servicer or the Subservicers that are designated by
these
entities (or in the case of the Custodian and the Trustee, during normal
business hours at its designated office); provided, however, that, unless
otherwise required by law, the Servicer and any Subservicer shall not be
required to provide access to such documentation if the provision thereof
would
violate the legal right to privacy of any Mortgagor; provided, further, however,
that the Trustee shall coordinate its request for such access so as not to
impose an unreasonable burden on, or cause an unreasonable interruption of,
the
business of the Servicer or any Subservicer. The Servicer, the Subservicers,
the
Trustee and the Custodian shall allow representatives of the above entities
to
photocopy any of the documentation and shall provide equipment for that purpose
at a charge that covers their own actual out-of-pocket costs.
26
Section
3.10 [Reserved].
Section
3.11 Maintenance
of Hazard Insurance and Fidelity Coverage.
(a)
The
Servicer shall maintain and keep, or cause each Subservicer to maintain and
keep, with respect to each Mortgage Loan and each REO Property, in full force
and effect hazard insurance (fire insurance with extended coverage) equal
to at
least the lesser of the Principal Balance of the Mortgage Loan or the current
replacement cost of the Mortgaged Property, and containing a standard mortgagee
clause, provided, however, that the amount of hazard insurance may not be
less
than the amount necessary to prevent loss due to the application of any
co-insurance provision of the related policy. Unless applicable state law
requires a higher deductible, the deductible on such hazard insurance policy
may
be no more than $1,500 or 1% of the applicable amount of coverage, whichever
is
less. In the case of a condominium unit or a unit in a planned unit development,
the required hazard insurance shall take the form of a multi-peril policy
covering the entire condominium project or planned unit development, in an
amount equal to at least 100% of the insurable value based on replacement
cost.
If the Servicer shall obtain and maintain a blanket policy consistent with
its
general mortgage servicing activities insuring against hazard losses on all
of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in this Section 3.11(a), 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 a policy complying with this Section 3.11(a) and there
shall
have been a loss which would have been covered by such policy, deposit in
the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause without any right of reimbursement. Any
such
deposit by the Servicer shall be made on the last Business Day of the Due
Period
in the month in which payments under any such policy would have been deposited
in the Collection Account. In connection with its activities as servicer
of the
Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Issuing
Entity, and the Trustee, claims under any such blanket policy.
(b)
Any
amounts collected by the Servicer or a Subservicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or
repair
of the Mortgaged Property or amounts released to the Mortgagor in accordance
with the Servicer’s or a Subservicer’s normal servicing procedures, the Mortgage
Note, the Mortgage or applicable law) shall be deposited in the Collection
Account.
(c)
Any
cost
incurred by a Servicer or a Subservicer in maintaining any such individual
hazard insurance policies shall not be added to the amount owing under the
Mortgage Loan for the purpose of calculating monthly distributions to
Certificateholders, notwithstanding that the terms of the Mortgage Loan so
permit. Such costs of maintaining individual hazard insurance policies shall
be
recoverable by the Servicer or a Subservicer out of related late payments
by the
Mortgagor or out of Insurance Proceeds or Liquidation Proceeds or by the
Servicer from the Repurchase Price, to the extent permitted by Section
3.07.
(d)
No
earthquake or other additional insurance is to be required of any Mortgagor
or
maintained on property acquired with respect to a Mortgage other than pursuant
to such applicable laws and regulations as shall at any time be in force
and
shall require such additional insurance. When, at the time of origination
of the
Mortgage Loan or at any subsequent time, the Mortgaged Property is located
in a
federally designated special flood hazard area, the Servicer shall ensure
that,
with respect to such Mortgage Loan or such REO Property, flood insurance
is
acquired (to the extent available and in accordance with mortgage servicing
industry practice). Such flood insurance shall cover the Mortgaged Property,
including all items taken into account in arriving at the Appraised Value
on
which the Mortgage Loan was based, and shall be in an amount equal to the
lesser
of (i) the Principal Balance of the related Mortgage Loan and (ii) the minimum
amount required under the terms of coverage to compensate for any damage
or loss
on a replacement cost basis, but not more than the maximum amount of such
insurance available for the related Mortgaged Property under either the regular
or emergency programs of the National Flood Insurance Program (assuming that
the
area in which such Mortgaged Property is located is participating in such
program). Unless applicable state law requires a higher deductible, the
deductible on such flood insurance may not exceed $1,500 or 1% of the applicable
amount of coverage, whichever is less.
27
(e)
If
insurance complying with Subsections 3.11 (a) and (d) has not been maintained
and there shall have been a loss which would have been covered by such insurance
had it been maintained, the Servicer shall pay, or cause the related Subservicer
to pay, for any necessary repairs without any right of
reimbursement.
(f)
The
Servicer shall present, or cause the related Subservicer to present, claims
under any related hazard insurance or flood insurance policy.
(g)
The
Servicer shall obtain and maintain at its own expense, and shall cause each
Subservicer to obtain and maintain at its own expense, and for the duration
of
this Agreement, a blanket fidelity bond and an errors and omissions insurance
policy covering the Servicer’s and such Subservicer’s officers, employees and
other persons acting on its behalf in connection with its activities under
this
Agreement. The amount of coverage shall correspond with the FNMA/FHMLC levels
presently maintained by the Servicer. The Servicer shall promptly notify
the
Trustee of any material change in the terms of such bond or policy. The Servicer
shall provide annually by March 31st of each year, to the Trustee a
certification stating that such bond and policy are in effect. If any such
bond
or policy ceases to be in effect, the Servicer shall, to the extent possible,
give the Trustee ten days’ notice prior to any such cessation and shall use its
reasonable best efforts to obtain a comparable replacement bond or policy,
as
the case may be. Any amounts relating to the Mortgage Loans collected under
such
bond or policy shall be deposited in the Collection Account.
Section
3.12 Due-on-Sale
Clauses; Assumption Agreements.
(a)
In
any
case in which the Servicer is notified by any Mortgagor or Subservicer that
a
Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Servicer shall enforce, or shall instruct
such
Subservicer to enforce, any due-on-sale clause contained in the related Mortgage
to the extent permitted under the terms of the related Mortgage Note and
by
applicable law. The Servicer or the related Subservicer may repurchase a
Mortgage Loan at the Repurchase Price when the Servicer requires acceleration
of
the Mortgage Loan, but only if the Servicer is satisfied, as evidenced by
a
certification signed by a Servicing Officer delivered to the Trustee, that
such
Mortgage Loan is in default or default is reasonably foreseeable. If the
Servicer reasonably believes that such due-on-sale clause cannot be enforced
under applicable law or if the Mortgage Loan does not contain a due-on-sale
clause, the Servicer is authorized, and may authorize any Subservicer, to
consent to a conveyance subject to the lien of the Mortgage, and, with the
consent of the MI Insurer, if applicable, to take or enter into an assumption
agreement from or with the Person to whom such property has been or is about
to
be conveyed, pursuant to which such Person becomes liable under the related
Mortgage Note and unless prohibited by applicable state law, on condition,
however, that the related Mortgage Loan shall continue to be covered by a
hazard
policy. In connection with any such assumption, no material term of the related
Mortgage Note may be changed. The Servicer shall notify the Custodian and
Trustee, whenever possible, before the completion of such assumption agreement,
and shall forward to the Custodian the original copy of such assumption
agreement, which copy shall be added by the Custodian to the related Mortgage
File and which 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.
28
(b)
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 any conveyance by the Mortgagor of the related Mortgaged
Property or assumption of a Mortgage Loan which the Servicer reasonably believes
it may be restricted by law from preventing, for any reason whatsoever or
if the
exercise of such right would impair or threaten to impair any recovery under
any
applicable insurance policy.
Section
3.13 Realization
Upon Defaulted Mortgage Loans.
(a)
The
Servicer shall, or shall direct the related Subservicer to, foreclose upon
or
otherwise comparably convert the ownership of properties securing any Mortgage
Loans that come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.06, except that the Servicer shall not, and shall not direct the
related Subservicer to, foreclose upon or otherwise comparably convert a
Mortgaged Property if there is evidence of toxic waste or other environmental
hazards thereon unless the Servicer follows the procedures in Subsection
(c)
below. In connection with such foreclosure or other conversion, the Servicer
in
conjunction with the related Subservicer, if any, shall use its best reasonable
efforts to preserve REO Property and to realize upon defaulted Mortgage Loans
in
such manner as to maximize the receipt of principal and interest by the
Certificateholders, taking into account, among other things, the timing of
foreclosure and the considerations set forth in Subsection 3.13(b). The
foregoing is subject to the proviso that the Servicer shall not be required
to
expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it determines in good faith (i) that such
restoration or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses and (ii) that such expenses will be recoverable to it either through
Liquidation Proceeds (respecting which it shall have priority for purposes
of
reimbursements from the Collection Account pursuant to Section 3.07) or through
Insurance Proceeds (respecting which it shall have similar priority). The
Servicer shall be responsible for all costs and expenses constituting
Liquidation Expenses incurred by it in any such proceedings; provided, however,
that it shall be entitled to reimbursement thereof (as well as its normal
servicing compensation) as set forth in Section 3.07. Any income from or
other
funds (net of any income taxes) generated by REO Property shall be deemed
for
purposes of this Agreement to be Liquidation Proceeds.
29
Any
subsequent collections with respect to any Liquidated Mortgage Loan shall
be
deposited to the Collection Account. For purposes of determining the amount
of
any Liquidation Proceeds or Insurance Proceeds, or other unscheduled
collections, the Servicer may take into account any estimated additional
Liquidation Expenses expected to be incurred in connection with the related
defaulted Mortgage Loan.
In
the
event that a Mortgage Loan would be properly classified as a Liquidated Mortgage
Loan but for the fact that not all MI Insurance Proceeds claimed under the
related MI Policy have been received, the Servicer may, from its own funds,
make
an advance (an “MI
Claim Payment Advance”)
to the
Collection Account in an amount not to exceed the claimed amount of such
MI
Insurance Proceeds not yet received. The Servicer shall not make any MI Claim
Payment Advance with respect to a claim under an MI Policy if an MI Insurer
Insolvency Event has occurred and is continuing with respect to the related
MI
Insurer. In the event that the MI Claim Payment Advance equals the claimed
amount on such MI Policy, then upon the deposit of such MI Claim Payment
Advance
into the Collection Account the related Mortgage Loan shall be considered
a
“Liquidated Mortgage Loan.”
In
the
event that title to any Mortgaged Property is acquired in foreclosure or
by deed
in lieu of foreclosure, the deed or certificate of sale shall be issued to
the
Trust Fund and held by the Custodian, who shall hold the same on behalf of
Trustee in accordance with the Agreement. Notwithstanding any such acquisition
of title and cancellation of the related Mortgage Loan, such Mortgaged Property
shall (except as otherwise expressly provided herein) be considered to be
an
outstanding Mortgage Loan held as an asset of the Issuing Entity until such
time
as such property shall be sold.
(b)
The
Servicer shall not acquire any real property (or any personal property incident
to such real property) on behalf of the Trust Fund except in connection with
a
default or reasonably foreseeable default of a Mortgage Loan. In the event
that
the Servicer acquires any real property (or personal property incident to
such
real property) on behalf of the Trust Fund in connection with a default or
imminent default of a Mortgage Loan, such property shall be disposed of by
the
Servicer on behalf of the Trust Fund as soon as reasonably practicable, but
in
no event later than three years after its acquisition on behalf of the Trust
Fund.
(c)
With
respect to any Mortgage Loan as to which the Servicer or a Subservicer has
received notice of, or has actual knowledge of, the presence of any toxic
or
hazardous substance on the Mortgaged Property, the Servicer shall promptly
notify the Trustee, and shall act in accordance with any such directions
and
instructions provided by the Trustee. If the Trustee has not provided directions
and instructions to the Servicer in connection with any such Mortgage Loan
within 5 days of a request by the Servicer for such directions and instructions,
then the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund (other than proceeding against the Mortgaged
Property) and is hereby authorized at such time as it deems appropriate to
release such Mortgaged Property from the lien of the related Mortgage. The
parties hereto acknowledge that the Servicer shall not obtain on behalf of
the
Trust Fund or the Trustee a deed as a result or in lieu of foreclosure, and
shall not otherwise acquire possession of or title to, or commence any
proceedings to acquire possession of or title to, or take any other action
with
respect to, any Mortgaged Property, if the Trust Fund or the Trustee could
reasonably be considered to be a responsible party for any liability arising
from the presence of any toxic or hazardous substance on the Mortgaged
Property.
30
Section
3.14 Custodian
to Cooperate; Release of Mortgage Files.
(a)
Upon
payment in full of any Mortgage Loan, the Servicer will immediately notify
the
Custodian and the Trustee by a certification signed by a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received in connection with such payment which are required to be deposited
in
the Collection Account have been so deposited) and shall request delivery
to the
Servicer or Subservicer, as the case may be, of the Mortgage File. Upon receipt
of such certification and Request for Release, the Custodian, on behalf of
the
Trustee, shall promptly cause to be released the related Mortgage File to
the
Servicer or Subservicer and the Trustee shall execute and deliver to the
Servicer, without recourse, the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien
of
the Mortgage (furnished by the Servicer), together with the Mortgage Note
with
written evidence of cancellation thereon.
(b)
From
time
to time as is appropriate, for the servicing or foreclosure of any Mortgage
Loan
or collection under an insurance policy, the Servicer may deliver to the
Trustee
and the Custodian a Request for Release signed by a Servicing Officer on
behalf
of the Servicer in substantially the form attached as Exhibit E hereto. Upon
receipt of the Request for Release, the Custodian, on behalf of the Trustee,
shall deliver the Mortgage File or any document therein to the Servicer or
Subservicer, as the case may be, as bailee for the Trustee.
(c)
The
Servicer shall cause each Mortgage File or any document therein released
pursuant to Subsection 3.14(b) to be returned to the Custodian when the need
therefor no longer exists, and in any event within 21 days of the Servicer’s
receipt thereof, unless the Mortgage Loan has become a Liquidated Mortgage
Loan
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or such Mortgage File is being used to pursue
foreclosure or other legal proceedings. Prior to return of a Mortgage File
or
any document to the Custodian, the Servicer, the related insurer or Subservicer
to whom such file or document was delivered shall retain such file or document
in its respective control as bailee for the Custodian, on behalf of the Trustee,
unless 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, to initiate
or
pursue 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 and the Trustee, a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery. If a
Mortgage Loan becomes a Liquidated Mortgage Loan, the Custodian, on behalf
of
the Trustee, shall deliver the Request for Release with respect thereto to
the
Servicer upon deposit of the related Liquidation Proceeds in the Collection
Account.
(d)
Upon
receipt of written certification of a Servicing Officer, the Trustee shall
execute and deliver or cause to be executed and delivered to the Servicer
any
court pleadings, requests for trustee’s sale or other documents necessary (i)
for the foreclosure or trustee’s sale with respect to a Mortgaged Property; (ii)
for any legal action brought to obtain judgment against any Mortgagor on
the
Mortgage Note or Mortgage; (iii) to obtain a deficiency judgment against
the
Mortgagor; or (iv) to enforce any other rights or remedies provided by the
Mortgage Note or Mortgage or otherwise available at law or equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and explain the reasons for which the pleadings or
documents are required, and certify that the Trustee’s execution and delivery of
the pleadings or documents will not invalidate any insurance coverage under
the
insurance policies or 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.
31
Section
3.15 Servicing
Compensation.
(a)
As
compensation for its activities hereunder, the Servicer shall be entitled
to
receive the Servicing Fee from full payments of accrued interest on each
Mortgage Loan. The Servicer shall be solely responsible for paying any and
all
fees with respect to a Subservicer, and the Trustee and the Trust Fund shall
not
bear any fees, expenses or other costs directly associated with any
Subservicer.
(b)
The
Servicer may retain additional servicing compensation in the form of late
payment charges, to the extent such charges are collected from the related
Mortgagors and investment earnings on the Collection Account. The Servicer
shall
be required to pay all expenses it incurs in connection with servicing
activities under this Agreement and shall not be entitled in connection with
servicing activities under this Agreement to reimbursement except as provided
in
this Agreement. Expenses to be paid by the Servicer without reimbursement
under
this Subsection 3.15(b) shall include payment of the expenses of the accountants
retained pursuant to Section 3.17.
Section
3.16 Annual
Statements of Compliance.
Within
75
days after December 31 of each year, beginning in 2008, the Servicer at its
own
expense shall deliver to the Trustee, the Depositor and the Rating Agencies,
an
Officer’s Certificate of the Servicer (an “Annual
Statement of Compliance”)
stating, as to the signer thereof, that (i) a review of the activities of
the
Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officer’s supervision, (ii) to the best of
such officer’s knowledge, based on such review, the Servicer has fulfilled its
obligations under this Agreement in all material respects for such year,
or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof
including the steps being taken by the Servicer to remedy such default; (iii)
a
review of the activities of each Subservicer during the Subservicer’s most
recently ended calendar year and its performance under its Subservicing
Agreement has been made under such officer’s supervision; and (iv) to the best
of the Servicing Officer’s knowledge, based on his review and the certification
of an officer of the Subservicer (unless the Servicing Officer has reason
to
believe that reliance on such certification is not justified), either each
Subservicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement and its Subservicing Agreement in all material
respects throughout the year, or, if there has been a default in performance
or
fulfillment of any such duties, responsibilities or obligations, specifying
the
nature and status of each such default known to the Servicing Officer. Copies
of
such statements shall be provided by the Servicer to the Certificateholders
upon
request or by the Trustee at the expense of the Servicer should the Servicer
fail to provide such copies. Such Annual Statement of Compliance shall contain
no restrictions or limitations on its use. In the event that the Servicer
has
delegated any servicing responsibilities with respect to the Mortgage Loans
to a
Subservicer or subcontractor that meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB, the Servicer shall cause the related Subservicer
or subcontractor (as the case may be) to deliver a similar Annual Statement
of
Compliance by that Subservicer or subcontractor to the Trustee, the Depositor
and the Rating Agencies as described above as and when required with respect
to
such servicer. To the extent that the Trustee does not receive any such similar
Annual Statement of Compliance from a Subservicer or subcontractor (as the
case
may be), it shall be entitled to assume no such Subservicer or subcontractor
has
been used by the Servicer.
32
Section
3.17 Assessments
of Compliance and Attestation Reports.
The
Servicer shall service and administer the Mortgage Loans in accordance with
all
applicable requirements of the Servicing Criteria. Pursuant to Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122 of Regulation AB, each of the Servicer
and the Trustee (each, an “Attesting
Party”)
shall
deliver to the Trustee and the Depositor on or before March 15th of each
calendar year in which the Issuing Entity is required to file a Form 10-K
beginning in 2008, a report regarding such Attesting Party’s assessment of
compliance (an “Assessment
of Compliance”)
with
the Servicing Criteria during the preceding calendar year. The Assessment
of
Compliance, as set forth in Regulation AB, must contain the following:
(a)
A
statement by such officer of its responsibility for assessing compliance
with
the Servicing Criteria applicable to the related Attesting Party;
(b)
A
statement by such officer that such Attesting Party used the Servicing Criteria
attached as Exhibit L hereto, and which will also be attached to the Assessment
of Compliance, to assess compliance with the Servicing Criteria applicable
to
the related Attesting Party;
(c)
An
assessment by such officer of the related Attesting Party’s compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based
on the
activities such Attesting Party performs with respect to asset-backed securities
transactions taken as a whole involving the Servicer, that are backed by
the
same asset type as the Mortgage Loans; and
(d)
A
statement that a registered public accounting firm has issued an attestation
report on the related Attesting Party’s Assessment of Compliance for the period
consisting of the preceding calendar year.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit L hereto which are indicated as applicable to the related Attesting
Party.
On
or
before March 15th of each calendar year in which the Issuing Entity is required
to file a Form 10-K beginning in 2008, each Attesting Party specified in
this
Section shall furnish to the Trustee and the Depositor a report (an
“Attestation
Report”)
by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance made by the Servicer, as required by Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation
Report must be made in accordance with standards for attestation reports
issued
or adopted by the Public Company Accounting Oversight Board.
33
The
Servicer or the Trustee, as the case may be, shall cause any Subservicer,
and
each subcontractor determined by it to be materially “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB, to deliver
to the Trustee and the Depositor an Assessment of Compliance and Attestation
Report as and when provided above along with an indication of what Servicing
Criteria are addressed in such assessment.
Notwithstanding
the foregoing, as to any Subservicer or subcontractor, an Assessment of
Compliance is not required to be delivered unless it is required as part
of a
Form 10-K with respect to the Issuing Entity.
In
addition, the Custodian shall deliver to the Sponsor, the Trustee and the
Depositor an Assessment of Compliance and Attestation Report, as and when
provided above, which shall at a minimum address each of the Servicing Criteria
specified on Exhibit L hereto which are indicated as applicable to a
“custodian.”
Section
3.18 Reports
filed with Securities and Exchange Commission.
(a)
(i)
(A)
Within 15 days after each Distribution Date for so long as the Issuing Entity
is
subject to the Exchange Act reporting requirements, the Trustee shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System (“XXXXX”),
a
Form 10-D, signed by the Servicer, with a copy of the monthly statement to
be
furnished by the Trustee to the Certificateholders for such Distribution
Date;
provided that the Trustee shall have received no later than five (5) calendar
days after the related Servicer Reporting Date, all information required
to be
provided to the Trustee as described below. 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 approved by the Depositor.
Within
five (5) calendar days after the related Servicer Reporting Date, (i) the
parties set forth in Exhibit M shall be required to provide, pursuant to
section
3.18(a)(iv) below, to the Trustee and the Depositor, to the extent known,
in
XXXXX-compatible format at the following email address:
XXXxx.Xxxxxxxxxxxxx@xx.xxx, (with a copy to the Depositor) or in such other
form
as otherwise agreed upon by the Trustee and the Depositor 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 will be responsible for any reasonable fees and expenses assessed
or incurred by the Trustee in connection with including any Additional Form
10-D
Disclosure on Form 10-D pursuant to this Section.
34
(B)
After
preparing the Form 10-D, the Trustee shall forward electronically a draft
copy
of the Form 10-D to the Depositor and the Servicer for review. No later than
two
(2) Business Days prior to the 15th
calendar
day after the related Distribution Date, either the Depositor or a senior
officer of the Servicer in charge of the servicing function 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 Trustee.
For
administrative convenience, the Depositor or the Servicer may deliver executed
signature pages to the Trustee to be held by the Trustee in escrow and attached
to a Form 10-D only upon such Depositor’s or Servicer’s electronic notification
to the Trustee authorizing such attachment. If a Form 10-D cannot be filed
on
time or if a previously filed Form 10-D needs to be amended, the Trustee
will
follow the procedures set forth in Section 3.18(a)(v). Promptly (but no later
than one (1) Business Day) after filing with the Commission, the Sponsor
will
make available on its internet website a final executed copy of each Form
10-D.
The signing party at the Depositor or the Servicer can be contacted as set
forth
in Section 12.06. The parties to this Agreement acknowledge that the performance
by the Trustee of its duties under Sections 3.18(a)(i) and (iv) related to
the
timely preparation and filing of Form 10-D is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties
under such Sections. The Trustee 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 Trustee’s
inability or failure to receive, on a timely basis, as set forth herein,
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.
(ii)
(A)
Within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable
Event”)
for so
long as the Issuing Entity is subject to the Exchange Act reporting
requirements, the Trustee shall file on behalf of the Issuing Entity any
Form
8-K prepared by the Depositor, 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; provided further, that the Trustee shall only be responsible
for
filing such Form 8-K if the Trustee has been notified by the Depositor of
the
necessity therefore and provided with the disclosure to be included therein.
Any
disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K (“Form
8-K Disclosure Information”)
shall
be prepared by the Depositor.
(B)
For
so long as the Issuing Entity is subject to the Exchange Act reporting
requirements, no later than 12:00 p.m. New York time on the 2nd Business
Day
after the occurrence of a Reportable Event (i) the parties set forth in Exhibit
M shall be required pursuant to Section 3.18(a)(iv) below to provide to the
Depositor, to the extent known, in XXXXX-compatible format, or in such other
form as otherwise agreed upon by the Depositor 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 on Form 8-K. The
Depositor will be responsible for any reasonable fees and expenses assessed
or
incurred by the Trustee in connection with including any Form 8-K Disclosure
Information on Form 8-K pursuant to this Section.
(C)
No
later than the end of business New York City time on the 3rd
Business
Day after the Reportable Event, either the Depositor or a senior officer
of the
Servicer in charge of the servicing function shall sign the Form 8-K and
deliver
an electronic or fax copy of such signed Form 8-K in XXXXX-compatible form
(with
an original executed hard copy to follow by overnight mail) to the Trustee.
If a
Form 8-K cannot be filed on time or if a previously filed Form 8-K needs
to be
amended, the Trustee will follow the procedures set forth in Section 3.18(a)(v).
Promptly (but
no
later than 1 Business Day) after filing with the Commission, the Sponsor
will,
make available on its internet website a final executed copy of each Form
8-K.
The signing party at the Depositor or the Servicer can be contacted as set
forth
in Section 12.06. The parties to this Agreement acknowledge that the performance
by the Trustee of its duties under this Section 3.18(a)(ii) related to the
timely filing of Form 8-K is contingent upon such parties strictly observing
all
applicable deadlines in the performance of their duties under this Section
3.18(a)(ii). The Trustee shall have no liability for any loss, expense, damage,
claim arising out of or with respect to the preparation of the Form 8-K by
the
Depositor or for any failure by the Trustee to timely file such Form 8-K,
where
such failure results from the Trustee’s inability or failure to receive, on a
timely basis, as set forth herein, 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.
35
(iii)
(A)
Within 90 days after the end of each fiscal year of the Issuing Entity 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 Issuing Entity ends on December
31st
of each
year) for so long as the Issuing Entity is subject to the Exchange Act reporting
requirements, commencing in March 2008, the Trustee shall prepare and file
on
behalf of the Issuing Entity 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 Trustee within the applicable
time frames set forth in this Agreement, (1) an annual compliance statement
of
the Servicer and any Subservicer, as described under Section 3.16, the annual
reports on assessment of compliance with Servicing Criteria for the Servicer,
each Subservicer and each subcontractor materially participating in the
Servicing Function, each Servicing Function Participant, the Trustee and
the
Custodian, as described under Section 3.17, (2) the registered public accounting
firm attestation report for the Servicer, each Subservicer and each
subcontractor materially participating in the Servicing Function, each Servicing
Function Participant, the Trustee and the Custodian, as described under Section
3.17, which shall identify any material instance of noncompliance, disclosure
identifying such instance of noncompliance, and (3) a Xxxxxxxx-Xxxxx
Certification as described in this Section 3.18(a)(iii)(D) below. All such
information and data shall be provided to the Trustee in XXXXX-compatible
form
and delivered to the email address set forth in Section 12.06. Any disclosure
or
information in addition to (1) through (3) above that is required to be included
on Form 10-K (“Additional
Form 10-K Disclosure”)
shall
be determined and prepared by and approved by the Depositor.
(B)
No
later than March 5th of each year that the Issuing Entity is subject to the
Exchange Act reporting requirements, commencing in 2008, (1) the parties
set
forth in Exhibit M shall be required to provide pursuant to Section 3.18(a)(iv)
below to the Trustee and the Depositor, to the extent known, in XXXXX-compatible
format, at the email address set forth in Section 12.06 hereof with respect
to
the Trustee, or in such other form as otherwise agreed upon by the Trustee
and
the Depositor and such party, the form and substance of any Additional Form
10-K
Disclosure, if applicable, and (2) 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 Trustee in connection
with including any Additional Form 10-K Disclosure on Form 10-K pursuant
to this
Section.
36
(C)
After
preparing the Form 10-K, the Trustee shall forward electronically a draft
copy
of the Form 10-K to the Depositor and the Servicer for review. No later than
12:00 p.m. New York time on the 4th Business Day prior to the 10-K Filing
Deadline, either the Depositor or a senior officer of the Servicer in charge
of
the servicing function shall sign the Form 10-K and return an electronic
or fax
copy of such signed Form 10-K (with an original executed hard copy to follow
by
overnight mail) to the Trustee. If a Form 10-K cannot be filed on time or
if a
previously filed Form 10-K needs to be amended, the Trustee will follow the
procedures set forth in Section 3.18(a)(v). Promptly (but no later than one
(1)
Business Day) after filing with the Commission, the Sponsor will make available
on its internet website a final executed copy of each Form 10-K. The signing
party at the Depositor or the Servicer can be contacted as set forth in Section
12.06. The parties to this Agreement acknowledge that the performance by
the
Trustee of its duties under Sections 3.18(a)(iii) and (iv) related to the
timely
preparation and filing of Form 10-K is contingent upon such parties strictly
observing all applicable deadlines in the performance of their duties under
such
Section 3.16 and Section 3.17. The Trustee 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
Trustee’s inability or failure to receive, on a timely basis, as set forth
herein, 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.
(D)
Each
Form 10-K shall include a certification (the “Xxxxxxxx-Xxxxx
Certification”),
required to be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The
Servicer and the Trustee, shall and the Servicer shall cause any Subservicer
or
subcontractor engaged by it to, provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the “Certifying
Person”),
by
March 15 of each year in which the Issuing Entity is subject to the reporting
requirements of the Exchange Act, a certification (each, a “Back-Up
Certification”),
in
the form attached hereto as Exhibit N-2, upon which the Certifying Person, the
entity for which the Certifying Person acts as an officer, and such entity’s
officers, directors and Affiliates (collectively with the Certifying Person,
“Certification
Parties”)
can
reasonably rely. The senior officer of the Servicer shall serve as the
Certifying Person on behalf of the Issuing Entity. Such officer of the
Certifying Person can be contacted as set forth in Section 12.06. In the
event
the Trustee is terminated or resigns pursuant to the terms of this Agreement,
the Trustee shall provide a Back-Up Certification to the Certifying Person
pursuant to this Section 3.18(a)(iii) with respect to the period of time
it was
subject to this Agreement.
(iv)
With
respect to any Additional Form 10-D Disclosure or Additional From 10-K
Disclosure (collectively, the “Additional
Disclosure”)
relating to the Trust Fund, the Trustee’s obligation to include such Additional
Information in the applicable Exchange Act report is subject to receipt from
the
entity that is indicated in Exhibit M as the responsible party for providing
that information, if other than the Trustee, as and when required as described
in Section 3.18(a)(i) through (iii) above. Each of the Servicer, Sponsor,
and
Depositor hereby agree to notify and provide to the extent known to the Trustee
and the Depositor all Additional Disclosure relating to the Trust Fund, with
respect to which such party is indicated in Exhibit M as the responsible
party
for providing that information.
37
(v)
With
respect to any Form 8-K Disclosure Information (collectively, the “8-K
Additional Disclosure”)
relating to the Trust Fund, the Depositor’s obligation to include such 8-K
Additional Information in the applicable Exchange Act report is subject to
receipt from the entity that is indicated in Exhibit M as the responsible
party
for providing that information, if other than the Depositor, as and when
required as described in Section 3.18(a)(i) through (iii) above. Each of
the
Trustee, Servicer, Sponsor, and Depositor hereby agree to notify and provide
to
the extent known to the Depositor all 8-K Additional Disclosure relating
to the
Trust Fund, with respect to which such party is indicated in Exhibit M as
the
responsible party for providing that information.
(vi)
(A)
On or prior to January 30 of the first year in which the Trustee is able
to do
so under applicable law, the Trustee shall file a Form 15 relating to the
automatic suspension of reporting in respect of the Issuing Entity under
the
Exchange Act. The Trustee will promptly notify the Depositor, the Servicer
and
the Hedge Counterparties after filing Form 15.
(B)
In
the event that the Trustee is unable to timely file with the Commission all
or
any required portion of any Form 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 Trustee will immediately notify the Depositor and
the
Servicer. In the case of Form 10-D and 10-K, the Depositor, Servicer and
Trustee
will cooperate to prepare and file a Form 12b-25 and a 10-D/A and 10-K/A
as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Depositor will, upon receipt of all required Form 8-K Disclosure
Information provide such Form 8-K Disclosure Information to the Trustee for
inclusion on the next Form 10-D. In the event that any previously filed Form
10-D or 10-K needs to be amended, the Trustee (to the extent of actual
knowledge) will notify the Depositor and the Servicer and such parties will
cooperate to prepare any necessary 10-D/A or 10-K/A. Any Form 15, Form 12b-25
or
any amendment to Form 8-K, 10-D or 10-K shall be signed by a senior officer
of
the Servicer. The Depositor and Servicer acknowledge that the performance
by the
Trustee of its duties under this Section 3.18(a)(v) related to the timely
preparation and filing of Form 15, or any amendment to Form 10-D or 10-K,
is
contingent upon the Servicer and the Depositor performing their duties under
this Section. The Trustee 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 or any amendments to Forms 10-D or 10-K, where
such
failure results from the Trustee’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 15 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 preparing and filing any required Form
12b-25
and the Trustee shall have no obligations with respect thereto.
The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within
its
control related to this Agreement, the Mortgage Loans as is necessary for
the
preparation and filing of all required reports with the Commission. The Trustee
shall have no responsibility to file any items other than those specified
in
this Section 3.18; provided, however, the Trustee will cooperate with the
Depositor in connection with any additional filings with respect to the Issuing
Entity as the Depositor deems necessary under the Exchange Act. Copies of
all
reports filed by the Trustee under the Exchange Act shall be sent to the
Depositor as set forth in Section 12.06.
38
(b)
In
connection with the filing of any 10-K hereunder, the Trustee shall sign
a
certification (a “Form
of Back-Up Certification to Form 10-K Certificate,”
substantially in the form attached hereto as Exhibit N-2) for the Depositor
regarding certain aspects of the Form 10-K certification signed by the
Depositor, provided, however, that the Trustee shall not be required to
undertake an analysis of any accountant’s report attached as an exhibit to the
Form 10-K.
(c)
Notwithstanding
anything to the contrary contained in this Agreement, the Servicer shall
indemnify the Depositor and the Trustee and any director, officer, employee
or
agent of the Depositor or the Trustee and hold them harmless against any
and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain in any way related to any failure by the Servicer
or any Subservicer engaged by the Servicer or any Subcontractor utilized
by the
Servicer to deliver any information, report, certification or accountants’
letter when and as required under this Section, including without limitation
any
failure by the Servicer to identify any Subcontractor “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB. If such
indemnification is unavailable or insufficient to hold harmless any Person
entitled to indemnification thereunder, then the Servicer shall contribute
to
the amount paid or payable to the Person entitled to indemnification as a
result
of the losses, claims, damages or liabilities of such Person in such proportion
as is appropriate to reflect the relative fault of such Person on the one
hand
and the Servicer, on the other, in connection with the Servicer’s obligations
pursuant to this Section. This Section shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
Section
3.19 Optional
Purchase of Defaulted Mortgage Loans.
Subject
to the limitations set forth in Section 10.02 hereof, the Servicer shall
have
the right, but not the obligation, to purchase any Mortgage Loan which becomes
90 days or more delinquent at a purchase price equal to the Repurchase Price
(a)
within 29 days after the date the Mortgage Loan becomes 90 days delinquent
or
(b) on the date the Servicer liquidates the related Mortgaged Property. The
procedure for such purchase shall be the same as for a repurchase made by
the
Sponsor under the Purchase Agreement. With respect to any Mortgage Loans
being
purchased pursuant to this Section 3.19, the Servicer shall purchase the
most
delinquent Mortgage Loans before purchasing other less delinquent Mortgage
Loans. The Servicer or the related Subservicer may purchase a Mortgage Loan
at
the Repurchase Price when the Servicer requires acceleration of the Mortgage
Loan, but only if the Servicer is satisfied, as evidenced by a certification
from a Servicing Officer delivered to the Trustee, that such Mortgage Loan
is in
default or default is reasonably foreseeable.
Section
3.20 Information
Required by the Internal Revenue Service Generally and Reports of Foreclosures
and Abandonments of Mortgaged Property.
The
Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws.
In
particular, with respect to the requirement under Section 6050J of the Code
to
the effect that the Servicer or Subservicer shall make reports of foreclosures
and abandonments of any mortgaged property, the Servicer or Subservicer shall
file reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) acquires an interest in any Mortgaged Property
through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that
any
Mortgaged Property has been abandoned. The reports from the Servicer or
Subservicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J, Section 6050H (reports relating to
mortgage interest received) and Section 6050P of the Code (reports relating
to
cancellation of indebtedness).
39
Section
3.21 [Reserved].
Section
3.22 [Reserved].
Section
3.23 Servicing
and Administration of the MI Policies.
(a)
The
Servicer shall take all such actions on behalf of the Trustee as are necessary
to service, maintain and administer the MI Policies and to perform the Trustee’s
obligations and enforce the Trustee’s rights under the MI Policies, which
actions shall conform to the standards of an institution prudently administering
MI Policies for its own account. Except as expressly set forth herein, the
Servicer shall have full authority on behalf of the Issuing Entity to do
anything it reasonably deems appropriate or desirable in connection with
the
servicing, maintenance and administration of the MI Policies. The Servicer
shall
make its best reasonable efforts to file all insured claims under the MI
Policies and collect from the MI Insurer all Insurance Proceeds due to the
Trustee under the MI Policies. The Servicer shall not take, or permit any
Subservicer to take, any action which would result in non-coverage under
any
applicable MI Policy of any loss which, but for the actions of the Servicer
or
Subservicer, would have been covered thereunder. To the extent coverage is
available, the Servicer shall keep or cause to be kept in full force and
effect
each such MI Policy for the life of the Mortgage Loan; provided, however,
that
if a MI Insurer Insolvency Event has occurred and is continuing, the Servicer
may terminate the MI Policy on any Mortgage Loan that is not then past due.
The
Servicer shall cooperate with the MI Insurer and shall use its best efforts
to
furnish all reasonable aid, evidence and information in the possession of
the
Servicer or to which the Servicer has access with respect to any Mortgage
Loan.
(b)
The
Servicer shall deposit into the Collection Account pursuant to Section
3.06(d)(v) hereof all MI Insurance Proceeds received from the MI Insurer
under
the terms of the MI Policies. The Servicer shall withdraw from the Collection
Account and pay to the MI Insurer pursuant to Section 3.07(a)(xii) hereof,
the
monthly MI Premiums due to the MI Insurer in accordance with the terms of
the MI
Insurance Agreements. In the event that the Trustee has actual knowledge
that
any MI Premiums have in fact not been paid, the Trustee shall distribute
such
amounts (in such amounts as specified by the MI Insurer in writing) to the
MI
Insurer from the Interest Remittance Amount for the related Mortgage Loans,
at
the same level of priority as the Trustee Fee.
(c)
Notwithstanding
the provisions of Subsection 3.23(a) and (b), the Servicer shall not take
any
action in regard to the MI Policies inconsistent with the interests of the
Trustee or the Certificateholders or with the rights and interests of the
Trustee or the Certificateholders under this Agreement; provided, however,
that
payments of the monthly MI Premiums to the MI Insurer pursuant to Subsection
3.23(b) above and Section 3.07(a)(xii) hereof shall be deemed not to be
inconsistent with such interests.
40
(d)
The
Trustee shall furnish the Servicer with any powers of attorney in the form
of
Exhibit P and other documents in form as provided to it necessary or appropriate
to enable the Servicer to service and administer the MI Policies; provided,
however, that the Trustee shall not be liable for the actions of, or the
use or
misuse by, the Servicer under such powers of attorney.
(e)
If
at any
time during the term of this Agreement, a MI Insurer Insolvency Event has
occurred and is continuing, the Servicer agrees to review, not less often
than
monthly, the financial condition of the related MI Insurer with a view towards
determining whether recoveries under the MI Policy are jeopardized for reasons
related to the financial condition of the related MI Insurer. In such event,
the
Servicer may obtain an additional MI Policy or a replacement MI Policy, the
MI
Premiums on which would be paid by the Servicer from the Collection Account
pursuant to Section 3.07(a)(xii) hereof.
(f)
The
Servicer shall comply with all other terms, conditions and obligations set
forth
in the MI Policies.
Section
3.24 Determination
Date Reports.
On
the
second Business Day (or, if the Backup Servicer becomes the successor Servicer,
the third Business Day) following each Determination Date (the “Servicer
Reporting Date”),
the
Servicer shall deliver to the Trustee a report, prepared as of the close
of
business on the Determination Date (the “Determination
Date Report”),
and
shall forward to the Trustee in the form of computer readable electromagnetic
tape or disk a copy of such report in a format acceptable to the Trustee.
The
Determination Date Report and any written information supplemental thereto
shall
include such information with respect to the Mortgage Loans that is reasonably
available to the Servicer and that is required by the Trustee for purposes
of
making the calculations and providing the reports referred to in this Agreement,
as set forth in written specifications or guidelines issued by the Trustee
from
time to time. Such information shall include the aggregate amounts required
to
be withdrawn from the Collection Account and deposited into the Distribution
Account pursuant to Section 3.07. Such information shall also include (a)
the
number of Mortgage Loans that prepaid in the previous month; (b) the loan
balance of each such Mortgage Loan; (c) whether a prepayment penalty was
applied
to such Mortgage Loan; and (d) the amount of prepayment penalty with respect
to
each such Mortgage Loan. The Servicer agrees to cooperate with the Trustee
in
providing all information as is reasonably requested by the Trustee to prepare
the reports required under the Agreement.
The
determination by the Servicer of such amounts shall, in the absence of obvious
error, be presumptively deemed to be correct for all purposes hereunder and
the
Trustee shall be fully protected in relying upon the same without any
independent check or verification.
41
Section
3.25 Advances.
If
any
Monthly Payment (together with any advances from the Subservicers) on a Mortgage
Loan that was due on the immediately preceding Due Date and delinquent on
the
Determination Date is delinquent other than as a result of application of
the
Relief Act, the Servicer will deposit in the Collection Account not later
than
the Servicer Remittance Date immediately preceding the related Distribution
Date
an amount equal to such deficiency net of the related Servicing Fee for such
Mortgage Loan, except to the extent the Servicer determines any such advance
to
be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future
payments on such Mortgage Loan. Subject to the foregoing and in the absence
of
such a determination, the Servicer shall continue to make such advances through
the date that the related Mortgaged Property has, in the judgment of the
Servicer, been completely liquidated.
The
Servicer may fund an Advance from its own corporate funds, advances made
by any
Subservicer or funds held in the Collection Account for future payment or
withdrawal.
Advances
made from funds held in the Collection Account may be made by the Servicer
from
subsequent collections of principal and interest received on other Mortgage
Loans and deposited into the Collection Account. Advances made from the
Collection Account are not limited to subsequent collections of principal
and
interest received on the delinquent Mortgage Loan with respect to which an
Advance is made. If on the Servicer Remittance Date prior to any Distribution
Date funds in the Collection Account are less than the amount required to
be
paid to the Certificateholders on such Distribution Date, then the Servicer
shall deposit its own funds into the Distribution Account in the amount of
the
lesser of (i) any unreimbursed Advances previously made by the Servicer with
funds held in the Collection Account or (ii) the shortfall in the Collection
Account, provided, however, that in no event shall the Servicer deposit into
the
Collection Account an amount that is less than any shortfall in the Collection
Account attributable to delinquent payments on Mortgage Loans which the Servicer
deems to be recoverable and which has not been covered by an Advance from
the
Servicer’s own corporate funds or any Subservicer’s funds. If applicable, on the
Servicer Remittance Date preceding each Distribution Date, the Servicer shall
present an Officers’ Certificate to the Trustee (i) stating that the Servicer
elects not to make an Advance in a stated amount and (ii) detailing the reason
it deems the advance to be nonrecoverable.
Section
3.26 Compensating
Interest Payments.
The
Servicer shall deposit in the Collection Account not later than the Servicer
Remittance Date preceding the Distribution Date an amount equal to the
Compensating Interest related to the related Determination Date. The Servicer
shall not be entitled to any reimbursement of any Compensating Interest payment.
Section
3.27 Advance
Facility.
(a)
The
Servicer on behalf of the Trust Fund, is hereby authorized to enter into
a
facility (such an arrangement, an “Advance
Facility”)
with
any Person which provides that such Person (an “Advancing
Person”)
may
fund Advances and/or Servicing Advances under this Agreement, although no
such
facility shall reduce or otherwise affect the Servicer’s obligation to fund such
Advances and/or Servicing Advances. No consent of the Trustee,
Certificateholders or any other party shall be required before the Servicer
may
enter into an Advance Facility nor shall the Trustee or the Certificateholders
be a third party beneficiary of any obligation of an Advancing Person to
the
Servicer. If the Servicer enters into an Advance Facility, the Servicer and
the
related Advancing Person shall deliver to the Trustee at the address set
forth
in Section 12.06 hereof a written notice (an “Advance
Facility Notice”)
(in
the form attached hereto as Exhibit K), stating (a) the identity of the
Advancing Person and (b) the identity of the Person (the “Servicer’s
Assignee”)
that
will, subject to Section 3.27(b) hereof, have the right to make withdrawals
from
the Collection Account pursuant to Section 3.07 hereof to reimburse previously
unreimbursed Advances and/or Servicing Advances (“Advance
Reimbursement Amounts”).
If
the Servicer enters into such an Advance Facility pursuant to this Section
3.27,
the Trustee shall execute the acknowledgment of the Advance Facility Notice,
as
prepared by the Servicer confirming its receipt of written notice of the
existence of such Advance Facility. To the extent that an Advancing Person
purchases or funds any Advance or any Servicing Advance and provides the
Trustee
with written notice (in the form attached hereto as Exhibit K) acknowledged
by
the Servicer that such Advancing Person is entitled to reimbursement directly
from the Trustee pursuant to the terms of the Advance Facility, such Advancing
Person shall be entitled to receive reimbursement pursuant to this Agreement
for
such amount to the extent provided in Section 3.27(b). Such notice from the
Advancing Person must specify the amount of the reimbursement, the Section
of
this Agreement that permits the applicable Advance or Servicing Advance to
be
reimbursed, the section(s) of the Advance Facility that entitle the Advancing
Person to request reimbursement from the Trustee, on behalf of the Trust
Fund,
rather than the Servicer, the Advancing Person’s wire transfer instructions, and
include the Servicer’s acknowledgment thereto or proof of an Event of Default
under the Advance Facility. The Trustee shall have no duty or liability with
respect to any calculation of any reimbursement to be paid to an Advancing
Person and shall be entitled to rely without independent investigation on
the
Advancing Person’s notice provided pursuant to this Section 3.27. An Advancing
Person whose obligations hereunder are limited to the funding of Advances
and/or
Servicing Advances shall not be required to meet the qualifications of a
Sub-Servicer pursuant to Section 6.06 hereof.
42
(b)
Notwithstanding
the foregoing, and for the avoidance of doubt, (i) the Servicer and/or the
Servicer’s Assignee shall only be entitled to reimbursement of Advance
reimbursement amounts hereunder from withdrawals from the Collection Account
pursuant to Section 3.07 of this Agreement and shall not otherwise be entitled
to make withdrawals or receive amounts that shall be deposited in the
Distribution Account, and (ii) none of the Trustee or the Certificateholders
shall have any right to, or otherwise be entitled to, receive any Advance
reimbursement amounts to which the Servicer or Servicer’s Assignee, as
applicable, shall be entitled pursuant to Section 3.07 hereof. An Advance
Facility may be terminated by the joint written direction of the Servicer
and
the related Advancing Person. Written notice of such termination shall be
delivered to the Trustee in the manner set forth in Section 12.06 hereof.
None
of the Depositor or the Trustee shall, as a result of the existence of any
Advance Facility, have any additional duty or liability with respect to the
calculation or payment of any Advance reimbursement amount, nor, as a result
of
the existence of any Advance Facility, shall the Depositor or the Trustee
have
any additional responsibility to track or monitor the administration of the
Advance Facility or the payment of Advance reimbursement amounts to the
Servicer’s Assignee. The Servicer shall indemnify the Depositor, the Trustee,
any successor Servicer and the Trust Fund for any claim, loss, liability
or
damage resulting from any claim by the related Advancing Person, except to
the
extent that such claim, loss, liability or damage resulted from or arose
out of
negligence, recklessness or willful misconduct on the part of the Depositor,
the
Trustee or any successor Servicer, as the case may be, or failure by the
successor Servicer or the Trustee, as the case may be, to remit funds as
required by this Agreement or the commission of an act or omission to act
by the
successor Servicer or the Trustee, as the case may be, and the passage of
any
applicable cure or grace period, such that an Event of Default under this
Agreement occurs or such entity is subject to termination for cause under
this
Agreement. The Servicer shall maintain and provide to any successor Servicer
and, upon request, the Trustee a detailed accounting on a loan-by-loan basis
as
to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by the predecessor Servicer, and the successor Servicer shall not
be
liable for any errors in such information.
43
(c)
If
an
Advancing Person is entitled to reimbursement for any particular Advance
or
Servicing Advance as set forth in Section 3.27(a), then the Servicer shall
not
be permitted to reimburse itself therefor under Section 3.07, but instead
the
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.06(d) to the extent of amounts on deposit in the
Collection Account on the related Servicer Remittance Date. The Trustee is
hereby authorized to pay to an Advancing Person reimbursements for Advances
and
Servicing Advances from the Distribution Account to the same extent the Servicer
would have been permitted to reimburse itself for such Advances and/or Servicing
Advances in accordance with Section 3.07, had the Servicer made such Advance
or
Servicing Advance.
(d)
All
Advances and Servicing Advances made pursuant to the terms of this Agreement
shall be deemed made and shall be reimbursed on a “first in first out” (FIFO)
basis. In the event the Servicer’s Assignee shall have received some or all of
an Advance reimbursement amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advancing Person in error, then such Servicer’s Assignee shall be required to
remit any portion of such Advance reimbursement amount to each Person entitled
to such portion of such Advance reimbursement amount. Without limiting the
generality of the foregoing, the Servicer shall remain entitled to be reimbursed
pursuant to Section 3.07 for all Advances and/or Servicing Advances funded
by
the Servicer to the extent the related Advance reimbursement amounts have
not
been assigned, sold or pledged to such Advancing Person or Servicer’s
Assignee.
(e)
In
the
event the Servicer is terminated pursuant to Section 7.01, the Advancing
Person
shall succeed to the terminated Servicer’s right of reimbursement set forth in
Section 7.02 to the extent of such Advancing Person’s financing of Advances or
Servicing Advances hereunder then remaining unreimbursed.
(f)
Any
amendment to this Section 3.27 or to any other provision of this Agreement
that
may be necessary or appropriate to effect the terms of an Advance Facility
as
described generally in this Section 3.27, including amendments to add provisions
relating to a successor Servicer, may be entered into by the Trustee, the
Depositor and the Servicer without the consent of any Certificateholder,
provided such amendment complies with Section 12.01 hereof. All reasonable
costs
and expenses (including attorneys’ fees) of each party hereto of any such
amendment shall be borne solely by the Servicer. The parties hereto hereby
acknowledge and agree that: (a) the Advances and/or Servicing Advances financed
by, sold and/or pledged to an Advancing Person under any Advance Facility
are
obligations owed to the Servicer payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances and/or Servicing
Advances only to the extent provided herein, and the Trustee and the Trust
Fund
are not, as a result of the existence of any Advance Facility, obligated
or
liable to repay any Advances and/or Servicing Advances financed by the Advancing
Person; (b) the Servicer will be responsible for remitting to the Advancing
Person the applicable amounts collected by it as reimbursement for Advances
and/or Servicing Advances purchased or funded by the Advancing Person, subject
to the provisions of this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advancing Person.
44
Section
3.28 Servicer
Rights Facility.
The
Servicing Rights Owner is hereby authorized to finance, pledge and/or assign
any
or all of its right, title and interest in, to and under this Agreement to
one
or more lenders (each, a “Servicing Rights Pledgee”) selected by the Servicing
Rights Owner. The Trustee and the Depositor hereby (i) consent to any such
financing, pledge and/or assignment (without the need for the delivery of
any
notice or other communication to the Trustee or the Depositor, or for the
execution by the Trustee or the Depositor of any agreement or other document
or
instrument, other than this Agreement), and (ii) agree that upon delivery
by the
Servicing Rights Pledgee to the Trustee of a letter signed by the Servicing
Rights Pledgee (without further need for the delivery of any notice or other
communication to the Trustee or the Depositor, or for the execution by the
Trustee or the Depositor of any agreement or other document or instrument
in
addition to this Agreement), the Trustee shall appoint the Servicing Rights
Pledgee or its designee as successor Servicer upon termination of the Servicer,
provided that at the time of such appointment, the Servicing Rights Pledgee
or
such designee meets the requirements of a successor Servicer pursuant to
Section
7.02, agrees to be subject to the terms of this Agreement and provided further
that such appointment does not cause any of the Rating Agencies to withdraw,
downgrade or qualify the ratings they have assigned to any of the Certificates,
as evidenced by a confirmation from the Rating Agencies. For the avoidance
of
doubt, the Servicing Rights Pledgee or its designee (as the case may be)
shall
not be otherwise required to satisfy any other eligibility requirements of
a
successor Servicer pursuant to Section 6.04.
ARTICLE
IV
FLOW
OF FUNDS
Section
4.01 Distributions.
(a)
On
each
Distribution Date, the Trustee, will first distribute the Prepayment Charges
collected on the Group I Mortgage Loans and on the Group II Mortgage Loans
during the prior Prepayment Period to the Holders of the Class CA Certificates.
After making that distribution, the Trustee, shall (based solely on the
information provided to the Trustee by the Servicer pursuant to Section 3.24
hereof) withdraw from the Distribution Account that portion of Available
Funds
for such Distribution Date consisting of the Interest Remittance Amount and
the
Principal Remittance Amount for such Distribution Date, and, subject to the
special rules relating to Reallocations provided in Section 4.04(e) hereof,
make
the following disbursements and transfers in the order of priority described
below, in each case to the extent of the Interest Remittance Amount and the
Principal Remittance Amount remaining for such Distribution Date:
45
(i) On
each
Distribution Date, the Trustee, will distribute, pro-rata from the Group
I
Interest Remittance Amount and the Group II Interest Remittance Amount, the
Trustee Fee, the Back-up Servicing Fee and the Custodian Fee which are due
on
that Distribution Date to the Trustee and Custodian respectively. After making
that distribution, the Trustee will then apply the remaining Interest Remittance
Amount to the payment of interest then due on the certificates in the following
order of priority:
(A)
first,
on each
Distribution Date on or prior to the Class I Termination Date, payable (i)
from
the Group I Interest Remittance Amount to the Supplemental Interest Trust
as the
Holder of the Class I Certificates, the product of (x) the sum of (1) the
Class
I Monthly Interest Distributable Amount and (2) any unpaid Hedge Termination
Payments that are not Defaulted Hedge Termination Payments, multiplied by
(y)
the Group I Class I Percentage, (ii) from the Group II Interest Remittance
Amount, to the Supplemental Interest Trust as the Holder of the Class I
Certificates, the product of (x) the sum of (1) the Class I Monthly Interest
Distributable Amount and (2) any unpaid Hedge Termination Payments that are
not
Defaulted Hedge Termination Payments, multiplied by (y) the Group II Class
I
Percentage and (iii) if the amounts in (i) and (ii) above are insufficient
to
pay to the Supplemental Interest Trust as the Holder of the Class I Certificates
the sum of (1) the Class I Monthly Interest Distributable Amount and (2)
any
unpaid Hedge Termination Payments that are not Defaulted Hedge Termination
Payments, then such insufficiency shall be paid pro rata from the Group I
Principal Remittance Amount and the Group II Principal Remittance
Amount);
|
(B)
|
second,
concurrently, with equal priority of
payment:
|
(I)
payable
solely from the Group I Interest Remittance Amount for that Distribution
Date
or, to the extent that the Group I Interest Remittance Amount is less than
the
related Monthly Interest Distributable Amount for the Class A-1A Certificates,
also from the Group II Cross Collateralization Amount for that Distribution
Date, to the Holders of the Class A-1A Certificates, the Monthly Interest
Distributable Amount for the Class A-1A Certificates;
(II)
payable
solely from the Group II Interest Remittance Amount for that Distribution
Date
or, to the extent that the Group II Interest Remittance Amount is less than
the
related aggregate Monthly Interest Distributable Amount for the Class A-2A1,
Class A-2A2, Class A-2B, Class A-2C and Class A-2D Certificates, also from
the
Group I Cross Collateralization Amount for that Distribution Date, concurrently
to the Holders of the Class A-2A1, Class A-2A2, Class A-2B, Class A-2C and
Class
A-2D Certificates, the related Monthly Interest Distributable Amount, pro-rata
based on the amounts of interest each such Class is otherwise entitled to
receive on such Distribution Date;
46
(C)
third,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-1 Certificates,
the
Monthly Interest Distributable Amount for the Class M-1
Certificates;
(D)
fourth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-2 Certificates,
the
Monthly Interest Distributable Amount for the Class M-2
Certificates;
(E)
fifth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-3 Certificates,
the
Monthly Interest Distributable Amount for the Class M-3
Certificates;
(F)
sixth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-4 Certificates,
the
Monthly Interest Distributable Amount for the Class M-4
Certificates;
(G)
seventh,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-5 Certificates,
the
Monthly Interest Distributable Amount for the Class M-5
Certificates;
(H)
eighth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-6 Certificates,
the
Monthly Interest Distributable Amount for the Class M-6
Certificates;
(I)
ninth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-7 Certificates,
the
Monthly Interest Distributable Amount for the Class M-7
Certificates;
(J)
tenth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-8 Certificates,
the
Monthly Interest Distributable Amount for the Class M-8
Certificates;
(K)
eleventh,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-9 Certificates,
the
Monthly Interest Distributable Amount for the Class M-9
Certificates;
(L)
twelfth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class M-10 Certificates,
the
Monthly Interest Distributable Amount for the Class M-10
Certificates;
(M)
thirteenth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount to the Holders of the Class M-11 Certificates,
the
Monthly Interest Distributable Amount for the Class M-11
Certificates;
(N)
fourteenth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Supplemental Interest Trust, the Excess
Cashflow relating to interest (net of any amounts distributed pursuant to
Section 4.04(d)(i)), to be distributed pursuant to Sections 4.04 (d)(ii);
and
47
(O)
fifteenth,
payable
from the remaining Group I Interest Remittance Amount and the remaining Group
II
Interest Remittance Amount, to the Holders of the Class R Certificates, any
remainder.
(ii) On
each
Distribution Date (a) prior to the Crossover Date or (b) on which a Trigger
Event is in effect, the Trustee, shall (based solely on the information provided
to the Trustee by the Servicer pursuant to Section 3.24 hereof) withdraw
from
the Distribution Account that portion of the Available Funds relating to
principal plus the Extra Principal Distribution Amount (to be distributed
pursuant to Section 4.04 (d)(i)) for such Distribution Date and (after making
payments to the Supplemental Interest Trust as the Holder of the Class I
Certificates in respect of any Class I Monthly Interest Distributable Amount
remaining unpaid from the Interest Remittance Amount) make the following
disbursements and transfers in the order of priority described
below:
|
(A)
|
first,
concurrently, with equal priority of
payment:
|
(I)
payable
solely from the Group I Principal Distribution Amount, to the Holders of
the
Class A-1A Certificates, the entire amount of the Group I Principal Distribution
Amount, until the Certificate Principal Balance of the Class A-1A Certificates
has been reduced to zero; and
(II)
payable
solely from the Group II Principal Distribution Amount, to the Holders of
the
Group II Certificates (to be distributed among such Certificates pursuant
to
Section 4.01(d)), the entire amount of the Group II Principal Distribution
Amount, until the aggregate Certificate Principal Balance of the Group II
Certificates has been reduced to zero;
|
(B)
|
second,
|
(I)
if
the
Certificate Principal Balance of the Class A-1A Certificates has been reduced
to
zero, then to the Holders of the Group II Certificates (to be distributed
among
such Certificates pursuant to Section 4.01(d)), the amount of any remaining
Group I Principal Distribution Amount, until the aggregate Certificate Principal
Balance of the Group II Certificates has been reduced to zero; or
(II)
if
the
aggregate Certificate Principal Balance of the Group II Certificates has
been
reduced to zero, then to the Holders of the Class A-1A Certificates, the
amount
of any remaining Group II Principal Distribution Amount, until the Certificate
Principal Balance of the Class A-1A Certificates has been reduced to
zero;
(C)
third,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-1 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-1 Certificates has been reduced to
zero;
48
(D)
fourth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-2 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to
zero;
(E)
fifth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-3 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
(F)
sixth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-4 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced to
zero;
(G)
seventh,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-5 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced to
zero;
(H)
eighth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-6 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-6 Certificates has been reduced to
zero;
(I)
ninth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-7 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-7 Certificates has been reduced to
zero;
(J)
tenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-8 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-8 Certificates has been reduced to
zero;
(K)
eleventh,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-9 Certificates,
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance of the Class M-9 Certificates has been reduced to
zero;
(L)
twelfth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-10 Certificates,
the entire remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-10 Certificates has been reduced to
zero;
(M)
thirteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-11 Certificates,
the entire remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-11 Certificates has been reduced to
zero;
49
(N)
fourteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Trustee and the Custodian, pro-rata,
any amounts owed to them under the Basic Documents remaining
unpaid;
(O)
fifteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Servicer, the amount of any
reimbursement of indemnification owed to it by the Issuing Entity pursuant
to
Section 6.03 hereof;
(P)
sixteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount and any remaining Available Funds relating
to
principal, to the Holders of the Class CA Certificates, for the benefit of
the
Supplemental Interest Trust, the entire remaining Principal Remittance Amount
up
to the extent of the Overcollateralization Amount; and
(Q)
seventeenth,
payable
from the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount, to the Holders of the Class R Certificates, for the
benefit
of the Supplemental Interest Trust, any remainder.
(iii) On
each
Distribution Date (a) on or after the Crossover Date and (b) on which a Trigger
Event is not in effect, the Trustee, shall (based solely on the information
provided to the Trustee by the Servicer pursuant to Section 3.24 hereof)
withdraw from the Distribution Account that portion of the Available Funds
relating to principal plus the Extra Principal Distribution Amount (to be
distributed pursuant to Section 4.04 (d)(i)) for such Distribution Date and
(after making payments to the Supplemental Interest Trust as the Holder of
the
Class I Certificates in respect of any Class I Monthly Interest Distributable
Amount remaining unpaid from the Interest Remittance Amount) make the following
disbursements and transfers in the order of priority described
below:
|
(A)
|
first,
concurrently, with equal priority of
payment:
|
(I)
payable
solely from the Group I Principal Distribution Amount, to the Holders of
the
Class A-1A Certificates, the Group I Certificate Principal Distribution Amount,
until the Certificate Principal Balance of the Class A-1A Certificates has
been
reduced to zero; and
(II)
payable
solely from the Group II Principal Distribution Amount, to the Holders of
the
Group II Certificates (to be distributed among such Certificates pursuant
to
Section 4.01(d)), the Group II Certificate Principal Distribution Amount,
until
the aggregate Certificate Principal Balance of the Group II Certificates
has
been reduced to zero;
|
(B)
|
second,
concurrently, with equal priority of
payment:
|
50
(I)
if
the
Group I Principal Distribution Amount was insufficient to pay the Group I
Certificate Principal Distribution Amount, then payable from the remaining
Group
II Principal Distribution Amount, to the Holders of the Class A-1A Certificates,
the unpaid portion of the Group I Certificate Principal Distribution Amount
based on the aggregate unpaid portion of the Class A Principal Distribution
Amount; or
(II)
if
the
Group II Principal Distribution Amount was insufficient to pay the Group
II
Certificate Principal Distribution Amount, then payable from the remaining
Group
I Principal Distribution Amount, to the Holders of the Group II Certificates
(to
be distributed among such Certificates pursuant to Section 4.01(d)), the
unpaid
portion of the Group II Certificate Principal Distribution Amount based on
the
aggregate unpaid portion of the Class A Principal Distribution
Amount;
(C)
third,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-1 Certificates,
the Class M-1 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-1 Certificates has been reduced to zero;
(D)
fourth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-2 Certificates,
the Class M-2 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-2 Certificates has been reduced to zero;
(E)
fifth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-3 Certificates,
the Class M-3 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-3 Certificates has been reduced to zero;
(F)
sixth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-4 Certificates,
the Class M-4 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-4 Certificates has been reduced to zero;
(G)
seventh,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-5 Certificates,
the Class M-5 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-5 Certificates has been reduced to zero;
(H)
eighth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-6 Certificates,
the Class M-6 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-6 Certificates has been reduced to zero;
(I)
ninth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-7 Certificates,
the Class M-7 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-7 Certificates has been reduced to zero;
51
(J)
tenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-8 Certificates,
the Class M-8 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-8 Certificates has been reduced to zero;
(K)
eleventh,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-9 Certificates,
the Class M-9 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-9 Certificates has been reduced to zero;
(L)
twelfth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-10 Certificates,
the Class M-10 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-10 Certificates has been reduced to zero;
(M)
thirteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Holders of the Class M-11 Certificates,
the Class M-11 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-11 Certificates has been reduced to zero;
(N)
fourteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Trustee and the Custodian, pro-rata,
any amounts owed to them under the Basic Documents remaining
unpaid;
(O)
fifteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount, to the Servicer, the amount of any
reimbursement of indemnification owed to it by the Issuing Entity pursuant
to
Section 6.03 hereof;
(P)
sixteenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount and any remaining Available Funds relating
to
principal, to the Holders of the Class CA Certificates, for the benefit of
the
Supplemental Interest Trust, the entire remaining Principal Remittance Amount
up
to the extent of the Overcollateralization Amount; and
(Q)
seventeenth,
payable
from the remaining Group I Principal Distribution Amount and the remaining
Group
II Principal Distribution Amount and any remaining Available Funds relating
to
principal, to the Holders of the Class R Certificates, for the benefit of
the
Supplemental Interest Trust, any remainder.
(b)
Method
of Distribution.
The
Trustee shall make distributions in respect of a Distribution Date to each
Certificateholder of record on the related Record Date (other than as provided
in Section 11.01 respecting the final distribution), in the case of
Certificateholders of the Regular Certificates, by wire transfer, or upon
written request at least five Business Days prior to the related Distribution
Date by check or money order mailed to such Certificateholder at the address
appearing in the Certificate Register. Distributions among Certificateholders
shall be made in proportion to the Percentage Interests evidenced by the
Certificates held by such Certificateholders.
52
(c)
Distributions
on Book-Entry Certificates.
Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures.
Each
Depository Participant shall be responsible for disbursing such distribution
to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a “brokerage firm” or “indirect participating firm”) for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository
and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Custodian, the Trustee, the Depositor, the Servicer
or
the Sponsor shall have any responsibility therefor except as otherwise provided
by applicable law.
(d)
All
principal amounts distributed to the Group II Certificates shall be distributed
in the following order:
|
(i)
|
concurrently
to the Class A-2A1 and Class A-2A2 Certificates pro rata by their
respective Certificate Principal Balances, until their Certificate
Principal Balances have been reduced to zero,
|
|
(ii)
|
to
the Class A-2B Certificates until its Certificate Principal Balance
has been reduced to zero,
|
|
(iii)
|
to
the Class A-2C Certificates until its Certificate Principal Balance
has
been reduced to zero, and
|
|
(iv)
|
to
the Class A-2D Certificates until its Certificate Principal Balance
has
been reduced to zero.
|
However,
if the aggregate Certificate Principal Balance of the Mezzanine Certificates
and
the Overcollateralization Amount is reduced or written down to zero, principal
distributions to the Classes of Group II Certificates will be made pro rata,
based on their respective Certificate Principal Balances until their respective
Certificate Principal Balances are paid to zero.
Section
4.02 Distribution
Account.
(a)
No
later
than the Closing Date, the Trustee, shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled “Distribution
Account, Deutsche Bank National Trust Company, as Trustee for the registered
holders of NovaStar Mortgage Funding Trust 2007-1, Home Equity Loan Asset-Backed
Certificates, Series 2007-1” (the “Distribution
Account”).
The
Trustee shall, promptly upon receipt, deposit in the Distribution Account
and
retain therein the Interest Remittance Amount and the Principal Remittance
Amount remitted on each Servicer Remittance Date to the Trustee by the Servicer.
Funds deposited in the Distribution Account shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth
herein.
53
(b)
The
Trustee shall invest funds deposited in the Distribution Account in Eligible
Investments in accordance with the written direction of the Servicer with
a
maturity date no later than the Business Day immediately proceeding the date
on
which such funds are required to be withdrawn from such account pursuant
to this
Agreement. All income or other gain from such investments may be released
from
the Distribution Account and paid to the Servicer. The Servicer shall be
obligated to cover losses on such Eligible Investments. If the Trustee does
not
receive such written investment direction it shall retain the funds uninvested.
The Trustee or its Affiliates are permitted to receive additional compensation
that could be deemed to be in the Trustee’s economic self-interest for (i)
serving as investment adviser, administrator, shareholder, servicing agent,
custodian or sub-custodian with respect to certain of the investments, (ii)
using affiliates to effect transactions in certain investments and (iii)
effecting transactions in certain investments. Such compensation is not payable
or reimbursable under this Agreement. The Trustee shall not be liable for
the
selection of investments or for investment losses incurred thereon.
(c)
Amounts
on deposit in the Distribution Account shall be withdrawn by the Trustee
as
follows:
(i) To
fund
the distributions described in Section 4.01 hereof;
(ii) To
withdraw any amount not required to be deposited in the Distribution Account
or
deposited therein in error;
(iii) To
clear
and terminate the Distribution Account upon the termination of this Agreement,
with any amounts remaining on deposit therein being paid to the Holders of
the
Class R Certificates; and
(iv) To
distribute any amounts of investment income to the Servicer.
(d)
On
each
Distribution Date, the Trustee shall distribute all amounts on deposit in
the
Distribution Account (other than investment income) established by it to
Certificateholders in respect of the Certificates and to such other persons
in
the order of priority set forth in Section 4.01 hereof.
Section
4.03 Statements.
(a)
On
each
Distribution Date, based solely on information provided to it by the Servicer
in
its Determination Date Report, the Trustee shall prepare and make available
to
each Holder of the Regular Certificates, the Hedge Counterparties, the Servicer
and the Rating Agencies, a statement as to the distributions made on such
Distribution Date:
(i) the
amount of the distribution made on such Distribution Date to the Holders
of each
Class of Regular Certificates, separately identified, allocable to principal
and
the amount of the distribution made to the Holders of the Class C Certificates
allocable to Prepayment Charges;
54
(ii) the
amount of the distribution made on such Distribution Date to the Holders
of each
Class of Regular Certificates allocable to interest, separately
identified;
(iii) the
Pool
Balance of the Group I Mortgage Loans and the Group II Mortgage Loans at
the
Close of Business at the end of the related Due Period;
(iv) the
number, aggregate principal balance, and weighted average Mortgage Rate of
the
Mortgage Loans as of the related Determination Date;
(v) the
number and aggregate unpaid principal balance of Mortgage Loans (identified
by
Group) that (A) were Delinquent (exclusive of Mortgage Loans in bankruptcy
or
foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to 89 days and
(3) 90
or more days (B) as to which foreclosure proceedings have been commenced
and
that (i) are not Delinquent, and (ii) are Delinquent (1) 30 to 59 days, (2)
60
to 89 days and (3) 90 or more days, (C) are related to a REO Property and
that
(i) are not Delinquent and (ii) are Delinquent (1) 30 to 59 days, (2) 60
to 89
days and (3) 90 or more days and (D) are related to a Mortgagor that was
subject
to a bankruptcy proceeding and that (i) are not Delinquent and (ii) are
Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days,
in each
case on a contractual and bankruptcy legal basis;
(vi) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(vii) the
aggregate amount of Realized Losses incurred during the related Prepayment
Period and the cumulative amount of Realized Losses;
(viii) the
Certificate Principal Balance of each Class of the Class A Certificates and
each
Class of the Mezzanine Certificates, after giving effect to the distributions
made on such Distribution Date;
(ix) the
Unpaid Interest Shortfall Amount, if any, with respect to each Class of the
Class A Certificates and each Class of the Mezzanine Certificates for such
Distribution Date;
(x) the
aggregate amount of any Prepayment Interest Shortfalls for such Distribution
Date, to the extent not covered by payments by the Servicer pursuant to Section
3.26;
(xi) the
Credit Enhancement Percentage for such Distribution Date;
(xii) the
Available Funds Cap Carryforward Amount for each Class of the Class A
Certificates and each Class of the Mezzanine Certificates if any, for such
Distribution Date and the amount remaining unpaid after reimbursements therefor
on such Distribution Date;
55
(xiii) the
respective Pass-Through Rates applicable to each Class of the Class A
Certificates and each Class of the Mezzanine Certificates for such Distribution
Date and the Pass-Through Rate applicable to each Class of the Class A
Certificates and each Class of the Mezzanine Certificates for the immediately
succeeding Distribution Date;
(xiv) the
Supplemental Interest Payment for each Class on such Distribution
Date;
(xv) the
difference between (x) the aggregate notional amount of the Hedge Agreements
and
(y) the aggregate Certificate Principal Balance of the Class A Certificates
and
Mezzanine Certificates on such Distribution Date;
(xvi) the
Required Overcollateralization Amount for such Distribution Date;
(xvii) the
Excess Cashflow for such Distribution Date;
(xviii) the
aggregate amount of Scheduled Principal Payments made during the related
Due
Period;
(xix) the
aggregate amount of Principal Prepayments made during the related Due Period
in
which the related Mortgagor paid the related Mortgage Loan in full;
(xx) the
aggregate amount of Principal Prepayments in part made during the related
Prepayment Period;
(xxi) the
number and the aggregate principal balance of all Liquidated Mortgage Loans
for
the related Prepayment Period;
(xxii) the
aggregate amount of Net Liquidation Proceeds received during the related
Prepayment Period;
(xxiii) the
dollar amount of claims made, amounts paid by the MI Insurer in respect of
claims made, and premiums due and paid under the MI Policy; and
(xxiv) the
amount equal to the difference between (x) the Class I Monthly Interest
Distributable Amount and (y) any amounts received by the Supplemental Interest
Trust from the Hedge Counterparties in respect of the Hedge Agreements,
respectively; provided, however, that if the resulting number is a negative
number, then the absolute value of such negative number.
In
the
case of information furnished pursuant to subclauses (i) and (ii) above,
the
amounts shall be expressed in a separate section of the report as a dollar
amount for each Class for each $1,000 original dollar amount as of the Closing
Date.
56
For
all
purposes of this Agreement, with respect to any Mortgage Loan, delinquencies
shall be determined and reported based on the “OTS” methodology for determining
delinquencies on mortgage loans similar to the Mortgage Loans as described
in
the definition of “Delinquent.”
The
Trustee may, in the absence of manifest error, conclusively rely upon the
Determination Date Report of the Servicer in its preparation of the statement
to
Certificateholders pursuant to this Section 4.03.
(b)
Within
a
reasonable period of time after the end of each calendar year, the Trustee
shall, upon written request, furnish to each Person who at any time during
the
calendar year was a Certificateholder of a Regular Certificate, if requested
in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information set forth in subclauses
(i) and (ii) above, aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation
of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished by the Trustee to
Certificateholders pursuant to any requirements of the Code as are in force
from
time to time.
(c)
On
each
Distribution Date, the Trustee shall make available on its website to the
Residual Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate.
(d)
Within
a
reasonable period of time after the end of each calendar year, the Trustee
shall
deliver to each Person who at any time during the calendar year was a Residual
Certificateholder, if requested in writing by such Person, such information
as
is reasonably necessary to provide to such Person a statement containing
the
information provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person was
a
Residual Certificateholder. Such obligation of the Trustee shall be deemed
to
have been satisfied to the extent that substantially comparable information
shall be prepared and furnished to Certificateholders by the Trustee pursuant
to
any requirements of the Code as from time to time in force.
(e)
On
each
Distribution Date, the Trustee shall post on its website at xxxxx://xxx.xxx.xx.xxx/xxxx,
which
posting shall be accessible to each Certificateholder and the Hedge
Counterparties, the statement prepared pursuant to paragraph (a) of this
Section
4.03. Assistance in using the website can be obtained by calling the Trustee’s
investor relations desk at 0-000-000-0000. Such parties that are unable to
use
the website are entitled to have a paper copy mailed to them via first class
mail by providing a written request of such to the Trustee at its Corporate
Trust Office. The Trustee shall have the right to change the way such statements
are distributed in order to make such distribution more convenient and/or
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes. The
Trustee shall not have any responsibility to (i) verify information provided
by
the Servicer to be included in such statement or (ii) include any information
required to be included in such statement if the Servicer has failed to timely
produce such information to the Trustee, as required pursuant
hereto.
57
Section
4.04 Supplemental
Interest Trust; Excess Cashflow; Reallocations.
(a)
(i)
The
parties do hereby create and establish a sub-trust of the Trust Fund which
shall
hold an account, which, no later than the Closing Date, the Trustee shall,
at
the direction of the Servicer, establish and maintain, as a segregated trust
account that is an Eligible Account, which shall be titled “Supplemental
Interest Trust, Deutsche Bank National Trust Company, as Trustee for the
registered holders of NovaStar Mortgage Funding Trust 2007-1, Home Equity
Loan
Asset-Backed Certificates, Series 2007-1.” The Trustee shall, promptly upon
receipt, deposit in the Supplemental Interest Trust amounts of Excess Cashflow,
if any, pursuant to Section 4.01 and each distribution of the Class I Monthly
Interest Distributable Amount pursuant to Section 4.01(a)(i)(A), if any.
Funds
deposited in the Supplemental Interest Trust shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth herein.
Neither the Supplemental Interest Trust nor the related Supplemental Interest
Account shall be an asset of any of the REMICs created hereunder.
(i) (a)
On
each Distribution Date prior to the Class I Termination Date, the funds in
the
Supplemental Interest Trust (as reduced from time to time in accordance with
this Section 4.04) will equal the sum of (x) any amounts received under any
Hedge Agreement pursuant to Section 4.04(f), (y) the Class I Monthly Interest
Distributable Amount and (z) any amounts of Excess Cashflow not used to maintain
the Required Overcollateralization Amount.
On
each
Distribution Date commencing in February 2010, the funds in the Supplemental
Interest Trust (as reduced from time to time in accordance with this Section
4.04) will equal any amounts of Excess Cashflow not used to maintain the
Required Overcollateralization Amount.
(b)
The
Trustee will invest funds deposited in the Supplemental Interest Trust as
directed in writing by the Servicer in Eligible Investments with a maturity
date
(i) 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,
if a Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required
to
be withdrawn from such account pursuant to this Agreement, if the Trustee
or an
Affiliate manages or advises such investment. If the Trustee does not receive
such written investment instructions it shall retain such funds uninvested.
All
income and gain realized from investment of funds deposited in the Supplemental
Interest Trust shall be credited to such Account. The Trustee will not be
liable
for investment losses on investments selected by the Servicer pursuant to
this
Section 4.04(b). The Supplemental Interest Trust will not be an asset of
any of
the REMICs created hereunder.
(c)
On
each
Distribution Date, the Trustee shall distribute the funds held in the
Supplemental Interest Trust as follows:
(i) first,
on each
Distribution Date up to and including the Class I Termination Date, from
funds
other than funds relating to Excess Cashflow, and if such funds are
insufficient, any Excess Cashflow remaining after the distributions set forth
in
Section 4.04(d)(i), to each Hedge Counterparty, its related Swap Amount and/or
Cap Amount for such Distribution Date, and any unpaid Hedge Termination Payment
owed to a Hedge Counterparty that is not a Defaulted Hedge Termination
Payment;
58
(ii) second,
from
funds other than funds relating to Excess Cashflow, and if such funds are
insufficient, any Excess Cashflow remaining after the distributions set forth
in
Section 4.04(d)(i), and after taking into account any amounts applied pursuant
to clause (i) above, the amount necessary, if any, to eliminate any
Overcollateralization Deficiency, after taking into account any Excess Cashflow
previously applied to such purpose on such Distribution Date (provided, however,
the amount paid pursuant to this Section 4.04(c)(ii) on any Distribution
Date
shall not exceed the excess of (A) the cumulative amount of Realized Losses
from
the Cut-Off Date through the last day of the related Payment Period over
(B) the
sum of all amounts paid pursuant to this Section 4.04(c)(ii) on all prior
Distribution Dates);
(iii) third,
any
remaining amounts to pay:
(a)
first,
concurrently pro rata based on their respective amounts of Available Funds
Cap
Shortfall, from funds other than funds relating to Excess Cashflow, and if
such
funds are insufficient, any Excess Cashflow remaining after the distributions
set forth in Section 4.04(d)(i), and after taking into account any amounts
applied pursuant to clauses (i) and (ii) above, to each Class of Class A
Certificates, the Supplemental Interest Payment for each Class of Class A
Certificates (in each case only up to the amount necessary to pay any the
related Supplemental Interest Amount Due); and
(b)
second,
in
direct order of priority (i.e., commencing with the Class M-1 Certificates
and
ending with the Class M-11 Certificates):
(1) to
each
Class of Mezzanine Certificates which is not a Reallocable Class, from funds
other than funds relating to Excess Cashflow, and if such funds are
insufficient, any Excess Cashflow remaining after the distributions set forth
in
Section 4.04(d)(i), and after taking into account any amounts applied pursuant
to clauses (i) and (ii) above, or clause (iii)(a) above, the Supplemental
Interest Payment for each Class of Mezzanine Certificates (in each case only
up
to the amount necessary to pay the related Supplemental Interest Amount Due);
and
(2) with
respect to all or any portion of a Reallocable Class which has not previously
been the subject of a Reallocation (a) the Supplemental Interest Payment
otherwise allocated to Class M-6 Certificates shall be distributed to the
Class
M-6N Certificates and shall be the Non-Derivative Supplemental Interest Payment
for the Class M-6 Certificates, the Supplemental Interest Payment otherwise
allocated to the Class M-7 Certificates shall be distributed to the Class
M-7N
Certificates and shall be the Non-Derivative Supplemental Interest Payment
for
the Class M-7 Certificates, the Supplemental Interest Payment otherwise
allocated to the Class M-8 Certificates shall be distributed to the Class
M-8N
Certificates and shall be the Non-Derivative Supplemental Interest Payment
for
the Class M-8 Certificates, the Supplemental Interest Payment otherwise
allocated to the Class M-9 Certificates shall be distributed to the Class
M-9N
Certificates and shall be the Non-Derivative Supplemental Interest Payment
for
the Class M-9 Certificates, the Supplemental Interest Payment otherwise
allocated to the Class M-10 Certificates shall be distributed to the Class
M-10N
Certificates and shall be the Non-Derivative Supplemental Interest Payment
for
the Class M-10 Certificates and the Supplemental Interest Payment otherwise
allocated to the Class M-11 Certificates shall be distributed to the Class
M-11N
Certificates and shall be the Non-Derivative Supplemental Interest Payment
for
the Class M-11 Certificates, and (b) the Derivative Supplemental Interest
Payment for the Class M-6 Certificates shall be paid to the Holders of the
Class
M-6 DSI Certificates, the Derivative Supplemental Interest Payment for the
Class
M-7 Certificates shall be paid to the Holders of the Class M-7 DSI Certificates,
the Derivative Supplemental Interest Payment for the Class M-8 Certificates
shall be paid to the Holders of the Class M-8 DSI Certificates, the Derivative
Supplemental Interest Payment for the Class M-9 Certificates shall be paid
to
the Holders of the Class M-9 DSI Certificates, the Derivative Supplemental
Interest Payment for the Class M-10 Certificates shall be paid to the Holders
of
the Class M-10 DSI Certificates and the Derivative Supplemental Interest
Payment
for the Class M-11 Certificates shall be paid to the Holders of the Class
M-11
DSI Certificates.
59
(iv) fourth,
from
any remaining funds, to the Hedge Counterparties to which such amounts are
owed,
pro
rata,
any
Defaulted Hedge Termination Payments and any indemnity payments provided
for in
Part 5 of the Hedge Agreements; and
(v) fifth,
from
any remaining funds, to the Holders of the Class CB Certificates, an amount
equal to the Class CB Interest Distributable Amount for such Distribution
Date;
and
(vi) sixth,
any
remaining amounts, to the Holders of the Class CA Certificates.
(d)
On
each
Distribution Date, the Trustee shall distribute the funds relating to Excess
Cashflow as follows:
(i) prior
to
any deposit to the Supplemental Interest Trust, to the Holders of the Class
or
Classes of Certificates then entitled to receive distributions in respect
of
principal, in an amount equal to any Extra Principal Distribution Amount,
distributable to such holders in the same order of priority as the Group
I
Principal Distribution Amount and the Group II Principal Distribution Amount
as
described in Section 4.01; and
60
(ii) to
the
Supplemental Interest Trust to distribute in accordance with Section
4.04(c).
(e)
With
respect to each Class of Reallocable Certificates, each Class of Class N
Certificates and each Class of DSI Certificates:
(i) upon
receipt by the Trustee from the Depositor of a Reallocation Notice (which
Reallocation Notice must be received by the Trustee at least seven Business
Days
prior to the Distribution Date on which the Reallocation is sought to be
effective), the Trustee shall allocate, on all future Distribution Dates,
the
related Percentage Interests of distributions made on account of the specified,
related Class DSI Certificates and Class N Certificates (which must be the
identical Percentage Interest in each related Class DSI Certificate and Class
N
Certificate, e.g.,
75%
Percentage Interest in Class M-10 DSI and 75% Percentage Interest in Class
M-10N) to the Holders of the related Class of Reallocable Certificates
(e.g.,
following the prior example, Class M-10); and
(ii) unless
subject to a prior Reallocation, all amounts otherwise distributable to each
Reallocable Class (or Percentage Interest therein not previously Reallocated)
pursuant to Section 4.01 hereof shall be distributed instead to the related
Class of Class N Certificates.
(f)
[reserved].
(g)
In
the
event that a Hedge Counterparty elects to post collateral as provided in
the
related Hedge Agreement, the Trustee shall establish and maintain an Eligible
Account with respect to the related Hedge Agreement (each, a “Hedge
Collateral Account”)
for
the benefit of such Hedge Counterparty, as applicable, and the
Certificateholders, as their interests may appear, into which such collateral
shall be deposited. The Trustee may or shall (as indicated) make withdrawals
from the related Hedge Collateral Account for the purposes of (i) entering
into
a substitute hedge agreement, (ii) funding the amount of any payment due
to be
made by such Hedge Counterparty under the related Hedge Agreement, as
applicable, following the failure by such Hedge Counterparty to make that
payment or (iii) as permitted pursuant to the related Hedge Agreement or
this
Agreement. The Trustee shall make withdrawals from the related Hedge Collateral
Account and transfer the collateral (i) as required of the Trustee pursuant
to
the related Hedge Agreement or (ii) to the related Hedge Counterparty if
the
circumstances which required the posting of collateral no longer exist; and
to
the extent necessary to perform such obligation, the Trustee is required
to
liquidate any investments held in such Hedge Collateral Account. In the event
that additional collateral is required to be posted by a Hedge Counterparty
under the related Hedge Agreement, as applicable, the Trustee shall promptly
make a demand on such Hedge Counterparty to post such additional collateral.
To
the extent cash makes up all or any portion of the collateral in a Hedge
Collateral Account, such cash shall be invested in overnight (or redeemable
within two local business days of demand) investments rated at least “A-1+” by
S&P and “Prime-1” by Xxxxx’x or “AAAm” or “AAAm-G” by S&P and “Aaa” by
Xxxxx’x (or such other investments as may be affirmed in writing by S&P and
Xxxxx’x), in accordance with the related Hedge Agreement. Such funds shall be
invested at the written direction of the applicable Hedge Counterparty, or
in
case of an event of default or additional termination event with respect
to
which the Hedge Counterparty is the defaulting or sole affected party under
the
relevant Hedge Agreement, the Servicer, and if neither the Hedge Counterparty
nor the Servicer provides such written instructions, such funds shall be
retained by the Trustee uninvested, with gains and losses incurred in respect
of
such investments to be for the account of the applicable Hedge Counterparty.
Any
and all interest generated by such investment shall be transferred to the
related Hedge Counterparty as provided in the related Hedge Agreement, as
applicable, or where unspecified, on each Distribution Date. In connection
with
the maintenance and administration of a Hedge Collateral Account, the Trustee
may request and rely on written instructions from the Hedge Counterparty
or the
Servicer, which the Hedge Counterparty and the Servicer hereby agree to provide,
with respect to the maintenance and administration of such account. For the
avoidance of doubt, the Trustee shall not have any right to apply any amounts
or
assets in any Hedge Collateral Account except in accordance with the enforcement
and realization of its security interest pursuant to the related Hedge Agreement
or otherwise in accordance with the related Hedge Agreement. The Trustee
shall
not be liable for the selection of investments or for investment losses incurred
thereon.
61
The
Trustee may designate an agent to maintain any Hedge Collateral Account,
provided that the following conditions are satisfied: (i) the agent or its
parent shall have a long-term debt rating of “A1” or better by Xxxxx’x, “A+” (or
better) and “A-1” (or better) by S&P and “A+” or better by Fitch a and (ii)
the total assets of the agent shall exceed $25,000,000. Under such
circumstances, all references to the Trustee in this subsection (f) shall
be to
the Trustee’s agent appointed pursuant to this paragraph.
Section
4.05
[Reserved].
Section
4.06 [Reserved].
Section
4.07 Allocation
of Realized Losses.
All
Realized Losses on the Mortgage Loans shall be allocated by the Trustee on
each
Distribution Date as follows: first,
to
amounts of Excess Cashflow, second,
to the
Overcollateralization Amount, third,
to the
Class M-11 Certificates, until the Certificate Principal Balance thereof
has
been reduced to zero; fourth,
to the
Class M-10 Certificates, until the Certificate Principal Balance thereof
has
been reduced to zero; fifth,
to the
Class M-9 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; sixth,
to the
Class M-8 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; seventh,
to the
Class M-7 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; eighth,
to the
Class M-6 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; ninth,
to the
Class M-5 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; tenth,
to the
Class M-4 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; eleventh,
to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; twelfth,
to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; and thirteenth,
to the
Class M-1 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above.
All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof
by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date. In no event shall Realized Losses be allocated
to the
Class A-1A Certificates, the Group II Certificates or the Class I
Certificates.
62
Any
allocation of Realized Losses to a Mezzanine Certificate on any Distribution
Date shall be made by reducing the Certificate Principal Balance thereof
by the
amount so allocated. Any Subsequent Recoveries will be allocated to the
Mezzanine Certificates in the reverse order of the Realized Loss allocation
set
forth in the preceding paragraph, to the extent of the Realized Loss allocated
to each related Certificate.
ARTICLE
V
THE
CERTIFICATES
Section
5.01 The
Certificates.
Each
of
the Class A Certificates, the Mezzanine Certificates, the Class DSI
Certificates, the Class C Certificates, the Class I Certificates and the
Residual Certificates shall be substantially in the forms annexed hereto
as
exhibits, and shall, on original issue, be executed, authenticated and delivered
by the Trustee to or upon the order of the Depositor concurrently with the
sale
and assignment to the Issuing Entity of the Trust Fund. The Class A Certificates
and Mezzanine Certificates shall be initially evidenced by one or more
Certificates representing a Percentage Interest with a minimum dollar
denomination of $25,000 and integral dollar multiples of $1,000 in excess
thereof, with a minimum investment of $100,000 (if the Certificates are
Book-Entry Certificates), except that one Certificate of each such Class
of
Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date. The Class
DSI
Certificates, the Class C Certificates, the Class I Certificates and the
Residual Certificates are issuable in any Percentage Interests; provided,
however, that the sum of all such percentages for each such Class totals
100%
and no more than ten Certificates of each Class may be issued.
The
Certificates shall be executed on behalf of the Issuing Entity by manual
or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who
were,
at the time when such signatures were affixed, authorized to sign on behalf
of
the Trustee shall bind the Issuing Entity, notwithstanding that such individuals
or any of them have ceased to be so authorized prior to the authentication
and
delivery of 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 such Certificate shall have
been
manually authenticated by the Trustee substantially in the form provided
for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date
of their authentication. Subject to Section 5.02(c), the Class A Certificates,
the Mezzanine Certificates and the Class DSI Certificates shall be Book-Entry
Certificates. The other Classes of Certificates shall be Definitive
Certificates.
63
Section
5.02 Registration
of Transfer and Exchange of Certificates.
(a)
The
Certificate Registrar shall cause to be kept at the Corporate Trust Office
a
Certificate Register in which, subject to such reasonable regulations as
it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee shall initially serve as Certificate Registrar for the purpose
of
registering Certificates and transfers and exchanges of Certificates as herein
provided.
Upon
surrender for registration of transfer of any Certificate at the office
designated in the definition of “Corporate Trust Office” maintained for such
purpose pursuant to the foregoing paragraph and, in the case of a Residual
Certificate, upon satisfaction of the conditions set forth below, the Trustee
on
behalf of the Issuing Entity shall execute, authenticate and deliver, in
the
name of the designated transferee or transferees, one or more new Certificates
of the same aggregate Percentage Interest.
At
the
option of the Certificateholders, Certificates may be exchanged for other
Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at such designated
office. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute on behalf of the Issuing Entity and 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 (if so required by the Trustee or the Certificate Registrar)
be duly endorsed by, or be accompanied by a written instrument of transfer
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the
Holder thereof or his attorney duly authorized in writing.
(b)
Except
as
provided in paragraph (c) 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 such Certificates may not be transferred by the Trustee
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 Certificates; (iii) ownership and transfers of registration
of
such 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 Trustee shall for all purposes deal with the Depository as representative
of
the Certificate Owners of the Certificates for purposes of exercising the
rights
of Holders under this Agreement, and requests and directions for and votes
of
such representative shall not be deemed to be inconsistent if they are made
with
respect to different Certificate Owners; (vi) the Trustee 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; and (vii) the direct participants of the Depository shall have no
rights
under this Agreement under or with respect to any of the Certificates held
on
their behalf by the Depository, and the Depository may be treated by the
Trustee, the Trustee and its agents, employees, officers and directors as
the
absolute owner of the Certificates for all purposes whatsoever.
64
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 Owners. Each Depository Participant
shall only transfer Book-Entry Certificates of Certificate Owners that it
represents or of brokerage firms for which it acts as agent in accordance
with
the Depository’s normal procedures. The parties hereto are hereby authorized to
execute a Letter of Representations with the Depository or take such other
action as may be necessary or desirable to register a Book-Entry Certificate
to
the Depository. In the event of any conflict between the terms of any such
Letter of Representation and this Agreement, the terms of this Agreement
shall
control.
(c)
If
(i)(x)
the Depository or the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to discharge properly its
responsibilities as Depository and (y) the Depositor is unable to locate
a
qualified successor, or (ii) after the occurrence of a Servicing Default,
the
Certificate Owners of the Book-Entry Certificates representing not less than
51%
of the Voting Rights advise the Trustee and Depository through the Financial
Intermediaries and the Depository Participants in writing that the continuation
of a book-entry system through the Depository to the exclusion of definitive,
fully registered certificates (“Definitive
Certificates”)
to
Certificate Owners is no longer in the best interests of the Certificate
Owners.
Upon surrender to the Certificate Registrar of the Book-Entry Certificates
by
the Depository, accompanied by registration instructions from the Depository
for
registration, the Trustee shall, at the Sponsor’s expense, execute on behalf of
the Issuing Entity and authenticate the Definitive Certificates. Neither
the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Certificate Registrar, the Servicer, any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d)
No
transfer, sale, pledge or other disposition of any Class M-10 Certificate,
Class
M-11 Certificate, Class N Certificate, Class DSI Certificate, Class CA
Certificate, Class CB Certificate or Residual Certificate 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 laws. In the event of any such transfer, except with respect to transfers
of
any Class M-10 Certificate, Class M-11 Certificate, Class N Certificate,
Class
DSI Certificate, Class CA Certificate, Class CB Certificate or Residual
Certificates by or to the Depositor by or to NCFLLC by or to NCFC, or by
or to
NCFC by or to NCFLLC by or to Greenwich Capital Financial Products, Inc.,
Wachovia Investment Holdings, LLC, or Newport Funding Corp., unless (i) such
transfer is made in reliance upon Rule 144A under the 1933 Act and an investment
letter, in substantially the form attached hereto as Exhibit G, is delivered
by
the Transferee to the Trustee) or (ii) a written Opinion of Counsel (which
may
be in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Depositor is delivered to them stating
that
such transfer may be made pursuant to (x) the 1933 Act, or an exemption thereto,
describing the applicable provision or exemption and the basis therefore,
and
(y) the Investment Company Act of 1940, or an exemption thereto, describing
the
applicable provision or exemption and the basis therefore, which Opinion
of
Counsel shall not be an expense of the Trustee or the Depositor. The Holder
of a
Class M-10 Certificate, Class M-11 Certificate, Class N Certificate, Class
DSI
Certificate, Class CA Certificate, Class CB Certificate or Residual Certificate
desiring to effect such transfer shall indemnify and hold harmless the Trustee
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.
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The
Class
I Certificates shall be registered in the name of the Supplemental Interest
Trust and shall not be transferable.
No
transfer of a Class M-6 Certificate, Class M-7 Certificate, Class M-8
Certificate, Class M-9 Certificate, Class M-10 Certificate, Class M-11
Certificate, Class N Certificate, Class DSI Certificate, Class CA Certificate,
Class CB Certificate or Residual Certificate or any interest therein shall
be
made to any Plan or to any Person acting, directly or indirectly, on behalf
of
any such Plan or acquiring such Certificates with “plan assets” of a Plan within
the meaning of the Department of Labor regulation promulgated at 29 C.F.R.
§
2510.3-101 or otherwise (“Plan
Assets”).
Each
Person who acquires any Ownership Interest in such Classes of Certificates
shall
be deemed, by the acceptance or acquisition of such Ownership Interest, to
represent that it is not a Plan and is not acting, directly or indirectly,
on
behalf of a Plan or acquiring such Ownership Interest with Plan Assets.
The
foregoing restrictions shall not apply to the transfer of any Class
X-0, Xxxxx X-0, Class M-8 or Class M-9 Certificate
that has been sold pursuant to a Qualified Underwriting, provided such transfer
satisfies the other conditions under an Underwriter Exemption. The foregoing
restrictions shall not apply to the transfer of any Class M-10 Certificate
or
Class M-11 Certificate that has been sold pursuant to a Qualified Underwriting,
provided such transfer is to an “insurance company general account” (within the
meaning of PTCE 95-60) and the conditions set forth in Sections I and III
of
PTCE 95-60 have been satisfied.
Reallocations
are not, in and of themselves, “transfers, sales, pledges or other dispositions”
of the related Classes requiring any action pursuant to this Section
5.02.
The
Depositor agrees to provide, upon request of any holder of a private Certificate
or of any prospective purchaser of a private Certificate designated by such
holder, at or prior to the time of sale, reasonably current information
concerning the Issuing Entity and the Mortgage Loans, as more specifically
detailed pursuant to Rule 144A(d) under the 1933 Act.
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 to have irrevocably
appointed the Depositor or its designee as its attorney-in-fact to negotiate
the
terms of any mandatory sale under clause (v) below and to execute all
instruments of transfer and to do all other things necessary in connection
with
any such sale, 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 Trustee of
any
change or impending change in its status as a Permitted Transferee.
(ii) No
Person
shall acquire an Ownership Interest in a Residual Certificate unless such
Ownership Interest is a pro-rata undivided interest.
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(iii) In
connection with any proposed transfer of any Ownership Interest in a Residual
Certificate, the Trustee shall as a condition to registration of the transfer,
require delivery to it, in form and substance satisfactory to it, of each
of the
following:
(A)
an
affidavit in the form of Exhibit H hereto from the proposed transferee to
the
effect that such transferee is a Permitted Transferee and that it is not
acquiring its Ownership Interest in the Residual Certificate that is the
subject
of the proposed transfer as a nominee, Trustee or agent for any Person who
is
not a Permitted Transferee; and
(B)
an
affidavit in the form of Exhibit I hereto from the proposed transferor to
the
effect that no purpose of the transfer is to impede the assessment or collection
of any tax.
(iv) Any
attempted or purported transfer of any Ownership Interest in a Residual
Certificate in violation of the provisions of this Section shall be absolutely
null and void and shall vest no rights in the purported transferee. If any
purported transferee shall, in violation of the provisions of this Section,
become a Holder of a Residual Certificate, then the prior Holder of such
Residual Certificate that is a Permitted Transferee shall, upon discovery
that
the registration of transfer of such Residual Certificate was not in fact
permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section or for making any distributions due on such Residual 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 Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made
on
such Residual Certificate. Any such distributions so recovered by the Trustee
shall be distributed and delivered by the Trustee to the prior Holder of
such
Residual Certificate that is a Permitted Transferee.
(v) If
any
Person other than a Permitted Transferee acquires any Ownership Interest
in a
Residual Certificate in violation of the restrictions in this Section, then
the
Trustee shall have the right but not the obligation, without notice to the
Holder of such Residual Certificate or any other Person having an Ownership
Interest therein, to notify the Depositor to arrange for the sale of such
Residual Certificate. The proceeds of such sale, net of commissions (which
may
include commissions payable to the Depositor or its affiliates in connection
with such sale), expenses and taxes due, if any, will be remitted by the
Trustee
to the previous Holder of such Residual Certificate that is a Permitted
Transferee, except that in the event that the Trustee determines that the
Holder
of such Residual Certificate may be liable for any amount due under this
Section
or any other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The
terms
and conditions of any sale under this clause (v) shall be determined in the
sole
discretion of the Trustee and the Depositor and neither of them shall be
liable
to any Person having an Ownership Interest in a Residual Certificate as a
result
of its exercise of such discretion.
67
(vi) If
any
Person other than a Permitted Transferee acquires any Ownership Interest
in a
Residual Certificate in violation of the restrictions in this Section, then
the
Trustee upon receipt of reasonable compensation will provide to the Internal
Revenue Service, and to the persons specified in Sections 860E(e)(3) and
(6) of
the Code, information needed to compute the tax imposed under Section 860E(e)
of
the Code on transfers of residual interests to disqualified
organizations.
The
foregoing provisions of this Section shall cease to apply to transfers occurring
on or after the date on which there shall have been delivered to the Trustee,
in
form and substance satisfactory to the Trustee, (i) written notification
from
each Rating Agency that the removal of the restrictions on Transfer set forth
in
this Section will not cause such Rating Agency to downgrade its rating of
the
Certificates and (ii) an Opinion of Counsel to the effect that such removal
will
not cause any REMIC created hereunder to fail to qualify as a
REMIC.
(e)
No
service charge shall be made for any registration of transfer or exchange
of
Certificates of any Class, but the Certificate Registrar may require payment
of
a sum sufficient to cover any tax or governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
All
Certificates surrendered for registration of transfer or exchange shall be
cancelled by the Certificate Registrar and disposed of pursuant to its standard
procedures.
Section
5.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(i)
any mutilated Certificate is surrendered to the Certificate Registrar or
the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (ii) there is delivered to the Trustee,
the
Depositor and the Certificate Registrar such security or indemnity as may
be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee or the Certificate Registrar that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute on behalf of
the
Issuing Entity, authenticate and deliver, in exchange for or in lieu of any
such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee or the Certificate Registrar 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 Trustee and the Certificate Registrar) in connection therewith.
Any duplicate Certificate issued pursuant to this Section, shall constitute
complete and indefeasible evidence of ownership in the Issuing Entity, as
if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
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Section
5.04 Persons
Deemed Owners.
The
Servicer, the Depositor, the Trustee, the Certificate Registrar, any Paying
Agent and any agent of the Servicer, the Depositor, the Trustee, the Certificate
Registrar or any Paying Agent may treat the Person, including a Depository,
in
whose name any Certificate is registered as the owner of such Certificate
for
the purpose of receiving distributions pursuant to Section 4.01 and for all
other purposes whatsoever, and none of the Servicer, the Issuing Entity,
the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
Section
5.05 Appointment
of Paying Agent.
(a)
The
Paying Agent shall make distributions to Certificateholders from the
Distribution Account pursuant to Section 4.01 and shall report the amounts
of
such distributions to the Trustee. The duties of the Paying Agent may include
the obligation to distribute statements prepared by the Trustee pursuant
to
Section 4.03 and provide information to Certificateholders as required
hereunder. The Paying Agent hereunder shall at all times be an entity duly
incorporated and validly existing under the laws of the United States of
America
or any state thereof, authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by federal or state
authorities. The Paying Agent shall initially be the Trustee. The Trustee
may
appoint a successor to act as Paying Agent, which appointment shall be
reasonably satisfactory to the Depositor.
(b)
The
Trustee shall cause the Paying Agent (if other than the Trustee) to execute
and
deliver to the Trustee an instrument in which such Paying Agent shall agree
with
the Trustee that such Paying Agent shall hold all sums, if any, held by it
for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all requirements
of
the Code regarding the withholding of payments in respect of Federal income
taxes due from Certificate Owners and otherwise comply with the provisions
of
this Agreement applicable to it.
ARTICLE
VI
THE
SERVICER AND THE DEPOSITOR
Section
6.01 Liability
of the Servicer and the Depositor.
The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by Servicer herein.
The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the
Depositor.
Section
6.02 Merger
or Consolidation of, or Assumption of the Obligations of, the Servicer or
the
Depositor.
Any
entity into which the Servicer or Depositor may be merged or consolidated,
or
any entity resulting from any merger, conversion or consolidation to which
the
Servicer or the Depositor shall be a party, or any corporation succeeding
to the
business of the Servicer or the Depositor, shall be the successor of the
Servicer or the Depositor, 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 Servicer shall satisfy all the requirements of Section 7.02
with
respect to the qualifications of a successor Servicer.
69
Section
6.03 Limitation
on Liability of the Servicer and Others.
Neither
the Servicer nor any of the directors or officers or employees or agents
of the
Servicer shall be under any liability to the Issuing Entity or the
Certificateholders for any action taken or for refraining from the taking
of any
action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided,
however,
that
this provision shall not protect the Servicer or any such Person against
any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or negligence in the performance of duties of the Servicer or by
reason of its reckless disregard of its obligations and duties of the Servicer
hereunder.
The
Servicer and any director or officer or employee or agent of the Servicer
may
rely in good faith on any document of any kind prima facie properly executed
and
submitted by any Person respecting any matters arising hereunder. The Servicer
and any director or officer or employee or agent of the Servicer shall be
indemnified by the Issuing Entity and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, including any amount paid to the Trustee pursuant
to Section 6.06(b), 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 its willful misfeasance,
bad
faith or negligence in the performance of its duties hereunder or by reason
of
its reckless disregard of its obligations and duties hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement, and which in its opinion may involve it in
any
expense or liability; provided, however, that the Servicer may in its sole
discretion undertake any such action which 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 Certificateholders hereunder. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Issuing Entity, and the Servicer
shall be entitled to be reimbursed therefor. The Servicer’s right to indemnity
or reimbursement pursuant to this Section 6.03 shall survive any resignation
or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect
to any
losses, expenses, costs or liabilities arising prior to such resignation
or
termination (or arising from events that occurred prior to such resignation
or
termination). Any reimbursements or indemnification to the Servicer from
the
Issuing Entity pursuant to this Section 6.03 shall be payable in the priority
set forth in Section 4.01 hereof.
Section
6.04 Servicer
Not to Resign.
Subject
to the provisions of Section 6.02, the Servicer shall not resign from the
obligations and duties hereby imposed on it except upon determination that
the
performance of its obligations or duties hereunder are no longer permissible
under applicable law provided,
however,
that no
such resignation by the Servicer shall become effective until the Back-up
Servicer shall have assumed the Servicer’s responsibilities and obligations
hereunder. 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. The Servicer
shall
have no claim (whether by subrogation or otherwise) or other action against
any
Certificateholder for any amounts paid by the Servicer pursuant to any provision
of this Pooling and Agreement. Any such determination permitting the resignation
of the Servicer under clause (i) above shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee.
70
Section
6.05 Delegation
of Duties.
In
the
ordinary course of business, the Servicer at any time may delegate any of
its
duties hereunder to any Person, including any of its Affiliates, who agrees
to
conduct such duties in accordance with the same standards with which the
Servicer complies pursuant to Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such
duties
and shall not constitute a resignation within the meaning of Section
6.04.
Section
6.06 Servicing
Rights Owner to Pay Trustee’s Fees and Expenses;
Indemnification.
(a)
The
Servicing Rights Owner covenants and agrees to pay to the Trustee and any
co-trustee of the Trustee from time to time, and the Trustee and any such
co-trustee shall be entitled to, reasonable compensation, including all
indemnification payments (which shall not be limited by any provision of
law in
regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts created hereunder
and in
the exercise and performance of any of the powers and duties and the Servicing
Rights Owner will pay or reimburse the Trustee and any co-trustee upon request
for all reasonable expenses, disbursements and advances incurred or made
by the
Trustee or any co-trustee of the Trustee in accordance with any of the
provisions of this Agreement except any such expense, disbursement or advance
as
may arise from its negligence or bad faith.
(b)
The
Servicing Rights Owner agrees to indemnify the Trustee for, and to defend
and
hold, the Trustee harmless against, any claim, tax, penalty, loss, liability
or
expense of any kind whatsoever, incurred without gross negligence or willful
misconduct on the part of the Trustee as such and/or in its individual capacity,
arising out of, or in connection with, the performance of the Trustee’s duties
under this Agreement or the other Basic Documents, including the reasonable
costs and expenses (including reasonable legal fees and expenses) of defending
itself against any claim in connection with the exercise or performance of
any
of its powers or duties hereunder, provided that:
(i) with
respect to any such claim, the Trustee shall have given the Servicing Rights
Owner written notice thereof promptly after the Trustee shall have actual
knowledge thereof, provided that failure to promptly notify shall not relieve
the Servicing Rights Owner of its liability to indemnify hereunder except
to the
extent it has been materially prejudiced thereby;
71
(ii) while
maintaining control over its own defense, the Trustee shall cooperate and
consult fully with the Servicing Rights Owner in preparing such defense;
and
(iii) notwithstanding
anything in this Agreement to the contrary, the Servicing Rights Owner shall
not
be liable for settlement of any claim by the Trustee entered into without
the
prior consent of the Servicing Rights Owner, which consent shall not be
unreasonably withheld.
No
termination of this Agreement and resignation and removal of the Trustee
shall
affect the obligations created by this Section 6.06 of the Servicing Rights
Owner to indemnify the Trustee under the conditions and to the extent set
forth
herein. This section shall survive the termination of this Agreement and
resignation and removal of the Trustee. Any amounts to be paid by the Servicing
Rights Owner pursuant to this Subsection may not be paid from the Trust Fund
except as provided in Section 6.03.
Notwithstanding
the foregoing, the indemnification provided by the Servicing Rights Owner
in
this Section 6.06 shall not pertain to any loss, liability or expense of
the
Trustee including the costs and expenses of defending itself against any
claim,
incurred in connection with any actions taken by the Trustee at the direction
of
the Certificateholders, as the case may be, pursuant to the terms of this
Agreement.
(c)
The
Servicer agrees to indemnify the Trust Fund in an amount equal to the amount
of
any claim made under a MI Policy for which coverage is denied by the MI Insurer
because (and if the MI Insurer’s denial of coverage is contested by the
Servicing Rights Owner or the Servicer, a court or arbitrator finally determines
that coverage is not available under the MI Policy because) of the Servicer’s
failure to abide by the terms of the MI Policy or the MI Insurance Agreement
or
the Servicer’s failure to abide by the NFI Underwriting Guidelines or the NFI
Servicing Guidelines, as attached to the MI Insurance Agreement.
(d)
In
the
event the Trustee becomes the Servicer pursuant to Section 7.02 hereof, the
Trustee shall not be obligated, in its individual capacity, to pay any
obligation of the Servicer under clause (c) above or clause (e)
below.
(e)
To
the
extent any amounts set forth in clause (a) or (b) above are not paid by the
Servicing Rights Owner for any reason, such amounts shall be paid by the
Servicer, except that, if the successor servicer is the Trustee, then any
such
amounts shall be paid by NovaStar Mortgage, Inc.
ARTICLE
VII
DEFAULT
Section
7.01 Servicing
Default.
(a)
If
any
one of the following events (a “Servicing
Default”)
shall
occur and be continuing:
72
(i) Any
failure by the Servicer to deposit in the Collection Account or Distribution
Account (A) any Advances and Compensating Interest or (B) any other Deposit
required to be made under the terms of this Agreement, which, in the case
of
this clause (B), continues unremedied for a period of three Business Days
after
the date upon which written notice of such failure shall have been given
to the
Servicer by the Trustee or to the Servicer and the Trustee by the Holders
of
Certificates evidencing at least 25% of the Voting Rights; or
(ii) Failure
on the part of the Servicer duly to observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in this Agreement,
which failure, in each case, materially and adversely affects the interests
of
Certificateholders or the breach of any representation or warranty of the
Servicer in this Agreement which materially and adversely affects the interests
of the Certificateholders, and which in either case continues unremedied
for a
period of 30 days after the date on which written notice of such failure
or
breach, requiring the same to be remedied, and stating that such notice is
a
“Notice of Default” hereunder, shall have been given to the Servicer by the
Trustee or to the Servicer and the Trustee by the Holders of Certificates
evidencing at least 25% of the Voting Rights; or
(iii) The
entry
against the Servicer of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshaling of assets and liabilities
or
similar proceedings, or for the winding up or liquidation of its affairs,
and
the continuance of any such decree or order unstayed and in effect for a
period
of 60 consecutive days; or
(iv) The
Servicer shall voluntarily go into liquidation, consent to the appointment
of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court, agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally
as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors
or
voluntarily suspend payment of its obligations; or
(v) The
Cumulative Loss Percentage exceeds (a) with respect to the first 12 Distribution
Dates, 2.50%, (b) with respect to the next 12 Distribution Dates, 4.00% (c)
with
respect to the next 12 Distribution Dates, 5.25%, (d) with respect to the
next
12 Distribution Dates, 6.25%, (e) with respect to the next 12 Distribution
Dates, 7.00%, (f) and with respect to all Distribution Dates thereafter,
8.50%;
or
73
(vi) Realized
Losses on the Mortgage Loans over any twelve-month period exceeds 3.00% of
the
sum of the aggregate Principal Balance of the Mortgage Loans as of the Cut-off
Date; or
(vii) The
Rolling 90 Day Delinquency Percentage exceeds 23%.
(b)
then,
and
in each and every such case, so long as a Servicing Default shall not have
been
remedied within the applicable grace period, (x) with respect solely to clause
(a)(i)(A) above, if such Advance is not made by 5:00 P.M., New York time,
on the
Business Day immediately following the Servicer Remittance Date (provided
the
Trustee shall give the Servicer (with a copy to the Back-up Servicer) notice
of
such failure to advance by 5:00 P.M., New York time, on the Servicer Remittance
Date), the Trustee shall terminate all of the rights and obligations of the
Servicer under this Agreement and the Back-up Servicer, shall assume, pursuant
to Section 7.02, the duties of a successor Servicer and (y) in the case of
(a)(i)(B), (a) (ii), (a) (iii), (a) (iv), (a) (v), (a) (vi) and (a) (vii)
above,
the Trustee shall, at the direction of the Holders of Certificates evidencing
at
least 51% of the Voters Rights, by notice then given in writing to the Servicer
(and to the Trustee if given by Holders of Certificates), terminate all of
the
rights and obligations of the Servicer as servicer under this Agreement.
Any
such notice to the Servicer shall also be given to the Servicing Rights Pledgee,
the Trustee, the Back-up Servicer, each Rating Agency, the Depositor, each
Hedge
Counterparty (if prior to the Class I Termination Date) and the Sponsor.
On or
after the receipt by the Servicer (and by the Trustee if such notice is given
by
the Holders) of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Back-up
Servicer.
In
the event of a Servicing Default, notwithstanding anything to the contrary
in
this agreement, the Trustee and the Depositor hereby agree that upon delivery
to
the Trustee by the Servicing Rights Pledgee of a letter signed by the Servicing
Rights Pledgee within 15 days of when the Servicer provides the Servicing
Rights
Pledgee notice of such Servicing Default, the Servicing Rights Pledgee or
its
designee shall be appointed as successor Servicer (whether or not the Backup
Servicer is then acting as Backup Servicer or as successor Servicer), provided
that at the time of such appointment, the Servicing Rights Pledgee or such
designee meets the requirements of a successor Servicer set forth in Section
7.02 below, the Servicing Rights Pledgee or such designee agrees to be subject
to the terms of this Agreement and the Servicing Rights Pledgee or such designee
assumes the Advance obligations of the successor Servicer as outlined in
Section
7.02(a), provided, however, that at such time the Servicing Rights Pledgee
will
have the right to reimbursement as outlined in Section 3.07 and pays any
required release fee to the Backup Servicer.
Section
7.02 Trustee
to Act; Appointment of Successor.
(a)
Within
90
days of the time the Servicer (and the Trustee if notice is sent by the Holders)
receives a notice of termination pursuant to Section 7.01, the Back-up Servicer
shall be the successor in all respects 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
arising on and after its succession. Notwithstanding the foregoing, the parties
hereto agree that the Back-up Servicer, in its capacity as successor Servicer,
immediately will assume all of the obligations of the Servicer to make Advances;
provided however, that the obligation of the Back-up Servicer to make Advances
is subject to the standards set forth in Section 3.25 hereof. Notwithstanding
the foregoing, the Back-up 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. As compensation for acting as
successor Servicer, the Backup Servicer (or other successor Servicer) shall
receive the Servicing Fee. The appointment of a successor Servicer shall
not
affect any liability of the predecessor Servicer which may have arisen under
this Agreement prior to its termination as Servicer to pay any deductible
under
an insurance policy pursuant to Section 3.11 or to indemnify the Trustee
pursuant to Section 3.06, nor shall any successor Servicer (including the
Backup
Servicer or the Trustee as successor Servicer) be liable for any acts or
omissions of the predecessor Servicer or for any breach by such Servicer
of any
of its representations or warranties contained herein or in any related document
or agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
All Servicing Transfer Costs shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
Servicer defaults in its obligation to pay such costs, such costs shall be
paid
by the successor Servicer (in which case the successor Servicer shall be
entitled to reimbursement therefor from the assets of the Issuing Entity)
or if
not paid, then by the Trustee from the Trust Fund.
74
(b)
Any
successor Servicer shall pay over to the prior Servicer amounts representing
recoveries of Advances funded by such prior Servicer from sources other than
the
amounts held in the Collection Account for future distribution as contemplated
by Section 3.25 hereof, such amounts to be paid over the respect to the oldest
outstanding Advances first, in accordance with the provisions of Section
3.07(a)
hereof.
(c)
Any
successor, including the Back-up Servicer, to the Servicer as servicer shall
during the term of its service as servicer continue to service and administer
the Mortgage Loans for the benefit of Certificateholders, and maintain in
force
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and a Fidelity Bond
in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.11.
(d)
In
connection with the termination or resignation of the Servicer hereunder,
either
(i) the successor Servicer, shall represent and warrant that it is a member
of
MERS in good standing and shall agree to comply in all material respects
with
the rules and procedures of MERS in connection with the servicing of the
Mortgage Loans that are registered with MERS, in which case the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to revise
its records to reflect the transfer of servicing to the successor Servicer
as
necessary under MERS’ rules and regulations, or (ii) the predecessor Servicer
shall cooperate with the successor Servicer in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer the Mortgages
from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect
a
transfer of such Mortgage Loans or servicing of such Mortgage Loan on the
MERS
System to the successor Servicer. The predecessor Servicer shall file or
cause
to be filed any such assignment in the appropriate recording offices. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing
any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection (c). The successor Servicer
shall cause assignment to be delivered to the Trustee promptly upon receipt
of
the original with evidence of recording thereon or a copy certified by the
public recording office in which such assignment was recorded.
75
Section
7.03 Waiver
of Defaults.
The
Majority Certificateholders may, on behalf of all Certificateholders, waive
any
events permitting removal of the Servicer as servicer pursuant to this Article
VII by delivering written notice to the Trustee, provided,
however,
that
the Majority Certificateholders may not waive a default in making a required
distribution on a Certificate without the consent of the Holder of such
Certificate. Upon any waiver of a past default, such default shall cease
to
exist and any Servicing 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 thereto except
to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to the Rating Agencies.
Section
7.04 Notification
to Certificateholders.
(a)
Upon
any
termination or appointment of a successor to the Servicer pursuant to this
Article VII, the Trustee shall give prompt written notice thereof to the
Hedge
Counterparties, if prior to the Class I Termination Date, to the
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
(b)
No
later
than 60 days after the occurrence of any event which constitutes or which,
with
notice or a lapse of time or both, would constitute a Servicing Default for
five
Business Days after a Responsible Officer of the Trustee obtains actual
knowledge or written notice of the occurrence of such an event, the Trustee
shall transmit by mail to the Hedge Counterparties, if prior to the Class
I
Termination Date, and all Certificateholders notice of such occurrence unless
such default or Servicing Default shall have been waived or cured.
Section
7.05 Survivability
of Servicer Liabilities.
Notwithstanding
anything herein to the contrary, upon termination of the Servicer hereunder,
any
liabilities of the Servicer which accrued prior to such termination shall
survive such termination.
76
ARTICLE
VIII
THE
TRUSTEE
Section
8.01 Duties
of the Trustee.
On
the
Closing Date, the Trustee will act as paying agent and will distribute the
proceeds from the sale of the Offered Certificates according to the closing
settlement statement provided by the Sponsor. If a Servicing Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Agreement and use the same degree of care and skill
in its
exercise as a prudent person would exercise or use under the circumstances
in
the conduct of such person’s own affairs.
(a)
Except
during the continuance of a Servicing Default:
(i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement with respect to the Trustee and
no
implied covenants or obligations shall be read into this Agreement against
the
Trustee; and
(ii) in
the
absence of bad faith on its part, the Trustee may conclusively rely, as to
the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the
requirements of this Agreement; provided, however, that the Trustee shall
examine the certificates and opinions delivered to it to determine whether
or
not they conform on their face to the requirements of this
Agreement.
(b)
The
Trustee may not be relieved from liability for its own negligent action,
its own
negligent failure to act or its own willful misconduct, except
that:
(i) the
Trustee shall not be liable for interest on any money received by the
Trustee;
(ii) the
Trustee shall not be liable for any error of judgment made in good faith
by its
Responsible Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the
Trustee shall not be liable with respect to any action it takes or omits
to take
in good faith in accordance with a direction received by it from the Majority
Certificateholders.
Money
held in trust by the Trustee need not be segregated from other trust funds
except to the extent required by law or the terms of this
Agreement.
No
provision of this Agreement shall require the Trustee to expend or risk its
own
funds or otherwise incur financial liability in the performance of any of
its
duties hereunder or in the exercise of any of its rights or powers, if it
shall
have reasonable grounds to believe that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not reasonably assured
to
it.
77
Subject
to the other provisions of this Agreement and without limiting the generality
of
this Section 8.01, the Trustee 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 of any thereof,
(B)
to see to any insurance, (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, or (D) to confirm
or verify the contents of any reports or certificates of the Servicer delivered
to the Trustee believed by the Trustee to be genuine and to have been signed
or
presented by the proper party or parties.
(c)
The
Trustee shall act as successor to the Servicer to the extent provided in
Section
7.02 hereof.
(d)
For
all
purposes under this Agreement, the Trustee shall not be deemed to have notice
or
knowledge of any Servicing Default unless a Responsible Officer assigned
to and
working in the Trustee’s corporate trust department has actual knowledge thereof
or unless written notice of any event which is in fact such Servicing Default
is
received by the Trustee at the Corporate Trust Office, and such notice
references the Certificates generally, the Issuing Entity, or this
Agreement.
The
Trustee is hereby authorized to execute and shall execute this Agreement
and the
Purchase Agreement and shall perform their respective duties and satisfy
their
respective obligations thereunder. Every provision of this Agreement relating
to
the conduct or affecting the liability of or affording protection to the
Trustee
shall apply to the Trustee’s execution of this Agreement and the Purchase
Agreement and the performance of their respective duties and satisfaction
of its
obligations hereunder and thereunder.
In
order
to comply with laws, rules and regulations applicable to banking institutions,
including those relating to the funding of terrorist activities and money
laundering, the Trustee is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with the Trustee. Accordingly, each of the parties agrees to
provide to the Trustee upon its request from time to time such party’s complete
name, address, tax identification number and such other identifying information
together with copies of such party’s constituting documentation, securities
disclosure documentation and such other identifying documentation as may
be
available for such party.
Section
8.02 Rights
of Trustee.
The
Trustee may rely and shall be protected in acting or refraining from acting
on
any resolution, officer’s certificate, opinion of counsel, certificate of
auditors or other certificate, statement, instrument, or document believed
by it
to be genuine and to have been signed or presented by the proper person.
The
Trustee need not investigate any fact or matter stated in the
document.
78
Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel reasonably satisfactory in form and
substance to the Trustee which Officers’ Certificate or Opinion of Counsel shall
not be at the expense of the Trustee or the Trust Fund. The Trustee shall
not be
liable for any action either of them takes or omits to take in good faith
in
reliance on an Officers’ Certificate or Opinion of Counsel.
The
Trustee may execute any of its trusts or powers hereunder and the Trustee
may
perform any of its respective duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Trustee shall have
no
liability for any misconduct or negligence on the part of such agent, attorney
or custodian appointed by the Trustee with due care; provided, further, that
the
Trustee shall not be responsible for any act or omission of the
Custodian.
The
Trustee shall not be liable for any action either of them takes or omits
to take
in good faith which it believes to be authorized or within its rights or
powers;
provided, however, that the Trustee’s conduct does not constitute willful
misconduct, negligence or bad faith.
The
Trustee may consult with counsel chosen by it with due care, and the advice
or
opinion of counsel with respect to legal matters relating to this Agreement
and
the Certificates shall be full and complete authorization and protection
from
liability in respect to any action taken, omitted or suffered by either of
them
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
The
Trustee shall be under no obligation to exercise any of the trusts 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 Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may
be
incurred therein or thereby (which in the case of the Majority
Certificateholders will be deemed to be satisfied by a letter agreement with
respect to such costs from such Majority Certificateholders); nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Servicing Default of which a Responsible Officer of the Trustee
shall have actual knowledge (which has not been cured), to exercise such
of the
rights and powers vested in it by this Agreement, and to use the same degree
of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person’s own
affairs.
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 by the Majority Certificateholders; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making
of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require indemnity reasonably satisfactory to it against such
cost,
expense or liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Servicer or, if paid
by
the Trustee, shall be repaid by the Servicer upon demand from the Servicer’s own
funds.
79
The
rights of the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of such act.
The
Trustee shall not be required to give any bond or surety in respect of the
execution of the Trust Fund created hereby or the powers granted
hereunder.
Section
8.03 Individual
Rights of Trustee.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates and may otherwise deal with the Sponsor or its Affiliates
with
the same rights it would have if it were not Trustee. Any Certificates
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Section 8.11 hereof.
Section
8.04 Trustee’s
Disclaimer.
The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Agreement or the Certificates, or of any Mortgage
Loan or related document, or of MERS or the MERS System. The Trustee shall
not
be accountable for the use of the proceeds from the Certificates, and the
Trustee shall not be responsible for any statement of the Issuing Entity
in this
Agreement or in any document issued in connection with the sale of the
Certificates or in the Certificates other than the Trustee’s or the Certificate
Registrar’s certificate of authentication.
Section
8.05 Notice
of Servicing Default.
The
Trustee shall mail to each Certificateholder notice of the Servicing Default
within 10 days after a Responsible Officer has actual knowledge thereof unless
such Servicing Default shall have been waived or cured. Except in the case
of a
Servicing Default in payment of principal of or interest on any Certificate,
the
Trustee may withhold the notice if and so long as it in good faith determines
that withholding the notice is in the interests of
Certificateholders.
Section
8.06 [Reserved].
Section
8.07 Compensation.
The
amount of the Trustee Fee and Custodian Fee shall be paid to the Trustee
and
Custodian, respectively, on each Distribution Date pursuant to Section
4.01(a)(i) of this Agreement, and all amounts owing to the Trustee hereunder
in
excess of such amount shall be paid solely as provided in this Agreement.
The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.
80
Section
8.08 Replacement
of Trustee.
No
resignation or removal of the Trustee and no appointment of a successor Trustee
shall become effective until the acceptance of appointment by the successor
Trustee pursuant to this Section 8.08. The Trustee may resign at any time
by so
notifying the Hedge Counterparties, if prior to the Class I Termination Date,
and the Depositor. The Majority Certificateholders may at any time remove
the
Trustee by so notifying the Hedge Counterparties, if prior to the Class I
Termination Date, the Depositor and the Trustee, and the Depositor may appoint
a
successor Trustee. The Depositor shall remove the Trustee if:
(a)
the
Trustee fails to comply with Section 8.11 hereof;
(b)
the
Trustee is adjudged a bankrupt or insolvent;
(c)
a
receiver or other public officer takes charge of the Trustee or its respective
property; or
(d)
the
Trustee otherwise becomes incapable of acting as a trustee with trust
powers.
If
the
Trustee resigns or is removed or if a vacancy exists in the office of the
Trustee for any reason (the Trustee in such event being referred to herein
as
the retiring Trustee), the Depositor shall promptly appoint a successor
Trustee.
A
successor Trustee shall deliver a written acceptance of its appointment to
the
retiring Trustee, the Back-up Servicer, the Depositor, the Rating Agencies
and
the Servicer. Thereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee or under this Agreement. The successor Trustee
shall mail a notice of its succession to Hedge Counterparties, if prior to
the
Class I Termination Date, and the Certificateholders. The retiring Trustee
shall
promptly transfer all property held by it as Trustee to the successor
Trustee.
If
a
successor Trustee does not take office within 60 days after the retiring
Trustee
resigns or is removed, the retiring Trustee, the Depositor, the Trustee or
the
Majority Certificateholders may petition any court of competent jurisdiction
for
the appointment of a successor Trustee.
Section
8.09 Successor
Trustee by Merger.
If
the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Trustee; provided,
that such corporation or banking association shall be otherwise qualified
and
eligible under Section 8.11 hereof.
If
at the
time such successor or successors by merger, conversion or consolidation
to the
Trustee, shall succeed to the trusts created by this Agreement and any of
the
Certificates shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee and deliver such Certificates so authenticated; and if at that time
any
of the Certificates shall not have been authenticated, any successor to the
Trustee may authenticate such Certificates either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such
cases
such certificates shall have the full force as the Certificates or this
Agreement provide that such certificates of the Trustee shall have.
81
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 requirement of any jurisdiction in which any part of the Trust
Fund
may at the time be located, the Trustee shall, at the expense of the Trust
Fund,
have the power and may execute and deliver all instruments to appoint one
or
more Persons to act as a co-trustee or co-trustees, 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 hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required
to meet
the terms of eligibility as a successor trustee under Section 8.11 hereof
and
notice to, and no consent of the Certificateholders of the appointment of
any
co-trustee or separate trustee shall be required.
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)
all
rights, powers, duties and obligations conferred or imposed upon the Trustee
shall be conferred or imposed upon and exercised or performed by the Trustee
and
such separate trustee or co-trustee jointly (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 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 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 personally liable by reason of any act or omission
of
any other trustee hereunder; and
(c)
the
Trustee may at any time accept the resignation of or remove any 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 then separate trustees and co-trustees, as effectively
as
if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this Article
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 to, the Trustee.
Every
such instrument shall be filed with the Trustee.
82
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 Eligibility;
Disqualification.
The
Trustee shall be a corporation or association organized and doing business
under
the laws of a state of the United States. The Trustee is subject to supervision
or examination by federal or state authority. The Trustee shall at all times
be
reasonably acceptable to the Depositor and authorized to exercise corporate
trust powers. The Trustee shall have a combined capital and surplus of at
least
$50,000,000 as set forth in its most recent published annual report of condition
and it or its parent shall have a long-term debt rating of Baa3 or better
by
Moody’s, BBB or better by Standard & Poor’s and BBB or F-2 or better by
Fitch. The Trustee shall also have a short term rating of A-1 or better by
Standard & Poor’s.
Section
8.12 [Reserved].
Section
8.13 Representations
and Warranties.
(a)
The
Trustee hereby represents that:
(i) The
Trustee is duly organized and validly existing as a national banking association
in good standing under the laws of the United States with power and authority
to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted;
(ii) The
Trustee has the power and authority to execute and deliver this Agreement
and to
carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Trustee by all necessary corporate
action;
(iii) The
consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach
of
any of the terms and provisions of, or constitute (with or without notice
or
lapse of time) a default under, the articles of organization or bylaws of
the
Trustee or any agreement or other instrument to which the Trustee is a party
or
by which it is bound which would materially adversely affect its ability
to
perform hereunder or under the Basic Documents; and
(iv) To
the
Trustee’s best knowledge, there are no proceedings or investigations pending or
threatened before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Trustee or its
properties: (A) asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or (C) seeking any determination or ruling that might materially
and
adversely affect the performance by the Trustee of its obligations under,
or the
validity or enforceability of, this Agreement.
83
Section
8.14 Directions
to Trustee.
The
Trustee is hereby directed:
(a)
to
accept
the Mortgage Loans and hold the assets of the Trust Fund in trust for the
Certificateholders;
(b)
to
authenticate and deliver the Certificates of each Class substantially in
the
forms prescribed by Exhibits X-0, X-0, X-0, X-0, X-0, X-0, A-8, A-9, X-00,
X-00,
X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00,
X-00, X-00, X-00, X-00, X-00, A-30, A-31, A-32, X-00, X-00, X-00, X-00, X-00,
X-00, X-00 and A-40 in accordance with the terms of this Agreement;
(c)
to
execute the Hedge Agreements as trustee on behalf of the Supplemental Interest
Trust;
(d)
to
execute the Back-up Servicing Agreement on behalf of the Trust; and
(e)
to
take
all other actions as shall be required to be taken by the terms of this
Agreement.
Section
8.15 The
Agents.
The
provisions of this Agreement relating to the limitations of the Trustee’s
liability and to its indemnity shall inure also to the Paying Agent, and
the
Certificate Registrar.
Section
8.16 Issuing
Entity Fiscal Year.
The
fiscal year of the Issuing Entity shall end on December 31 of each
year.
Section
8.17 Execution
of the Novation Agreements and Hedge Agreements.
The
Depositor hereby directs the Trustee to enter into and execute the Novation
Agreements and the Hedge Agreements on the Closing Date on behalf of the
Supplemental Interest Trust. The Sponsor, the Depositor, the Servicer and
the
Certificateholders (by their acceptance of such Certificates) acknowledge
that
Deutsche Bank National Trust Company is entering into the Hedge Agreements
solely in its capacity as Trustee of the Trust Fund and not in its individual
capacity.
If
an
“Early Termination Date” is designated as a result of a “Termination Event” or
an “Event of Default” (each as defined in the related Hedge Agreement) shall
occur and be continuing and any Hedge Counterparty is the “Defaulting Party” or
the “Affected Party” (as defined in the related Hedge Agreement), the Trustee
shall, if so directed by the Holders of Certificates evidencing not less
than
50% of the Voting Rights (and if permitted by the related Hedge Agreement),
replace the related Hedge Counterparty with a successor designated by such
Holders, provided that such successor must comply with all the applicable
requirements of such Hedge Agreement. The Trustee will deliver any notices
and
communications relating to the Hedge Agreements, solely as directed by the
Servicer.
84
ARTICLE
IX
[Reserved]
ARTICLE
X
REMIC
ADMINISTRATION
Section
10.01 REMIC
Administration.
(a)
[Reserved].
(b)
February
28, 2007 is hereby designated as the “Startup Day” of each REMIC within the
meaning of Section 860G(a)(9) of the Code.
(c)
The
Servicer shall pay any and all tax related expenses (not including taxes)
of
each REMIC, including but not limited to any professional fees or expenses
related to audits or any administrative or judicial proceedings with respect
to
each REMIC that involve the Internal Revenue Service or state tax authorities,
but only to the extent that (i) such expenses are ordinary or routine expenses,
including expenses of a routine audit but not expenses of litigation (except
as
described in (ii)); or (ii) such expenses or liabilities (including taxes
and
penalties) are attributable to the negligence or willful misconduct of the
Servicer in fulfilling its duties hereunder. The Servicer shall be entitled
to
reimbursement of expenses to the extent provided in clause (i) above from
the
Collection Account.
(d)
The
Trustee shall (a) maintain (or cause to be maintained) the books of the Issuing
Entity on a calendar year basis using the accrual method of accounting, (b)
deliver (or cause to be delivered) to each Certificateholder as may be required
by the Code and applicable Treasury Regulations, including the REMIC Provisions,
such information as may be required to enable each Certificateholder to prepare
its federal and state income tax returns, (c) prepare and file or cause to
be
prepared and filed such Tax Returns relating to the Issuing Entity as may
be
required by the Code and applicable Treasury Regulations (including timely
making elections to treat specified assets of the Issuing Entity as one or
more
REMICs for federal income tax purposes and any other such elections as may
from
time to time be required or appropriate under any applicable state or federal
statutes, rules or regulations), (d) collect or cause to be collected any
required withholding tax with respect to income or distributions to
Certificateholders and prepare or cause to be prepared the appropriate forms
relating thereto and (e) maintain records as required by the REMIC
Provisions.
85
(e)
The
Holder of the Residual Certificate at any time holding the largest Percentage
Interest thereof shall be the “tax matters person” as defined in the REMIC
Provisions (the “Tax
Matters Person”)
with
respect to each REMIC and shall act as Tax Matters Person for each REMIC.
The
Trustee, as agent for the Tax Matters Person, shall perform on behalf of
each
REMIC all reporting and other tax compliance duties that are the responsibility
of such REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or
other
such guidance, the Trustee, as agent for the Tax Matters Person, shall provide
(i) to the Treasury or other governmental authority such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization or non-U.S. Person and (ii)
to the
Certificateholders such information or reports as are required by the Code
or
REMIC Provisions.
(f)
The
Trustee, the Servicer and the Holders of Certificates shall take any action
or
cause the REMIC to take any action necessary to create or maintain the status
of
each REMIC as a REMIC under the REMIC Provisions and shall assist each other
as
necessary to create or maintain such status. Neither the Trustee, the Servicer
nor the Holder of any Residual Certificate shall take any action, cause any
REMIC created hereunder to take any action or fail to take (or fail to cause
to
be taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of such REMIC as a REMIC or
(ii)
result in the imposition of a tax upon such REMIC (including but not limited
to
the tax on prohibited transactions as defined in Code Section 860F(a)(2)
and the
tax on prohibited contributions set forth on Section 860G(d) of the Code)
(either such event, an “Adverse
REMIC Event”)
unless
the Trustee and the Servicer have received an Opinion of Counsel (at the
expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such
a tax.
In addition, prior to taking any action with respect to any REMIC created
hereunder or the assets therein, or causing such REMIC to take any action,
which
is not expressly permitted under the terms of this Agreement, any Holder
of a
Residual Certificate will consult with the Trustee and the Servicer, or their
respective designees, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to any REMIC, and no such
Person shall take any such action or cause any REMIC to take any such action
as
to which the Trustee or the Servicer has advised it in writing that an Adverse
REMIC Event could occur.
(g)
Each
Holder of a Residual Certificate shall pay when due any and all taxes imposed
on
each REMIC created hereunder by federal or state governmental authorities.
To
the extent that such Issuing Entity taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in the REMICs or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of regular interests in the related REMIC.
(h)
The
Trustee, as agent for the Tax Matters Person, shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis.
(i)
After
the
Closing Date, no additional contributions of assets shall be made to any
REMIC
created hereunder, except as expressly provided in this Agreement with respect
to Qualified Replacement Mortgages.
86
(j)
Neither
of the Trustee nor the Servicer shall enter into any arrangement by which
any
REMIC created hereunder will receive a fee or other compensation for
services.
(k)
The
Trustee will apply for an Employee Identification Number from the Internal
Revenue Service via a Form SS-4 or other acceptable method for REMIC I, REMIC
II, REMIC III, REMIC IV, REMIC V and the Master REMIC.
(l)
The
Trustee shall treat the Supplemental Interest Trust as an outside reserve
fund
within the meaning of Treasury Regulation Section 1.860G-2(h) that is owned
by
the Holders of the Class CA Certificates and that is not an asset of any
REMIC.
The Trustee shall treat the rights of the holders of the Class A and Mezzanine
Certificates to receive any interest payments in excess of the REMIC
Pass-Through Rate on the Master REMIC Regular Interest corresponding to such
Class of Certificates as rights in an interest rate cap contract written
by the
Class CA Certificateholders in favor of the holders of the Class A and Mezzanine
Certificates. Thus, each Class A and Mezzanine Certificate shall be treated
as
representing not only ownership of a regular interest in the Master REMIC,
but
also ownership of an interest in an interest rate cap contract. Furthermore,
the
Trustee shall treat the obligation of the Holders of the Class A and Mezzanine
Certificates to make certain payments to the Supplemental Interest Account
to
the extent that the payment on the Pass-Through Rate on the Master REMIC
Regular
Interest exceeds the interest payment on the corresponding Class of Certificates
as an obligation to make payments pursuant to an interest rate cap contract
written by the Holders of the Class A and Mezzanine Certificates in favor
of the
Class CA Certificateholder. In no event shall any payments provided for in
this
subsection be treated as payments with respect to a “regular interest” in a
REMIC within the meaning of Code Section 860G(a)(1). The pledge of payments
on
the Class CB Certificates to the Supplemental Interest Trust will be treated
as
a limited guaranty written by the Holder of the Class CB Certificate for
the
benefit of the Holders of the Class CA Certificate. Such guaranty is expected
to
have nominal value. To the extent that the Class CB Interest Distributable
Amount paid to the Supplemental Interest Trust as described in Section 10.01(n)
is not paid in full to the Holders of the Class CB Certificates pursuant
to
Section 4.04(c)(v), a right of reimbursement will arise in favor of the Holders
of the Class CB Certificates against the Holders of the Class CA Certificates.
(m)
Notwithstanding
the priority and sources of payments set forth in Article IV hereof or
otherwise, the Trustee shall account for all distributions on the Certificates
as set forth in this section.
(n)
For
federal income tax purposes, payments pursuant to Section 4.01(a)(i)(O) shall
be
treated as having been made to the extent of remaining Interest Remittance
Amount (i) first, to the Holders of the Class CA Certificates, the Class
CA
Interest Distributable Amount and (ii) second, to the Holders of the Class
CB
Certificates, the Class CB Interest Distributable Amount.
(o)
For
federal income tax purposes, payments of Excess Cashflow pursuant to Section
4.04(d)(i) will be treated as having been made (i) first, from Excess Cashflow
relating to the Class CB Interest Distributable Amount and (ii) second, from
Excess Cashflow relating to amounts otherwise distributable on the Class
CA
Certificates.
87
(p)
None
of
the Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class M-8 DSI
Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates or
the
Class M-11 DSI Certificates will be treated as regular or residual interest
in
any REMIC created hereunder.
Section
10.02 Prohibited
Transactions and Activities.
Except
as
specifically provided in this Agreement, none of the Depositor, the Servicer
nor
the Trustee shall sell, dispose of, or substitute for any of the Mortgage
Loans,
if such disposition, acquisition, substitution, or acceptance would (a) affect
adversely the status of any REMIC created hereunder as a REMIC or (b) cause
any
REMIC created hereunder to be subject to a tax on prohibited transactions
or
prohibited contributions pursuant to the REMIC Provisions.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
(a)
The
respective obligations and responsibilities of the Sponsor, the Servicer,
the
Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Servicer to send certain notices
as
hereinafter set forth and the obligation of the Servicer to indemnify the
Trustee in accordance with Section 6.06) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero,
(ii)
the final payment or other liquidation of the last Mortgage Loan held by
the
Issuing Entity, (iii) the optional purchase by the Servicer of the Mortgage
Loans as described below and (iv) the Assumed Final Maturity Date.
Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
The
Servicer may, at its option, terminate this Agreement on any date on which
the
aggregate of the Principal Balances of the Mortgage Loans on such date is
equal
to or less than 10% of the Maximum Collateral Amount, by purchasing, on the
next
succeeding Distribution Date, all of the outstanding Mortgage Loans and REO
Properties at a price equal to the aggregate Principal Balance of the Mortgage
Loans and REO Properties plus accrued and unpaid interest thereon at the
weighted average of the Mortgage Rates through the end of the Due Period
preceding the final Distribution Date plus unreimbursed Servicing Advances,
Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and
REO
Properties, any accrued and unpaid Available Funds Cap Shortfall Amount and
Available Funds Cap Carryforward Amount (without duplication of amounts already
paid) and any unpaid amount due the Trustee, the Hedge Counterparties and
the
Custodian under this Agreement; provided,
however,
that in
no event shall such price be less than the amount necessary to pay the sum
of
(i) 100% of the aggregate Certificate Principal Balance of each Class of
Certificates, (ii) accrued and unpaid interest thereon at the related
Pass-Through Rate (including accrued and unpaid interest at the related REMIC
Pass-Through Rate for the Class CA and Class CB Certificates) through the
date
on which the trust is terminated, (iii) any unpaid Administrative Fees and
(iv)
any unpaid amount due to the Hedge Counterparties (including any Hedge
Termination Payments) (the “Termination
Price”);
provided, however, that such option may only be exercised if the Termination
Price is sufficient to pay all interest accrued on, as well as amounts necessary
to retire the principal balance of, each class of net interest margin notes
issued pursuant to the Indenture at the time the option is
exercised.
88
In
connection with any such purchase pursuant to and
subject to the requirements of the
preceding paragraph, the Servicer shall deposit in the Distribution Account
all
amounts then on deposit in the Collection Account, which deposit shall be
deemed
to have occurred immediately preceding such purchase, and which amount shall
be
applied in accordance with the priorities set forth in Article IV
hereof.
Any
such
purchase shall be accomplished by deposit into the Distribution Account on
the
Distribution Date of the Termination Price.
The
Servicer may assign or pledge to any Person its right to exercise the foregoing
option by giving written notice of the assignment or pledge to the Trustee.
Any
assignee of such option may further assign or pledge its interest in such
option.
(b)
In
the
event that the Certificate Principal Balances of all of the Class A and
Mezzanine have not been reduced to zero by the Assumed Final Maturity Date,
the
Trustee, shall (i) sign a plan of complete liquidation prepared and provided
to
it by the Servicer of each REMIC created hereunder meeting the requirements
of a
“Qualified Liquidation” under Section 860F of the Code and any regulations
thereunder, (ii) sell all of the assets of the Trust Fund for cash, pursuant
to
the terms of the plan of complete liquidation, (iii) distribute the proceeds
of
the sale to the Certificateholders in accordance with Section 4.01 hereof,
and
(iv) terminate the Issuing Entity. By their acceptance of Certificates, the
Holders thereof hereby agree to appoint the Trustee as their attorney in
fact
to: (i) adopt such a plan of complete liquidation (and the Certificateholders
hereby appoint the Trustee as their attorney in fact to sign such a plan)
as
appropriate and (ii) to take such other action in connection therewith as
may be
reasonably required to carry out such plan of complete liquidation in accordance
with the terms thereof.
(c)
Notice
of
any termination, specifying the Distribution Date (which shall be a date
that
would otherwise be a Distribution Date) upon which the Certificateholders
may
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Trustee upon
the
Trustee receiving notice of such date from the Servicer, by letter to the
Hedge
Counterparties (if prior to the Class I Termination Date) and the
Certificateholders mailed not earlier than the 15th day and not later than
the
25th day of the month next preceding the month of such final distribution
specifying (1) the Distribution Date upon which final distribution of the
Certificates will be made upon presentation and surrender of such Certificates
at the office or agency of the Trustee therein designated, (2) the amount
of any
such final distribution and (3) 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 or agency of
the
Trustee therein specified.
89
(d)
Upon
presentation and surrender of the Certificates, the Trustee shall cause to
be
distributed to the Holders of the Certificates on the Distribution Date for
such
final distribution, in proportion to the Percentage Interests of their
respective Class and to the extent that funds are available for such purpose,
an
amount equal to the amount required to be distributed to such Holders in
accordance with the provisions of Section 4.01 for such Distribution Date.
(e)
In
the
event that all Certificateholders shall not surrender their Certificates
for
final payment and cancellation on or before such final Distribution Date,
the
Trustee shall promptly following such date cause all funds in the Distribution
Account not distributed in final distribution to Certificateholders to be
withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate trust account for the benefit of such
Certificateholders, which shall be held uninvested, and the Servicer (if
the
Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee
(in any other case) 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 nine months after
the
second notice all the Certificates shall not have been surrendered for
cancellation, the Residual Certificateholder shall be entitled to all unclaimed
funds and other assets which remain subject hereto, and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such
funds,
and the Certificateholders shall look to the Residual Certificateholder for
payment.
Section
11.02 Additional
Termination Requirements.
(a)
In
the
event that the Servicer exercises its purchase option as provided in Section
11.01 or the Trustee terminates the Issuing Entity, each REMIC shall be
terminated in accordance with the following additional requirements, unless
the
Trustee shall have been furnished with an Opinion of Counsel to the effect
that
the failure of the Issuing Entity to comply with the requirements of this
Section will not (i) result in the imposition of taxes on “prohibited
transactions” of the Issuing Entity as defined in Section 860F of the Code or
(ii) cause any REMIC constituting part of the Issuing Entity to fail to qualify
as a REMIC at any time that any Certificates are outstanding:
(i) Within
90
days prior to the final Distribution Date, the Servicer shall adopt and prepare,
and the Trustee shall sign, a plan of complete liquidation of each REMIC
created
hereunder meeting the requirements of a “Qualified Liquidation” under Section
860F of the Code and any regulations thereunder; and
(ii) At
or
after the time of adoption of such a plan of complete liquidation and at
or
prior to the final Distribution Date, the Trustee shall sell all of the assets
of the Trust Fund to the Servicer for cash pursuant to the terms of the plan
of
complete liquidation.
(b)
By
their
acceptance of Certificates, the Holders thereof hereby agree to appoint the
Trustee as their attorney in fact to: (i) adopt such a plan of complete
liquidation (and the Certificateholders hereby appoint the Trustee as their
attorney in fact to sign such plan) as appropriate and (ii) to take such
other
action in connection therewith as may be reasonably required to carry out
such
plan of complete liquidation all in accordance with the terms
hereof.
90
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Amendment.
This
Agreement may be amended from time to time by the parties hereto, and without
the consent of the Certificateholders or the Hedge Counterparties (i) to
cure
any ambiguity, (ii) to correct or supplement any provisions herein which
may be
defective or inconsistent with any other provisions herein or (iii) to make
any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
provided that any such amendment will have no material adverse effect, as
evidenced by an Opinion of Counsel as described below, on the Hedge
Counterparties provided,
however,
that
any such action listed in clause (i) through (iii) above shall be deemed
not to
adversely affect in any respect the interests of (A) any Certificateholder,
if
evidenced by (i) written notice to the Depositor, the Servicer and the Trustee
from the Rating Agencies that such action 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 or (ii) an Opinion of Counsel delivered to
the
Servicer, the Depositor and the Trustee and (B) any Hedge Counterparty, (i)
if
evidenced by an opinion of counsel from outside counsel of recognized
international reputation in the field of sophisticated financial transactions
delivered to the Servicer, the Depositor, the Trustee, each Hedge Counterparty
with a copy to the Rating Agencies stating that such actions will have no
material adverse effect on the Hedge Counterparties or (ii) if the written
consent of the Hedge Counterparties is obtained. This Agreement may be amended
by the parties hereto without the consent of the Hedge Counterparties after
the
Class I Termination Date.
In
addition, this Agreement may be amended from time to time by the parties
hereto
with the consent of the Majority Certificateholders 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 or waiver shall (w)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates or distributions which are required to be made on any Certificate
without the consent of the Holder of such Certificate, (x) 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 (w) above, without the consent
of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, (y) reduce the percentage of Voting Rights required
by
clause (x) above without the consent of the Holders of all Certificates of
such
Class then outstanding or (z) have a material adverse effect on the interests
of
the Hedge Counterparties without such Hedge Counterparties’ written consent.
Upon approval of an amendment, a copy of such amendment shall be sent to
the
Rating Agencies.
Notwithstanding
the provisions of this Section 12.01, Sections 3.17 and 3.18 may be amended
as
necessary to comply with the provisions of Regulation AB without the consent
of
the Certificateholders.
The
Servicer shall send to the Hedge Counterparties (for so long as the Hedge
Agreements are outstanding) a copy of any executed amendment made pursuant
to
this Section 12.01. If the consent of the Hedge Counterparties is required
for
any amendment, a copy of such proposed amendment shall be sent to the Hedge
Counterparties 10 days (or such shorter time period as shall be agreed to
by the
parties) prior to the effective date thereof.
91
Notwithstanding
any provision of this Agreement to the contrary, the Trustee shall not consent
to any amendment to this Agreement unless it shall have first received an
Opinion of Counsel, delivered by (and at the expense of) the Person seeking
such
Amendment, to the effect that such amendment will not result in the imposition
of taxes on “prohibited transactions” of the Issuing Entity as defined in
Section 860F of the Code or cause any REMIC constituting part of the Issuing
Entity to fail to qualify as a REMIC at any time that any Certificates are
outstanding, and that the amendment is being made in accordance with the
terms
hereof. Additionally, prior to entering into any amendment, the Trustee shall
be
entitled to receive from the party requesting such amendment an Opinion of
Counsel stating that such amendment is authorized and permitted pursuant
to the
terms of this Agreement and all conditions precedent to its execution and
delivery have been satisfied.
Promptly
after the execution of any such amendment the Trustee shall furnish, at the
expense of the Person that requested the amendment if such Person is the
Sponsor
or the Servicer (but in no event at the expense of the Trustee), otherwise
at
the expense of the Issuing Entity, a copy of such amendment and the Opinion
of
Counsel referred to in the immediately preceding paragraph to the Servicer
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; instead 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.
The
Trustee shall not be obligated to enter into any amendment pursuant to this
Section 12.01 that affects its rights, duties and immunities under this
Agreement or otherwise.
Section
12.02 Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the properties subject
to
the Mortgages are situated, and in any other appropriate public recording
office
or elsewhere, such recordation to be effected by the Servicer at the expense
of
the Issuing Entity, but only upon direction of Certificateholders accompanied
by
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any
number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall together constitute but one and the same
instrument.
92
Section
12.03 Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not (i) operate to terminate
this
Agreement or the Issuing Entity, (ii) entitle such Certificateholder’s legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Issuing Entity,
or
(iii) otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
Except
as
expressly provided for herein, no Certificateholder shall have any right
to vote
or in any manner otherwise control the operation and management of the Issuing
Entity, 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
person 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 of any provision 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 default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates
entitled to at least 25% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own
name as
Trustee hereunder and shall have offered to the Trustee such indemnity as
it may
reasonably require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee for 15 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 is understood and intended,
and 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 of any provision of
this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other
of such Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, which priority or preference is not otherwise provided
for herein, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions
of this
Section 12.03 each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section
12.04 Compliance
with Regulation AB.
Each
of
the parties hereto acknowledges and agrees that the purpose of Sections 3.17
and
3.18 of this Agreement is to facilitate compliance by the Sponsor and the
Depositor with the provisions of Regulation AB, as such may be amended or
clarified from time to time. Therefore, each of the parties agrees that (a)
the
obligations of the parties hereunder shall be interpreted in such a manner
as to
accomplish compliance with Regulation AB, (b) the parties’ obligations hereunder
will be supplemented and modified as necessary to be consistent with any
such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB and (c) the
parties
shall comply, to the extent practicable from a timing and information systems
perspective, with requests made by the Sponsor or the Depositor for delivery
of
additional or different information as the Sponsor or the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB.
93
Section
12.05 Governing
Law; Jurisdiction.
This
Agreement shall be construed in accordance with the laws of the State of
New
York, and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws. With respect to any claim arising
out
of this Agreement, each party irrevocably submits to the exclusive jurisdiction
of the courts of the State of New York and the United States District Court
located in the Borough of Manhattan in The City of New York, and each party
irrevocably waives any objection which it may have at any time to the laying
of
venue of any suit, action or proceeding arising out of or relating hereto
brought in any such courts, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section
12.06 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by certified
mail, return receipt requested, or sent by reputable overnight courier service
to:
|
(a)
|
in
the case of the Depositor:
|
NovaStar
Mortgage Funding Corporation
0000
Xxxx
Xxxxxxx
Xxxxx
000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxx Xxxxxxxxxxxx
(b) in
the
case of the Servicer or the Sponsor:
NovaStar
Mortgage, Inc.
0000
Xxxx
Xxxxxxx
Xxxxx
000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxx Xxxxxxxxxxxx
94
|
(c)
|
in
the case of Rating Agencies:
|
Xxxxx’x
Investors Service Inc.
00
Xxxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxx
Standard
& Poor’s
00
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attention:
Xxxxxx Xxxxxx
|
(d)
|
in
the case of the Custodian:
|
U.S.
Bank
National Association
0000
Xxxxxxxxxxxx Xxxxx
Xxxxx
X
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attention:
Structured Finance Trust Services
|
(e)
|
in
the case of the Trustee:
|
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, XX 00000
Attention:
Trust Administration - NS0701
provided,
however, all reports, statements, certifications and information required
to be
provided to the Trustee pursuant to Section 3.18 shall be electronically
forwarded to XXXxx.Xxxxxxxxxxxxx@xx.xxx
|
(f)
|
in
the case of The Royal Bank of Scotland plc, as Hedge
Counterparty:
|
c/o
RBS
Financial Markets
Level
7,
135 Xxxxxxxxxxx
Xxxxxx,
XX0X 0XX
|
Attention:
|
Financial
Markets Legal
|
|
Telephone:
|
00
000 000 0000
|
|
Facsimile:
|
44
207 085 8411
|
95
With
a copy to:
x/x
Xxxxxxxxx Xxxxxxx Xxxxxxx, Inc.
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
|
Attention:
|
Legal
Department - Derivatives
Documentation
|
|
Telephone:
|
000
000-0000/32
|
|
Facsimile:
|
000
000-0000/34
|
(g) in
the
case of Wachovia Bank, N.A., as Hedge Counterparty:
Wachovia
Bank, N.A.
000
Xxxxx
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
Collateral Management Group
Tel:
(000)
000-0000
Fax:
(000)
000-0000
(h) in
the
case of Deutsche Bank AG, as Hedge Counterparty:
Deutsche
Bank AG
Xxxxxxxxxxxx
00
00000
Xxxxxxxxx
XXXXXXX
Attention:
Legal Department
Telex
No:
411836 or 416731 or 41233
Answerback: DBF-D
(i) in
the
case of the Back-up Servicer:
000
Xxxxxxxx Xxxxxx
XX-
XX0-X
Xxxx
Xxxxxx, XX 00000
Attention:
Portfolio Services
or,
as to
each party, at such other address as shall be designated by such party in
a
written notice to each other party. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice. Any notice or other document required
to
be delivered or mailed by the Trustee to any Rating Agency shall be given
on a
reasonable efforts basis and only as a matter of courtesy and accommodation
and
the Trustee shall have no liability for failure to deliver such notice or
document to any Rating Agency.
Section
12.07 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall for any reason whatsoever be 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.
96
Section
12.08 Article
and Section References.
All
article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section
12.09 Further
Assurances.
Notwithstanding
any other provision of this Agreement, the Trustee shall not have any obligation
to consent to any amendment or modification of this Agreement unless they
have
been provided reasonable security or indemnity against their out-of-pocket
expenses (including reasonable attorneys’ fees) to be incurred in connection
therewith.
Section
12.10 Benefits
of Agreement.
Nothing
in this Agreement or in the Certificates, expressed or implied, shall give
to
any Person, other than the Certificateholders, the Hedge Counterparties and
the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement. For the avoidance
of
doubt, the parties agree that each of the Hedge Counterparties, prior to
the
Class I Termination Date, and the Servicing Rights Pledgee are intended and
shall have all rights of a third-party beneficiary of this Agreement.
Section
12.11 Acts
of Certificateholders.
(a)
Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by the Certificateholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Certificateholders in person or by agent duly
appointed in writing, and such action shall become effective when such
instrument or instruments are delivered to the Trustee, the Sponsor and the
Servicer. Such instrument or instruments (and the action embodied therein
and
evidenced thereby) are herein sometimes referred to as the “act” of the
Certificateholders signing such instrument or instruments. Proof of execution
of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Issuing Entity, if made in the manner provided in this Section
12.11.
(b)
The
fact
and date of the execution by any Person of any such instrument or writing
may be
proved by the affidavit of a witness of such execution or by the certificate
of
a notary public or other officer authorized by law to take acknowledgments
of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is by
a
signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
97
(c)
Any
request, demand, authorization, direction, notice, consent, waiver or other
action by any Certificateholder shall bind every future Holder of such
Certificate and the Holder of every Certificate issued upon the registration
of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuing
Entity in reliance thereon, whether or not notation of such action is made
upon
such Certificate.
Section
12.12 Confidentiality.
The
Trustee hereby agrees to hold and treat all Confidential Information (as
defined
below) provided to it in connection with the offering of the Certificates
in
confidence and in accordance with this Section 12.12, and will implement
and
maintain safeguards in accordance with the “Interagency Guidelines Establishing
Standards for Safeguarding Customer Information” as required by Appendix B to 12
CFR, Chapter I, Part 30, to further assure the confidentiality of such
Confidential Information. Such Confidential Information will not, without
the
prior written consent of the Servicer, be disclosed or used by the Trustee
or by
its subsidiaries or, affiliates, or its or their directors, officers, employees,
agents or controlling persons or agents or advisors (collectively, the
“Information
Recipients”)
other
than for the purposes of (i) structuring the securitization transaction and
the
facilitating the issuance of the Certificates, or (ii) in connection with
the
performance of its required due diligence on the Mortgage Loans. Disclosure
that
is not in violation of the Right to Financial Privacy Act of 1978, as amended,
the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended, (the “G-L-B
Act”)
or
other applicable law by the Trustee of any Confidential Information at the
request of its outside auditors or governmental regulatory authorities in
connection with an examination of the Trustee by any such authority or for
the
purposes specified in above shall not constitute a breach of its obligations
under this Section 12.12, and shall not require the prior consent of the
Servicer.
As
used
herein, “Confidential Information” means non-public personal information (as
defined in the G-L-B Act and its enabling regulations issued by the Federal
Trade Commission) regarding obligors on the Mortgage Loans that is identified
as
such by the Servicer. Confidential Information shall not include information
which (i) is or becomes generally available to the public other than as a
result
of disclosure by the Trustee or any of its Information Recipients; (ii) was
available to the Trustee on a non-confidential basis from a person or entity
other than the Servicer; (iii) is requested to be disclosed by a governmental
authority or related governmental, administrative, or regulatory or
self-regulatory agencies having or claiming authority to regulate or oversee
any
aspect of the Trustee’s business or that of its affiliates or is otherwise
required by law or by legal or regulatory process to be disclosed;
(iv) becomes available to the Trustee on a non-confidential basis from a
person or entity other than the Servicer who, to the best knowledge of the
Trustee, is not otherwise bound by a confidentiality agreement with the
Servicer, and is not otherwise prohibited from transmitting the information
to
the Trustee; (v) the Servicer provides written permission to the Trustee
to
release, (vi) is independently developed by employees of the Trustee who
did not
have access to any or all of the otherwise Confidential Information or (vii)
is
disclosed to the Trustee’s auditors or counsel or is required to be disclosed to
its lenders or rating agencies, to the extent required for the purpose of
consummating the services it is to provide as set forth herein.
98
IN
WITNESS WHEREOF, the Depositor, the Servicer, the Sponsor, Custodian and
the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above
written.
NOVASTAR
MORTGAGE FUNDING CORPORATION,
as
Depositor
By:
/s/
Xxxx Xxxxxxxxxxxx
Name:
Xxxx Xxxxxxxxxxxx
Title:
Vice President
NOVASTAR
MORTGAGE, INC.,
as
Servicer and as Sponsor
By:
/s/
Xxxx Xxxxxxxxxxxx
Name:
Xxxx Xxxxxxxxxxxx
Title:
Vice President
U.S.
BANK
NATIONAL ASSOCIATION,
as
Custodian
By: /s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Vice President
DEUTSCHE
BANK NATIONAL TRUST
COMPANY,
as
Trustee and as
Trustee to NovaStar Mortgage
Supplemental
Interest Trust, Series 2007-1
By: /s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Authorized Signer
By:
/s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Vice President
[Pooling
and Servicing Agreement Signature Page]
99
|
STATE
OF MISSOURI
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF XXXXXXX
|
)
|
On
the
28th day of February, 2007 before me, a notary public in and for said State,
personally appeared Xxxx Xxxxxxxxxxxx known to me (or proved to me on the
basis
of satisfactory evidence) to be a Vice President of NovaStar Mortgage Funding
Corporation, a Delaware corporation that executed the within instrument,
and
also known to me (or proved to me on the basis of satisfactory evidence)
to be
the person who executed it on behalf of said corporation, and acknowledged
to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
/s/
Xxxxxx X. Xxxx
|
|
|
Seal
|
Notary
Public
|
i
|
STATE
OF MISSOURI
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF XXXXXXX
|
)
|
On
the
28th day of February, 2007 before me, a notary public in and for said State,
personally appeared Xxxx Xxxxxxxxxxxx known to me (or proved to me on the
basis
of satisfactory evidence) to be a Vice President of NovaStar Mortgage, Inc.,
a
Virginia corporation that executed the within instrument, and also known
to me
(or proved to me on the basis of satisfactory evidence) to be the person
who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
/s/
Xxxxxx X. Xxxx
|
|
|
Seal
|
Notary
Public
|
ii
|
STATE
OF MINNESOTA
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF MARICOPA
|
)
|
On
the
28th day of February, 2007 before me, a notary public in and for said State,
personally appeared Xxxxxx Xxxxxxx known to me (or proved to me on the basis
of
satisfactory evidence) to be a Vice President of U.S. Bank National Association,
a national banking association that executed the within instrument, and also
known to me (or proved to me on the basis of satisfactory evidence) to be
the
person who executed it on behalf of said corporation, and acknowledged to
me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
/s/
Xxxxxx Xxxxxxxxx
|
|
|
Seal
|
Notary
Public
|
iii
|
STATE
OF CALIFORNIA
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF ORANGE
|
)
|
On
the
28th day of February, 2007 before me, a notary public in and for said State,
personally appeared Xxxxxxx Xxxxxxxxx, known to me (or proved to me on the
basis
of satisfactory evidence) to be an Authorized Signer of Deutsche Bank National
Trust Company that executed the within instrument, and also known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed it on behalf of said association, and acknowledged to me that such
corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
/s/
Xxxxx Xxx
|
|
|
Seal
|
Notary
Public
|
iv
|
STATE
OF CALIFORNIA
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF ORANGE
|
)
|
On
the
28th day of February, 2007 before me, a notary public in and for said State,
personally appeared Xxxxxxx Xxxxx, known to me (or proved to me on the basis
of
satisfactory evidence) to be a Vice President of Deutsche Bank National Trust
Company that executed the within instrument, and also known to me (or proved
to
me on the basis of satisfactory evidence) to be the person who executed it
on
behalf of said association, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
|
/s/
Xxxxx Xxx
|
|
|
Seal
|
Notary
Public
|
v
APPENDIX
A
DEFINITIONS
"1933
Act":
The
Securities Act of 1933, as amended.
"Account":
The
Collection Account, the Supplemental Interest Account, and the Distribution
Account.
"Accrual
Period":
With
respect to each Distribution Date, (i) in the case of the LIBOR Certificates,
the Cap Payments and the Swap Amount, the period commencing on the preceding
Distribution Date (or in the case of the first Accrual Period, commencing
on the
Closing Date) and ending on the day preceding the applicable Distribution
Date
and (ii) in the case of the Class A-2A2 Certificates, the period commencing
on
the first day of the month prior to the month in which the Distribution Date
occurs to and including the last day of such month
"Adjustable
Rate Mortgage Loan":
A
Mortgage Loan which provides at any period during the life of such loan for
the
adjustment of the Mortgage Rate payable in respect thereto. The Adjustable
Rate
Mortgage Loans are identified as such on the Mortgage Loan
Schedule.
"Adjustment
Date":
With
respect to each Adjustable Rate Mortgage Loan, each adjustment date, on which
the Mortgage Rate of such Mortgage Loan changes pursuant to the related Mortgage
Note.
"Administrative
Fee":
With
respect to each Distribution Date, the sum of the MI Premium, the Servicing
Fee,
the Back-up Servicing Fee, the Custodian Fee and the Trustee Fee with respect
to
such Distribution Date.
"Administrative
Fee Rate":
As to
each Distribution Date, the sum of (i) the Trustee Fee Rate, (ii) the Servicing
Fee Rate, (iii) the Back-up Servicing Fee Rate, (iv) the Custodian Fee Rate
and
(v) the total MI Premiums due during the related Due Period, expressed as
an
annual percentage rate of the Pool Balance as of the beginning of that Due
Period.
"Advance":
As to
any Mortgage Loan, any advance made by the Servicer in respect of any
Distribution Date pursuant to Section 3.25.
"Adverse
REMIC Event":
As
defined in Section 10.01(f) hereof.
"Affiliate":
With
respect to any Person, any other Person controlling, controlled by or under
common control with such Person. For purposes of this definition, "control"
means the power to direct the management and policies of a Person, directly
or
indirectly, whether through ownership of voting securities, by contract or
otherwise and "controlling" and "controlled" shall have meanings correlative
to
the foregoing.
"Agreement":
This
Pooling and Servicing Agreement and all amendments hereof and supplements
hereto.
"Allocated
Realized Loss Amount":
With
respect to any Distribution Date and any Class of Mezzanine Certificates,
the
Realized Losses allocated to such Class of Certificates on such Distribution
Date.
"Applicable
Regulations":
As to
any Mortgage Loan, all federal and state laws, statutes, rules and regulations
applicable thereto.
"Appraised
Value":
The
appraised value of a Mortgaged Property based upon the appraisal made at
the
time of the origination of the related Mortgage Loan. With respect to a Mortgage
Loan the proceeds of which were used to refinance an existing Mortgage Loan,
the
appraised value of the Mortgaged Property based upon the appraisal with the
lowest appraised value (as reviewed and approved by the Sponsor) obtained
within
12 months of the time of refinancing.
"Assignment
of Mortgage":
An
assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale of
the
Mortgage, which assignment, notice of transfer or equivalent instrument may
be
in the form of one or more blanket assignments covering Mortgages secured
by
Mortgaged Properties located in the same county, if permitted by
law.
"Assumed
Final Maturity Date":
As to
each Class of Certificates, the Distribution Date in March 2037.
"Available
Funds":
As to
each Distribution Date, an amount equal to the amount on deposit in the
Distribution Account, representing the sum of (i) the aggregate amount of
scheduled payments on the related Mortgage Loans due on the related Due Date
and
received on or prior to the related Determination Date, (ii) miscellaneous
fees
and collections, including prepayment penalties with respect to the Mortgage
Loans (but excluding late fees), (iii) any unscheduled payments and receipts,
including Mortgagor prepayments on the related Mortgage Loans, received during
the related Prepayment Period and proceeds of repurchases, and adjustments
in
the case of substitutions and terminations, Net Liquidation Proceeds and
Insurance Proceeds, and Subsequent Recoveries, (iv) all Advances made and
Compensating Interest paid for such Distribution Date in respect of the related
Mortgage Loans, (v) on the Distribution Date following the termination pursuant
to Section 11.01 herein, the Termination Price.
"Available
Funds Cap":
For
each Distribution Date, the percentage equivalent of a fraction (adjusted
with
respect to the LIBOR Certificates for the actual number of days elapsed in
the
related Accrual Period) the numerator of which is (a) an amount equal to
(i) the
aggregate Interest Remittance Formula Amount for the Group I and Group II
Mortgage Loans, less (ii) the Administrative Fees, less (iii) the Class I
Monthly Interest Distributable Amount, and less (iv) any unpaid Hedge
Termination Payments that are not Defaulted Hedge Termination Payments, and
the
denominator of which is (b) the product of (i) 12 and (ii) the aggregate
Principal Balance of the Mortgage Loans.
Appendix
A-2
"Available
Funds Cap Carryforward Amount":
With
respect to any Class of Class A Certificates and Mezzanine Certificates and
any
Distribution Date, the sum of (i) the positive excess, if any, of (x) the
aggregate cumulative amount of Available Funds Cap Shortfall Amounts for
such
Class on all prior Distribution Dates over (y) the aggregate cumulative amount
of Supplemental Interest Payments actually paid to the Holders of that Class
on
all prior Distribution Dates pursuant to those clauses of Section 4.04(c),
which
relate to payments to that Class, plus (ii) interest on the amount described
in
clause (i) at a rate equal to the related Formula Rate for such Class and
Distribution Date.
"Available
Funds Cap Shortfall Amount":
With
respect to any Distribution Date and Class of Class A Certificates and Mezzanine
Certificates the excess, if any, of (1) the interest due on such Class
calculated using the Formula Rate applicable to such Class over (2) the interest
due on such Class, calculated using the Pass-Through Rate applicable to such
Class.
"Back-up
Servicer":
Countrywide Home Loans Servicing LP, a Texas limited partnership.
"Back-up
Servicer Indemnification Agreement
": The
Indemnification Agreement dated as of February 22, 2007, between the Sponsor
and
the Back-up Servicer.
"Back-up
Servicing Agreement":
The
Back-Up Servicing Agreement dated as of February 1, 2007, by and between
the
Back-up Servicer and the Trustee.
"Back-up
Servicing Fee":
With
respect to the Mortgage Loans and any Distribution Date, the product of (i)
the
Back-up Servicing Fee Rate divided by 12 and (ii) the Pool Balance as of
the
first day of the related Due Period.
"Back-up
Servicing Fee Rate":
With
respect to any Mortgage Loan, 0.01% per annum.
"Balloon
Mortgage Loan":
A
Mortgage Loan that provides for the payment of the unamortized principal
balance
of such Mortgage Loan in a single payment at the maturity of such Mortgage
Loan
that is substantially greater than the preceding monthly payment.
"Balloon
Payment":
A
payment of the unamortized principal balance of a Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater
than
the preceding Monthly Payment.
"Bankruptcy
Code":
The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as
amended.
"Base
Prospectus":
The
base Prospectus, dated June 16, 2006 with respect to the Offered
Certificates.
"Basic
Documents":
This
Agreement, the Purchase Agreement, the Underwriting Agreement, MI Policy,
the
Trustee Indemnification Agreement, the LPMI Provider Indemnification Agreement,
the Back-up Servicer Indemnification Agreement, the Hedge Agreements, the
Novation Agreements and the other documents and Certificates delivered in
connection with any of the above.
Appendix
A-3
"Book-Entry
Certificates":
Any of
the Certificates that shall be registered in the name of the Depository or
its
nominee, the ownership of which is reflected on the books of the Depository
or
on the books of a Person maintaining an account with the Depository (directly,
as a Depository Participant, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in Section 5.02
hereof). On the Closing Date, the Class A, Class M and Class DSI Certificates
shall be Book-Entry Certificates.
"Business
Day":
Any
day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the City of New York, or the State of Missouri or in the
city in
which the Corporate Trust Office of the Trustee are located, are required
or
authorized by law to be closed.
"Cap
Agreement":
Any of
the interest rate cap agreements between the Supplemental Interest Trust
and a
Cap Counterparty which are deemed to be assets of the Supplemental Interest
Trust and not an asset of any one of the REMICs created hereunder.
"Cap
Amount":
With
regard to each Cap Agreement and each Distribution Date on or prior to the
Class
I Termination Date, the product of (i) the related fixed rate of interest,
(ii)
30 divided by 360 and (iii) the related notional amount. Each Cap Amount
is
subject to the verification and confirmation of the Cap Counterparty who
is the
calculation agent for the related Cap Agreement.
"Cap
Contract Rights and Obligations":
The
rights of the Class A Certificates and Mezzanine Certificates to receive
interest payments in excess of payments at the REMIC Pass-Through Rate on
the
Master REMIC Regular Interest corresponding to such Class of Certificates
as set
forth in Exhibit J and the obligations of the Class A Certificates and Mezzanine
Certificates to make certain payments to the Holder of the Class CA Certificates
to the extent that the amounts allocated at the REMIC Pass-Through Rate on
the
Master REMIC Regular Interest corresponding to such Class of Certificates
exceed
the amount of interest distributed on such Certificates.
"Cap
Counterparty":
A
Hedge Counterparty.
"Cap
Payment":
With
regard to each Cap Agreement and each Distribution Date on or prior to the
Class
I Termination Date, the excess, if any, of (a) the product of (i) the excess
of
LIBOR over the strike rate on the related Cap Agreement, (ii) the
actual number of days elapsed in the related Accrual Period divided by 360
and
(iii) the related notional amount
over (b)
the Cap Amount for the related Cap Agreement (so
long as such calculation results in a positive number). The
Cap
Payment is subject to the verification and confirmation of the Cap
Counterparties who are calculation agents for the Cap Agreements.
"Cash
Liquidation":
As to
any defaulted Mortgage Loan other than a Mortgage Loan as to which an REO
Acquisition occurred, a determination by the Servicer that it has received
all
Liquidation Proceeds and other payments or cash recoveries which the Servicer
reasonably and in good faith expects to be finally recoverable with respect
to
such Mortgage Loan.
"Certificate":
Any
Regular Certificate, Class DSI Certificate or Class R Certificate.
Appendix
A-4
"Certificateholder"
or
"Holder":
The
Person in whose name a Certificate is registered in the Certificate Register,
except that a Disqualified Organization or non-U.S. Person shall not be a
Holder
of a Residual Certificate for any purpose hereof.
"Certificate
Margin":
With
respect to each Class and each Distribution Date prior to the Rate Step-Up
Date:
|
Class
|
Rate
|
|
|
A-1A
|
LIBOR
plus 0.13000%
|
|
|
A-2A1
|
LIBOR
plus 0.10000%
|
|
|
X-0X
|
XXXXX
xxxx 0.00000%
|
|
|
X-0X
|
XXXXX
plus 0.18000%
|
|
|
A-2D
|
LIBOR
plus 0.24000%
|
|
|
M-1
|
LIBOR
plus 0.32000%
|
|
|
M-2
|
LIBOR
plus 0.39000%
|
|
|
M-3
|
LIBOR
plus 0.42000%
|
|
|
M-4
|
LIBOR
plus 0.55000%
|
|
|
X-0
|
XXXXX
xxxx 0.00000%
|
|
|
X-0
(xxx X-0X)
|
LIBOR
plus 0.75000%
|
|
|
M-7
(and M-7N)
|
LIBOR
plus 1.75000%
|
|
|
M-8
(and M-8N)
|
LIBOR
plus 2.25000%
|
|
|
M-9
(and M-9N)
|
LIBOR
plus 2.25000%
|
|
|
M-10
(and M-10N)
|
LIBOR
plus 2.25000%
|
|
|
M-11
(and M-11N)
|
LIBOR
plus 2.25000%
|
Appendix
A-5
With
respect to each Class and each Distribution Date on and after the Rate Step-Up
Date:
|
Class
|
Rate
|
|
|
A-1A
|
LIBOR
plus 0.26000%
|
|
|
A-2A1
|
LIBOR
plus 0.20000%
|
|
|
X-0X
|
XXXXX
xxxx 0.00000%
|
|
|
X-0X
|
XXXXX
plus 0.36000%
|
|
|
A-2D
|
LIBOR
plus 0.48000%
|
|
|
M-1
|
LIBOR
plus 0.48000%
|
|
|
M-2
|
LIBOR
plus 0.58500%
|
|
|
M-3
|
LIBOR
plus 0.63000%
|
|
|
M-4
|
LIBOR
plus 0.82500%
|
|
|
X-0
|
XXXXX
xxxx 0.00000%
|
|
|
X-0
(xxx X-0X)
|
LIBOR
plus 1.12500%
|
|
|
M-7
(and M-7N)
|
LIBOR
plus 2.62500%
|
|
|
M-8
(and M-8N)
|
LIBOR
plus 3.37500%
|
|
|
M-9
(and M-9N)
|
LIBOR
plus 3.37500%
|
|
|
M-10
(and M-10N)
|
LIBOR
plus 3.37500%
|
|
|
M-11
(and M-11N)
|
LIBOR
plus 3.37500%
|
"Certificate
Owner":
With
respect to each Book-Entry Certificate, any beneficial owner
thereof.
"Certificate
Principal Balance":
With
respect to any Class of Regular Certificates (other than the Class C
Certificates and the Class I Certificates) immediately prior to any Distribution
Date, an amount equal to the Initial Certificate Principal Balance thereof
reduced by the sum of all amounts actually distributed in respect of principal
of such Class and, in the case of a Mezzanine Certificate, Allocated Realized
Loss Amounts applied with respect to that Class on all prior Distribution
Dates.
With
respect to each Class of Reallocable Certificates and its corresponding Class
of
Class N Certificates, such Certificate Principal Balance shall be allocated
between the two based upon the Percentage Interests previously subject to
Reallocation (with such Certificate Principal Balances initially allocated
entirely to the corresponding Class N Certificates). For all purposes of
this
Agreement other than as specifically provided herein or than as deemed necessary
by the Trustee in connection with the Reallocation mechanics (e.g.,
for
purposes of determining the Principal Distribution Amounts, allocations of
Realized Losses, and other rules relating to the calculations of distributions)
the distinction between the Reallocable Certificates’ and the corresponding
Class of Class N Certificates’ Certificate Principal Balances shall be
disregarded, and they shall be considered to be the same.
Appendix
A-6
The
Class
C Certificates, Class DSI Certificates and the Class I Certificates will
not
have a Certificate Principal Balance.
"Certificate
Register":
The
register maintained by the Certificate Registrar in which the Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates.
"Certificate
Registrar":
Initially, the Trustee, in its capacity as Certificate Registrar, or any
successor to the Trustee in such capacity.
"Class":
Collectively, Certificates which have the same priority of payment and bear
the
same Class designation and the form of which is identical except for variation
in the Percentage Interest evidenced thereby.
"Class
A Certificate":
Any
Group I Certificate or Group II Certificate.
"Class
A Principal Distribution Amount":
For
any Distribution Date, the sum of the Group I Certificate Principal Distribution
Amount and the Group II Certificate Principal Distribution Amount for such
Distribution Date.
"Class
A-1A Certificate":
Any
one of the Class A-1A Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-1, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
"Class
A-2A1 Certificate":
Any
one of the Class A-2A1 Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-2, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
"Class
A-2A2 Certificate":
Any
one of the Class A-2A2 Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-3, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
"Class
A-2B Certificate":
Any
one of the Class A-2B Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-4, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
"Class
A-2C Certificate":
Any
one of the Class A-2C Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-5, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
"Class
A-2D Certificate":
Any
one of the Class A-2D Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-6, representing the right to distributions as set forth herein and therein
and
evidencing a regular interest in the Master REMIC.
Appendix
A-7
"Class
C Certificate":
Any
Class CA Certificate or Class CB Certificate.
"Class
CA Certificate":
Any
one of the Class CA Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-21,
representing the right to distributions as set forth herein and therein and
evidencing one or more regular interests in the Master REMIC.
"Class
CA Interest Distributable Amount":
For
any Distribution Date, an
amount, if any, equal to the interest payable on the Class CA-1 Master REMIC
Regular Interest as described in Appendix J.
"Class
CB Certificate":
Any
one of the Class CB Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-22,
representing the right to distributions as set forth herein and therein and
evidencing one or more regular interests in the Master REMIC.
"Class
CB Certificate Schedule":
As set
forth in Appendix B.
"Class
CB Interest Distributable Amount":
For
any Distribution Date, an
amount, if any, equal to the interest payable on the Class CB Master REMIC
Regular Interest as described in Appendix J.
"Class
DSI Certificate":
Any
Class M-6 DSI Certificate, Class M-7 DSI Certificate, Class M-8 DSI Certificate,
Class M-9 DSI Certificate, Class M-10 DSI Certificate or Class M-11 DSI
Certificate.
"Class
I Certificates":
Collectively, the Class I-1 Certificates, the Class I-2 Certificates and
the
Class I-3 Certificates.
"Class
I-1 Certificate":
Any
one of the Class I-1 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-18,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
I-2 Certificate":
Any
one of the Class I-2 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-19,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
I-3 Certificate":
Any
one of the Class I-3 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-20,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
Appendix
A-8
"Class
I Monthly Interest Distributable Amount":
For
any Distribution Date, shall mean the sum of (i) the Class I-1 Monthly Interest
Distributable Amount and (ii) the Class I-2 Monthly Interest Distributable
Amount, each for such Distribution Date.
"Class
I-1 Monthly Interest Distributable Amount":
For
any
Distribution Date
commencing on the first Distribution Date through and including the Distribution
Date in May 2008, an amount equal to the sum of the amounts described in
clauses
(I) through (VI) of the definition of Class I Monthly Interest Formula
Amounts.
For
the Distribution Date in June 2008, an amount equal to the sum of the amounts
described in clauses (III) through VI) of the definition of Class I Monthly
Interest Formula Amounts.
For
the Distribution Dates in July 2008 through November 2008, an amount equal
to
the sum of the amounts described in clauses (IV) through (VI) of the definition
of Class I Monthly Interest Formula Amounts.
For
the Distribution Date in December 2008, an amount equal to the sum of the
amounts described in clauses (V) and (VI) of the definition of Class I Monthly
Interest Formula Amounts.
For
the Distribution Date in January 2009 and each Distribution Date thereafter,
the
Class I-1 Monthly Interest Distributable Amount shall be zero.
"Class
I-2 Monthly Interest Distributable Amount":
For
any
Distribution Date
commencing on the first Distribution Date through and including the Distribution
Date in May 2009, an amount equal to the sum of the amounts described in
clauses
(VII) through (XVIII) of the definition of Class I Monthly Interest Formula
Amounts.
For
the Distribution Date in June 2009, an amount equal to the sum of the amounts
described in clauses (IX) through (XVIII) of the definition of Class I Monthly
Interest Formula Amounts.
For
the Distribution Date in July 2009, an amount equal to the sum of the amounts
described in clauses (X) through (XVIII) of the definition of Class I Monthly
Interest Formula Amounts.
For
the Distribution Dates in August 2009 through November 2009, an amount equal
to
the sum of the amounts described in clauses (XI) through (XVIII) of the
definition of Class I Monthly Interest Formula Amounts.
For
the Distribution Date in December 2009, an amount equal to the sum of the
amounts described in clauses (XIV) through (XVIII) of the definition of Class
I
Monthly Interest Formula Amounts.
For
the Distribution Date in January 2010 and each Distribution Date thereafter,
the
Class
I-2 Monthly Interest Distributable Amount shall be zero.
Appendix
A-9
"Class
I-3 Monthly Interest Distributable Amount":
For
any
Distribution Date
commencing on the first Distribution Date through and including the Distribution
Date in January 2010, an amount equal to the amount described in clause (XIX)
of
the definition of Class I Monthly Interest Formula Amounts.
For
the Distribution Date in February 2010 and each Distribution Date thereafter,
the Class I-3 Monthly Interest Distributable Amount shall be zero.
"Class
I Monthly Interest Formula Amounts":
For
each Distribution Date
up to and including the Distribution Date in January 2010, the following:
(I)
the product of (x) the excess, if any, of 5.09200% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $110,000,000; and
(II)
the product of (x) the excess, if any, of 5.12750% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $80,000,000; and
(III)
the product of (x) the excess, if any, of 5.01875% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $160,000,000; and
(IV)
the product of (x) 0.2330%
(on a 30/360 basis) and (y) $80,000,000;
and
(V)
the
product of (x) the excess, if any, of 4.89750% (on a 30/360 basis) over LIBOR
(on an actual/360 basis) and (y) $80,000,000; and
(VI)
the product of (x) the excess, if any, of 4.97700% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $130,000,000; and
(VII)
the product of (x) the excess, if any, of 4.98200% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $55,000,000; and
(VIII)
the product of (x) the excess, if any, of 4.91100% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(IX)
the product of (x) the excess, if any, of 4.73700% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(X)
the product of (x) the excess, if any, of 4.87000% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(XI)
the product of (x) the excess, if any, of 4.98400% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(XII)
the product of (x) the excess, if any, of 4.90350% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(XIII)
the product of (x) the excess, if any, of 4.97500% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $20,000,000; and
Appendix
A-10
(XIV)
the product of (x) 0.3270%
(on a 30/360 basis) and (y) $20,000,000;
and
(XV)
the
product of (x) the excess, if any, of 4.83100% (on a 30/360 basis) over LIBOR
(on an actual/360 basis) and (y) $20,000,000; and
(XVI)
the product of (x) the excess, if any, of 4.72000% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000; and
(XVII)
the product of (x) the excess, if any, of 4.85500% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $20,000,000; and
(XVIII)
the product of (x) the excess, if any, of 4.90500% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $30,000,000; and
(XIX)
the product of (x) the excess, if any, of 4.96375% (on a 30/360 basis) over
LIBOR (on an actual/360 basis) and (y) $40,000,000.
"Class
I Termination Date":
The
Distribution Date occurring in January
2010.
"Class
IV-Accrual Interest":
As
defined in Exhibit J hereof.
"Class
M Certificate":
Any
Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class
M-4
Certificate, Class M-5 Certificate, Class M-6 (and Class M-6N) Certificate,
Class M-7 (and Class M-7N) Certificate, Class M-8 (and Class M-8N) Certificate,
Class M-9 (and Class M-9N) Certificate, Class M-10 (and Class M-10N) Certificate
or Class M-11 (and Class M-11N) Certificate.
"Class
M-1 Certificate":
Any
one of the Class M-1 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-7,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-1 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date) and (ii) the Certificate Principal Balance of the
Class
M-1 Certificates immediately prior to such Distribution Date over (y) the
lesser
of (A) the product of (i) 65.00% and (ii) the aggregate Principal Balance
of the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Principal Balance
of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period,
to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus $9,444,129.
"Class
M-2 Certificate":
Any
one of the Class M-2 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-8,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
Appendix
A-11
"Class
M-2 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 73.90% and
(ii)
the aggregate Principal Balance of the Mortgage Loans as of the last day
of the
related Due Period (after giving effect to scheduled payments of principal
due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
"Class
M-3 Certificate":
Any
one of the Class M-3 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-9,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-3 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date) and
(iv)
the Certificate Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of
(i)
76.70% and (ii) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
"Class
M-4 Certificate":
Any
one of the Class M-4 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-10,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-4 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (v) the Certificate Principal Balance of the Class
M-4
Certificates immediately prior to such Distribution Date over (y) the lesser
of
(A) the product of (i) 80.70% and (ii) the aggregate Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Principal Balance
of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period,
to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus $9,444,129.
Appendix
A-12
"Class
M-5 Certificate":
Any
one of the Class M-5 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-11,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-5 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 84.10% and
(ii)
the aggregate Principal Balance of the Mortgage Loans as of the last day
of the
related Due Period (after giving effect to scheduled payments of principal
due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
"Class
M-6 Certificate":
Any
one of the Class M-6 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-12,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
Appendix
A-13
"Class
M-6 DSI Certificates":
Any
one of the Class M-6 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-24, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-6N Certificates and which represent the right to receive
certain distributions from the Supplemental Interest Trust.
"Class
M-6N Certificates":
Any
one of the Class M-6N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-30, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-6 Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the sum of (i)
the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date) and
(vii)
the Certificate Principal Balance of the Class M-6 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of
(i)
86.20% and (ii) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
"Class
M-7 Certificate":
Any
one of the Class M-7 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-13,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-7 DSI Certificates":
Any
one of the Class M-7 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-25, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-7N Certificates and which represent the right to receive
certain distributions from the Supplemental Interest Trust.
"Class
M-7N Certificates":
Any
one of the Class M-7N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-31, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
Appendix
A-14
"Class
M-7 Principal Distribution Amount":
For
any Distribution Date, is an amount equal to the excess of (x) the sum of
(i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date(ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on
such
Distribution Date) and (viii) the Certificate Principal Balance of the Class
M-7
Certificates immediately prior to that Distribution Date over (y) the lesser
of
(A) the product of (i) 88.50% and (ii) the aggregate Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Principal Balance
of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period,
to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus $9,444,129.
"Class
M-8 Certificate":
Any
one of the Class M-8 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-14,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-8 DSI Certificates":
Any
one of the Class M-8 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-26, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-8N Certificates and which represent the right to receive
certain distributions from the Supplemental Interest Trust.
"Class
M-8N Certificates":
Any
one of the Class M-8N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-32, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-8 Principal Distribution Amount":
For
any Distribution Date, is an amount equal to the excess of (x) the sum of
(i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on
such
Distribution Date), (viii) the Certificate Principal Balance of the Class
M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date) and (ix) the Certificate
Principal Balance of the Class M-8 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.00% and
(ii)
the aggregate Principal Balance of the Mortgage Loans as of the last day
of the
related Due Period (after giving effect to scheduled payments of principal
due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
Appendix
A-15
"Class
M-9 Certificate":
Any
one of the Class M-9 Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-15,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in the Master REMIC.
"Class
M-9 DSI Certificates":
Any
one of the Class M-9 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-27, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-9N Certificates and which represent the right to receive
certain distributions from the Supplemental Interest Trust.
"Class
M-9N Certificates":
Any
one of the Class M-9N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-33, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-9 Principal Distribution Amount":
For
any Distribution Date, is an amount equal to the excess of (x) the sum of
(i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on
such
Distribution Date), (viii) the Certificate Principal Balance of the Class
M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment
of
the Class M-8 Principal Distribution Amount on such Distribution Date) and
(x)
the Certificate Principal Balance of the Class M-9 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of
(i)
92.00% and (ii) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
Appendix
A-16
"Class
M-10 Certificate":
Any
one of the Class M-10 Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-16, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-10 DSI Certificates":
Any
one of the Class M-10 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-28, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-10N Certificates and which represent the right to
receive
certain distributions from the Supplemental Interest Trust.
"Class
M-10N Certificates":
Any
one of the Class M-10N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-34, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-10 Principal Distribution Amount":
For
any Distribution Date, is an amount equal to the excess of (x) the sum of
(i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on
such
Distribution Date), (viii) the Certificate Principal Balance of the Class
M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment
of
the Class M-8 Principal Distribution Amount on such Distribution Date), (x)
the
Certificate Principal Balance of the Class M-9 Certificates (after taking
into
account the payment of the Class M-9 Principal Distribution Amount on such
Distribution Date and (xi) the Certificate Principal Balance of the Class
M-10
Certificates immediately prior to such Distribution Date over (y) the lesser
of
(A) the product of (i) 93.40% and (ii) the aggregate Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Principal Balance
of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period,
to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus $9,444,129.
Appendix
A-17
"Class
M-11 Certificate":
Any
one of the Class M-11 Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-17, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-11 DSI Certificates":
Any
one of the Class M-11 DSI Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-29, which are notional amount certificates based on the Certificate Principal
Balance of the Class M-11N Certificates and which represent the right to
receive
certain distributions from the Supplemental Interest Trust.
"Class
M-11N Certificates":
Any
one of the Class M-11N Certificates executed, authenticated and delivered
pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit
A-35, representing the right to distributions as set forth herein and therein
and evidencing a regular interest in the Master REMIC.
"Class
M-11 Principal Distribution Amount":
For
any Distribution Date, is an amount equal to the excess of (x) the sum of
(i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment
of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the
Certificate Principal Balance of the Class M-3 Certificates (after taking
into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment
of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on
such
Distribution Date), (viii) the Certificate Principal Balance of the Class
M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment
of
the Class M-8 Principal Distribution Amount on such Distribution Date), (x)
the
Certificate Principal Balance of the Class M-9 Certificates (after taking
into
account the payment of the Class M-9 Principal Distribution Amount on such
Distribution Date, (xi) the Certificate Principal Balance of the Class M-10
Certificates (after taking into account the payment of the Class M-10 Principal
Distribution Amount on such Distribution Date, and (xii) the Certificate
Principal Balance of the Class M-11 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.40% and
(ii)
the aggregate Principal Balance of the Mortgage Loans as of the last day
of the
related Due Period (after giving effect to scheduled payments of principal
due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Mortgage Loans as
of the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $9,444,129.
Appendix
A-18
"Class
N Certificate":
Any
Class M-6N Certificate, Class M-7N Certificate, Class M-8N Certificate, Class
M-9N Certificate, Class M-10N Certificate or Class M-11N
Certificate.
"Class
R Certificate":
Any
one of the Class R Certificates executed, authenticated and delivered pursuant
to Section 5.01, substantially in the form annexed hereto as Exhibit A-23,
representing the right to distributions as set forth herein, and evidencing
the
R-I Interest, the R-II Interest, the R-III Interest, the R-IV Interest, the
R-V
Interest and the R-VI Interest, each the sole "residual interest" in
REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V and the
Master REMIC, respectively.
"Close
of Business":
As
used herein, with respect to any Business Day, 5:00 p.m. (New York
time).
"Closing
Date":
February 28, 2007.
"Code":
The
Internal Revenue Code of 1986 as it may be amended from time to
time.
Appendix
A-19
"Collection
Account":
The
account or accounts created and maintained by the Servicer pursuant to Section
3.06(d) hereof, which must be an Eligible Account.
"Commission":
The
Securities and Exchange Commission.
"Compensating
Interest":
With
respect to any Determination Date, an amount equal to the lesser of (i) the
aggregate amount of Prepayment Interest Shortfalls for the related Prepayment
Period and (ii) the Servicing Fee for the related Distribution
Date.
"Corporate
Trust Office":
With
respect to the Trustee, the Paying Agent and the Certificate Registrar, the
corporate trust office at which at any particular time its corporation trust
business shall be administered, which office at the date of execution of
this
Agreement is located at (i) solely for purposes of the transfer, exchange
or
surrender of Certificates, c/o DB Services Tennessee, 000 Xxxxxxxxx Xxxx
Xxxx,
Xxxxxxxxx, XX 00000-0000, Attention: Transfer Unit and (ii) for all other
purposes, Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, XX 00000, Attention: Trust Administration - NS0701.
"Corresponding
Class of Master REMIC Certificates":
As
defined in Exhibit J hereof.
"Corresponding
Class of REMIC II Regular Interest":
As
defined in Exhibit J hereof.
"Corresponding
Class of REMIC V Regular Interests":
As
defined in Exhibit J hereof.
"Corresponding
Interest Rate":
As set
forth in the Swap/Cap Interest Rate Schedule.
"Corresponding
Interest Rate Strip":
As set
forth in the Class CB Certificate Schedule.
"Corresponding
Maturity Date":
As set
forth in the Swap/Cap Interest Rate Schedule.
"Credit
Enhancement Percentage":
For
any Distribution Date, is equal to (i) the sum of the aggregate Certificate
Principal Balance of the Mezzanine Certificates and the Overcollateralization
Amount, divided by (ii) the Pool Balance, in each case calculated prior to
taking into account the distribution of the Principal Distribution Amount
to the
Holders of the Certificates then entitled to distributions of principal on
such
Distribution Date and prior to taking into account distributions of principal
on
the Mortgage Loans on such Distribution Date.
"Crossover
Date":
The
earlier to occur of (i) the Distribution Date after the Distribution Date
on
which the aggregate Certificate Principal Balance of the Class A Certificates
is
reduced to zero; and (ii) the later to occur of (x) the Distribution Date
occurring in March 2010 and (y) the first Distribution Date on which the
Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans but prior to the
principal distributions to the Certificates) is greater than or equal to
45.60%.
"Cumulative
Loss Percentage":
As to
any Distribution Date, the percentage equivalent of the fraction obtained
by
dividing (i) the aggregate amount of Realized Losses on the Mortgage Loans
from
the Cut-off Date through such Distribution Date by (ii) the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date.
Appendix
A-20
"Current
Interest":
For
any Distribution Date and each Class of Class A Certificates and Mezzanine
Certificates the amount of interest accrued during the related Accrual Period
at
the related Pass-Through Rate on the Certificate Principal Balance of such
Class
immediately prior to such Distribution Date, in each case, reduced by any
Net
Prepayment Interest Shortfalls and any Relief Act Shortfalls allocated to
that
Class (allocated to each Certificate based on its respective entitlements
to
interest irrespective of any Net Prepayment Interest Shortfalls or Relief
Act
Shortfalls for that Distribution Date).
"Custodian":
U.S.
Bank National Association, a national banking association, and any successor
thereto.
"Custodian
Fee":
With
respect to each Distribution Date, the product of (i) $0.20 and (ii) the
number
of Mortgage Loans.
"Custodian
Fee Rate":
The
percentage equivalent of a fraction, the numerator of which is (i) the product
of (a) the Custodian Fee and (b) 12 and the denominator of which is (ii)
the
aggregate Principal Balance of the Mortgage Loans as of the beginning of
the Due
Period.
"Cut-off
Date":
With
respect to each Mortgage Loan the later of (i) February 1, 2007 and (ii)
the
date of origination of such Mortgage Loan.
"Cut-off
Date Aggregate Principal Balance":
With
respect to the Mortgage Pool, the aggregate of the Cut-off Date Principal
Balances of the Mortgage Loans of $1,888,825,898 consisting of $1,040,880,343
related to Group I and $847,945,555 related to Group II.
"Cut-off
Date Principal Balance":
With
respect to any Mortgage Loan, the unpaid Principal Balance thereof as of
the
Cut-off Date (or as of the applicable date of substitution with respect to
an
Eligible Substitute Mortgage Loan).
"Debt
Service Reduction":
With
respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment
for
such Mortgage Loan by a court of competent jurisdiction in a proceeding under
the Bankruptcy Code, except such a reduction resulting from a Deficient
Valuation.
"Defaulted
Hedge Termination Payment":
Any
Hedge Termination Payment required to be made by the Supplemental Interest
Trust
to a Hedge Counterparty pursuant to a Hedge Agreement as a result of an "Event
of Default" with respect to which the Hedge Counterparty is the "Defaulting
Party" or a "Termination Event" (other than "Illegality" or "Tax Event")
(each
as defined in the Hedge Agreements) with respect to which a Hedge Counterparty
is the sole "Affected Party."
"Deficient
Valuation":
With
respect to any Mortgage Loan, a valuation of the related Mortgaged Property
by a
court of competent jurisdiction in an amount less than the then outstanding
principal balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.
"Definitive
Certificates":
The
Class C, Class I and Class R Certificates, and such other Classes of
Certificates as become Definitive Certificates pursuant to Section 5.02(c)
hereof.
Appendix
A-21
"Deleted
Mortgage Loan":
A
Mortgage Loan replaced or to be replaced by one or more Eligible Substitute
Mortgage Loans.
"30-Day
Delinquency Percentage":
As of
the last day of any Due Period, the percentage equivalent of a fraction,
(i) the
numerator of which equals the aggregate Principal Balance of the Mortgage
Loans
that are 30 or more days contractually delinquent, in foreclosure or converted
to REO Properties, and (ii) the denominator of which is the Pool Balance
as of
the last day of such Due Period.
"60-Day
Delinquency Percentage":
As of
the last day of any Due Period, the percentage equivalent of a fraction,
(i) the
numerator of which equals the aggregate Principal Balance of the Mortgage
Loans
that are 60 or more days contractually delinquent, in foreclosure or converted
to REO Properties, and (ii) the denominator of which is the Pool Balance
as of
the last day of such Due Period.
"90-Day
Delinquency Percentage":
As of
the last day of any Due Period, the percentage equivalent of a fraction,
(i) the
numerator of which equals the aggregate Principal Balance of the Mortgage
Loans
that are 90 or more days contractually delinquent, in foreclosure or converted
to REO Properties and (ii) the denominator of which is the Pool Balance as
of
the last day of such Due Period.
"Delinquent":
Any
Mortgage Loan, the Monthly Payment due on a Due Date which is not made by
the
Close of Business on the next scheduled Due Date for such Mortgage
Loan.
"Depositor":
NovaStar Mortgage Funding Corporation, a Delaware corporation, and its
successors and assigns.
"Depository":
The
initial Depository shall be The Depository Trust Company, whose nominee is
Cede
& Co., or any other organization registered as a "clearing agency" pursuant
to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository shall initially be the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation"
as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State
of
New York.
"Depository
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
Supplemental Interest Payment":
With
respect to each Distribution Date, and the Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10 and Class M-11 Certificates, the dollar amount of the
excess of (i) the Supplemental Interest Amount Due for the Class M-6, Class
M-7,
Class M-8, Class M-9, Class M-10 or Class M-11 Certificates, as appropriate,
over (ii) the Non-Derivative Supplemental Interest Payment for the Class
M-6,
Class M-7, Class M-8, Class M-9, Class M-10 or Class M-11 Certificates, as
appropriate.
"Determination
Date":
With
respect to any Distribution Date, the 15th day of the calendar month in which
such Distribution Date occurs or, if such 15th day is not a Business Day,
the
Business Day immediately preceding such 15th day.
Appendix
A-22
"Determination
Date Report":
The
meaning specified in Section 3.24 hereof.
"Disqualified
Organization":
"Disqualified Organization" shall have the meaning set forth from time to
time
in the definition thereof at Section 860E(e)(5) of the Code and applicable
to
the Issuing Entity.
"Distribution
Account":
The
trust account or accounts created and maintained by the Trustee pursuant
to
Section 4.02 hereof, which must be an Eligible Account.
"Distribution
Date":
The
25th day of any calendar month, or if such 25th day is not a Business Day,
the
Business Day immediately following such 25th day, commencing in March
2007.
"Due
Date":
For
any Distribution Date, the first day of the month of that Distribution
Date.
"Due
Period":
With
respect to any Mortgage Loan and Due Date, the period commencing on the second
day of the month preceding the month of such Distribution Date and ending
on the
related Due Date.
"Eligible
Account":
An
account that is either: (A) a segregated account or accounts maintained with
an
institution whose deposits are insured by the FDIC, the unsecured and
uncollateralized long-term debt obligations of which institution shall be
rated
"AA" or higher by Standard & Xxxx'x, "Xx0" or higher by Xxxxx'x and
"AA"/"F-1+" or higher by Fitch and in the highest short-term rating category
by
each of the Rating Agencies, and which is (i) a federal savings and loan
association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution duly organized, validly existing
and
in good standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws, or (iv) a principal subsidiary of
a
bank holding company or (B) a segregated trust account or accounts maintained
with the trust department of a federal or state chartered depository institution
acceptable to each Rating Agency, having capital and surplus of not less
than
$100,000,000, acting in its fiduciary capacity. All Eligible Accounts held
by
the Trustee shall be non-interest bearing trust accounts.
"Eligible
Investments":
One or
more of the following:
(i) direct
obligations of, and obligations fully guaranteed by, the United States of
America, any of the Federal Home Mortgage Corporation, the Federal National
Mortgage Association, the Federal Home Loan Banks or any agency or
instrumentality of the United States of America the obligations of which
are
backed by the full faith and credit of the United States of
America;
(ii) (A)
demand and time deposits in, Certificates of deposit of, banker's acceptances
issued by or federal funds sold by any depository institution or trust company
(including the Trustee or its agents acting in their respective commercial
capacities) incorporated under the laws of the United States of America or
any
State thereof and subject to supervision and examination by federal and/or
state
authorities, so long as at the time of such investment or contractual commitment
providing for such investment, such depository institution or trust company
has
a short-term unsecured debt rating in the highest available rating category
of
each of the Rating Agencies and provided that each such investment has an
original maturity of no more than 365 days, and (B) any other demand or time
deposit or deposit which is fully insured by the Federal Deposit Insurance
Corporation;
Appendix
A-23
(iii) repurchase
obligations with a term not to exceed 30 days with respect to any security
described in clause (i) above and entered into with a depository institution
or
trust company (acting as a principal) rated "A-1+" or higher by S&P, "A2" or
higher by Moody's and "F-1+" or higher by Fitch; provided, however, that
collateral transferred pursuant to such repurchase obligation must (A) be
valued
daily at current market price plus accrued interest, (B) pursuant to such
valuation, equal, at all times, 105% of the cash transferred in exchange
for
such collateral and (C) be delivered in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any State thereof which
has a
long-term unsecured debt rating in the highest available rating category
of each
of the Rating Agencies at the time of such investment;
(v) commercial
paper having an original maturity of less than 365 days and issued by an
institution having a short-term unsecured debt rating in the highest available
rating category of each of the Rating Agencies at the time of such
investment;
(vi) a
guaranteed investment contract approved by each of the Rating Agencies and
issued by an insurance company or other corporation having a long-term unsecured
debt rating in the highest available rating category of each of the Rating
Agencies at the time of such investment;
(vii) money
market funds having ratings in the highest available long-term rating category
of each of the Rating Agencies at the time of such investment; any such money
market funds which provide for demand withdrawals being conclusively deemed
to
satisfy any maturity requirement for Eligible Investments set forth in the
Agreement; and
(viii) money
market deposit accounts, time deposits or savings deposits, in each case
as
defined in Regulation D of the Board of Governors of the Federal Reserve
System
and issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a
combined capital and surplus and undivided profits of not less than
$250,000,000
which
are fully insured by FDIC, including the Bank Insurance Fund and the Savings
Association Insurance Fund.
provided,
however,
that
each such instrument shall be acquired in an arm's-length transaction and
no
such instrument shall be an Eligible Investment if it represents, either
(1) the
right to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest payments
derived from obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield to maturity
greater than 120% of the yield to maturity at par of such underlying
obligations; provided, further, however, that each such instrument acquired
shall not be acquired at a price in excess of par. The Trustee may purchase
from
or sell to itself or an affiliate, as principal or agent, the Eligible
Investments listed above.
Appendix
A-24
"Eligible
Substitute Mortgage Loan":
A
Mortgage Loan substituted by the Sponsor for a Deleted Mortgage Loan which
must,
on the date of such substitution, as confirmed in an Officers’ Certificate
delivered to the Trustee, (i) have an outstanding principal balance, after
deduction of the principal portion of the monthly payment due in the month
of
substitution (or in the case of a substitution of more than one Mortgage
Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance,
after
such deduction), not in excess of the outstanding principal balance of the
Deleted Mortgage Loan (the amount of any shortfall to be deposited by the
Sponsor in the Collection Account in the month of substitution); (ii) comply
in
all material respects with each representation and warranty set forth in
clauses, (ii) through (xcix) of Section 3.01(b) of the Purchase Agreement
other
than clauses (iii), (v)-(xiv), (xlii), (lv), (lvi)-(lviii), (lxxii), (lxxxix)
and (xc); (iii) have a Mortgage Rate and, with respect to an Adjustable Rate
Mortgage Loan, a Gross Margin no lower than and not more than 1% per annum
higher than the Mortgage Rate and Gross Margin, respectively, of the Deleted
Mortgage Loan as of the date of substitution; (iv) have a Loan-to-Value Ratio,
at the time of substitution no higher than that of the Deleted Mortgage Loan
at
the time of substitution; (v) have a remaining term to stated maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan; (vi) not be 30 days or more delinquent; (vii) not be a negative
amortization loan; (viii) have a lien priority equal to or superior to the
lien
priority of the Deleted Mortgage Loan; and (ix) be a Qualified Replacement
Mortgage.
"ERISA":
The
Employee Retirement Income Security Act of 1974, as amended.
"Excess
Cashflow":
For
any Distribution Date, the excess of (a) the Interest Remittance Amount over
(b)
the sum of (x) the Monthly Interest Distributable Amounts for the Class A
Certificates and the Mezzanine Certificates, (y) the Class I Monthly Interest
Distributable Amount and (z) the Administrative Fees, each for such Distribution
Date.
"Extra
Principal Distribution Amount":
For
any Distribution Date, the lesser of (x) the sum of (a) Excess Cashflow for
such
Distribution Date and (b) the amount remaining in the Supplemental Interest
Trust after funding amounts in clause (i) under Section 4.04(c), for such
Distribution Date, and (y) the Overcollateralization Deficiency Amount for
such
Distribution Date.
"Expense
Adjusted Mortgage Rate":
With
respect to any Mortgage Loan, as of any date of determination, a per annum
rate
of interest equal to the then applicable Mortgage Rate for such Mortgage
Loan
minus the Administrative Fee Rate.
"Xxxxxx
Xxx":
Federal National Mortgage Association or any successor thereto.
"FDIC":
Federal Deposit Insurance Corporation or any successor thereto.
"Fitch":
Fitch
Ratings, or its successors in interest.
Appendix
A-25
"Fixed
Rate Mortgage Loan":
A
first-lien or second-lien Mortgage Loan which provides for a fixed Mortgage
Rate
payable with respect thereto. The Fixed Rate Mortgage Loans are identified
as
such on the Mortgage Loan Schedule.
"Foreclosure
Profit":
With
respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the
aggregate of its Net Liquidation Proceeds exceeds (ii) the related Principal
Balance (plus accrued and unpaid interest thereon at the applicable Mortgage
Rate from the date interest was last paid through the last day of the month
of
the date of receipt of the final Liquidation Proceeds) of such Liquidated
Mortgage Loan immediately prior to the final recovery of its Liquidation
Proceeds.
"Formula
Rate":
For
any Distribution Date and (a) any Class of LIBOR Certificates, the lesser
of (i)
LIBOR plus the related Certificate Margin and (ii) the applicable Maximum
Rate,
if any and (b) for the Class A-2A2 Certificates, 5.86000%
"Xxxxxxx
Mac":
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
"Gross
Margin":
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage set forth
in
the related Mortgage Note that is added to the Index on each Adjustment Date
in
accordance with the terms of the related Mortgage Note used to determine
the
Mortgage Rate for such Mortgage Loan.
"Group":
Any of
the Group I Mortgage Loans and the Group II Mortgage Loans.
"Group
I Allocation Percentage":
For
any Distribution Date, the percentage equivalent of a fraction, the numerator
of
which is (i) the Group I Principal Remittance Amount for such Distribution
Date
and the denominator of which is (ii) the Principal Remittance Amount for
such
Distribution Date.
"Group
I Certificate":
Any
Class A-1A Certificate.
"Group
I Certificate Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the Certificate
Principal Balance of the Class A-1A Certificates immediately prior to that
Distribution Date over (y) the lesser of (A) the product of (i) 54.40% and
(ii)
the aggregate Principal Balance of the Group I Mortgage Loans as of the last
day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Group I Mortgage Loans
as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $5,204,402.
"Group
I Class I Percentage":
For
any Distribution Date beginning on the first Distribution Date through and
including the Distribution Date in January 2010, the percentage equivalent
of
the fraction (a) the numerator of which is the aggregate principal balance
of
the Group I Loans and (b) the denominator of which is the aggregate principal
balance of the Mortgage Loans. For all Distribution Dates thereafter, 0.00%.
The
sum of the Group I Class I Percentage plus the Group II Class I Percentage
shall
equal 100%.
Appendix
A-26
"Group
I Cross Collateralization Amount":
For
any Distribution Date, the portion of the Group I Interest Remittance Amount
remaining after payment of (a) the Monthly Interest Distributable Amount
on the
Group I Certificates, (b) the Class I Monthly Interest Distributable Amount
multiplied by the Group I Class I Percentage and (c) the related proportional
amount of the Administrative Fees.
"Group
I Interest Remittance Amount":
For
any Distribution Date, the portion of the Interest Remittance Amount that
was
collected or advanced on the Group I Mortgage Loans.
"Group
I Mortgage Loans":
The
Mortgage Loans allocated to Group I.
"Group
I Pool Balance":
The
Pool Balance relating to the Group I Mortgage Loans.
"Group
I Principal Distribution Amount":
With
respect to any Distribution Date is the sum of (i) the Group I Principal
Remittance Amount for such Distribution Date and (ii) the Extra Principal
Distribution Amount for such Distribution Date multiplied by the Group I
Allocation Percentage.
"Group
I Principal Remittance Amount":
For
any Distribution Date, the portion of the Principal Remittance Amount relating
to the Group I Mortgage Loans.
"Group
II Allocation Percentage":
For
any Distribution Date, the percentage equivalent of a fraction, the numerator
of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date
and the denominator of which is (ii) the Principal Remittance Amount for
such
Distribution Date.
"Group
II Certificate":
Any of
the Class A-2A1 Certificates, Class A-2A2 Certificates, Class A-2B Certificates,
Class A-2C Certificates or Class A-2D Certificates.
"Group
II Certificate Principal Distribution Amount":
For
any Distribution Date, an amount equal to the excess of (x) the aggregate
Certificate Principal Balance of the Group II Certificates immediately prior
to
that Distribution Date over (y) the lesser of (A) the product of (i) 54.40%
and
(ii) the aggregate Principal Balance of the Group II Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Principal Balance of the Group II Mortgage
Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $4,239,728.
"Group
II Class I Percentage":
For
any Distribution Date beginning on the first Distribution Date through and
including the Distribution Date in January 2010, the percentage equivalent
of
the fraction (a) the numerator of which is the aggregate Principal Balance
of
the Group II Loans and (b) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans. For all Distribution Dates thereafter, 0.000%.
The sum of the Group I Class I Percentage plus the Group II Class I Percentage
shall equal 100%.
Appendix
A-27
"Group
II Cross Collateralization Amount":
For
any Distribution Date, the portion of the Group II Interest Remittance Amount
remaining after payment of (a) the Monthly Interest Distributable Amounts
on the
Group II Certificates, (b) the Class I Monthly Distributable Amount multiplied
by the Group II Class I Percentage and (c) the related proportional amount
of
the Administrative Fees.
"Group
II Interest Remittance Amount":
For
any Distribution Date, the portion of the Interest Remittance Amount that
was
collected or advanced on the Group II Mortgage Loans.
"Group
II Mortgage Loans:"
The
Mortgage Loans allocated to Group II.
"Group
II Principal Distribution Amount":
With
respect to any Distribution Date is the sum of (i) the Group II Principal
Remittance Amount for such Distribution Date and (ii) the Extra Principal
Distribution Amount for such Distribution Date multiplied by the Group II
Allocation Percentage.
"Group
II Principal Remittance Amount":
For
any Distribution Date, the portion of the Principal Remittance Amount relating
to the Group II Mortgage Loans.
"Hedge
Agreement":
Any
Cap Agreement or Swap Agreement.
"Hedge
Counterparty":
The
Royal Bank of Scotland plc, Deutsche Bank AG, New York Branch, or Wachovia
Bank,
National Association, as applicable, or any successor hedge counterparty
to the
Supplemental Interest Trust.
"Hedge
Termination Payment":
Upon
the designation of an "Early Termination Date" as defined in the Hedge
Agreements, the payment to be made by the Supplemental Interest Trust to
the
respective Hedge Counterparty, or by the respective Hedge Counterparty to
the
Supplemental Interest Trust, as applicable, pursuant to the terms of the
respective Hedge Agreement.
"Holder":
See
"Certificateholder".
"Indenture":
An
indenture relating to the issuance of net interest margin notes secured by
the
Class C
Certificates.
"Independent":
When
used with respect to any specified Person, any such Person who (a) is in
fact
independent of the Depositor, the Servicer and their respective Affiliates,
(b)
does not have any direct financial interest in or any material indirect
financial interest in the Depositor or the Servicer or any Affiliate thereof,
and (c) is not connected with the Depositor or the Servicer or any Affiliate
thereof as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions; provided, however, that
a
Person shall not fail to be Independent of the Depositor or the Servicer
or any
Affiliate thereof merely because such Person is the beneficial owner of 1%
or
less of any Class of securities issued by the Depositor or the Servicer or
any
Affiliate thereof, as the case may be.
Appendix
A-28
"Index":
With
respect to each Adjustable Rate Mortgage Loan and with respect to each related
Adjustment Date, the index as specified in the related Mortgage
Note.
"Initial
Certificate Principal Balance":
With
respect to any Class of Regular Certificate (other than a Class C Certificate
or
Class I Certificate), the amount designated "Original Principal Balance"
on the
face thereof.
"Insurance
Proceeds":
Proceeds paid by any insurer pursuant to any insurance policy covering a
Mortgage Loan which are required to be remitted to the Servicer, including
MI
Insurance Proceeds in the case of Mortgage Loans covered under a MI Policy,
or
amounts required to be paid by the Servicer hereunder, net of any component
thereof (i) covering any expenses incurred by or on behalf of the Servicer
in
connection with obtaining such proceeds, (ii) that is applied to the restoration
or repair of the related Mortgaged Property or (iii) released to the Mortgagor
in accordance with the Servicer's normal servicing procedures.
"Interest
Determination Date":
With
respect to each Accrual Period and the LIBOR Certificates, the second LIBOR
Business Day preceding the commencement of such Accrual Period.
"Interest
Remittance Amount":
With
respect to any Distribution Date, that portion of the Available Funds for
such
Distribution Date allocable to interest (excluding Prepayment
Charges).
"Interest
Remittance Formula Amount":
As of
any Distribution Date and any Group, an amount equal to (1) the product of
(x)
1/12 of the Weighted Average Mortgage Rate of the related Group as of the
beginning of the prior Due Period and (y) the Pool Balance related to that
Group
as of the beginning of the prior Due Period minus (2) the aggregate amount
of
Relief Act Shortfalls and Net Prepayment Interest Shortfalls for such Group
for
the prior period.
"Issuing
Entity":
NovaStar Mortgage Funding Trust, Series 2007-1, the New York common law trust
created hereunder.
"Lender
Letter":
The
lender letter #LL03-00 dated April 11, 2000 for Xxxxxx Xxx Xxxxxxx.
"LIBOR":
With
respect to any Accrual Period, the rate determined by the Trustee on the
related
Interest Determination Date (provided that, in the case of each interest
rate
Hedge Agreement, LIBOR will be determined by the applicable Hedge Counterparty)
on the basis of the offered rates of the Reference Banks for one-month United
States dollar deposits, as such rates appear on the Telerate Page 3750, as
of
11:00 a.m. (London time) on such Interest Determination Date. If such rate
does
not appear on Telerate Page 3750, the rate for that day will be determined
on
the basis of the rates at which deposits in United States dollars are offered
by
the Reference Banks at approximately 11:00 a.m., London time, on that day
to
prime banks in the London interbank market for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The
Trustee
will 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 day will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that day will
be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by
the Trustee, at approximately 11:00 a.m., New York City time, on that day
for
loans in United States dollars to leading European banks for a period equal
to
the relevant Accrual Period (commencing on the first day of such Accrual
Period).
Appendix
A-29
The
establishment of LIBOR on each Interest Determination Date by the Trustee
and
the Trustee's calculation of the rate of interest applicable to the Certificates
for the related Accrual Period shall (in the absence of manifest error) be
final
and binding.
"LIBOR
Business Day":
Any
day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the State of New York or in the city of London, England are
required or authorized by law to be closed.
"LIBOR
Certificates":
Collectively, the Class A-1A, Class A-2A1, Class A-2B, Class A-2C, Class
A-2D
and Class M Certificates.
"Lifetime
Rate Cap":
With
respect to each Adjustable Rate Mortgage Loan, the maximum Mortgage Rate,
if
any, permitted over the life of such Mortgage Loan under the terms of such
Mortgage Note, as set forth on the Mortgage Loan Schedule.
"Liquidated
Mortgage Loan":
With
respect to any Distribution Date, any Mortgage Loan in respect of which the
Servicer has determined, in accordance with the servicing procedures specified
in Article III hereof, as of the end of the related Prepayment Period that
substantially all Liquidation Proceeds which it reasonably expects to recover
with respect to the disposition of the related Mortgaged Property or REO
Property have been recovered.
"Liquidation
Expenses":
Out-of-pocket expenses (exclusive of overhead) which are incurred by or on
behalf of the Servicer in connection with the liquidation of any Mortgage
Loan
and not recovered under any insurance policy, such expenses, including, without
limitation, legal fees and expenses, any unreimbursed amount expended respecting
the related Mortgage Loan and any related and unreimbursed expenditures for
real
estate property taxes or for property restoration, preservation or insurance
against casualty loss or damage.
"Liquidation
Proceeds":
Proceeds (including Insurance Proceeds) received in connection with the
liquidation of any Mortgage Loan or related REO Property.
"Loan-to-Value
Ratio":
With
respect to any Mortgage Loan, as of any date of determination, a fraction
expressed as a percentage, the numerator of which is the then current principal
amount of the Mortgage Loan, and the denominator of which is the lesser of
the
purchase price or the Appraised Value of the related Mortgaged
Property.
"Loan
Year":
With
respect to any Mortgage Loan, the one year period commencing on the day
succeeding the origination of such Mortgage Loan and ending on the anniversary
date of such Mortgage Loan, and each annual period thereafter.
"LPMI
Indemnification Agreement
": The
Indemnification Agreement dated as of February 22, 2007, between the Sponsor
and
Mortgage
Guaranty Insurance Corporation.
Appendix
A-30
"Majority
Certificateholders":
The
Holders of Certificates evidencing at least 51% of the Voting Rights. If
any
matter concerns fewer than all Classes of Certificates (as evidenced by an
Opinion of Counsel) then the Majority Certificateholders shall be considered
to
be the Holders of Certificates evidencing at least 51% of each Class of affected
Certificates.
"Master
REMIC":
The
REMIC established pursuant to Exhibit J hereof. The assets of the Master
REMIC
shall be the REMIC IV Regular Interests.
"Master
REMIC Regular Interests":
As
defined in Exhibit J hereof.
"Maximum
Collateral Amount":
The
sum of the Principal Balance as of the Cut-off Date of the Mortgage
Loans.
"Maximum
Mortgage Rate":
With
respect to each Adjustable Rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the maximum Mortgage Rate thereunder.
"Maximum
Rate":
For
the LIBOR Certificates, 11%.
"MERS":
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
"MERS
System":
The
system of recording transfers of Mortgages electronically maintained by
MERS.
"Mezzanine
Certificate":
Any
Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class
M-4
Certificate, Class M-5 Certificate, Class M-6 (and Class M-6N) Certificate,
Class M-7 (and Class M-7N) Certificate, Class M-8 (and Class M-8N) Certificate,
Class M-9 (and Class M-9N) Certificate, Class M-10 (and Class M-10N) Certificate
or Class M-11 (and Class M-11N) Certificate.
"MI
Claim Payment Advance":
As
defined in Section 3.13(a) hereof.
"MI
Insurance Agreement":
A
private mortgage insurance agreement issued by the MI Insurer pursuant to
which
MI Policies are issued on individual Mortgage Loans.
"MI
Insurance Proceeds":
Proceeds paid by the MI Insurer pursuant to an MI Policy.
"MI
Insurer":
Each of (i) PMI Mortgage Insurance Co., an Arizona mortgage insurance company,
(ii) Radian Guaranty, Inc., a Pennsylvania mortgage insurance corporation
and
(iii) Mortgage Guaranty Insurance Corporation, a Wisconsin private mortgage
insurance company and their successors and assigns.
"MI
Insurer Insolvency Event":
(A)
The determination by the applicable regulatory or supervisory agency having
jurisdiction over the MI Insurer that such MI Insurer is insolvent or unable
to
pay its obligations as they mature, (B) following the failure of the MI Insurer
to pay under the related MI Policy, the determination by the Servicer that
such
MI Insurer is insolvent or unable to pay its obligations as they become due,
(C)
the long-term rating on the claims paying ability of the MI Insurer shall
be
lowered by Moody's below A-2, if such MI Insurer is then rated by Moody's,
or
shall be lowered by S&P below AA, if such MI Insurer is then rated by
S&P.
Appendix
A-31
"MI
Policy":
A
private mortgage insurance policy underwritten by the MI Insurer with respect
to
an individual Mortgage Loan, issued pursuant to the MI Insurance Agreement.
"MI
Premium":
The
primary mortgage insurance premium for each MI Policy, payable annually to
an MI
Insurer, as specified in the MI Insurance Agreement, and with respect to
each
monthly premium payment, 1/12 of the annual premium.
"MIN":
The
Mortgage Identification Number for Mortgage Loans registered with MERS on
the
MERS System.
"Minimum
Mortgage Rate":
With
respect to each Adjustable Rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the minimum Mortgage Rate thereunder.
"MOM
Loan":
With
respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage
Loan, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns, at the origination thereof.
"Monthly
Interest Distributable Amount":
For
any Distribution Date and any Class of Class A Certificates and Mezzanine
Certificates, the sum of (1) the Unpaid Interest Shortfall Amount for that
Class
and Distribution Date and (2) the Current Interest for that Class and
Distribution Date. In the event of a shortfall in the full amount necessary
to
pay both the Unpaid Interest Shortfall Amount and the Current Interest for
a
Class, the money will first be applied to the Unpaid Interest Shortfall Amount
and then to the Current Interest.
"Monthly
Payment":
With
respect to any Mortgage Loan (including any REO Property) and any Due Date,
the
payment of principal and interest due thereon in accordance with the
amortization schedule at the time applicable thereto (after adjustment, if
any,
for partial Principal Prepayments and for Deficient Valuations occurring
prior
to such Due Date but before any adjustment to such amortization schedule
by
reason of any bankruptcy, other than a Deficient Valuation, or similar
proceeding or any moratorium or similar waiver or grace period).
"Moody's":
Xxxxx'x Investors Service, Inc. or its successor in interest.
"Mortgage":
The
mortgage, deed of trust or other instrument creating a first lien on an estate
or fee simple interest in real property securing a Mortgage Note.
"Mortgage
File":
The
mortgage documents listed in Section 2.01 pertaining to a particular Mortgage
Loan and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
"Mortgage
Loan":
The
Mortgage Loans which are described (with complete statistical information
included) in the Prospectus Supplement and which are included in the Trust
Fund
on the Closing Date.
Appendix
A-32
"Mortgage
Loan Schedule":
With
respect to any date, the schedule of Mortgage Loans subject to this Agreement
on
such date. The schedule of Mortgage Loans as of the Cut-off Date is the schedule
set forth in Exhibit B hereto, sets forth as to each Mortgage Loan:
(i) the
loan
number and name of the Mortgagor;
(ii) xxx
xxxxxx xxxxxxx, xxxx, xxxxx and zip code of the Mortgaged Property;
(iii) the
Mortgage Rate at origination;
(iv) with
respect to an Adjustable Rate Mortgage Loan, the Maximum Rate and the Minimum
Rate;
(v) the
maturity date;
(vi) the
original Principal Balance;
(vii) the
first
due date;
(viii) the
type
of Mortgaged Property;
(ix) the
Monthly Payment in effect as of the Cut-off Date;
(x) the
Principal Balance as of the Cut-off Date;
(xi) with
respect to an Adjustable Rate Mortgage Loan, the Index, the Gross Margin;
the
Lifetime Rate Cap and the Periodic Rate Cap;
(xii) with
respect to an Adjustable Rate Mortgage Loan, the first Adjustment Date and
next
Adjustment Date, if any;
(xiii) with
respect to an Adjustable Rate Mortgage Loan, the Adjustment Date frequency
and
Distribution Date frequency;
(xiv) the
occupancy status;
(xv) the
purpose of the Mortgage Loan;
(xvi) the
Appraised Value of the Mortgaged Property;
(xvii) the
original term to maturity;
(xviii) the
paid-through date of the Mortgage Loan;
(xix) the
Loan-to-Value Ratio;
(xx) whether
the Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage
Loan;
Appendix
A-33
(xxi) whether
or not the Mortgage Loan was underwritten pursuant to a limited documentation
program;
(xxii) whether
the Mortgage Loan is covered by an MI Policy;
(xxiii) if
the
Mortgage Loan is registered with MERS on the MERS System, the MIN;
and
(xxiv) whether
the Mortgage Loan is in Group I or Group II.
The
Mortgage Loan Schedule shall set forth the total of the amounts described
under
(x) above for all of the Mortgage Loans.
"Mortgage
Loans":
At any
time, collectively, all Mortgage Loans that have been transferred and conveyed
to the Issuing Entity, in each case together with the Related Documents,
and
that remain subject to the terms of the Agreement. As applicable, a "Mortgage
Loan" shall be deemed to refer to the related REO Property.
"Mortgage
Note":
The
original executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage
Rate":
With
respect to any Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan.
"Mortgage
Pool":
The
pool of Mortgage Loans, identified on Exhibit B from time to time, and any
REO
Properties acquired in respect thereof.
"Mortgaged
Property":
The
underlying property, including real property and improvements thereon, securing
a Mortgage Loan.
"Mortgagor":
The
obligor on a Mortgage Note.
"Net
Liquidation Proceeds":
With
respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation
Expenses.
"Net
Mortgage Rate":
With
respect to any Mortgage Loan and any day, the related Mortgage Rate less
the
Administrative Fee Rate.
"Net
Prepayment Interest Shortfall":
On any
Distribution Date, the excess, if any of (i) any Prepayment Interest Shortfall
and (ii) Compensating Interest for such Distribution Date.
"Net
WAC":
With
respect to any Distribution Date, the weighted average of the Net Mortgage
Rates
on the Mortgage Loans (weighted by the Principal Balances of the Mortgage
Loans
as of the first day of the related Due Period (after giving effect to scheduled
payments of principal due prior to such date, to the extent received or
advanced, and unscheduled collections of principal received prior to such
date)).
Appendix
A-34
"NCFC":
NovaStar Certificates Financing Corporation, a Delaware corporation, and
its
successors and assigns.
"NCFLLC":
NovaStar Certificates Financing LLC, a Delaware limited liability company,
and
its successors and assigns.
"NFI":
NovaStar Financial, Inc., a Maryland corporation, and its successors and
assigns.
"NIM
Note":
Any of
the notes (i) issued pursuant to a structured net interest margin transaction
sponsored by NovaStar Financial, Inc. or its Affiliates and (ii) evidencing
debt
of the trust formed pursuant to such transaction. For the avoidance of doubt,
any subordinate equity interests (or subordinate certificates issued evidencing
an equity interest) in such trust shall not be considered NIM
Notes.
"Non-Derivative
Supplemental Interest Payment":
With
respect to each Distribution Date, and the Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10 and Class M-11 Certificates, the dollar amount of the
Supplemental Interest Payment which would be distributed to each such Class
on
such Distribution Date pursuant to Section 4.04(c)(iii) hereof if the amount
received by the Supplemental Interest Trust from each Hedge Counterparty
on such
Distribution Date had been zero (i.e.,
disregarding all amounts actually received from each Hedge
Counterparty).
"Non-REMIC
Accounts":
The
Supplemental Interest Account held by the Supplemental Interest
Trust.
"Nonrecoverable
Advance":
With
respect to any Mortgage Loan:
(x)
any
Advance or Servicing Advance (i) which was previously made or is proposed
to be
made by the Servicer; and (ii) which, in the good faith judgment of the
Servicer, will not or, in the case of a proposed Advance or Servicing Advance,
would not, be ultimately recoverable by the Servicer from Liquidation Proceeds,
Repurchase Price or future payments on such Mortgage Loan; and
(y)
the
amount, if any, by which an MI Claim Payment Advance made or to be made by
the
Servicer exceeds, or would exceed, the amount actually received, or expected
to
be received as MI Insurance Proceeds from the related MI Insurer on account
of
the related claim; provided,
however
that if
an MI Insurer Insolvency Event occurs after the MI Claim Payment Advance
has
been made by the Servicer and before the full amount thereof has been reimbursed
to the Servicer from the related MI Insurance Proceeds, then any remaining,
unreimbursed amount shall be considered a Nonrecoverable Advance as of the
date
of the MI Insurer Insolvency Event.
"Novation
Agreements":
The
Novation Agreement, dated as of February 28, 2007, among NovaStar Mortgage,
Inc., the Supplemental Interest Trust and Wachovia Bank, National Association,
the Novation Agreement, dated as of February 28, 2007, among The Royal Bank
of
Scotland plc, the Supplemental Interest Trust and NovaStar Mortgage, Inc.
and
the Novation Agreement, dated as of February 28, 2007, among Deutsche Bank
AG,
New York Branch, the Supplemental Interest Trust and NovaStar Mortgage,
Inc.
Appendix
A-35
"Offered
Certificates":
Collectively, the Class A Certificates and the Class M-1 Certificates, Class
M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates and Class M-9 Certificates.
"Officers’
Certificate":
A
Certificate signed by the Chairman of the Board, the Vice Chairman of the
Board,
the President or any vice president (however denominated), and by the Treasurer,
the Secretary, or any assistant treasurer or assistant secretary of the
applicable Person.
"Opinion
of Counsel":
A
written opinion of counsel, who may, without limitation, be a salaried counsel
for the Depositor or the Servicer, in form and substance acceptable to the
Trustee, except that any opinion of counsel relating to (a) the qualification
of
any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be
an
opinion of Independent counsel.
"Optional
Termination Date":
The
first Distribution Date on which the Servicer may terminate the Trust Fund
pursuant to Section 11.01.
"Original
Value":
Except
in the case of a refinanced Mortgage Loan, the lesser of the Appraised Value
or
sales price of the Mortgaged Property at the time a Mortgage Loan is closed,
and
for a refinanced Mortgage Loan, the Original Value is the value of such property
set forth in an appraisal acceptable to the Servicer.
"Ownership
Interest":
As to
any Certificate, any ownership or security 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, as owner
or
as pledgee.
"Overcollateralization
Amount":
For
any Distribution Date, is equal to (a) the Pool Balance, after giving effect
to
distributions of principal on the Mortgage Loans, minus (b) the aggregate
Certificate Principal Balance of the Class A Certificates and Mezzanine
Certificates, after giving effect to principal distributions to be made on
the
Class A Certificates and Mezzanine Certificates on such Distribution
Date.
"Overcollateralization
Deficiency Amount":
With
respect to any Distribution Date equals the amount, if any, by which the
Required Overcollateralization Amount exceeds the Overcollateralization Amount
on such Distribution Date (after giving effect to distributions in respect
of
the Group I Principal Remittance Amount and the Group II Principal Remittance
Amount on such Distribution Date).
"Overcollateralization
Release Amount":
With
respect to any Distribution Date, the lesser of (x) the Principal Remittance
Amount for such Distribution Date and (y) the excess, if any, of (i) the
Overcollateralization Amount for such Distribution Date (assuming that 100%
of
the Principal Remittance Amount is applied as a principal payment on such
Distribution Date) over (ii) the Required Overcollateralization Amount for
such
Distribution Date.
"Pass-Through
Rate":
For
any Distribution Date and any Class of Class A Certificates and Class M
Certificates, the lesser of (1) the Formula Rate for such Class for such
Distribution Date and (2) the related Available Funds Cap for such Distribution
Date.
Appendix
A-36
"Paying
Agent":
Any
paying agent appointed pursuant to Section 5.05.
"Percentage
Interest":
With
respect to any Class A Certificate or Class M Certificate, a fraction, expressed
as a percentage, the numerator of which is the Initial Certificate Principal
Balance represented by such Certificate and the denominator of which is the
Initial Certificate Principal Balance of the related Class. With respect
to a
Class I Certificate, Class C Certificate, Class DSI Certificate or Residual
Certificate, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate; provided, however,
that
the sum of all such percentages for each such Class totals 100%.
"Periodic
Rate Cap":
With
respect to each Adjustable Rate Mortgage Loan and any Adjustment Date therefor,
the fixed percentage set forth in the related Mortgage Note, which is the
maximum amount by which the Mortgage Rate for such Mortgage Loan may increase
or
decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage
Rate) on such Adjustment Date from the Mortgage Rate in effect immediately
prior
to such Adjustment Date.
"Permitted
Transferee":
Any
transferee of a Residual Certificate other than a Disqualified Organization
or a
non-U.S. Person.
"Person":
Any
individual, corporation, limited liability company, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan":
Either
(i)
an employee benefit plan (as defined in section 3(3) of ERISA) that is subject
to the provisions of Title I of ERISA or (ii) a plan (as defined in section
4975(e)(1) of the Code) that is subject to Section 4975 of the
Code.
"Plan
Assets":
As
defined in Section 5.02(d) hereof.
"Pool
Balance":
As of
any date of determination, the aggregate Principal Balance of the related
Mortgage Loans as of such date.
"Prepayment
Assumption":
As
defined in the Prospectus Supplement.
"Prepayment
Charge":
With
respect to any Mortgage Loan, the charges or premiums, if any, due in connection
with a full or partial Principal Prepayment of such Mortgage Loan in accordance
with the terms thereof.
"Prepayment
Interest Shortfall":
As to
any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating
to an REO Property) that was the subject of (a) a Principal Prepayment in
full
during the portion of the related Prepayment Period in the prior calendar
month
an amount equal to the excess of interest accrued during the prior calendar
month at the Mortgage Rate (net of the Servicing Fee) on the Principal Balance
of such Mortgage Loan over the amount of interest (adjusted to the Mortgage
Rate
(net of the Servicing Fee)) paid by the Mortgagor for such Prepayment Period
to
the date of such Principal Prepayment in full or (b) a partial Principal
Prepayment during the prior calendar month, an amount equal to interest accrued
during the related prior calendar month at the Mortgage Rate (net of the
Servicing Fee) on the amount of such partial Principal Prepayment.
Appendix
A-37
"Prepayment
Period":
For
any Distribution Date, the period commencing on the day after the Determination
Date in the month preceding the month in which such Distribution Date occurs
(or, in the case of the first Distribution Date, from February 1, 2007) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.
"Principal
Balance":
With
respect to any Mortgage Loan or related REO Property, at any given time,
(i) the
Principal Balance of the Mortgage Loan as of the Cut-off Date minus (ii)
the sum
of (a) the principal portion of the Monthly Payments due with respect to
such
Mortgage Loan or REO Property during each Due Period ending prior to the
most
recent Distribution Date which were received or with respect to which an
Advance
was made, and (b) all Principal Prepayments with respect to such Mortgage
Loan
or REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO
Proceeds, to the extent applied by the Servicer as recoveries of principal
in
accordance with Section 3.13 hereof with respect to such Mortgage Loan or
REO
Property, and (c) the principal portion of any Realized Loss with respect
thereto for any previous Distribution Date.
"Principal
Prepayment":
Any
payment of principal made by the Mortgagor on a Mortgage Loan which is received
in advance of its scheduled Due Date and which is not accompanied by an amount
of interest representing the full amount of scheduled interest due on any
Due
Date in any month or months subsequent to the month of prepayment.
"Principal
Remittance Amount":
With
respect to any Distribution Date, the sum of (i) each scheduled payment of
principal collected or advanced on the Mortgage Loans by the Servicer that
were
due during the related Due Period, (ii) the principal portion of all partial
and
full Principal Prepayments of the Mortgage Loans applied by the Servicer
during
the related Prepayment Period, (iii) the principal portion of all related
Net
Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period, (iv) that portion of the Repurchase Price, representing principal
of any
repurchased Mortgage Loan, deposited to the Collection Account during such
Prepayment Period, (v) the principal portion of any related Substitution
Adjustment Amounts deposited in the Collection Account during such Prepayment
Period, (vi) on the Distribution Date on which the Trust Fund is to be
terminated pursuant to Section 11.01, that portion of the Termination Price,
in
respect of principal and (viii) Subsequent Recoveries to pay certain
Certificates amounts in respect of Realized Losses allocated to such
Certificates.
"Prospectus":
The
Prospectus Supplement together with the Base Prospectus attached thereto
with
respect to the Offered Certificates.
"Prospectus
Supplement":
That
certain Prospectus Supplement dated February 23, 2007 relating to the public
offering of the Offered Certificates.
"PTCE
95-60":
U.S. Department of Labor Prohibited Transaction Class Exemption
95-60.
Appendix
A-38
"Purchase
Agreement":
The
agreement, dated as of February 1, 2007, between the Sponsor, the Depositor,
the
Trustee and the Custodian, regarding the transfer of the Mortgage Loans by
the
Sponsor to or at the direction of the Depositor.
"Qualified
Liquidation":
The
meaning set forth from time to time in the definition thereof at Section
860F(a)(4) of the Code and applicable to the Issuing Entity.
"Qualified
Mortgage":
The
meaning set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code and applicable to the Issuing Entity.
"Qualified
Replacement Mortgage":
A
Mortgage Loan substituted for another pursuant to Section 3.01 of the Purchase
Agreement and that satisfies all of the criteria set forth from time to time
in
the definition thereof at Section 860G(a)(4) of the Code and applicable to
the
Issuing Entity, all as evidenced by an Officers’ Certificate of the Sponsor
delivered to the Trustee prior to any such substitution.
"Qualified
Underwriting":
Any
public offering or private placement of securities with respect to which
an
entity that has received an Underwriter Exemption is (i) the sole underwriter,
(ii) the manager or co-manager of the underwriting syndicate or (iii) a selling
or placement agent.
"Rate
Step-up Date":
The
first Distribution Date to occur after the Optional Termination
Date.
"Rating
Agency":
Any
nationally recognized statistical rating organization, or its successor,
that
rated the Class A Certificates and Mezzanine Certificates at the request
of the
Depositor at the time of the initial issuance of the Class A Certificates
and
Mezzanine Certificates. Initially such rating agencies shall consist of Xxxxx'x
and Standard & Poor's. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein
to
the highest short-term unsecured rating category of a Rating Agency shall
mean
"A-1" or better in the case of Standard & Poor's, "P-1" or better in the
case of Xxxxx'x, "F-1+" or better in the case of Fitch and in the case of
any
other Rating Agency shall mean such equivalent rating. References herein
to the
highest long-term rating category of a Rating Agency shall mean "AAA" in
the
case of Standard & Poor's, "Aaa" in the case of Xxxxx'x and "AAA" in the
case of Fitch, and in the case of any other Rating Agency, such equivalent
rating.
"Realized
Loss":
With
respect to each Mortgage Loan (or REO Property) as to which a Cash Liquidation
or REO Disposition has occurred, an amount (not less than zero) equal to
(i) the
Principal Balance of the Mortgage Loan (or REO Property) as of the date of
Cash
Liquidation or REO Disposition, plus (ii) interest (and REO Imputed Interest,
if
any) at the Net Mortgage Rate from the Due Date as to which interest was
last
paid or advanced to Certificateholders up to the last day of the month in
which
the Cash Liquidation (or REO Disposition) occurred on the Principal Balance
of
such Mortgage Loan (or REO Property) outstanding during each Due Period that
such interest was not paid or advanced, minus (iii) Net Liquidation Proceeds,
if
any, received with respect to such Cash Liquidation (or REO Disposition),
minus
the portion thereof reimbursable to the Servicer or any Subservicer with
respect
to related Advances or expenses as to which the Servicer or Subservicer is
entitled to reimbursement thereunder but which have not been previously
reimbursed. With respect to each Mortgage Loan which has become the subject
of a
Deficient Valuation, the difference between the Principal Balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the
Principal Balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the object of a Debt
Service
Reduction, the amount of such Debt Service Reduction.
Appendix
A-39
"Reallocable
Certificates":
The
Class M-6, Class M-7 Class M-8, Class M-9, Class M-10 and Class M-11
Certificates.
"Reallocate",
"Reallocation",
etc.:
The act of reallocating distributions from a Class DSI Certificate and its
corresponding Class N Certificate to the corresponding Class of Reallocable
Certificates, as described in Section 4.04(e) hereof.
"Record
Date":
For as
long as there are no definitive certificates (and excluding the Class A-2A2
Certificates), with respect to each Distribution Date, the Close of Business
on
the Business Day immediately preceding that Distribution Date. If definitive
certificates have been issued, and for the Class A-2A2 Certificates, the
Record
Date is the last business day of the month prior to the related Distribution
Date.
"Reference
Banks":
Deutsche Bank, Barclays Bank PLC, The Bank of Tokyo-Mitsubishi, LTD. and
National Westminster Bank PLC and their successors in interest; provided
that if
any of the foregoing banks are not suitable to serve as a Reference Bank,
then
any leading banks selected by the Trustee (after consultation with the
Depositor) which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business
in
London, (ii) not controlling, under the control of or under common control
with
the Sponsor or any Affiliate thereof, (iii) whose quotations appear on the
Reuters Screen LIBOR Page on the relevant Interest Determination Date and
(iv)
which have been designated as such by the Trustee.
"Regular
Certificate":
Any of
the Class A Certificates, Mezzanine Certificates, Class I Certificates or
Class
C Certificates.
"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.
"Related
Documents":
With
respect to each Mortgage Loan, the documents specified in Section 2.01 hereof
and any documents required to be added to such documents pursuant to this
Agreement or the Purchase Agreement.
"Relief
Act":
The
Servicemembers Civil Relief Act, as amended.
Appendix
A-40
"Relief
Act Shortfall":
As to
any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating
to an REO Property), any shortfalls relating to the Relief Act or similar
legislation or regulations.
"REMIC":
A
"real estate mortgage investment conduit" within the meaning of Section 860D
of
the Code.
"REMIC
Available Funds Cap":
The
weighted average of the pass-through rates on the Class IV-Accrual, Class
IV-A1A, Class IV-A2A, Class IV-A2B, Class IV-A2C, Class IV-A2D, Class IV-M1,
Class IV-M2, Class IV-M3, Class IV-M4, Class IV-M5, Class IV-M6, Class IV-M7,
Class IV-M8, Class IV-M9, Class IV-M10, Class IV-M11, Class IV-M12, Class
IV-M13
and Class IV-CA Interests.
"REMIC
III Net WAC":
The
weighted average of the pass-through rates on the Class II-A, Class II-B,
Class
II-C, Class II-D, Class II-E, Class II-F, Class II-G, Class II-H, Class II-K,
Class II-L, Class II-M, Class II-O, Class II-Q, Class II-S and Class II-J
Interests.
"REMIC
Pass-Through Rate":
As
defined in Exhibit J hereof.
"REMIC I
Pass-Through Rate":
As to
each of the respective REMIC I Regular Interests, the applicable
"REMIC I Pass-Through Rate" set forth in Exhibit J hereof.
"REMIC II
Pass-Through Rate":
As to
each of the respective REMIC II Regular Interests, the applicable
"REMIC II Pass-Through Rate" set forth in Exhibit J hereof.
"REMIC III
Pass-Through Rate":
As to
each of the respective REMIC III Regular Interests, the applicable
"REMIC III Pass-Through Rate" set forth in Exhibit J hereof.
"REMIC IV
Pass-Through Rate":
As to
each of the respective REMIC IV Regular Interests, the applicable "REMIC
IV
Pass-Through Rate set forth in Exhibit J hereof.
"REMIC V
Pass-Through Rate":
As to
each of the respective REMIC V Regular Interests, the applicable "REMIC V
Pass-Through Rate set forth in Exhibit J hereof.
"REMIC
Provisions":
Provisions of the federal income tax law relating to real estate mortgage
investment conduits which appear at Section 860A through 860G of Subchapter
M of
Chapter 1 of the Code, and related provisions, and regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time to
time.
"REMIC
Regular Interests":
The
REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III
Regular
Interests, the REMIC IV Regular Interests, the REMIC V Regular Interests
and the
Master REMIC Regular Interests.
"REMIC I
Regular Interests":
As
defined in Exhibit J hereof.
"REMIC II
Regular Interests":
As
defined in Exhibit J hereof.
"REMIC III
Regular Interests":
As
defined in Exhibit J hereof.
Appendix
A-41
"REMIC IV
Regular Interests":
As
defined in Exhibit J hereof.
"REMIC V
Regular Interests":
As
defined in Exhibit J hereof.
"REO
Acquisition":
The
acquisition by the Servicer on behalf of the Trustee for the benefit of the
Certificateholders of any REO Property pursuant to Section 3.13
hereof.
"REO
Disposition":
As to
any REO Property, a determination by the Servicer that it has received
substantially all Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and
other payments and recoveries (including proceeds of a final sale) which
the
Servicer expects to be finally recoverable from the sale or other disposition
of
the REO Property.
"REO
Imputed Interest":
As to
any REO Property, for any period, an amount equivalent to interest (at the
Net
Mortgage 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 for such period as such balance is reduced
pursuant to Section 3.13 hereof by any income from the REO Property treated
as a
recovery of principal.
"REO
Proceeds":
Proceeds, net of expenses, received in respect of any REO Property (including,
without limitation, proceeds from the rental of the related Mortgaged Property),
which proceeds are required to be deposited into the Collection Account within
two days of receipt by the Servicer.
"REO
Property":
A
Mortgaged Property that is acquired by the Issuing Entity by foreclosure
or by
deed in lieu of foreclosure.
"Repurchase
Event":
With
respect to any Mortgage Loan, either (i) a discovery that, as of the Closing
Date the related Mortgage was not a valid lien on the related Mortgaged Property
subject only to (A) the lien of real property taxes and assessments not yet
due
and payable, (B) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording
of such
Mortgage and such other permissible title exceptions as are permitted and
(C)
other matters to which like properties are commonly subject which do not
materially adversely affect the value, use, enjoyment or marketability of
the
related Mortgaged Property or (ii) with respect to any Mortgage Loan as to
which
the Sponsor delivers an affidavit certifying that the original Mortgage Note
has
been lost or destroyed, a subsequent default on such Mortgage Loan if the
enforcement thereof or of the related Mortgage is materially and adversely
affected by the absence of such original Mortgage Note.
"Repurchase
Price":
With
respect to any Mortgage Loan (i) required to be repurchased on any date by
the
Sponsor pursuant to the Purchase Agreement or (ii) permitted to be purchased
by
the Servicer pursuant to Article III hereof, an amount equal to the sum,
without
duplication, of (i) 100% of the Principal Balance thereof (without reduction
for
any amounts charged off) and (ii) unpaid accrued interest at the Mortgage
Rate
on the outstanding principal balance thereof from the Due Date to which interest
was last paid by the Mortgagor (or with respect to which an Advance was last
made by the Servicer) to the first day of the month following the month of
purchase plus (iii) the amount of any unreimbursed Servicing Advances or
unreimbursed Advances made with respect to such Mortgage Loan plus (iv) any
other amounts owed to the Servicer or the Subservicer pursuant to Section
3.07
hereof and not included in clause (iii) of this definition plus (v) any costs
and damages incurred by the Trust Fund in connection with any violation by
any
Mortgage Loan of any predatory or abusive lending law or breach of
representations and warranties regarding licensing or any predatory or abusive
lending law.
Appendix
A-42
"Request
for Release":
A
request for release in substantially the form of Exhibit E hereto.
"Required
Overcollateralization Amount":
For
any Distribution Date, an amount equal to:
(i) prior
to
the Crossover Date, 2.30% of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-off Date.
(ii) on
or
after the Crossover Date, the greater of:
(a) 0.50%
of
the aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date;
and
(b) 4.60%
of
the current aggregate Principal Balance of the Mortgage Loans as of the end
of
the related Due Period (after giving effect to Principal Prepayments in the
related Prepayment Period).
On
any
Distribution Date on which a Trigger Event is in effect, the Required
Overcollateralization Amount will be equal to the Required Overcollateralization
Amount as of the preceding Distribution Date.
"Residual
Certificate":
The
Class R Certificates representing beneficial ownership of the Class R-I,
Class R-II, Class R-III, Class R-IV and Class R-V
Interests.
"Residual
Interest":
The
sole Class of "residual interests" in a REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible
Officer":
With
respect to the Trustee, any officer working in the Corporate Trust Office
with
direct responsibility for the administration of this Agreement and also,
with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rolling
60-Day Delinquency Percentage":
For
any Distribution Date, the average of the 60-Day Delinquency Percentages
for the
Mortgage Loans as of the last day of each of the three (or 1 and 2 in the
case
of the first two Distribution Dates, as applicable) most recently ended Due
Periods.
"Rolling
90-Day Delinquency Percentage":
For
any Distribution Date, the average of the 90-Day Delinquency Percentages
for the
Mortgage Loans as of the last day of each of the three (or 1 and 2 in the
case
of the first two Distribution Dates, as applicable) most recently ended Due
Periods.
Appendix
A-43
"Scheduled
Principal Payment":
Any
scheduled payment of principal made on a scheduled Due Date.
"Servicer":
NovaStar Mortgage, Inc., a Virginia corporation, and its successors and
assigns.
"Servicer
Remittance Date":
The
third Business Day prior to each Distribution Date.
"Servicer
Reporting Date":
As
defined in Section 3.24 hereof.
"Servicing
Account":
The
separate trust account created and maintained by the Servicer or each
Subservicer with respect to the Mortgage Loans or REO Property, which shall
be
an Eligible Account, for collection of taxes, assessments, insurance premiums
and comparable items as described in Section 3.08 hereof.
"Servicing
Advances":
All
customary, reasonable and necessary "out of pocket" costs and expenses incurred
in connection with a default, delinquency or other unanticipated event in
the
performance by the Servicer of its servicing obligations, including, without
duplication, but not limited to, the cost of (i) the preservation, restoration
and protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation
of any
REO Property, (iv) compliance with the obligations under Section 3.13 hereof,
and (v) expenses incurred in connection with any Mortgage Loan being registered
on the MERS System.
"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
Default":
The
meaning assigned in Section 7.01 hereof.
"Servicing
Fee":
With
respect to the Mortgage Loans and any Distribution Date, the product of (i)
the
Servicing Fee Rate divided by 12 and (ii) the Pool Balance as of the first
day
of the related Due Period provided,
that if
the Back-up Servicer becomes the successor servicer, the Servicing Fee shall
be
as provided in paragraph (b) of the “Scope of Work” Exhibit to the Back-up
Servicing Agreement.
"Servicing
Fee Rate":
With
respect to any Mortgage Loan, 0.50% per annum.
"Servicing
Function Participant":
Any
sub-servicer, subcontractor or any other Person, other than the Servicer
and the
Trustee, that is performing activities addressed by the Servicing Criteria,
unless such Person’s activities relate only to 5% or less of the Mortgage
Loans.
"Servicing
Officer":
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name and specimen signature appear
on a
list of servicing officers furnished to the Trustee by the Servicer or a
Subservicer, as such list may be amended from time to time.
"Servicing
Rights Owner":
NovaStar Mortgage, Inc., or its transferee or assignee, in its capacity as
owner
of the servicing rights with respect to the Mortgage Loans.
Appendix
A-44
"Servicing
Rights Pledgee":
The entity designated by the Servicing Rights Owner pursuant to Section
3.28.
"Servicing
Transfer Costs":
Reasonable and necessary costs and expenses incurred, by or on behalf of
the
Trustee or successor Servicer in connection with the transfer of servicing
in
the event of termination of the Servicer as servicer hereunder and the resulting
transfer to the successor Servicer.
"Sponsor":
NovaStar Mortgage, Inc., a Virginia corporation, and its successors and
assigns.
"Standard
& Poor's"
or
"S&P":
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., or its successor in interest.
"Startup
Day":
As
defined in Section 10.01(a) hereof.
"Subsequent
Recovery":
With
respect to any Mortgage Loan that had previously been the subject of a Realized
Loss, any principal amount subsequently received in connection with such
Mortgage Loan.
"Subservicer":
Any
Person with which the Servicer has entered into a Subservicing Agreement
and
which meets the qualifications of a Subservicer pursuant to Section 3.02
hereof.
"Subservicing
Account":
An
account established by a Subservicer which meets the requirements set forth
in
Section 3.06(e) and is otherwise acceptable to the Servicer.
"Subservicing
Agreement":
The
written contract between the Servicer and a Subservicer relating to servicing
and administration of certain Mortgage Loans as provided in Section 3.02
hereof.
"Subservicing
Fee":
With
respect to each Mortgage Loan and any Distribution Date, the portion of the
Servicing Fee paid to a Subservicer.
"Substitution
Adjustment Amount":
As
defined in Section 2.03 hereof.
"Supplemental
Interest Account":
An
account established by the Trustee pursuant to Section 4.04 hereof, which
must
be an Eligible Account.
"Supplemental
Interest Amount Due":
With
respect to any Class of Class A Certificates and Mezzanine Certificates and
any
Distribution Date, the sum of (x) the Available Funds Cap Shortfall Amount
for
such Class of Certificates and such Distribution Date and (y) the Available
Funds Cap Carryforward Amount for such Class and Distribution Date.
"Supplemental
Interest Payment":
With
respect to any Distribution Date and any Class of Class A or Mezzanine
Certificates, the lesser of (x) the Supplemental Interest Amount Due for
that
Class and (y) the amounts on deposit and available for distribution to that
Class from the Supplemental Interest Trust on that Distribution
Date.
Appendix
A-45
"Supplemental
Interest Trust":
The
supplemental interest trust established and maintained pursuant to Section
4.04
and designated as such.
"Swap
Agreement":
Any of the eighteen interest rate Swap Agreements between the Supplemental
Interest Trust and a Swap Counterparty which are deemed to be assets of the
Supplemental Interest Trust and not an asset of any one of the REMICs created
hereunder.
"Swap
Amount":
The calculation of the Swap Amount is subject to the verification and
confirmation of the Swap Counterparties who are calculation agents for the
Swap
Agreements. With regard to each Swap Agreement, Swap Amount shall mean, on
each
Distribution Date on or prior to the Class I Termination Date, the excess
of (x)
the product of (i) the related fixed rate of interest, (ii) 30 divided by
360
and (iii) the related notional amount over (y) the product of (i) LIBOR,
(ii)
the actual number of days elapsed in the related Accrual Period divided by
360
and (iii) the related notional amount, (so long as such calculation results
in a
positive number).
"Swap
Counterparty":
A
Hedge Counterparty.
"Swap/Cap
Interest Rate Schedule":
As set
forth in Appendix B.
"Tax
Matters Person":
The
tax matters person appointed pursuant to Section 10.01(e) hereof.
"Tax
Returns":
The
federal income tax return on Internal Revenue Service Form 1066, U.S. Real
Estate Mortgage Investment Conduit (REMIC) Income Tax Return, including Schedule
Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable
Income
or Net Loss Allocation, or any successor forms, to be filed by the Trustee,
on
behalf of each REMIC, together with any and all other information reports,
forms
or returns that may be required to be furnished to the Certificateholders
or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax
laws.
"Telerate
Page 3750":
The
display page currently so designated on the Moneyline Telerate Service (or
such
other page as may replace that page on that service for the purpose of
displaying comparable rates or prices).
"Termination
Price":
As
defined in Section 11.01(a) of the Pooling and Servicing Agreement.
"Treasury
Regulations":
Regulations, including proposed or temporary Regulations, promulgated under
the
Code. References herein to specific provisions of proposed or temporary
regulations shall include analogous provisions of final Treasury Regulations
or
other successor Treasury Regulations.
"Trigger
Event":
A
Trigger Event is in effect with respect to any Distribution Date, on or after
the Crossover Date, if either (i) the Rolling 60-Day Delinquency Percentage
(calculated on a contractual basis) exceeds 37.28% of the current Credit
Enhancement Percentage, or (ii) the Cumulative Loss Percentage for such
Distribution Date is greater than the applicable percentage set forth below
with
respect to such Distribution Date:
Appendix
A-46
|
Distribution
Date Occurring In:
|
Percentage
(%)
|
|||
|
March
2009
|
1.15
|
%
|
||
|
April
2009
|
1.26
|
%
|
||
|
May
2009
|
1.38
|
%
|
||
|
June
2009
|
1.49
|
%
|
||
|
July
2009
|
1.60
|
%
|
||
|
August
2009
|
1.71
|
%
|
||
|
September
2009
|
1.83
|
%
|
||
|
October
2009
|
1.94
|
%
|
||
|
November
2009
|
2.05
|
%
|
||
|
December
2009
|
2.16
|
%
|
||
|
January
2010
|
2.28
|
%
|
||
|
February
2010
|
2.39
|
%
|
||
|
March
2010
|
2.50
|
%
|
||
|
April
2010
|
2.62
|
%
|
||
|
May
2010
|
2.74
|
%
|
||
|
June
2010
|
2.86
|
%
|
||
|
July
2010
|
2.98
|
%
|
||
|
August
2010
|
3.10
|
%
|
||
|
September
2010
|
3.23
|
%
|
||
|
October
2010
|
3.35
|
%
|
||
|
November
2010
|
3.47
|
%
|
||
|
December
2010
|
3.59
|
%
|
||
|
January
2011
|
3.71
|
%
|
||
|
February
2011
|
3.83
|
%
|
||
|
March
2011
|
3.95
|
%
|
||
|
April
2011
|
4.05
|
%
|
||
|
May
2011
|
4.14
|
%
|
||
|
June
2011
|
4.24
|
%
|
||
|
July
2011
|
4.33
|
%
|
||
|
August
2011
|
4.43
|
%
|
||
|
September
2011
|
4.53
|
%
|
||
|
October
2011
|
4.62
|
%
|
||
|
November
2011
|
4.72
|
%
|
||
|
December
2011
|
4.81
|
%
|
||
|
January
2012
|
4.91
|
%
|
||
|
February
2012
|
5.00
|
%
|
||
|
March
2012
|
5.10
|
%
|
||
|
April
2012
|
5.15
|
%
|
||
|
May
2012
|
5.21
|
%
|
||
|
June
2012
|
5.26
|
%
|
||
|
July
2012
|
5.32
|
%
|
||
|
August
2012
|
5.37
|
%
|
||
|
September
2012
|
5.43
|
%
|
||
|
October
2012
|
5.48
|
%
|
||
|
November
2012
|
5.53
|
%
|
||
|
December
2012
|
5.59
|
%
|
||
|
January
2013
|
5.64
|
%
|
||
|
February
2013
|
5.70
|
%
|
||
|
March
2013 and thereafter
|
5.75
|
%
|
||
Appendix
A-47
"Trust
Fund":
All of
the assets of the Issuing Entity, which is the trust created hereunder
consisting of the REMIC I, REMIC II, REMIC III, REMIC IV,
REMIC V, the Master REMIC and the Supplemental Interest Trust.
"Trustee":
Deutsche Bank National Trust Company, a national banking association organized
under the laws of the United States, and its successors and assigns or any
successor trustee appointed pursuant to the terms of the Agreement.
"Trustee
Fee":
With
respect to each Distribution Date, the product of (i) the Trustee Fee Rate
divided by 12 and (ii) the Principal Balance of the Mortgage Loans as of
the
first day of the related Due Period.
"Trustee
Fee Rate":
0.0025% per annum.
"Trustee
Indemnification Agreement":
The
Indemnification Agreement dated as of February 22, 2007, between the Sponsor
and
the Trustee.
"Underwriter
Exemption":
An
individual prohibited transaction exemption, issued by the U.S. Department
of
Labor, which is described in PTE 2000-58, 65 Fed. Reg. 67,765 (Nov. 13,
2000).
"Underwriters":
Deutsche Bank Securities Inc., Greenwich Capital Markets, Inc. and Wachovia
Capital Markets, LLC, and their successors and assigns.
"Underwriting
Agreement":
The
Underwriting Agreement dated February 23, 2007 among the Underwriters, the
Depositor and the Sponsor with respect to the offer and sale of the Underwritten
Certificates, as the same may be amended from time to time.
"Underwriting
Guidelines":
The
underwriting guidelines set forth in the Prospectus Supplement under the
heading
"Description of the Mortgage Pool—Underwriting Standards for Mortgage
Loans".
"Underwritten
Certificates"
Collectively, the Class A Certificates and the Class M-1 Certificates, Class
M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates and Class M-5
Certificates.
"United
States Person"
or
"U.S.
Person":
A
citizen or resident of the United States, a corporation, partnership or other
entity treated as a corporation or partnership for federal income tax purposes
(other than a partnership that is not treated as a U.S. Person pursuant to
any
applicable Treasury regulations) created or organized in, or under the laws
of,
the United States, any state thereof or the District of Columbia, or an estate
the income of which from sources without the United States is includible
in
gross income for United States federal income tax purposes regardless of
its
connection with the conduct of a trade or business within the United States,
or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust.
Appendix
A-48
"Unpaid
Interest Shortfall Amount":
With
respect to each Class of Class A Certificates and Mezzanine Certificates
and (i)
the first Distribution Date, zero, and (ii) any Distribution Date after the
first Distribution Date, the sum of (a) the Unpaid Interest Shortfall Amount
for
that Class as of the prior Distribution Date, (b) the excess of the amount
of
the Current Interest due with respect to that Class on the prior Distribution
Date over the amount actually distributed to the Holders of that Class on
account of the Current Interest on the prior Distribution Date and (c) interest
on the sum of (a) and (b) to the extent permitted by law, at the Pass-Through
Rate for such Class for the related Accrual Period.
"Voting
Rights":
The
portion of the voting rights of all of the Certificates which is allocated
to
any Certificate. At all times the Class A Certificates and the Mezzanine
Certificates shall have 97% of the Voting Rights (allocated among the Holders
of
the Class A Certificates and the Mezzanine Certificates in proportion to
the
then outstanding Certificate Principal Balances of their respective
Certificates), the Class CA Certificates shall have 1% of the Voting Rights,
the
Class I Certificates shall have 1% of the Voting Rights and the Class R
Certificates shall have 1% of the Voting Rights. The Voting Rights allocated
to
any Class of Certificates (other than the Class CA Certificates, Class I
Certificates and the Class R Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance of such Certificates and the Voting Rights allocated to the Class
CA
Certificates, Class I Certificates and the Class R Certificates shall be
allocated among all Holders of each such Class in proportion to such Holders'
respective Percentage Interest; provided, however that when none of the Regular
Certificates are outstanding, 100% of the Voting Rights shall be allocated
among
Holders of the Class R Certificates in accordance with such Holders' respective
Percentage Interests in the Certificates of such Class. The Class DSI and
Class
CB Certificates do not have Voting Rights. The Voting Rights shall be allocated
between each of the Class M-6 and Class M-6N, the Class M-7 and Class M-7N,
the
Class M-8 and Class M-8N, Class M-9 and Class M-9N, Class M-10 and Class
M-10N
and Class M-11 and Class M-11N Certificates on the basis of their respective
Certificate Principal Balances.
"Weighted
Average Mortgage Rate":
With
respect to any Distribution Date, the weighted average of the Mortgage Rates
of
the Mortgage Loans (weighted by the Principal Balances of the Mortgage Loans
as
of the first day of the related Due Period (after giving effect to scheduled
payments of principal due prior to such date, to the extent received or
advanced, and unscheduled collections of principal received prior to such
date)).
Appendix
A-49
APPENDIX
B
Swap/Cap
Interest Rate Schedule
|
Corresponding
REMIC III
Regular
Interest
|
Corresponding
Interest Rate
|
Corresponding
Maturity
Date
|
||
|
All
A Interests
|
5.09200%
|
May
2008
|
||
|
All
B Interests
|
5.12750%
|
May
2008
|
||
|
All
C Interests
|
5.01875%
|
June
2008
|
||
|
All
D Interests
|
0.2330%
|
November
2008
|
||
|
All
E Interests
|
4.89750%
|
December
2008
|
||
|
All
F Interests
|
4.97700%
|
December
2008
|
||
|
All
G Interests
|
4.98200%
|
May
2009
|
||
|
All
H Interests
|
4.91100%
|
May
2009
|
||
|
All
K Interests
|
4.73700%
|
June
2009
|
||
|
All
L Interests
|
4.87000%
|
June
2009
|
||
|
All
M Interests
|
4.98400%
|
July
2009
|
||
|
All
O Interests
|
4.90350%
|
November
2009
|
||
|
All
Q Interests
|
4.97500%
|
November
2009
|
||
|
All
S Interests
|
0.3270%
|
November
2009
|
||
|
All
T Interests
|
4.83100%
|
December
2009
|
||
|
All
U Interests
|
4.72000%
|
December
2009
|
||
|
All
V Interests
|
4.85500%
|
December
2009
|
||
|
All
W Interests
|
4.90500%
|
December
2009
|
||
|
All
X Interests
|
4.96375%
|
January
2010
|
Appendix
B-1
Class
CB Certificate Schedule
|
Distribution
Date
|
Corresponding
Interest Rate Strip (%)
|
|
|
March
2007
|
0.00
|
|
|
April
2007
|
0.00
|
|
|
May
2007
|
0.00
|
|
|
June
2007
|
0.00
|
|
|
July
2007
|
0.00
|
|
|
August
2007
|
0.00
|
|
|
September
2007
|
0.00
|
|
|
October
2007
|
0.00
|
|
|
November
2007
|
0.00
|
|
|
December
2007
|
0.00
|
|
|
January
2008
|
0.00
|
|
|
February
2008
|
0.00
|
|
|
March
2008
|
0.12
|
|
|
April
2008
|
0.12
|
|
|
May
2008
|
0.12
|
|
|
June
2008
|
0.13
|
|
|
July
2008
|
0.13
|
|
|
August
2008
|
0.14
|
|
|
September
2008
|
0.21
|
|
|
October
2008
|
0.21
|
|
|
November
2008
|
0.22
|
|
|
December
2008
|
0.23
|
|
|
January
2009
|
0.24
|
|
|
February
2009
|
0.26
|
|
|
March
2009
|
0.29
|
|
|
April
2009
|
0.31
|
|
|
May
2009
|
0.34
|
|
|
June
2009
|
0.36
|
|
|
July
2009
|
0.38
|
|
|
August
2009
|
0.40
|
|
|
September
2009
|
0.37
|
|
|
October
2009
|
0.39
|
|
|
November
2009
|
0.40
|
|
|
December
2009
|
0.42
|
|
|
January
2010
|
0.44
|
|
|
February
2010
|
0.46
|
|
|
March
2010
|
0.41
|
|
|
April
2010
|
0.43
|
|
|
May
2010
|
0.45
|
|
|
June
2010
|
0.48
|
|
|
July
2010
|
0.50
|
|
|
August
2010
|
0.52
|
|
|
September
2010
|
0.44
|
|
|
October
2010
|
0.46
|
|
|
November
2010
|
0.48
|
|
|
December
2010
|
0.50
|
|
|
January
2011
|
0.52
|
|
|
February
2011
|
0.54
|
|
|
March
2011
|
0.45
|
|
|
April
2011
|
0.47
|
Appendix
B-2
|
May
2011
|
0.48
|
|
|
June
2011
|
0.50
|
|
|
July
2011
|
0.52
|
|
|
August
2011
|
0.54
|
|
|
September
2011
|
0.42
|
|
|
October
2011
|
0.56
|
|
|
November
2011
|
0.45
|
|
|
December
2011
|
0.47
|
|
|
January
2012
|
0.48
|
|
|
February
2012
|
0.50
|
|
|
March
2012
|
0.39
|
|
|
April
2012
|
0.40
|
|
|
May
2012
|
0.41
|
|
|
June
2012
|
0.43
|
|
|
July
2012
|
0.44
|
|
|
August
2012
|
0.46
|
|
|
September
2012
|
0.35
|
|
|
October
2012
|
0.36
|
|
|
November
2012
|
0.37
|
|
|
December
2012
|
0.38
|
|
|
January
2013
|
0.40
|
|
|
February
2013
|
0.41
|
|
|
March
2013
|
0.28
|
|
|
April
2013
|
0.29
|
|
|
May
2013
|
0.30
|
|
|
June
2013
|
0.31
|
|
|
July
2013
|
0.32
|
|
|
August
2013
|
0.33
|
|
|
September
2013
|
0.20
|
|
|
October
2013
|
0.20
|
|
|
November
2013
|
0.21
|
|
|
December
2013
|
0.22
|
|
|
January
2014
|
0.22
|
|
|
February
2014
|
0.23
|
|
|
March
2014
|
0.04
|
|
|
April
2014
|
0.04
|
|
|
May
2014
|
0.04
|
|
|
June
2014
|
0.04
|
|
|
July
2014
|
0.04
|
|
|
August
2014
|
0.04
|
|
|
September
2014
|
0.04
|
|
|
October
2014
|
0.04
|
|
|
November
2014
|
0.05
|
|
|
December
2014
|
0.05
|
|
|
January
2015
|
0.05
|
|
|
February
2015
|
0.05
|
|
|
March
2015
|
0.05
|
|
|
April
2015
|
0.05
|
|
|
May
2015
|
0.05
|
|
|
June
2015
|
0.05
|
|
|
July
2015
|
0.06
|
|
|
August
2015
|
0.06
|
|
|
September
2015
|
0.06
|
Appendix
B-3
|
October
2015
|
0.06
|
|
|
November
2015
|
0.06
|
|
|
December
2015
|
0.06
|
|
|
January
2016
|
0.06
|
|
|
February
2016
|
0.06
|
|
|
March
2016
|
0.06
|
|
|
April
2016
|
0.06
|
|
|
May
2016
|
0.06
|
|
|
June
2016
|
0.07
|
|
|
July
2016
|
0.07
|
|
|
August
2016
|
0.07
|
|
|
September
2016
|
0.07
|
|
|
October
2016
|
0.07
|
|
|
November
2016
|
0.07
|
|
|
December
2016
|
0.07
|
|
|
January
2017
|
0.07
|
|
|
February
2017
|
0.08
|
Appendix
B-4
Exhibit
A-1
Form
of Class A-1A Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-1A CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-1A
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$803,560,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.130000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group I Mortgage Loan identified on the Mortgage Loan Schedule attached
as Exhibit B to that certain Pooling and Servicing Agreement dated as of
February 1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar
Mortgage Funding Corporation, as the depositor (the "Depositor"), Deutsche
Bank
National Trust Company, as trustee (the "Trustee"), U.S. Bank National
Association, as the custodian (the "Custodian"), and NovaStar Mortgage, Inc.
as
servicer (the "Servicer") and as sponsor (the "Sponsor"), including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after
the
Cut-off Date and all collections in respect of interest and principal due after
the Cut-off Date; (ii) property which secured each such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) the
Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-1A Certificates on February 28, 2007
which aggregate amount was $803,560,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-1A Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-1A
Certificates (the "Class A-1A Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-2A1 Certificates, Class A-2A2 Certificates, Class A-2B Certificates, Class
A-2C Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-1-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-1A Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-1A Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-1A Certificates. The Percentage Interest of each
Class A-1A Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-1A Certificate by $803,560,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-1-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-1-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-1A Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-1A Certificates are exchangeable for
new
Class A-1A Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-1-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
|
By:
|
Name:
Title:
|
|
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
By:
|
Name:
Title:
|
||
|
|
|||
|
By:
|
Name:
Title:
|
X-0-0
Xxxxxxx
X-0
Form
of Class A-2A1 Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-2A1 CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-2A1
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$262,665,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.10000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group II Mortgage Loan identified on the Mortgage Loan Schedule
attached as Exhibit B to that certain Pooling and Servicing Agreement dated
as
of February 1, 2007 (the "Pooling and Servicing Agreement") by and among
NovaStar Mortgage Funding Corporation, as the depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), U.S. Bank
National Association, as the custodian (the "Custodian"), and NovaStar Mortgage,
Inc. as servicer (the "Servicer") and as sponsor (the "Sponsor"), including
the
related Cut-off Date Principal Balance, all interest accruing thereon on and
after the Cut-off Date and all collections in respect of interest and principal
due after the Cut-off Date; (ii) property which secured each such Mortgage
Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii)
the Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-2A1 Certificates on February 28, 2007
which aggregate amount was $262,665,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-2A Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-2A1
Certificates (the "Class A-2A1 Certificates") and issued under and subject
to
the terms, provisions and conditions of the Pooling and Servicing Agreement,
to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A2 Certificates, Class A-2B Certificates, Class
A-2C
Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-2-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-2A1 Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-2A1 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-2A1 Certificates. The Percentage Interest of each
Class A-2A1 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-2A1 Certificate by $262,665,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-2-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-2-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-2A1 Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2A1 Certificates are exchangeable for
new
Class A-2A1 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-2-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class A-2A2 Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-2A2 CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-2A2
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$100,000,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
5.86000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group II Mortgage Loan identified on the Mortgage Loan Schedule
attached as Exhibit B to that certain Pooling and Servicing Agreement dated
as
of February 1, 2007 (the "Pooling and Servicing Agreement") by and among
NovaStar Mortgage Funding Corporation, as the depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), U.S. Bank
National Association, as the custodian (the "Custodian"), and NovaStar Mortgage,
Inc. as servicer (the "Servicer") and as sponsor (the "Sponsor"), including
the
related Cut-off Date Principal Balance, all interest accruing thereon on and
after the Cut-off Date and all collections in respect of interest and principal
due after the Cut-off Date; (ii) property which secured each such Mortgage
Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii)
the Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-2A2 Certificates on February 28, 2007
which aggregate amount was $100,000,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-2A2 Certificates.
Therefore, the actual outstanding principal amount of this Certificate, on
any
date subsequent to March 26, 2007 (the first Distribution Date) will be less
than the Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-2A2
Certificates (the "Class A-2A2 Certificates") and issued under and subject
to
the terms, provisions and conditions of the Pooling and Servicing Agreement,
to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2B Certificates, Class
A-2C
Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-3-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-2A2 Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-2A2 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-2A2 Certificates. The Percentage Interest of each
Class A-2A2 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-2A2 Certificate by $100,000,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-3-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-3-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-2A2 Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2A2 Certificates are exchangeable for
new
Class A-2A2 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-3-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class A-2B Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-2B CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-2B
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$131,454,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.15000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group II Mortgage Loan identified on the Mortgage Loan Schedule
attached as Exhibit B to that certain Pooling and Servicing Agreement dated
as
of February 1, 2007 (the "Pooling and Servicing Agreement") by and among
NovaStar Mortgage Funding Corporation, as the depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), U.S. Bank
National Association, as the custodian (the "Custodian"), and NovaStar Mortgage,
Inc. as servicer (the "Servicer") and as sponsor (the "Sponsor"), including
the
related Cut-off Date Principal Balance, all interest accruing thereon on and
after the Cut-off Date and all collections in respect of interest and principal
due after the Cut-off Date; (ii) property which secured each such Mortgage
Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii)
the Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-2B Certificates on February 28, 2007
which aggregate amount was $131,454,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-2B Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-2B
Certificates (the "Class A-2B Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2C Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-4-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-2B Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-2B Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-2B Certificates. The Percentage Interest of each
Class A-2B Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-2B Certificate by $131,454,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-4-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-4-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-2B Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2B Certificates are exchangeable for
new
Class A-2B Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-4-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class A-2C Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-2C CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee, or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-2C
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$125,575,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.18000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group II Mortgage Loan identified on the Mortgage Loan Schedule
attached as Exhibit B to that certain Pooling and Servicing Agreement dated
as
of February 1, 2007 (the "Pooling and Servicing Agreement") by and among
NovaStar Mortgage Funding Corporation, as the depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), U.S. Bank
National Association, as the custodian (the "Custodian"), and NovaStar Mortgage,
Inc. as servicer (the "Servicer") and as sponsor (the "Sponsor"), including
the
related Cut-off Date Principal Balance, all interest accruing thereon on and
after the Cut-off Date and all collections in respect of interest and principal
due after the Cut-off Date; (ii) property which secured each such Mortgage
Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii)
the Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-2C Certificates on February 28, 2007
which aggregate amount was $125,575,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-2C Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-2C
Certificates (the "Class A-2C Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-5-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-2C Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-2C Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-2C Certificates. The Percentage Interest of each
Class A-2C Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-2C Certificate by $125,575,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-5-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-5-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-2C Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2C Certificates are exchangeable for
new
Class A-2C Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-5-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class A-2D Certificate
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
A-2D CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
A-2D
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$34,920,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.24000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Group II Mortgage Loan identified on the Mortgage Loan Schedule
attached as Exhibit B to that certain Pooling and Servicing Agreement dated
as
of February 1, 2007 (the "Pooling and Servicing Agreement") by and among
NovaStar Mortgage Funding Corporation, as the depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), U.S. Bank
National Association, as the custodian (the "Custodian"), and NovaStar Mortgage,
Inc. as servicer (the "Servicer") and as sponsor (the "Sponsor"), including
the
related Cut-off Date Principal Balance, all interest accruing thereon on and
after the Cut-off Date and all collections in respect of interest and principal
due after the Cut-off Date; (ii) property which secured each such Mortgage
Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii)
the Depositor's interest in any insurance policies in respect of such Mortgage
Loans; (iv) all proceeds of any of the foregoing; (v) the rights of the
Depositor under the Purchase Agreement and (vi) all other assets included or
to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class A-2D Certificates on February 28, 2007
which aggregate amount was $34,920,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class A-2D Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class A-2D
Certificates (the "Class A-2D Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-6-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class A-2D Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class A-2D Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class A-2D Certificates. The Percentage Interest of each
Class A-2D Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class A-2D Certificate by $34,920,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-6-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-6-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
A-2D Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2D Certificates are exchangeable for
new
Class A-2D Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-6-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class M-1 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-1
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
M-1
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$100,108,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.32000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor, (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-1 Certificates on February 28, 2007
which aggregate amount was $100,108,000. The owner hereof is entitled to
principal payments on each Distribution Date, as hereinafter described, which
will fully amortize such Original Principal Amount over the period from the
date
of initial delivery hereof to the final Distribution Date of the Class M-1
Certificates. Therefore, the actual outstanding principal amount of this
Certificate, on any date subsequent to March 26, 2007 (the first Distribution
Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-1
Certificates (the "Class M-1 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-7-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-1 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-1 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-1 Certificates. The Percentage Interest of each
Class M-1 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-1 Certificate by $100,108,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-7-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-7-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-1 Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-1 Certificates are exchangeable for
new
Class M-1 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-7-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class M-2 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-2
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
M-2
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$84,053,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.39000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(I) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-2 Certificates on February 28, 2007
which aggregate amount was $84,053,000. The owner hereof is entitled to
principal payments on each Distribution Date, as hereinafter described, which
will fully amortize such Original Principal Amount over the period from the
date
of initial delivery hereof to the final Distribution Date of the Class M-2
Certificates. Therefore, the actual outstanding principal amount of this
Certificate, on any date subsequent to March 26, 2007 (the first Distribution
Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-2
Certificates (the "Class M-2 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-8-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-2 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-2 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-2 Certificates. The Percentage Interest of each
Class M-2 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-2 Certificate by $84,053,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-8-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-8-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-2 Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-2 Certificates are exchangeable for
new
Class M-2 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-8-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
|
|||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
|
By:
|
Name:
Title:
|
||
X-0-0
Xxxxxxx
X-0
Form
of Class M-3 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-3
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
M-3
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$26,444,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.42000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-3 Certificates on February 28, 2007
which aggregate amount was $26,444,000. The owner hereof is entitled to
principal payments on each Distribution Date, as hereinafter described, which
will fully amortize such Original Principal Amount over the period from the
date
of initial delivery hereof to the final Distribution Date of the Class M-3
Certificates. Therefore, the actual outstanding principal amount of this
Certificate, on any date subsequent to March 26, 2007 (the first Distribution
Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-3
Certificates (the "Class M-3 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificate, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-9-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-3 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-3 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-3 Certificates. The Percentage Interest of each
Class M-3 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-3 Certificate by $26,444,000.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-9-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-9-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-3 Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-3 Certificates are exchangeable for
new
Class M-3 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-9-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
| DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity, but solely in its capacity as Trustee | |||
| By: | |||
|
Name:
Title:
|
A-9-6
Exhibit
A-10
Form
of Class M-4 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-4
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
M-4
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.55000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-4 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-4N Certificates, but will not exceed
$37,777,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-4 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-4
Certificates (the "Class M-4 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-10-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-4 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-4 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-4 Certificates. The Percentage Interest of each
Class M-4 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-4 Certificate by the aggregate Original Principal Balances of all Class
M-4 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-10-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-10-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-4 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-4 Certificates are exchangeable
for new Class M-4 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-10-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-10-6
Exhibit
A-11
Form
of Class M-5 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-5
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
|
No.:
M-5
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.60000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-5 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-5N Certificates, but will not exceed
$32,110,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-5 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-5
Certificates (the "Class M-5 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-11-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-5 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-5 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-5 Certificates. The Percentage Interest of each
Class M-5 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-5 Certificate by the aggregate Original Principal Balances of all Class
M-5 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-11-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-11-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-5 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-5 Certificates are exchangeable
for new Class M-5 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-11-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-11-6
Exhibit
A-12
Form
of Class M-6 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-6
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-6
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.75000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-6 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-6N Certificates, but will not exceed
$19,833,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-6 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
A-12-2
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-6
Certificates (the "Class M-6 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-6 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-6 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-6 Certificates. The Percentage Interest of each
Class M-6 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-6 Certificate by the aggregate Original Principal Balances of all Class
M-6 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
A-12-3
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-12-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-6 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-6 Certificates are exchangeable
for new Class M-6 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-12-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-12-6
Exhibit
A-13
Form
of Class M-7 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-7
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-7
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 1.75000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-7 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-7N Certificates, but will not exceed
$21,721,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-7 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
A-13-2
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-7
Certificates (the "Class M-7 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-7 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-7 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-7 Certificates. The Percentage Interest of each
Class M-7 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-7 Certificate by the aggregate Original Principal Balances of all Class
M-7 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
A-13-3
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-13-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-7 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-7 Certificates are exchangeable
for new Class M-7 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-13-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-13-6
Exhibit
A-14
Form
of Class M-8 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-8
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-8
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-8 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-8N Certificates, but will not exceed
$14,166,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-8 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
A-14-2
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-8
Certificates (the "Class M-8 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-9 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-8 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-8 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-8 Certificates. The Percentage Interest of each
Class M-8 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-8 Certificate by the aggregate Original Principal Balances of all Class
M-8 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
A-14-3
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-14-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-8 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-8 Certificates are exchangeable
for new Class M-8 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-14-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-14-6
Exhibit
A-15
Form
of Class M-9 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-9
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-9
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-9 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations from the Class M-9N Certificates, but will not exceed
$18,888,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-9 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
A-15-2
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-9
Certificates (the "Class M-9 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-10 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-9 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-9 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-9 Certificates. The Percentage Interest of each
Class M-9 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-9 Certificate by the aggregate Original Principal Balances of all Class
M-9 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
A-15-3
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-15-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-9 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-9 Certificates are exchangeable
for new Class M-9 Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-15-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-15-6
Exhibit
A-16
Form
of Class M-10 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-10 CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-10
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
||
|
Original
Principal Balance:
$0
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
||
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-10 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations form the Class M-10N Certificates, but will not
exceed $13,222,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-10 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
A-16-2
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-10
Certificates (the "Class M-10 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-11
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-10 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-10 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-10 Certificates. The Percentage Interest of each
Class M-10 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-10 Certificate by the aggregate Original Principal Balances of all
Class
M-10 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-16-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-16-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-10 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-10 Certificates are exchangeable
for new Class M-10 Certificates of authorized denominations evidencing the
same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-16-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Trustee
Authentication
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
|||
| By: | |||
|
Name:
Title:
|
A-16-6
Exhibit
A-17
Form
of Class M-11 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-11 CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
EXCEPT
AS
PERMITTED IN THE POOLING AND SERVICING AGREEMENT, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY PLAN
DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR ANY INTEREST HEREIN
WITH THE ASSETS OF ANY SUCH PLAN.
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No.:
M-11
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Date:
February 28, 2007
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CUSIP:
000000XX0
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Original
Principal Balance:
$0
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Registered
Owner:
CEDE
& CO.
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Final
Scheduled Distribution
Date:
March 25, 2037
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Percentage
Interest: 100%
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Pass-Through
Rate:
LIBOR
+ 2.25000%
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The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-11 Certificates on February 28, 2007
which aggregate amount was $0. The Original Principal Amount hereof may be
increased by Reallocations form the Class M-11N Certificates, but will not
exceed $18,888,000. The owner hereof is entitled to principal payments on each
Distribution Date, which will fully amortize such Original Principal Amount
over
the period from the date of initial delivery hereof to the final Distribution
Date of the Class M-11 Certificates. Therefore, the actual outstanding principal
amount of this Certificate, on any date subsequent to March 26, 2007 (the first
Distribution Date) will be less than the Original Principal Amount set forth
above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
A-17-2
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-11
Certificates (the "Class M-11 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-6 DSI Certificates, Class M-7 DSI Certificates, Class
M-8
DSI Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates,
Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-11 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-11 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class M-11 Certificates. The Percentage Interest of each
Class M-11 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-11 Certificate by the aggregate Original Principal Balances of all
Class
M-11 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-17-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-17-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-11 Certificates are issuable only as registered Certificates in denominations,
post Reallocation, of $25,000 Original Principal Amount and integral multiples
of $1,000. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class M-11 Certificates are exchangeable
for new Class M-11 Certificates of authorized denominations evidencing the
same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-17-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
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DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
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| By: | ||
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Name: Title:
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Trustee
Authentication
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DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
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By:
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Name:
Title:
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A-17-6
Exhibit
A-18
Form
of Class I-1 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
I-1
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAW OF ANY STATE. THIS
CERTIFICATE IS NOT TRANSFERABLE.
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No.:
I-1
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Date:
February 28, 2007
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CUSIP:
000000XX0
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Percentage
Interest: 100%
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Registered
Owner:
NovaStar
Mortgage Supplemental Interest Trust, Series 2007-1
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Final
Scheduled Distribution Date: December 25,
2008
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The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
THIS
CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS CERTIFICATE
SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT TO THE
MORTGAGE LOANS.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class I-1
Certificates (the "Class I-1 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class I-1 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
A-18-2
Each
owner of record of a Class I-1 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class I-1 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
A-18-3
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class I-1 Certificates are exchangeable for
new
Class I-1 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-18-4
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
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DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
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| By: | ||
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Name: |
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Title:
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Trustee
Authentication
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DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
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By:
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Name:
Title:
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A-18-5
Exhibit
A-19
Form
of Class I-2 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
I-2
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAW OF ANY STATE. THIS
CERTIFICATE IS NOT TRANSFERABLE.
|
No.:
I-2
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Percentage
Interest: 100%
|
Registered
Owner:
NovaStar
Mortgage Supplemental Interest Trust, Series 2007-1
|
Final
Scheduled Distribution Date: December 25,
2009
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
THIS
CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS CERTIFICATE
SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT TO THE
MORTGAGE LOANS.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class I-2
Certificates (the "Class I-2 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class I-2 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
A-19-2
Each
owner of record of a Class I-2 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class I-2 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
A-19-3
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class I-2 Certificates are exchangeable for
new
Class I-2 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-19-4
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-19-5
Exhibit
A-20
Form
of Class I-3 Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
I-3
CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAW OF ANY STATE. THIS
CERTIFICATE IS NOT TRANSFERABLE.
|
No.:
I-3
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Percentage
Interest: 100%
|
Registered
Owner:
NovaStar
Mortgage Supplemental Interest Trust, Series 2007-1
|
Final
Scheduled Distribution Date: January 25,
2010
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
THIS
CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS CERTIFICATE
SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT TO THE
MORTGAGE LOANS.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class I-3
Certificates (the "Class I-3 Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class I-3 Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
A-20-2
Each
owner of record of a Class I-3 Certificate will be entitled to receive such
owner's Percentage Interest in the amounts distributed on such Distribution
Date
to the owners of the Class I-3 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
A-20-3
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class I-3 Certificates are exchangeable for
new
Class I-3 Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-20-4
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
By:
Name:
Title:
|
A-20-5
Exhibit
A-21
Form
of Class CA Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
CA
CERTIFICATES
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
CA
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$1,888,825,898
|
Registered
Owner:
Newport
Funding Corp.
|
Final
Scheduled Distribution
Date: March 25, 2037 |
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class CA Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
ONE
OR MORE CLASSES OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE
CODE.
DISTRIBUTIONS
ON THIS CERTIFICATE WILL BE MADE TO THE OWNER HEREOF FOLLOWING THE PRIOR FUNDING
OF AMOUNTS OWED TO CERTAIN HEDGE COUNTERPARTIES, AND FOLLOWING THE FUNDING
OF
SUPPLEMENTAL INTEREST PAYMENTS TO CERTAIN OTHER CLASSES OF
CERTIFICATES.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class CA
Certificates (the "Class CA Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class I-3 Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-21-2
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class CA Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive payments in respect of interest,
principal, if any, and the Prepayment Charges relating to such Distribution
Date, all as described in Article IV of the Pooling and Servicing Agreement.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-21-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
A-21-4
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class CA Certificates are exchangeable for new
Class CA Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-21-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not
in its individual capacity, but solely in its capacity as
Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely in its capacity as Trustee |
|
|
|
|
|
By:
Name:
Title:
|
A-21-6
Exhibit
A-22
Form
of Class CB Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
CB
CERTIFICATES
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
CB
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$1,888,825,898
|
Registered
Owner:
Newport
Funding Corp.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class CB Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
ONE
OR MORE CLASSES OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE
CODE.
DISTRIBUTIONS
ON THIS CERTIFICATE WILL BE MADE TO THE OWNER HEREOF FOLLOWING THE PRIOR FUNDING
OF AMOUNTS OWED TO CERTAIN HEDGE COUNTERPARTIES, AND FOLLOWING THE FUNDING
OF
SUPPLEMENTAL INTEREST PAYMENTS TO CERTAIN OTHER CLASSES OF
CERTIFICATES.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
A-22-2
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class CB
Certificates (the "Class CB Certificates") and issued under and subject to
the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class I-3 Certificates, Class CA Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class CB Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive payments in respect of interest,
principal, if any, and the Prepayment Charges relating to such Distribution
Date, all as described in Article IV of the Pooling and Servicing Agreement.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
A-22-3
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
A-22-4
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class CB Certificates are exchangeable for new
Class CB Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-22-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not
in its individual capacity, but solely in its capacity as
Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
not
in its individual capacity, but solely in its capacity as
Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-22-6
Exhibit
A-23
Form
of Class R Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
R
CERTIFICATES
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans held
in
the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAW OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
R
|
Date:
February 28, 2007
|
Final
Scheduled Distribution Date: March 25, 2037
|
|
Percentage
Interest: 100%
|
Registered
Owner:
Wachovia
Bank N.A.
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class R Certificate will be entitled to certain
distributions as described in Exhibit K of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS "RESIDUAL
INTERESTS" IN SIX "REAL ESTATE MORTGAGE INVESTMENT CONDUITS" ("REMICs") AS
THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
TRANSFER
OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R CERTIFICATE MAY BE MADE TO
A
"DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(5) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH TERM INCLUDES THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT,
ANY
INTERNATIONAL ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE
ORGANIZATION FURNISHING ELECTRIC ENERGY OR PROVIDING THEREOF SERVICE TO PERSONS
IN RURAL AREAS, OR ANY ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE) THAT
IS
EXEMPT FROM FEDERAL INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
ON
UNRELATED BUSINESS INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE
REGISTERED BY THE TRUSTEE UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN
AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT
A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR
THE
ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED
OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE
TRUSTEE.
A-23-2
A
TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THRU ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND
THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT
OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THRU ENTITY BY SUCH DISQUALIFIED
ORGANIZATION AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS.
FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THRU" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T, CHAPTER 1 OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS,
NOMINEES.
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class R
Certificates (the "Class R Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class I-3 Certificates, Class CA Certificates, and Class CB
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
A-23-3
Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class R Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to receive the distribution described in Article
IV of the Pooling and Servicing Agreement relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
A-23-4
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class R Certificates are exchangeable for new
Class R Certificates of authorized denominations evidencing the same aggregate
principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-23-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-23-6
Exhibit
A-24
Form
of Class M-6 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-6
DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-6 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$19,833,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date: March 25, 2037 |
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-6 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-6
DSI Certificates (the "Class M-6 DSI Certificates") and issued under and subject
to the terms, provisions and conditions of the Pooling and Servicing Agreement,
to which the owner of this Certificate, by virtue of acceptance hereof assents,
and is bound. Also issued under the Pooling and Servicing Agreement are the
Class A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates,
Class A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates,
Class
M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-7 DSI Certificates, Class M-8
DSI
Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates, Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-24-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-6 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-24-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-24-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-6 DSI Certificates are exchangeable
for
new Class M-6 DSI Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-24-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-24-6
Exhibit
A-25
Form
of Class M-7 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-7
DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-7 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$27,721,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-7 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-7
DSI Certificates (the "Class M-7 DSI Certificates") and issued under and subject
to the terms, provisions and conditions of the Pooling and Servicing Agreement,
to which the owner of this Certificate, by virtue of acceptance hereof assents,
and is bound. Also issued under the Pooling and Servicing Agreement are the
Class A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates,
Class A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates,
Class
M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-8
DSI
Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates, Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-25-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-7 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-25-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-25-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-7 DSI Certificates are exchangeable
for
new Class M-7 DSI Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-25-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-25-6
Exhibit
A-26
Form
of Class M-8 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-8
DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT
TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-8 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$14,166,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the "Pooling and Servicing Agreement") by and among NovaStar Mortgage
Funding Corporation, as the depositor (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), U.S. Bank National Association,
as
the custodian (the "Custodian"), and NovaStar Mortgage, Inc. as servicer (the
"Servicer") and as sponsor (the "Sponsor"), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-8 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-8
DSI Certificates (the "Class M-8 DSI Certificates") and issued under and subject
to the terms, provisions and conditions of the Pooling and Servicing Agreement,
to which the owner of this Certificate, by virtue of acceptance hereof assents,
and is bound. Also issued under the Pooling and Servicing Agreement are the
Class A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates,
Class A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates,
Class
M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-9 DSI Certificates, Class M-10 DSI Certificates, Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
"Certificates". Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-26-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a "Distribution Date") commencing
March 26, 2007, the owners of the Class M-8 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
"Record Date") will be entitled to the distribution described in Article IV
of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-26-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-26-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-8 DSI Certificates are exchangeable
for
new Class M-8 DSI Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-26-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
|
|
Trustee
Authentication
|
|
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
|
|
|
|
|
By:
Name:
Title:
|
A-26-6
Exhibit
A-27
Form
of Class M-9 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-9
DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-9 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$18,888,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-9 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-9
DSI Certificates (the “Class M-9 DSI Certificates”) and issued under and subject
to the terms, provisions and conditions of the Pooling and Servicing Agreement,
to which the owner of this Certificate, by virtue of acceptance hereof assents,
and is bound. Also issued under the Pooling and Servicing Agreement are the
Class A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates,
Class A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates,
Class
M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-10 DSI Certificates, Class
M-11 DSI Certificates, Class M-6N Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
A-27-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-9 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-27-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-27-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-9 DSI Certificates are exchangeable
for
new Class M-9 DSI Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-27-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-27-6
Exhibit
A-28
Form
of Class M-10 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-10 DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-10 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$13,222,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-10 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-10
DSI Certificates (the “Class M-10 DSI Certificates”) and issued under and
subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which the owner of this Certificate, by virtue of acceptance
hereof assents, and is bound. Also issued under the Pooling and Servicing
Agreement are the Class A-1A Certificates, Class A-2A1 Certificates, Class
A-2A2
Certificates, Class A-2B Certificates, Class A-2C Certificates, Class A-2D
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9
Certificates, Class M-10 Certificates, Class M-11 Certificates, Class M-6 DSI
Certificates, Class M-7 DSI Certificates, Class M-8 DSI Certificates, Class
M-9
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class I-3 Certificates, Class CA Certificates, Class CB
Certificates, and Class R Certificates, and all such Certificates are
collectively referred to as the “Certificates”. Terms capitalized herein and not
otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
A-28-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-10 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-28-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-28-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-10 DSI Certificates are exchangeable
for
new Class M-10 DSI Certificates of authorized denominations evidencing the
same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-28-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-28-6
Exhibit
A-29
Form
of Class M-11 DSI Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-11 DSI CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of
Mortgage
Loans The Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-11 DSI
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Notional
Amount:
$18,888,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
Each
owner of record of a Class M-11 DSI Certificate will be entitled to certain
distributions, as described under Article IV of the Pooling and Servicing
Agreement.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-11
DSI Certificates (the “Class M-11 DSI Certificates”) and issued under and
subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which the owner of this Certificate, by virtue of acceptance
hereof assents, and is bound. Also issued under the Pooling and Servicing
Agreement are the Class A-1A Certificates, Class A-2A1 Certificates, Class
A-2A2
Certificates, Class A-2B Certificates, Class A-2C Certificates, Class A-2D
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9
Certificates, Class M-10 Certificates, Class M-11 Certificates, Class M-6 DSI
Certificates, Class M-7 DSI Certificates, Class M-8 DSI Certificates, Class
M-9
DSI Certificates, Class M-10 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class M-11N Certificates, Class I-1 Certificates, Class I-2
Certificates, Class I-3 Certificates, Class CA Certificates, Class CB
Certificates, and Class R Certificates, and all such Certificates are
collectively referred to as the “Certificates”. Terms capitalized herein and not
otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
A-29-2
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-11 DSI Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
A-29-3
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
A-29-4
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-11 DSI Certificates are exchangeable
for
new Class M-11 DSI Certificates of authorized denominations evidencing the
same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-29-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-29-6
Exhibit
A-30
Form
of Class M-6N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-6N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-6N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$19,833,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 0.75000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-6 Certificates on February 28, 2007
which aggregate amount was $19,833,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-6 Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-30-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-6N
Certificates (the “Class M-6N Certificates”) and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-7N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-6N Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-6 Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-6N Certificates. The Percentage Interest of each
Class M-6N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-6N Certificate by $19,833,000, less any portion thereof previously
Reallocated to the Class M-6 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-30-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-30-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-6N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-6N Certificates are exchangeable for
new
Class M-6N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-30-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity, but
solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-30-6
Exhibit
A-31
Form
of Class M-7N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-7N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-7N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$27,721,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 1.75000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-7 Certificates on February 28, 2007
which aggregate amount was $27,721,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-7 Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-31-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-7N
Certificates (the “Class M-7N Certificates”) and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-8N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-7N Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-7 Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-7 N Certificates. The Percentage Interest of each
Class M-7N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-7N Certificate by $27,721,000, less any portion thereof previously
Reallocated to the Class M-7 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-31-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-31-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-7N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-7N Certificates are exchangeable for
new
Class M-7N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-31-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-31-6
Exhibit
A-32
Form
of Class M-8N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-8N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-8N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$14,166,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-8N Certificates on February 28, 2007
which aggregate amount was $14,166,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-8N Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-32-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-8N
Certificates (the “Class M-8N Certificates”) and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-9N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-8N Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-8N Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-8N Certificates. The Percentage Interest of each
Class M-8N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-8N Certificate by $14,166,000, less any portion thereof previously
Reallocated to the Class M-8 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-32-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-32-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-8N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-8N Certificates are exchangeable for
new
Class M-8N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-32-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-32-6
Exhibit
A-33
Form
of Class M-9N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-9N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-9N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$18,888,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-9N Certificates on February 28, 2007
which aggregate amount was $18,888,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-9N Certificates. Therefore,
the actual outstanding principal amount of this Certificate, on any date
subsequent to March 26, 2007 (the first Distribution Date) will be less than
the
Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-33-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-9N
Certificates (the “Class M-9N Certificates”) and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-10N Certificates, Class
M-11N Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-9N Certificates as of the close of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-9N Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-9N Certificates. The Percentage Interest of each
Class M-9N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-9N Certificate by $18,888,000, less any portion thereof previously
Reallocated to the Class M-9 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-33-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-33-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-9N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-9N Certificates are exchangeable for
new
Class M-9N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-33-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
xxxxx
A-33-6
Exhibit
A-34
Form
of Class M-10N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-10N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-10N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$13,222,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution
Date:
March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-10N Certificates on February 28, 2007
which aggregate amount was $13,222,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-10N Certificates.
Therefore, the actual outstanding principal amount of this Certificate, on
any
date subsequent to March 26, 2007 (the first Distribution Date) will be less
than the Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-34-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-10N
Certificates (the “Class M-10N Certificates”) and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement,
to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-11N
Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-10N Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-10N Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-10N Certificates. The Percentage Interest of each
Class M-10N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-10N Certificate by $13,222,000, less any portion thereof previously
Reallocated to the Class M-10 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-34-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-34-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-10N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-10N Certificates are exchangeable for
new
Class M-10N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-34-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual
capacity, but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-34-6
Exhibit
A-35
Form
of Class M-11N Certificate
NOVASTAR
MORTGAGE FUNDING TRUST, SERIES 2007-1
HOME
EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS
M-11N CERTIFICATE
Comprised
of a Certificate Representing
Certain
Interests Relating to a Pool of Mortgage Loans
The
Mortgage Loans are Serviced by
NOVASTAR
MORTGAGE, INC., as Servicer
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.
(This
certificate does not represent an interest in, or an obligation of, nor are
the
underlying Mortgage Loans insured or guaranteed by, NovaStar Mortgage, Inc.,
NovaStar Mortgage Funding Corporation, NovaStar Financial, Inc., NovaStar
Capital, Inc., the Trustee or any of their subsidiaries and affiliates. This
certificate is comprised of a Certificate representing a fractional ownership
interest in distributions in certain Accounts created pursuant to the Pooling
and Servicing Agreement and certain other rights relating thereto and is payable
only from amounts received by the Trustee relating to the Mortgage Loans and
other assets held in the Trust Fund.)
THIS
CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH
THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO
SECTION 4975 OF THE CODE OR (III) ANY PERSON ACTING, DIRECTLY OR INDIRECTLY,
ON
BEHALF OF ANY PLAN DESCRIBED IN (I) OR (II) OR ACQUIRING THIS CERTIFICATE OR
ANY
INTEREST HEREIN WITH THE ASSETS OF ANY SUCH PLAN.
|
No.:
M-11N
|
Date:
February 28, 2007
|
CUSIP:
000000XX0
|
|
Original
Principal Balance:
$18,888,000
|
Registered
Owner:
CEDE
& CO.
|
Final
Scheduled Distribution Date: March 25, 2037
|
|
Percentage
Interest: 100%
|
Pass-Through
Rate:
LIBOR
+ 2.25000%
|
The
registered owner named above is the registered owner of a fractional interest
in
(i) each Mortgage Loan identified on the Mortgage Loan Schedule attached as
Exhibit B to that certain Pooling and Servicing Agreement dated as of February
1, 2007 (the “Pooling and Servicing Agreement”) by and among NovaStar Mortgage
Funding Corporation, as the depositor (the “Depositor”), Deutsche Bank National
Trust Company, as trustee (the “Trustee”), U.S. Bank National Association, as
the custodian (the “Custodian”), and NovaStar Mortgage, Inc. as servicer (the
“Servicer”) and as sponsor (the “Sponsor”), including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor’s
interest in any insurance policies in respect of such Mortgage Loans; (iv)
all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Purchase Agreement and (vi) all other assets included or to be included in
the
Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The
Original Principal Amount set forth above is equal to the product of (i) the
Percentage Interest represented by this Certificate and (ii) the aggregate
Original Principal Amount of the Class M-11N Certificates on February 28, 2007
which aggregate amount was $18,888,000. The owner hereof is entitled to
principal payments on each Distribution Date, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Distribution Date of the Class M-11N Certificates.
Therefore, the actual outstanding principal amount of this Certificate, on
any
date subsequent to March 26, 2007 (the first Distribution Date) will be less
than the Original Principal Amount set forth above.
In
order
to receive the final distribution hereon, the owner hereof is required to
present this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due
on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY
FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN
A
CLASS OF “REGULAR INTERESTS” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”
(“REMIC”) AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ASSUMING COMPLIANCE
WITH THE REMIC PROVISIONS (SECTIONS 860A THROUGH 860G) OF THE CODE.
THIS
CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING REFERENCES
HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS REPRESENTED HEREBY
(OTHER THAN AS REQUIRED FOR FEDERAL INCOME TAX PURPOSES).
A-35-2
NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
OR
ANY OTHER GOVERNMENTAL AGENCY.
This
Certificate is one of a Class of duly-authorized Certificates designated as
NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class M-11N
Certificates (the “Class M-11N Certificates”) and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement,
to
which the owner of this Certificate, by virtue of acceptance hereof assents,
and
is bound. Also issued under the Pooling and Servicing Agreement are the Class
A-1A Certificates, Class A-2A1 Certificates, Class A-2A2 Certificates, Class
A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class M-11 Certificates, Class M-6 DSI Certificates, Class M-7
DSI
Certificates, Class M-8 DSI Certificates, Class M-9 DSI Certificates, Class
M-10
DSI Certificates, Class M-11 DSI Certificates, Class M-6N Certificates, Class
M-7N Certificates, Class M-8N Certificates, Class M-9N Certificates, Class
M-10N
Certificates, Class I-1 Certificates, Class I-2 Certificates, Class I-3
Certificates, Class CA Certificates, Class CB Certificates, and Class R
Certificates, and all such Certificates are collectively referred to as the
“Certificates”. Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing
Agreement.
On
the
25th day of each month, or, if such day is not a Business Day, then the next
succeeding Business Day (each such day being a “Distribution Date”) commencing
March 26, 2007, the owners of the Class M-11N Certificates as of the close
of
business on the business day immediately preceding such Distribution Date (the
“Record Date”) will be entitled to the distribution described in Article IV of
the Pooling and Servicing Agreement, relating to such Distribution Date.
Distributions will be made in immediately available funds to such owners, by
wire transfer or by check mailed to the address of the person entitled thereto
as it appears on the Certificate Register.
Each
owner of record of a Class M-11N Certificate will be entitled to receive such
owner’s Percentage Interest in the amounts distributed on such Distribution Date
to the owners of the Class M-11N Certificates. The Percentage Interest of each
Class M-11N Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on
such
Class M-11N Certificate by $18,888,000, less any portion thereof previously
Reallocated to the Class M-11 Certificates.
The
Trustee is required to duly and punctually pay distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code or applicable
to
any owner shall be considered as having been paid by the Trustee to such owner
for all purposes of the Pooling and Servicing Agreement.
A-35-3
The
Mortgage Loans will be serviced by the Servicer pursuant to the Pooling and
Servicing Agreement. The Pooling and Servicing Agreement permits the Servicer
to
enter into Sub-Servicing Agreements with certain institutions eligible for
appointment as Sub-Servicers for the servicing and administration of certain
Mortgage Loans. No appointment of any Sub-Servicer shall release the Servicer
from any of its obligations under the Pooling and Servicing
Agreement.
This
Certificate does not represent a deposit or other obligation of, or an interest
in, nor are the underlying Mortgage Loans insured or guaranteed by, NovaStar
Mortgage, Inc., NovaStar Mortgage Funding Corporation, NovaStar Capital, Inc.,
NovaStar Financial Inc., the Trustee, or any of their subsidiaries and
affiliates and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Government National Mortgage Association, or any other
governmental agency. This Certificate is limited in right of payment to certain
collections and recoveries relating to the Mortgage Loans and amounts on deposit
in the Accounts (except as otherwise provided in the Pooling and Servicing
Agreement) all as more specifically set forth hereinabove and in the Pooling
and
Servicing Agreement.
No
owner
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Pooling and Servicing Agreement for the appointment of a receiver
or trustee, or for any other remedy under the Pooling and Servicing Agreement
except in compliance with the terms thereof.
Notwithstanding
any other provisions in the Pooling and Servicing Agreement, the owner of any
Certificate shall have the right which is absolute and unconditional to receive
distributions to the extent provided in the Pooling and Servicing Agreement
with
respect to such Certificate or to institute suit for the enforcement of any
such
distribution, and such right shall not be impaired without the consent of such
owner.
The
Pooling and Servicing Agreement will terminate upon notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan held by the Issuing
Entity, (iii) the optional purchase by the Servicer of the Mortgage Loans as
described below, (iv) the Distribution Date in March 2037 and (v) at any time
when a Qualified Liquidation of the Master REMIC and REMIC I, REMIC II, REMIC
III, REMIC IV and REMIC V is effected pursuant to the Pooling and Servicing
Agreement. In addition, under certain circumstances relating to the
qualification of either the Master REMIC or any of REMIC I, REMIC II, REMIC
III,
REMIC IV or REMIC V as a REMIC under the Code, the Mortgage Loans may be sold,
thereby affecting the early retirement of the Certificates. Notwithstanding
the
foregoing, in no event shall the Issuing Entity hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of
St.
Xxxxx, living on the date of the Pooling and Servicing Agreement.
The
Servicer may, at its option, terminate the Pooling and Servicing Agreement
on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
on such date is equal to or less than 10% of the Maximum Collateral Amount,
by
purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties or the market value
of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the
end
of the Due Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties and any accrued and unpaid Available Funds
Cap
Shortfall Amount and Available Funds Cap Carryforward Amount (without
duplication of amounts already paid) and any unpaid amount due the Trustee,
the
Hedge Counterparties and the Custodian under the Pooling and Servicing
Agreement.
A-35-4
The
Trustee shall give written notice of termination of the Pooling and Servicing
Agreement to each owner in the manner set forth therein.
As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the office designated as
the
location of the Certificate Register, and thereupon one or more new certificates
of like class, tenor and Percentage Interest will be issued to the designated
transferee or transferees.
The
Trustee is required to furnish certain information on each Distribution Date
to
the owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The
Class
M-11N Certificates are issuable only as registered Certificates in denominations
of $25,000 Original Principal Amount and integral multiples of $1,000. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-11N Certificates are exchangeable for
new
Class M-11N Certificates of authorized denominations evidencing the same
aggregate principal amount.
The
Trustee and any agent thereof may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the
Trustee or any such agent shall be affected by notice to the
contrary.
A-35-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on
behalf of the Issuing Entity.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Trustee
Authentication
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not in its individual capacity,
but solely in
its capacity as Trustee
|
||||
|
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
A-35-6
Exhibit
B
Mortgage
Loan Schedule
[See
Exhibit 1 to the Purchase Agreement]
Exhibit
C
[Reserved]
Exhibit
D
[Reserved]
Exhibit
E
Request
for Release
[date]
|
To:
|
U.S.
Bank National Association, as Custodian
|
|
and
Deutsche Bank National Trust
Company,
|
|
as
Trustee
|
|
Re:
|
Pooling
and Servicing Agreement, dated as of February 1, 2007
NovaStar
Home Equity Loan Asset-Backed Certificates, Series
2007-1
|
In
connection with the administration of the pool of Mortgage Loans held by you
as
Custodian, we request the release, and acknowledge receipt, of the (Mortgage
File/[specify document]) for the Mortgage Loan described below, for the reason
indicated.
Mortgagor’s
Name, Address & Zip Code:
Mortgage
Loan Number:
Reason
for Requesting Documents (check one)
|
____
1.
|
Mortgage
Loan Paid in Full
(Servicer
hereby certifies that all amounts received in connection therewith
have
been credited to the Collection Account and remitted to the Trustee
for
deposit into the Distribution Account pursuant to the Pooling and
Servicing Agreement.)
|
|
____
2.
|
Mortgage
Loan Liquidated
(Servicer
hereby certifies that all proceeds of foreclosure, insurance or
other
liquidation have been finally received and credited to the Collection
Account and remitted to the Trustee for deposit into the Distribution
Account pursuant to the Pooling and Servicing
Agreement.)
|
|
____
3.
|
Mortgage
Loan in Foreclosure
|
|
____
4.
|
Mortgage
Loan Purchased Pursuant to Section 11.01 of the Pooling and Servicing
Agreement.
|
|
____
5.
|
Mortgage
Loan Repurchased or Substituted pursuant to Article II or III of
the
Pooling and Servicing Agreement (Sponsor hereby certifies that
the
repurchase price or Substitution Adjustment has been credited to
the
Collection Account and that the substituted mortgage loan is a
Qualified
Substitute Mortgage Loan.)
|
|
____
6.
|
Other
(explain)
___________________________________________________
|
If
box 1
or 2 above is checked, and if all or part of the Mortgage File was previously
released to us, please release to us our previous receipt on file with you,
as
well as any additional documents in your possession relating to the above
specified Mortgage Loan.
If
box 3,
4, 5 or 6 above is checked, upon our return of all of the above documents to
you
as Custodian, please acknowledge your receipt by signing in the space indicated
below, and returning this form.
|
NovaStar
Mortgage, Inc.,
as
[Servicer][Sponsor]
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Documents
returned to Custodian:
U.S.
Bank National Association,
as
Custodian
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
| Date: | ||||
E-2
Exhibit
F-1
Form
of Initial Certification
[Date]
NovaStar
Mortgage, Inc.
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Senior Vice President
NovaStar
Mortgage Funding Corporation
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Senior Vice President
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration - NS0701
|
Re:
|
Pooling
and Servicing Agreement, dated as of February 1, 2007 (the “Agreement”),
among NovaStar Mortgage, Inc., NovaStar Mortgage Funding Corporation,
U.S.
Bank National Association (the “Custodian”)and Deutsche Bank National
Trust Company (the “Trustee”), relating to the NovaStar Mortgage Funding
Trust,
Series 2007-1 Home Equity Loan Asset-Backed
Certificates
|
Gentlemen:
In
accordance with Section 2.02 of the above-captioned Agreement, and Section
2.01(c) of the Mortgage Loan Purchase Agreement, dated as of February 1, 2007
(the “Purchase Agreement” and, together with the Agreement, the “Agreements”),
among NovaStar Mortgage, Inc., NovaStar Mortgage Funding Corporation, the
Custodian, the Trustee and U.S. Bank National Association, the undersigned,
as
Custodian, on behalf of the Trustee, hereby certifies that as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in
full or listed on the attachment hereto) it has reviewed the Mortgage File
and
the Mortgage Loan Schedule and has determined that: (i) all documents required
to be included in the Mortgage File are in its possession; (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, and only as to such
documents, the information set forth in items (i) - (vii) of the definition
or
description of “Mortgage Loan Schedule” is correct.
The
Custodian, on behalf of the Trustee, has made no independent examination of
any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Custodian, on behalf of the
Trustee, makes no representation that any documents specified in clause (vi)
of
Section 2.01(c) of the Purchase Agreement should be included in any Mortgage
File. The Custodian, on behalf of the Trustee, makes no representations as
to
and shall not be responsible to verify: (i) the validity, legality, sufficiency,
enforceability, due authorization, recordability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan, or (iii) the existence
of any assumption, modification, written assurance or substitution agreement
with respect to any Mortgage File if no such documents appear in the Mortgage
File delivered to the Custodian, on behalf of the Trustee.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Agreement.
|
U.S.
BANK NATIONAL ASSOCIATION, not in its
individual
capacity but solely as Custodian
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
F-1-2
Exhibit
F-2
Form
of Final Certification
[Date]
NovaStar
Mortgage, Inc.
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Senior Vice President
NovaStar
Mortgage Funding Corporation
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Senior Vice President
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration - NS0701
|
Re:
|
Pooling
and Servicing Agreement, dated as of February 1, 2007 (the “Agreement”),
among NovaStar Mortgage, Inc., NovaStar Mortgage Funding Corporation,
U.S.
Bank National Association (the “Custodian”) and Deutsche Bank National
Trust Company (the “Trustee”) relating to the NovaStar Mortgage Funding
Trust, Series
2007-1 Home Equity Loan Asset-Backed
Certificates
|
Gentlemen:
In
accordance with Section 2.02 of the above-captioned Agreement, and
Section 2.01(c) of the Mortgage Loan Purchase Agreement, dated as of
February 1, 2007 (the “Purchase Agreement” and, together with the Agreement, the
“Agreements”), among NovaStar Mortgage, Inc., NovaStar Mortgage Funding
Corporation, the Custodian and the Trustee, the undersigned, as Custodian,
on
behalf of the Trustee, hereby certifies that as to each Mortgage Loan listed
in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has received the documents set forth in
Section 2.01(c) of the Purchase Agreement.
The
Custodian, on behalf of the Trustee, has made no independent examination of
any
documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Custodian, on behalf of the Trustee, makes
no
representation that any documents specified in clause (vi) of Section 2.01(c)
should be included in any Mortgage File. The Custodian, on behalf of the
Trustee, makes no representations as to and shall not be responsible to verify:
(i) the validity, legality, sufficiency, enforceability, due authorization,
recordability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule,
(ii)
the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or (iii) the existence of any assumption, modification, written
assurance or substitution agreement with respect to any Mortgage File if no
such
documents appear in the Mortgage File delivered to the Custodian, on behalf
of
the Trustee.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Agreement.
|
U.S.
BANK NATIONAL ASSOCIATION, not in its
individual
capacity but solely as Custodian
|
||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
F-2-2
Exhibit
G
Form
of Investment Letter
NovaStar
Mortgage, Inc.
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Senior Vice President
Deutsche
Bank National Trust Company
c/o
DB
Services Tennessee
000
Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxx 00000-0000
Attention:
Transfer Unit
Ladies
and Gentlemen:
The
undersigned (the “Transferee”) has agreed to purchase from ________ (the
“Transferor”) the following certificates:
Class Number
__
__
__
__
__
I. The
Transferee is (check one):
|
__
|
(i)
An insurance company, as defined in Section 2(13) of the Securities
Act of
1933, as amended (the “Securities Act”), (ii) an investment company
registered under the Investment Company Act of 1940, as amended
(the
“Investment Company Act”), (iii) a business development company as defined
in Section 2(a)(48) of the Securities Act, (iv) 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,
as amended, (v) a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state
or its
political subdivisions, for the benefit of its employees, (vi)
a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as amended, (vii) an organization
described in Section 501(c)(3) of the Internal Revenue Code, corporation
(other than a bank as defined in Section 3(a)(2) of the Securities
Act or
a savings and loan association or other institution referenced
in Section
3(a)(2) of the Securities Act or a foreign bank or savings and
loan
association or equivalent institution), partnership, or Massachusetts
or
similar business trust; or (viii) an investment advisor registered
under
the Investment Advisors Act of 1940, as amended, which, for each
of (i)
through (viii), owns and invests on a discretionary basis at least
$100
million in securities other than securities of issuers affiliated
with the
Transferee, securities issued or guaranteed by the United States
or a
person controlled or supervised by and acting as an instrumentality
of the
government of the United States pursuant to authority granted by
the
Congress of the United States, bank deposit notes and certificates
of
deposit, loan participations, repurchase agreements, securities
owned but
subject to a repurchase agreement, and currency, interest rate
and
commodity swaps (collectively, “Excluded
Securities”);
|
|
__
|
a
dealer registered pursuant to Section 15 of the Securities Exchange
Act of
1934, as amended (the “Exchange Act”) that in the aggregate owns and
invests on a discretionary basis at least $10 million of securities
other
than Excluded Securities and securities constituting the whole
or part of
an unsold allotment to, or subscription by, Transferee as a participant
in
a public offering;
|
|
__
|
an
investment company registered under the Investment Company Act
that is
part of a family of investment companies (as defined in Rule 144A
of the
Securities and Exchange Commission) which own in the aggregate
at least
$100 million in securities other than Excluded Securities and securities
of issuers that are part of such family of investment
companies;
|
|
__
|
an
entity, all of the equity owners of which are entities described
in this
Paragraph A(I);
|
|
__
|
a
bank as defined in Section 3(a)(2) of the Securities Act, any savings
and
loan association or other institution as referenced in Section
3(a)(5)(A)
of the Securities Act, or any foreign bank or savings and loan
association
or equivalent institution that in the aggregate owns and invests
on a
discretionary basis at least $100 million in securities other than
Excluded Securities and has an audited net worth of at least $25
million
as demonstrated in its latest annual financial statements, as of
a date
not more than 16 months preceding the date of transfer of the Certificates
to the Transferee in the case of a U.S. Bank or savings and loan
association, and not more than 18 months preceding such date in
the case
of a foreign bank or savings association or equivalent
institution.
|
II. The
Transferee is acquiring such Certificates solely for its own account, for the
account of one or more others, all of which are “Qualified Institutional Buyers”
within the meaning of Rule 144A, or in its capacity as a dealer registered
pursuant to Section 15 of the Exchange Act acting in a riskless principal
transaction on behalf of a “Qualified Institutional Buyer”. The Transferee is
not acquiring such Certificates with a view to or for the resale, distribution,
subdivision or fractionalization thereof which would require registration of
the
Certificates under the Securities Act.
G-2
III. The
Transferee represents that it is not (i) an employee benefit plan (as defined
in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)) that is subject to the provisions of Title I of ERISA, or (ii) a plan
(as defined in section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended (the “Code”)) that is subject to Section 4975 of the Code, and is not
acting, directly or indirectly, on behalf of a plan described in (i) or (ii)
or
acquiring the Certificates with assets of any such plan.
|
Very
truly yours,
|
|||
| By: | |||
|
|
|||
| Title: | |||
|
|
|||
Dated:
__________
G-3
Exhibit
H
Form
of
Residual Certificate Transfer Affidavit
AFFIDAVIT
PURSUANT TO SECTION 860E OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED
[NAME
OF
OFFICER], being first duly sworn, deposes and says:
1. That
he
is [Title of Officer] of [Name of Investor] (the “Investor”), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ______] [the United States], on behalf of which he makes this affidavit
and agreement.
2. That
the
Investor (i) is not and will not be a “disqualified organization” as of [date of
transfer] within the meaning of Section 860E(e)(5) of the Internal Revenue
Code
of 1986 (the “Code”), (ii) will endeavor to remain other than a disqualified
organization for so long as it retains its ownership interest in the Class
R
Certificates, and (iii) is acquiring the Class R Certificates for its own
account or for the account of another investor from which it has received an
affidavit and agreement in substantially the same form as this affidavit and
agreement. For this purpose, a “disqualified organization” means the United
States, any state or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an instrumentality all
of
the activities of which are subject to tax and, except for the Federal Home
Loan
Mortgage Corporation, a majority of whose board of directors is not selected
by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers’ cooperatives) that generally is exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. That
the
Investor has historically paid its debts as they came due and will continue
to
pay its debts as they come due in the future.
4. That
the
Investor has no present knowledge or expectation that it will be unable to
pay
any United States taxes owed by it or that it will become insolvent or subject
to a bankruptcy proceeding for so long as any of the Class R Certificates remain
outstanding.
5. That
the
Investor has been advised of, and understands that as the holder of a
noneconomic residual interest it may incur tax liabilities in excess of any
cash
flows generated by the interest. That the Investor intends to pay such taxes
associated with holding the Class R Certificates as they become
due.
6. That
the
Investor will not cause income from the Class R Certificates to be attributable
to a foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Investor or another U.S.
taxpayer.
7. 1 [A.
Formula Test] That the Investor agrees that the present value of the anticipated
tax liabilities associated with holding the Class R Certificates does not exceed
the sum of the present value of any consideration given to the Investor to
acquire the Class R Certificates, the present value of the expected future
distributions on the Class R Certificates, and the present value of the
anticipated tax savings associated with holding the interest as the REMIC
generates losses. That the Investor agrees that it complied with U.S. Treasury
Regulations Section 1.860E-1(c)(8) in making such representation.
That
the
Investor agrees that it is not a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the Transferor or
another U.S. taxpayer.
[B.
Asset
Test] That the Investor, at the time of the transfer, and at the close of the
Investor’s two fiscal years preceding the year of the transfer, had gross assets
for financial reporting purposes in excess of $100 million and net assets in
excess of $10 million (excluding any obligation of a person related to the
Investor within the meaning of U.S. Treasury Regulations Section
1.860E-1(c)(6)(ii) or any other asset if a principle purpose for holding or
acquiring the other asset was to permit the Investor to satisfy the above stated
minimum asset requirements).
That
the
Investor is an “eligible corporation,” as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i). That the Investor agrees, in connection with any
subsequent transfer of its ownership interest in the Class R Certificates,
to
transfer its ownership interest only to another “eligible corporation,” as
defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), and to honor
the
restrictions on subsequent transfers of the Class R Certificates by transferring
its ownership interest only in a transaction that satisfies the requirements
of
U.S. Treasury Regulations Section 1.860E-1(c)(4)(i), (ii) (iii) and U.S.
Treasury Regulations Section 1.860E-1(c)(5).
That
the
Investor determined the consideration paid to it to acquire the Class R
Certificates in good faith and based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment
and
loss assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Investor).
8. That
the
Investor is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in, or under the laws of,
the
United States or any political subdivision thereof, or an estate or trust whose
income from sources without the United States is includable in gross income
for
United States federal income tax purposes regardless of its connection with
the
conduct of a trade or business within the United States.
9. That
the
Investor’s Taxpayer Identification Number is ____________.
10. That
the
Investor has reviewed the restrictions set forth on the face of the Class R
Certificates and the provisions of Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificates were issued, which authorize
the
Trustee to deliver payments to a person other than the Investor and negotiate
a
mandatory sale by the Trustee in the event that the Investor holds such
Certificates in violation of Section 5.02(d). That the Investor expressly agrees
to be bound by and to comply with all the provisions of Section 5.02(d) of
the
Pooling and Servicing Agreement and the restrictions on the face of the Class
R
Certificates.
1 Insert either section 7A or 7B.
H-2
11. That
the
Investor will, in connection with any transfer that it makes of the Class R
Certificates, deliver to the Trustee a certificate, in form and substance
satisfactory to the Trustee, that is in substantially the same form as Exhibit
I
attached to the Pooling and Servicing Agreement and that contains the same
representations set forth therein.
12. That
the
Investor will not transfer any of its interest in the Class R Certificates
unless (i) it has received from any subsequent transferee an affidavit in
substantially the same form as this affidavit containing the same
representations set forth herein, and (ii) as of the time of the transfer,
it
does not have actual knowledge that such affidavit is false. That the Investor
will cause such affidavit to be delivered to the Trustee upon receipt. That
the
Investor is aware that the Trustee will not register the transfer of any Class
R
Certificates unless and until such affidavit is received.
13. That
the
Investor consents to any additional restrictions or arrangements that shall
be
deemed necessary upon advice of counsel to constitute a reasonable arrangement
to ensure that the Class R Certificates will only be owned, directly or
indirectly, by an investor that is not a disqualified organization.
14. That
the
Investor understands and agrees that any breach of any of the representations
included herein shall render the transfer to the Investor contemplated hereby
null and void.
H-3
IN
WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its
behalf, pursuant to the authority of its Board of Directors, by its [Title
of
Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this _ day of .
[NAME
OF
INVESTOR]
By:
____________________________
[Name
of
Officer]
[Title
of
Officer]
[Corporate
Seal]
ATTEST:
[Assistant]
Secretary
Personally
appeared before me the above named [Name of Officer], known or proved to me
to
be the same person who executed the foregoing instrument and to be the [Title
of
Officer] of the Investor, and acknowledged to me that he executed the same
as
his free act and deed and the free act and deed of the Investor.
H-4
Exhibit
I
Transferor’s
Certificate
|
To:
|
Deutsche
Bank National Trust Company
c/o
DB Services Tennessee
000
Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxx 00000-0000
Attention:
Transfer Unit |
Re: The
Pooling and Servicing Agreement, dated as of February 1, 2007, among NovaStar
Mortgage Funding Corporation, as Depositor, NovaStar Mortgage, Inc., as Servicer
and as Sponsor, U.S. Bank National Association, as Custodian, Deutsche Bank
National Trust Company,
as trustee
Ladies
and Gentlemen:
This
letter is delivered to you in connection with the transfer by NovaStar Mortgage,
Inc. (the “Sponsor”) to ______________________ (the “Purchaser”) of a ___%
Percentage Interest of NovaStar Mortgage Funding Trust, Series 2007-1, NovaStar
Home Equity Loan Asset-Backed Certificates, Series 2007-1, Class R (the
“Certificates”), pursuant to Section 5.02(d) of the Pooling and Servicing
Agreement (the “Pooling and Servicing Agreement”), dated as of February 1, 2007
among NovaStar Mortgage Funding Corporation, as Depositor (the “Depositor”),
NovaStar Mortgage, Inc., as Servicer and Sponsor (the “Servicer and Sponsor”),
U.S. Bank National Association, as Custodian (the “Custodian”), Deutsche Bank
National Trust Company, as trustee (the “Trustee”). All terms used herein and
not otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Sponsor hereby certifies, represents and warrants
to,
and covenants with, the Depositor and the Trustee that:
1.
No
purpose of the Sponsor relating to the transfer of the Certificates by the
Sponsor to the Purchaser is or will be to impede the assessment or collection
of
any tax.
2.
The
Sponsor has conducted a reasonable investigation of the financial condition
of
the Purchaser and, as a result of such investigation, has concluded that the
Purchaser has historically paid its debts as they came due and will continue
to
pay its debts as they come due in the future.
3.
The
Sponsor has received, and understands that the Purchaser has delivered to the
Trustee and the Depositor, a Residual Certificate Transfer Affidavit in the
form
attached to the Pooling and Servicing Agreement as Exhibit H. The Sponsor does
not know or believe that any representation contained therein is
false.
4.
The
Sponsor does not know or have reason to know that the Purchaser (i) will be
unwilling or unable to pay taxes due on its share of the Certificates or (ii)
will not honor the restrictions on subsequent transfers of the Certificates
set
forth in section 5.02(d) of the Pooling and Servicing Agreement and in the
Residual Certificate Transfer Affidavit.
5.
The
Sponsor has no actual knowledge that the proposed Transferee is not both a
United States Person and a Permitted Transferee.
Very
truly yours,
(Sponsor)
By:
Name:
Title:
I-2
Exhibit
J
Designation
Under REMIC Provisions
[Please
See Attached]
Exhibit
J
Novastar
2007-1
Designation
Under REMIC Provisions
(a) The
Trustee shall elect that each of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC
V
and the Master REMIC be treated as a REMIC under Section 860D of the Code.
Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of
such
REMIC elections.
(b) The
designation of REMIC interests shall be as follows:
(i)REMIC
I
will consist of all of the assets of the Trust (other than the Supplemental
Interest Account, the Swap Agreements, the Cap Agreements, the Novation
Agreements and the Supplemental Interest Trust), including the Mortgage Loans,
the Accounts, any REO Property and any proceeds of the foregoing. REMIC I will
be evidenced by the "REMIC I Regular Interests" as set forth in (c) below,
which
will be uncertificated and will represent the "regular interests" in REMIC
I.
The Class R-I Interest will represent the sole class of residual interest in
REMIC I;
(ii)REMIC
II
will consist of the REMIC I Regular Interests and will be evidenced by the
"REMIC II Regular Interests" as set forth in (d) below, which will be
uncertificated and will represent the "regular interests" in REMIC II. The
Class
R-II Interest will represent the sole class of residual interest in REMIC
II;
(iii)REMIC
III
will consist of the REMIC II Regular Interests and will be evidenced by the
"REMIC III Regular Interests" as set forth in (e) below, which will be
uncertificated and will represent the "regular interests" in REMIC III. The
Class R-III Interest will represent the sole class of residual interest in
REMIC
III;
(iv)REMIC
IV
will consist of the REMIC III Regular Interests and will be evidenced by the
"REMIC IV Regular Interests" as set forth in (f) below, which will be
uncertificated and will represent the "regular interests" in REMIC IV. The
Class
R-IV Interest will represent the sole class of residual interest in REMIC
IV;
(v)REMIC
V
will consist of the REMIC IV Regular Interests and will be evidenced by the
"REMIC V Regular Interests" as set forth in (g) below, which will be
uncertificated and will represent the "regular interests" in REMIC V. The Class
R-V Interest will represent the sole class of residual interest in REMIC V;
and
(vi)The
Master REMIC will consist of the REMIC V Regular Interests and will be
evidenced, as set forth in (h) below, by (i) the following Certificates, in
each
case, other than its respective Cap Contract Rights and Obligations: the Class
A-1A, the Class A-2A1, the Class 1-2A2, the Class A-2B, the Class A-2C, the
Class A-2D, the Class M-1, the Class M-2, the Class M-3, the Class M-4, the
Class M-5, the Class M-6, the Class M-7, the Class M-8, the Class M-9, the
Class
M-10, and the Class M-11, and (ii) the following Certificates: the Class I-1,
the Class I-2, the Class I-3, the Class CA and the Class CB Certificates which,
in the case of each Class referenced in (i) and (ii), will represent one or
more
"regular interests" in the Master REMIC. The Class R-VI Interest will represent
the sole class of residual interest in the Master REMIC.
(vi)The
Class
R Certificates will represent the beneficial ownership of the Class R-I, Class
R-II, Class R-III, Class R-IV, Class R-V and Class R-VI Interests. The Class
R
Certificates will not have a principal balance and will not bear
interest.
(vii)The
Trustee will hold the REMIC I Regular Interests, REMIC II Regular Interests,
REMIC III Regular Interests, REMIC IV Regular Interests and REMIC V Regular
Interests.
(c) The
REMIC
I Regular Interests shall have the following principal balances and REMIC I
Pass-Through Rates as set forth in the table below:
|
REMIC
I Interests
|
Initial
Principal
Balances
|
REMIC
I
Pass-Through
Rates
|
|
I-A
|
$110,000,000
|
(1)
|
|
I-B
|
$80,000,000
|
(1)
|
|
I-C
|
$160,000,000
|
(1)
|
|
I-D
|
$80,000,000
|
(1)
|
|
I-E
|
$80,000,000
|
(1)
|
|
I-F
|
$130,000,000
|
(1)
|
|
I-G
|
$55,000,000
|
(1)
|
|
I-H
|
$40,000,000
|
(1)
|
|
I-K
|
$40,000,000
|
(1)
|
|
I-L
|
$40,000,000
|
(1)
|
|
I-M
|
$40,000,000
|
(1)
|
|
I-O
|
$40,000,000
|
(1)
|
|
I-Q
|
$20,000,000
|
(1)
|
|
I-S
|
$20,000,000
|
(1)
|
|
I-T
|
$20,000,000
|
(1)
|
|
I-U
|
$40,000,000
|
(1)
|
|
I-V
|
$20,000,000
|
(1)
|
|
I-W
|
$30,000,000
|
(1)
|
|
I-X
|
$40,000,000
|
(1)
|
|
I-J
|
$803,825,798
|
(1)
|
|
I-P
|
$100
|
(2)
|
2
(1) The
pass-through rate for these REMIC I Regular Interests will be the Net WAC of
the
Mortgage Loans.
(2) The
Class
I-P Interest is entitled to distributions of all Prepayment
Charges.
On
each
Distribution Date, all Realized Losses, prepayments and payments of scheduled
principal with respect to the Mortgage Loans shall be allocated in the following
order: (i) first, to the Class I-J Interest until such class is paid in full
or
eliminated by such losses; (I) second, to the Class I-A Interest until such
class is paid in full or eliminated by such losses; (iii) third, to the Class
I-B Interest until such class is paid in full or eliminated by such losses;
(iv)
fourth, to the Class I-C Interest until such class is paid in full or eliminated
by such losses; (v) fifth, to the Class I-D Interest until such class is paid
in
full or eliminated by such losses; (vi) sixth, to the Class I-E Interest until
such class is paid in full or eliminated by such losses; (vii) seventh, to
the
Class I-F Interest until such class is paid in full or eliminated by such
losses; (viii)
eighth, to the Class I-G Interest until such class is paid in full or eliminated
by such losses; (ix) ninth, to the Class I-H Interest until such class is paid
in full or eliminated by such losses; (x) tenth, to the Class I-K Interest
until
such class is paid in full or eliminated by such losses; (xi) eleventh, to
the
Class I-L Interest until such class is paid in full or eliminated by such
losses; (xii) twelfth, to the Class I-M Interest until such class is paid in
full or eliminated by such losses; (xiii) thirteenth, to the Class I-O Interest
until such class is paid in full or eliminated by such losses; (xiv) fourteenth,
to the Class I-Q Interest until such class is paid in full or eliminated by
such
losses, (xv) fifteenth, to the Class I-S Interest until such class is paid
in
full or eliminated by such losses; (xvi) sixteenth, to the Class I-T Interest
until such class is paid in full or eliminated by such losses; (xvii)
seventeenth, to the Class I-U Interest until such class is paid in full or
eliminated by such losses; (xviii) eighteenth, to the Class I-V Interest until
such class is paid in full or eliminated by such losses; (xix) nineteenth,
to
the Class I-W Interest until such class is paid in full or eliminated by such
losses, (xx) twentieth, to the Class I-X Interest until such class is paid
in
full or eliminated by such losses; and (xxi) twenty-first, to the Class I-P
Interest until such class is paid in full or eliminated by such losses.
(d) The
REMIC
II Regular Interests shall have the following principal balances and REMIC
II
Pass-Through Rates set forth in the table below:
|
REMIC
II Interests
|
Corresponding
Class of
REMIC
I Regular Interest
|
Initial
Principal
Balances
|
REMIC
II
Pass-
Through
Rates
|
|
II-A1
|
I-A
|
(1)
|
(2)
|
|
II-A2
|
I-A
|
(3)
|
(4)
|
3
|
REMIC
II Interests
|
Corresponding
Class of
REMIC
I Regular Interest
|
Initial
Principal
Balances
|
REMIC
II
Pass-
Through
Rates
|
|
II-A3
|
I-A
|
(5)
|
(6)
|
|
II-B1
|
I-B
|
(1)
|
(2)
|
|
II-B2
|
I-B
|
(3)
|
(4)
|
|
II-B3
|
I-B
|
(5)
|
(6)
|
|
II-C1
|
I-C
|
(1)
|
(2)
|
|
II-C2
|
I-C
|
(3)
|
(4)
|
|
II-C3
|
I-C
|
(5)
|
(6)
|
|
II-D1
|
I-D
|
(1)
|
(2)
|
|
II-D2
|
I-D
|
(3)
|
(4)
|
|
II-D3
|
I-D
|
(5)
|
(6)
|
|
II-E1
|
I-E
|
(1)
|
(2)
|
|
II-E2
|
I-E
|
(3)
|
(4)
|
|
II-E3
|
I-E
|
(5)
|
(6)
|
|
II-F1
|
I-F
|
(1)
|
(2)
|
|
II-F2
|
I-F
|
(3)
|
(4)
|
|
II-F3
|
I-F
|
(5)
|
(6)
|
|
II-G1
|
I-G
|
(1)
|
(2)
|
|
II-G2
|
I-G
|
(3)
|
(4)
|
|
II-G3
|
I-G
|
(5)
|
(6)
|
|
II-H1
|
I-H
|
(1)
|
(2)
|
|
II-H2
|
I-H
|
(3)
|
(4)
|
|
II-H3
|
I-H
|
(5)
|
(6)
|
|
II-K1
|
I-K
|
(1)
|
(2)
|
|
II-K2
|
I-K
|
(3)
|
(4)
|
|
II-K3
|
I-K
|
(5)
|
(6)
|
|
II-L1
|
I-L
|
(1)
|
(2)
|
|
II-L2
|
I-L
|
(3)
|
(4)
|
|
II-L3
|
I-L
|
(5)
|
(6)
|
|
II-M1
|
I-M
|
(1)
|
(2)
|
|
II-M2
|
I-M
|
(3)
|
(4)
|
|
II-M3
|
I-M
|
(5)
|
(6)
|
|
II-O1
|
I-O
|
(1)
|
(2)
|
|
II-O2
|
I-O
|
(3)
|
(4)
|
|
II-O3
|
I-O
|
(5)
|
(6)
|
|
II-Q1
|
I-Q
|
(1)
|
(2)
|
|
II-Q2
|
I-Q
|
(3)
|
(4)
|
|
II-Q3
|
I-Q
|
(5)
|
(6)
|
|
II-S1
|
I-S
|
(1)
|
(2)
|
|
II-S2
|
I-S
|
(3)
|
(4)
|
|
II-S3
|
I-S
|
(5)
|
(6)
|
|
II-T1
|
I-T
|
(1)
|
(2)
|
4
|
REMIC
II Interests
|
Corresponding
Class of
REMIC
I Regular Interest
|
Initial
Principal
Balances
|
REMIC
II
Pass-
Through
Rates
|
|
II-T2
|
I-T
|
(3)
|
(4)
|
|
II-T3
|
I-T
|
(5)
|
(6)
|
|
II-U1
|
I-U
|
(1)
|
(2)
|
|
II-U2
|
I-U
|
(3)
|
(4)
|
|
II-U3
|
I-U
|
(5)
|
(6)
|
|
II-V1
|
I-V
|
(1)
|
(2)
|
|
II-V2
|
I-V
|
(3)
|
(4)
|
|
II-V3
|
I-V
|
(5)
|
(6)
|
|
II-W1
|
I-W
|
(1)
|
(2)
|
|
II-W2
|
I-W
|
(3)
|
(4)
|
|
II-W3
|
I-W
|
(5)
|
(6)
|
|
II-X1
|
I-X
|
(1)
|
(2)
|
|
II-X2
|
I-X
|
(3)
|
(4)
|
|
II-X3
|
I-X
|
(5)
|
(6)
|
|
II-J
|
I-J
|
(7)
|
(8)
|
|
II-P
|
I-P
|
$100
|
(9)
|
|
(1)
|
These
REMIC II Regular Interests will have an initial principal balance
equal to
the product of (i) the initial principal balance of the Corresponding
Class of REMIC I Regular Interest and (ii) two divided by three.
|
|
(2)
|
The
pass-through rate for these REMIC II Regular Interests will be as
follows:
(i) commencing on the first Distribution Date through and including
the
Corresponding Maturity Date from the Swap/Cap Interest Rate Schedule,
1.5
multiplied by (REMIC II Net WAC minus the Corresponding Interest
Rate from
the Swap/Cap Interest Rate Schedule) and (ii) for all Distribution
Dates
thereafter, REMIC II Net WAC.
|
|
(3)
|
These
REMIC II Regular Interests will have an initial principal balance
equal to
the initial principal balance of the Corresponding Class of REMIC
I
Regular Interest divided by three.
|
|
(4)
|
The
pass-through rate for these REMIC II Regular Interests will be as
follows:
(i) commencing on the first Distribution Date through and including
the
Corresponding Maturity Date from the Swap/Cap Interest Rate Schedule,
3
multiplied by 1-month LIBOR, subject to a cap of 3 multiplied by
the
Corresponding Interest Rate from the Swap/Cap Interest Rate Schedule
and
(ii) for all Distribution Dates thereafter, REMIC II Net
WAC.
|
|
(5)
|
These
REMIC II Regular Interests will have a notional principal balance
equal to
the principal balance of the Corresponding Class of REMIC I Regular
Interest.
|
5
|
(6)
|
The
pass-through rate for these REMIC II Regular Interests will be as
follows:
(i) commencing on the first Distribution Date through and including
the
Corresponding Maturity Date from the Swap/Cap Interest Rate Schedule,
the
Corresponding Interest Rate from the Swap/Cap Interest Rate Schedule
minus
1-Month LIBOR, subject to a floor of zero and (ii) for all Distribution
Dates thereafter, zero.
|
|
(7)
|
This
REMIC II Regular Interest will have a principal balance equal to
the
principal balance of the Corresponding Class of REMIC I Regular
Interest.
|
|
(8)
|
The
pass-through rate for this REMIC II Regular Interest will be equal
to the
REMIC II Net WAC.
|
|
(9)
|
The
Class II-P Interest is entitled to all distributions on the Class
I-P
Interest.
|
On
each
Distribution Date, all Realized Losses, prepayments and payments of scheduled
principal generated with respect to the Mortgage Loans shall be allocated in
the
following order, in each case until such classes are paid in full or eliminated
by such losses: (i) first, to the Class II-J Interest; (ii) second, pro rata,
to
the Class II-A1 and Class II-A2 Interests; (iii) third, pro rata, to the Class
II-B1 and Class II-B2 Interests; (iv) fourth, pro rata, to the Class II-C1
and
Class II-C2 Interests; (v) fifth, pro rata, to the Class II-D1 and Class II-D2
Interests; (vi) sixth, pro rata, to the Class II-E1 and Class II-E2 Interests;
(vii) seventh, pro rata, to the Class II-F1 and Class II-F2 Interests; (viii)
eighth, pro rata to the Class II-G1 and Class II-G2 Interests; (ix) ninth,
pro
rata, to the Class II-H1 and Class II-H2 Interests; (x) tenth, pro rata, to
the
Class II-K1 and Class II-K2 Interests; (xi) eleventh, pro rata, to the Class
II-L1 and Class II-L2 Interests; (xii) twelfth, pro rata, to the Class II-M1
and
Class II-M2 Interests; (xiii) thirteenth, pro rata, to the Class II-O1 and
Class
II-O2 Interests; (xiv) fourteenth, pro rata, to the Class II-Q1 and Class II-Q2
Interests, (xv) fifteenth, pro rata, to the Class II-S1 and Class II-S2
Interests, (xvi) sixteenth, pro rata, to the Class II-T1 and Class II-T2
Interests; (xvii) seventeenth, pro rata, to the Class II-U1 and Class II-U2
Interests; (xviii) eighteenth, pro rata, to the Class II-V1 and Class II-V2
Interests; (xix) nineteenth, pro rata, to the Class II-W1 and Class II-W2
Interests, (xx) twentieth, pro rata, to the Class II-X1 and Class II-X2
Interests, and (xvi) sixteenth, to the Class II-P Interest.
(e) The
REMIC
III Regular Interests shall have the following principal balances and REMIC
III
Pass-Through Rates set forth in the table below:
|
REMIC
III
Interest
|
Initial
Principal
Balance
|
REMIC
III Pass-Through Rate
|
Corresponding
Class of REMIC IV Regular Interest
|
|
III-Accrual
|
50%
of the sum of the Pool Balance
|
(1)
|
N/A
|
|
III-A1A
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-A1A
|
6
|
III-A2A1
|
50%
of the Corresponding Class Balance
|
(1)
|
XX-X0X0
|
|
XXX-X0X0
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-A2A2
|
|
III-A2B
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-A2B
|
|
III-A2C
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-A2C
|
|
III-A2D
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-A2D
|
|
III-M1
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M1
|
|
III-M2
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M2
|
|
III-M3
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M3
|
|
III-M4
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M4
|
|
III-M5
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M5
|
|
III-M6
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M6
|
|
III-M7
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M7
|
|
III-M8
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M8
|
|
III-M9
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M9
|
|
III-M10
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M10
|
7
|
III-M11
|
50%
of the Corresponding Class Balance
|
(1)
|
IV-M11
|
|
III-CA
|
50%
of the Corresponding Class Balance (Overcollateralization
Amount)
|
(1)
|
IV-CA2/
Overcollateralization Amount
|
|
III-P
|
$100
|
(2)
|
IV-CA3
|
|
III-I1
|
(3)
|
(3)
|
IV-I1
|
|
III-I2
|
(4)
|
(4)
|
IV-I2
|
|
III-I3
|
(5)
|
(5)
|
IV-I3
|
|
(1)
|
The
pass-through rate for these REMIC III Regular Interests will be the
weighted average of the pass-through rates of the Class II-A1, Class
II-A2, Class II-B1, Class II-B2, Class II-C1, Class II-C2, Class
II-D1,
Class II-D2, Class II-E1, Class II-E2, Class II-F1, Class II-F2,
Class
II-G1, Class II-G2, Class II-H1, Class II-H2, Class II-K1, Class
II-K2,
Class II-L1, Class II-L2, Class II-M1, Class II-M2, Class II-O1,
Class
II-O2, Class II-Q1, Class II-Q2, Class II-S1, Class II-S2, Class
II-T1,
Class II-T2, Class II-U1, Class II-U2, Class II-V1, Class II-V2,
Class
II-W1, Class II-W2, Class II-X1, Class II-X2 and Class II-J
Interests.
|
|
(2)
|
The
Class III-P Interest is entitled to all distributions on the Class
II-P
Interest.
|
|
(3)
|
The
Class III-I1 Interest will be an interest only regular interest and
will
be entitled to receive on each Distribution Date the sum of the amounts
distributable on the Class II-A3, Class II-B3, Class II-C3, Class
II-D3,
Class II-E3, and Class II-F3 Interests on such Distribution
Date.
|
|
(4)
|
The
Class III-I2 Interest will be an interest only regular interest and
will
be entitled to receive on each Distribution Date the sum of the amounts
distributable on the Class II-G3, Class II-H3, Class II-K3, Class
II-L3,
Class II-M3, Class II-O3, Class II-Q3, Class II-S3, Class II-T3,
Class
II-U3, Class II-V3, and Class II-W3 Interests on such Distribution
Date.
|
|
(5)
|
The
Class III-I3 Interest will be an interest only regular interest and
will
be entitled to receive on each Distribution Date the sum of the amounts
distributable on the Class II-X3 Interest on such Distribution
Date.
|
On
each
Distribution Date, 50% of the increase in the Over-collateralization Amount
will
be payable as a reduction of the principal balances of the Class III-A1A, Class
III-A2A1, Class III-A2A2, Class III-A2B, Class III-A2C, Class III-A2D, Class
III-M1, Class III-M2, Class III-M3, Class III-M4, Class III-M5, Class III-M6,
Class III-M7, Class III-M8, Class III-M9, Class III-M10, Class III-M11, and
Class III-CA Interests (in the order and relative amount of such reduction
to
the principal balance of each class's Corresponding Class of Master REMIC
Certificates) and will be accrued and added to the principal balances of the
Class III-Accrual Interest. On each Distribution Date, the increase in the
principal balance of the Class III-Accrual Interest may not exceed interest
accruals for such Distribution Date for the respective Class III-Accrual
Interests. In the event that (i) 50% of the increase in the related
Overcollateralization Amount exceeds (ii) interest accruals on the related
Class
III-Accrual Interest for such Distribution Date, the excess for such
Distribution Date (accumulated with all such excesses for all prior Distribution
Dates) will be added to any increase in the Overcollateralization Amount for
purposes of determining the amount of interest accrual on the related Class
III-Accrual Interest payable as principal on the related Class III-Accrual
Interest on the next Distribution Date pursuant to the first sentence of this
paragraph.
8
All
payments of scheduled principal and prepayments of principal shall be allocated
as follows: (i) first, 50% to the Class III-Accrual Interest and (ii) second,
50% to the Class III-A1A, Class III-A2A1, Class III-A2A2, Class III-A2B, Class
III-A2C, Class III-A2D, Class III-M1, Class III-M2, Class III-M3, Class III-M4,
Class III-M5, Class III-M6, Class III-M7, Class III-M8, Class III-M9, Class
III-M10, Class III-M11, and Class III-CA Interests (to each such Class in an
amount equal to 1/2 of the principal paid in reduction of the principal balance
of the Corresponding Class of Master REMIC Certificates) until paid in full.
Notwithstanding the above, principal payments allocated to the Class CA
Certificates that result in the reduction of the Overcollateralization Amount
shall be allocated 50% to the Class III-Accrual Interest and 50% to the Class
III-CA Interest until such classes are paid in full. Realized Losses shall
be
applied so that after all distributions have been made on each Distribution
Date
the principal balances of the Class III-A1A, Class III-A2A1, Class III-A2A2,
Class III-A2B, Class III-A2C, Class III-A2D, Class III-M1, Class III-M2, Class
III-M3, Class III-M4, Class III-M5, Class III-M6, Class III-M7, Class III-M8,
Class III-M9, Class III-M10, and Class III-M11 Interests are each equal to
50%
of the principal balance of its Corresponding Class of Master REMIC Certificates
and the Class III-Accrual Interest is equal to 50% of the sum of the Pool
Balance.
(f) The
REMIC
IV Regular Interests shall have the following principal balances, REMIC IV
Pass-Through Rates and Corresponding Classes of REMIC V Certificates, as set
forth in the table below:
|
REMIC
IV Interest
|
Initial
Principal
Balance
|
REMIC
IV
Pass-Through
Rate
|
Corresponding
Class of
REMIC
V Regular Interest
|
|
IV-A1A
|
$803,560,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
X-X0X
|
|
XX-X0X0
|
$262,665,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
X-X0X0
|
|
XX-X0X0
|
$100,000,000
|
LIBOR
+ Certificate Margin (1)
|
V-A2A2
|
|
IV-A2B
|
$131,454,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-A2B
|
|
IV-A2C
|
$125,575,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-A2C
|
9
|
IV-A2D
|
$39,920,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-A2D
|
|
IV-M1
|
$100,108,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M1
|
|
IV-M2
|
$84,053,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M2
|
|
IV-M3
|
$26,444,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M3
|
|
IV-M4
|
$37,777,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M4
|
|
IV-M5
|
$32,110,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M5
|
|
IV-M6
|
$19,833,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M6
|
|
IV-M7
|
$21,721,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M7
|
|
IV-M8
|
$14,166,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M8
|
|
IV-M9
|
$18,888,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M9
|
|
IV-M10
|
$13,222,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M10
|
|
IV-M11
|
$18,888,000
|
the
lesser of (i) 11% and (ii) LIBOR + Certificate Margin (1)
|
V-M11
|
|
IV-CA1
|
(2)
|
(2)
|
V-CA
and V-XX
|
|
XX-CA2
|
$43,442,995
|
(3)
|
V-CA
(Overcollateralization Amount)
|
|
IV-CA3
|
$100
|
(4)
|
V-CA
(Prepayment
Premuims)
|
|
IV-I1
|
(5)
|
(5)
|
V-I1
|
|
IV
I2
|
(6)
|
(6)
|
V-I2
|
|
IV
I3
|
(7)
|
(7)
|
V-I3
|
|
(1)
|
Subject
to the REMIC Available Funds Cap.
|
|
(2)
|
The
Class IV-CA1 Interest will be an interest only regular interest.
The Class
IV-CA1 Interest will bear interest on its notional principal balance.
The
Class IV-CA1 Interest will have a notional principal balance equal
to the
Pool Balance. The REMIC IV Pass-Through Rate for the Class IV-CA1
Interest
will be the excess of: (I) the weighted average of the pass-through
rates
on the REMIC IV Regular Interests (other than the Class IV-I1, Class
IV-I2
and Class IV-I3 Interests) over (II) the product of: (A) two and
(B) the
weighted average pass-through rate of the REMIC IV Regular Interests
(other than the Class IV-I1, Class IV-I2 and Class IV-I3 Interests)
where
the Class IV-Accrual Interest and the Class IV-CA Interest are subject
to
a cap equal to zero, and the remaining classes are subject to a cap
equal
to the REMIC V Pass-Through Rates on their respective Corresponding
Class
of REMIC V Regular Interests.
|
10
|
(3)
|
The
Class IV-CA2 Interest will not be entitled to any payments of
interest.
|
|
(4)
|
The
Class IV-CA3 Interest is entitled to all distributions on the Class
III-P
Interest.
|
|
(5)
|
The
Class IV-I1 Interest will be an interest only regular interest and
will be
entitled to receive on each Distribution Date all distributions on
the
Class III-I1 Interest.
|
|
(6)
|
The
Class IV-I2 Interest will be an interest only regular interest and
will be
entitled to receive on each Distribution Date all distributions on
the
Class III-I2 Interest.
|
|
(7)
|
The
Class IV-I3 Interest will be an interest only regular interest and
will be
entitled to receive on each Distribution Date all distributions on
the
Class III-I3 Interest.
|
On
each
Distribution Date, all Realized Losses, prepayments and payments of scheduled
principal generated with respect to the Mortgage Loans shall be allocated to
each REMIC IV Regular Interest and reduce the principal balance thereof in
the
order and relative amount of such reduction to the principal balance of each
class's Corresponding Class of REMIC V Certificates.
(g) The
REMIC
V Regular Interests shall have the following principal balances, REMIC V
Pass-Through Rates and Corresponding Classes of Master REMIC Certificates,
as
set forth in the table below:
|
REMIC
V Interest
|
Initial
Principal
Balance
|
REMIC
V
Pass-Through
Rate
|
Corresponding
Class of Master REMIC Certificates
|
|
V-A1A
|
$803,560,000
|
(1)
|
A-1A
|
|
V-A2A1
|
$262,665,000
|
(1)
|
A-2A1
|
|
V-A2A2
|
$100,000,000
|
(1)
|
A-2A2
|
|
V-A2B
|
$131,454,000
|
(1)
|
X-0X
|
|
X-X0X
|
$125,575,000
|
(1)
|
A-2C
|
|
V-A2D
|
$34,920,000
|
(1)
|
A-2D
|
|
V-M1
|
$100,108,000
|
(1)
|
M-1
|
|
V-M2
|
$84,053,000
|
(1)
|
M-2
|
|
V-M3
|
$26,444,000
|
(1)
|
M-3
|
|
V-M4
|
$37,777,000
|
(1)
|
M-4
|
|
V-M5
|
$32,110,000
|
(1)
|
M-5
|
|
V-M6
|
$19,833,000
|
(1)
|
M-6
|
|
V-M7
|
$21,721,000
|
(1)
|
M-7
|
|
V-M8
|
$14,166,000
|
(1)
|
M-8
|
11
|
V-M9
|
$18,888,000
|
(1)
|
M-9
|
|
V-M10
|
$13,222,000
|
(1)
|
M-10
|
|
V-M11
|
$18,888,000
|
(1)
|
M-11
|
|
V-CA1
|
(2)
|
(1)
|
CA
and CB
|
|
V-CA2
|
$43,442,995
|
(1)
|
CA
(Overcollateralization Amount)
|
|
V-CA3
|
$100
|
(1)
|
CA
(Prepayment
Premiums)
|
|
V-I1
|
(2)
|
(1)
|
I-1
|
|
V
I2
|
(2)
|
(1)
|
I-2
|
|
V
I3
|
(2)
|
(1)
|
I-3
|
(1) These
REMIC V Regular Interests are entitled to all distributions on their respective
Corresponding Class of REMIC IV Regular Interest.
(2) These
REMIC V Regular Interests will have a notional principal balance equal to the
notional principal balance on their respective Corresponding Class of REMIC
IV
Regular Interest.
On
each
Distribution Date, all Realized Losses, prepayments and payments of scheduled
principal generated with respect to the Mortgage Loans shall be allocated to
each REMIC V Regular Interest and reduce the principal balance thereof in the
order and relative amount of such reduction to the principal balance of each
class's Corresponding Class of Master REMIC Certificates.
(h) The
following table sets forth characteristics of the Certificates, each of which
(other than the Class R Certificates and, with respect to the Class A
Certificates and Class M Certificates, other than its corresponding Cap Contract
Rights) is hereby designated as a "regular interest" in the Master
REMIC:
|
Class
of Certificates
|
Initial
Certificate
Principal
Balance
|
REMIC
Pass-Through
Rate
|
Corresponding
Class of REMIC V Regular Interest
|
|
Class
A-1A
|
$803,560,000
|
(1)
|
V-A1A
|
|
Class
A-2A1
|
$262,665,000
|
(1)
|
V-A2A1
|
|
Class
A-2A2
|
$100,000,000
|
(1)
|
V-A2A2
|
|
Class
A-2B
|
$131,454,000
|
(1)
|
V-A2B
|
|
Class
A-2C
|
$125,575,000
|
(1)
|
V-A2C
|
|
Class
A-2D
|
$34,920,000
|
(1)
|
V-A2D
|
|
Class
M-1
|
$100,108,000
|
(1)
|
V-M1
|
|
Class
M-2
|
$84,053,000
|
(1)
|
V-M2
|
|
Class
M-3
|
$26,444,000
|
(1)
|
V-M3
|
|
Class
M-4
|
$37,777,000
|
(1)
|
V-M4
|
|
Class
M-5
|
$32,110,000
|
(1)
|
V-M5
|
|
Class
M-6
|
$19,833,000
|
(1)
|
V-M6
|
12
|
Class
M-7
|
$21,721,000
|
(1)
|
V-M7
|
|
Class
M-8
|
$14,166,000
|
(1)
|
V-M8
|
|
Class
M-9
|
$118,888,000
|
(1)
|
V-M9
|
|
Class
M-10
|
$13,222,000
|
(1)
|
V-M10
|
|
Class
M-11
|
$18,888,000
|
(1)
|
V-M11
|
|
Class
CA-1 (2)
|
(3)
|
(4)
|
V-CA1
|
|
Class
CA-2 (2)
|
(5)
|
(1)
|
V-CA2
|
|
Class
CA-3 (2)
|
$100
|
(1)
|
V-CA3
|
|
Class
CB
|
(3)
|
(6)
|
V-CA1
|
|
Class
I-1
|
(7)
|
(7)
|
V-I1
|
|
Class
I-2
|
(8)
|
(8)
|
V-I2
|
|
Class
I-3
|
(9)
|
(9)
|
V-I3
|
|
Class
R
|
(10)
|
(10)
|
|
(1)
|
These
Master REMIC Regular Interests are entitled to all distributions
on their
respective Corresponding Class of REMIC V Regular
Interest.
|
|
(2)
|
The
Class CA Certificates will represent three regular interests in the
Master
REMIC, the Class CA-1, Class CA-2 and Class CA-3
Interest.
|
|
(3)
|
These
Master REMIC Regular Interests will have a notional principal balance
equal to the notional principal balance on their respective Corresponding
Class of REMIC V Regular Interest.
|
|
(4)
|
For
each Distribution Date, the REMIC Pass-Through Rate for Class CA-1
Interest will equal the excess, if any, of (i) the REMIC V Pass-Through
Rate on the Class V-CA1 Interest over (ii) the Corresponding Interest
Rate
Strip from the Class CB Certificate Schedule.
|
|
(5)
|
The
Class CA-2 Interest will have a principal balance equal to the principal
balance on its Corresponding Class of REMIC V Regular
Interest.
|
|
(6)
|
For
each Distribution Date, the REMIC Pass-Through Rate for the Class
CB
Certificate will equal the lesser of (i) the REMIC V Pass-Through
Rate on
the Class V-CA1 Interest and (ii) the Corresponding Interest Rate
Strip
from the Class CB Certificate
Schedule.
|
|
(7)
|
The
Class I-1 Certificates will be an interest only regular interest
and will
be entitled to receive on each Distribution Date all distributions
on the
Class V-I1 Interest.
|
|
(8)
|
The
Class I-2 Certificates will be an interest only regular interest
and will
be entitled to receive on each Distribution Date all distributions
on the
Class V-I2 Interest.
|
13
|
(9)
|
The
Class I-3 Certificates will be an interest only regular interest
and will
be entitled to receive on each Distribution Date all distributions
on the
Class V-I3 Interest.
|
|
(10)
|
The
Class R Certificates will represent the beneficial ownership of the
R-I,
R-II, R-III, R-IV, R-V and R-VI Interests. On each Distribution Date,
available funds, if any, remaining in any of the REMICs after payments
of
interest and principal, as designated above, will be distributed
to the
Class R Certificate. It is expected that there shall not be any
distributions on the Class R
Certificate.
|
(i) For
federal income tax purposes, the "latest possible maturity date" for each of
the
REMIC I Regular Interests, REMIC II Regular Interests, REMIC III Regular
Interests (other than the Class III-I1, Class III-I2, Class III-I3 Interests),
REMIC IV Regular Interests (other than the Class IV-I1, Class IV-I2, Class
IV-I3
Interests), REMIC V Regular Interests (other than the Class V-I1, Class V-I2,
and Class V-I3 Interests) and Master REMIC Regular Interests (other than the
Class I1, Class I2 and Class I3 Certificates) is hereby set to be the
Distribution Date of March 25, 2037. The "latest possible maturity date" for
the
Class IV-I1 Interest, the Class V-I1 Interest and the Class I1 Certificates
is
hereby set to be the Distribution Date of December 2008. The "latest possible
maturity date" for the Class IV-I2 Interest, the Class V-I2 Interest and the
Class I2 Certificates is hereby set to be the Distribution Date of December
2009. The "latest possible maturity date" for the Class IV-I3 Interest, the
Class V-I3 Interest and the Class I3 Certificates is hereby set to be the
Distribution Date of January 2010.
(j) NovaStar
Financial Inc. ("NFI") is hereby designated as the "Tax Interests Registrar"
for
the purposes of maintaining a register of the tax ownership of all
uncertificated Master REMIC Regular Interests. NFI, in such capacity, shall
maintain a book-entry register reflecting such tax ownership and shall transfer
tax ownership of such uncertificated Master REMIC Regular Interests at the
request of the then-registered owner. The Tax Interests Registrar shall request
such documentation in connection with any such transfer as it shall deem
appropriate.
14
Exhibit
K
Form
of Advance Facility Notice
[date]
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration - NS0701
|
Re:
|
Advance
Facility Notice
|
Ladies
and Gentlemen: Reference is hereby made to that certain Pooling
and Servicing Agreement, dated as of February 1, 2007, by and among NovaStar
Mortgage Funding Corporation (the “Depositor”), NovaStar Mortgage, Inc., as
sponsor and servicer
(the “Sponsor” or “Servicer”), U.S. Bank National Association, as custodian (the
“Custodian”) and Deutsche Bank National Trust Company, as trustee (the
“Trustee”) (the “Agreement”). Capitalized
terms used herein but not defined herein shall have the meanings given to such
terms in the Agreement.
Pursuant
to Section 3.27(a) of the Agreement, the undersigned hereby notify you as
follows:
|
(i)
|
The
Servicer has entered into an Advance
Facility.
|
|
(ii)
|
The
Advancing Person with respect to the Advance Facility is
[_______].
|
|
(iii)
|
The
Servicer’s Assignee with respect to the Advance Facility is
[_______].
|
|
(iv)
|
Pursuant
to the Advance Facility, the Servicer’s Assignee will grant one or more
Loans to the Servicer as borrower, and the Servicer as borrower will
use
the proceeds thereof to fund, or be reimbursed for, one or more Advances
and/or Servicing Advances made by it pursuant to the
Agreement.
|
|
(v)
|
[_______],
as the Servicer’s Assignee, has the right to make withdrawals from the
Collection Account subject to Section 3.27(b) of the Agreement to
reimburse previously unreimbursed Advances and/or Servicing Advances
pursuant to Section 3.07 of the
Agreement.
|
[Remainder
of Page Intentionally Left Blank]
| Very truly yours, | |||
|
NOVASTAR
MORTGAGE INC.
as Servicer |
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
[__________________]
|
|||
| as Advancing Person | |||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
The
undersigned hereby acknowledges receipt of this notice pursuant to Section
3.27(a) of the Agreement.
|
DEUTSCHE
BANK NATIONAL TRUST
COMPANY, not in its individual capacity but solely as Trustee |
||||
|
|
||||
| By: | ||||
|
Name:
|
||||
| Title: | ||||
EXHIBIT
L
SERVICING
CRITERIA TO BE ADDRESSED IN
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
payment chain they are responsible for in the related transaction
agreements.
Key:
X - obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
|
Trustee
|
Custodian
|
||||
|
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.
|
If
applicable
|
||||||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements
to maintain a back-up servicer
for the Pool Assets are maintained.
|
If
become contractually obligated
|
||||||
|
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
|
||||||
|
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
|
||||||
|
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
|
|||||
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding
collections, cash flows or payments,
and any interest or other
fees charged for such advances,
are made, reviewed and approved
as specified in the transaction
agreements.
|
X
|
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
|
Trustee
|
Custodian
|
|
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
|
|||||
|
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*
|
|||||
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as
to prevent unauthorized access
|
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
|
*
The
Trustee need only provide if it is determined that any account maintained
by the
Trustee is a custodial account for purposes of the Servicing Criteria. This
item
is subject to further clarification from the SEC.
L-2
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
|
Trustee
|
Custodian
|
|
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
|
|||||
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated
and remitted in accordance with
timeframes, payment 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
|
|||||
|
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
|
||||||
|
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
|
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
|
L-3
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
|
Trustee
|
Custodian
|
|
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 reagings) 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
|
L-4
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
|
Trustee
|
Custodian
|
|
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
|
||||||
|
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.
|
X
|
L-5
EXHIBIT
M
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant to
Section 3.18 of the Pooling and Servicing Agreement.
Under
Item 1 of Form 10-D: a) items marked "4.03 statement" are required to be
included in the periodic reports prepared by the Trustee under Section 4.03
of
the Pooling and Servicing Agreement, provided by the Trustee based on
information received from the Servicer; and b) items marked "Form 10-D report"
are required to be in the Form 10-D report but not the 4.03 statement, provided
by the party indicated. Information under all other Items of Form 10-D is to
be
included in the Form 10-D report. All such information and any other Items
of
Form 8-K and Form 10-K set forth in this exhibit shall be sent to the Trustee
and the Depositor.
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
Depositor
|
Sponsor
|
Custodian
|
||
|
10-D
|
Must
be filed within 15 days of the payment date for the asset-backed
securities.
|
||||||||
|
1
|
Payment
and Pool Performance Information
|
||||||||
|
Item
1121(a) - payment and Pool Performance Information
|
|||||||||
|
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating payments and actual payment dates for the payment
period.
|
X
(4.03
Statement)
|
||||||||
|
(2)
Cash flows received and the sources thereof for payments, fees
and
expenses.
|
X
|
X
(4.03
Statement)
|
|||||||
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
Depositor
|
Sponsor
|
Custodian
|
|
|
(3)
Calculated amounts and payment of the flow of funds for the period
itemized by type and priority of payment, including:
|
X
|
X
(4.03
Statement)
|
||||||
|
(i)
Fees or expenses accrued and paid, with an identification of
the general
purpose of such fees and the party receiving such fees or
expenses.
|
X
|
X
(4.03
Statement)
|
||||||
|
(ii)
Payments accrued or paid with respect to enhancement or other
support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of
the general
purpose of such payments and the party receiving such
payments.
|
X
|
X
(4.03
Statement)
|
M-2
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
(iii)
Principal, interest and other payments accrued and paid on the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
X
(4.03
Statement)
|
|||||||
|
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
X
(4.03
Statement)
|
||||||
|
|
(4) Beginning and ending principal balances of the asset-backed securities. |
X
(4.03
Statement)
|
||||||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
X
|
X
(4.03
Statement)
|
M-3
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
(6)
Beginning and ending balances of transaction accounts, such
as reserve
accounts, and material account activity during the period.
|
X
|
X
(4.03
Statement)
|
||||||
|
(7)
Any amounts drawn on any credit enhancement or other support
identified in
Item 1114 of Regulation AB, as applicable, and the amount of
coverage
remaining under any such enhancement, if known and
applicable.
|
X
(4.03
Statement)
|
|||||||
|
(8)
Number and amount of pool assets at the beginning and ending
of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
X
|
X
(4.03
Statement)
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
|||||
|
(9)
Delinquency and loss information for the period.
|
X
|
X
(4.03
Statement)
|
M-4
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
|||||||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of
funds
advanced and the general source of funds for
reimbursements.
|
X
|
X
(4.03
Statement)
|
||||||
|
(11)
Any material modifications, extensions or waivers to pool asset
terms,
fees, penalties or payments during the payment period or that
have
cumulatively become material over time.
|
X
|
X
|
X
|
|||||
|
(12)
Material breaches of pool asset representations or warranties
or
transaction covenants.
|
X
|
X
|
X
|
M-5
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger
and whether
the trigger was met.
|
X
|
X
(4.03
Statement)
|
||||||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
|
X
|
X
|
||||||
|
Information
regarding any pool asset changes (other than in connection with
a pool
asset converting into cash in accordance with its terms), such
as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
|
X
|
X
|
M-6
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
| Disclose any material changes in the solicitation, credit-granting, underwriting, origination, acquisition or pool selection criteria or procedures, as applicable, used to originate, acquire or select the new pool assets. | X | X | ||||||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
X
|
|||||||
|
2
|
Legal
Proceedings
|
|||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||||
|
Sponsor
|
X
|
|||||||
|
Depositor
|
X
|
|||||||
|
Issuing
entity
|
X
|
M-7
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
Servicer,
other Servicer servicing 20% or more of pool assets at time of
report,
other material servicers
|
X
|
|||||||
|
Trustee
|
X
|
|||||||
|
Custodian
|
X
|
|||||||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||||||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or
issuing
entity, that are backed by the same asset pool or are otherwise
issued by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing
information
can be omitted if securities were not registered.
|
X
|
|||||||
|
4
|
Defaults
Upon
Senior
Securities
|
M-8
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
| Information
from Item 3 of Part II of Form 10-Q:
Report
the occurrence of any Event of Default (after expiration of any
grace
period and provision of any required notice)
|
X | X | ||||||
|
5
|
Submission
of Matters to a Vote of Certificateholders
|
|||||||
|
Information
from Item 4 of Part II of Form 10-Q
|
X
(to the extent initiated by the Servicer)
|
X
(to the extent initiated by the Trustee)
|
X
(to the extent initiated by the Depositor)
|
X
(to the extent initiated by the Sponsor)
|
||||
|
6
|
Significant
Obligors of Pool Assets
|
|||||||
|
Item
1112(b) - Significant Obligor Financial Information*
|
X
|
|||||||
|
*This
information need only be reported on the Form 10-D for the payment
period
in which updated information is required pursuant to the
Item.
|
||||||||
|
7
|
Significant
Enhancement Provider Information
|
M-9
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
| Item 1114(b)(2) - Credit Enhancement Provider Financial Information* | ||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information*
|
||||||||
|
Determining
current maximum probable exposure
|
X
|
|||||||
|
Determining
current significance percentage
|
X
|
|||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||
|
*This
information need only be reported on the Form 10-D for the payment
period
in which updated information is required pursuant to the
Items.
|
M-10
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
|
8
|
Other
Information
|
||||||||
|
Disclose
any information required to be reported on Form 8-K during the
period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below.
|
||||||||
|
9
|
Exhibits
|
||||||||
|
Payment
Report
|
X
|
||||||||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
X
|
||||||||
|
8-K
|
Must
be filed within four business days of an event reportable on
Form
8-K.
|
||||||||
M-11
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
1.01
|
Entry
into a Material Definitive Agreement
|
|||||||
|
Disclosure
is required regarding entry into or amendment of any definitive
agreement
that is material to the securitization, even if depositor is not
a
party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are fully
disclosed in the prospectus
|
X
|
X
(as applicable, if known)
|
X
|
X
|
||||
|
1.02
|
Termination
of a Material Definitive Agreement
|
|||||||
|
Disclosure
is required regarding termination of any definitive agreement that
is
material to the securitization (other than expiration in accordance
with
its terms), even if depositor is not a party.
Examples:
servicing agreement, custodial agreement.
|
X
|
X
|
X
|
M-12
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
1.03
|
Bankruptcy
or Receivership
|
|||||||
|
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Depositor, Trustee, Sponsor or Servicer, with respect to any
of the
following:
Sponsor,
Depositor, Servicer, affiliated Servicer, other Servicer servicing
20% or
more of pool assets at time of report, other material servicers,
Trustee,
Trustee, significant obligor, credit enhancer (10% or more),
derivatives
counterparty, custodian
|
X
|
X
|
X
|
X
|
M-13
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|||||||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/payment
of
cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are
disclosed
in the 4.03 statement
|
X/X
|
X/X
|
X/X
|
X/X
|
X/X
|
X/X
|
|
3.03
|
Material
Modification to Rights of Certificateholders
|
|||||||
|
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
|
X
(if known)
|
X
|
X
|
||||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||||||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
X
|
M-14
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
5.06
|
Change
in Shell Company Status
|
|||||||
|
[Not
applicable to ABS issuers]
|
X
|
|||||||
|
6.01
|
ABS
Informational and Computational Material
|
|||||||
|
[Not
included in reports to be filed under Section 3.19]
|
X
|
|||||||
|
6.02
|
Change
of Servicer or Trustee
|
|||||||
|
Requires
disclosure of any removal, replacement, substitution or addition
of any
servicer, affiliated servicer, other servicer servicing 10% or
more of
pool assets at time of report, other material servicers, or
trustee.
|
X
|
X
|
||||||
|
Reg
AB disclosure about any new servicer is also required.
|
X
|
|||||||
|
Reg
AB disclosure about any new trustee is also required.
|
X
(by new trustee)
|
M-15
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
6.03
|
Change
in Credit Enhancement or Other External Support
|
|||||||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as
derivatives.
|
X
|
X
|
||||||
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
X
|
|||||||
|
6.04
|
Failure
to Make a Required Payment
|
X
|
||||||
|
6.05
|
Securities
Act Updating Disclosure
|
|||||||
|
If
any material pool characteristic differs by 5% or more at the time
of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
X
|
M-16
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
X
|
||||||||
|
7.01
|
7.01
Regulation FD Disclosure
|
X
|
X
|
X
|
|||||
|
8.01
|
Other
Events
|
||||||||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to
Certificateholders.
|
X
|
X
|
|||||||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Party applicable to reportable event.
|
|||||||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
||||||||
|
9B
|
Other
Information
|
||||||||
|
Disclose
any information required to be reported on Form 8-K during
the fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K Item as indicated
above.
|
||||||||
M-17
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
15
|
Exhibits
and Financial Statement Schedules
|
|||||||
|
Item
1112(b) - Significant Obligor Financial Information
|
X
|
|||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
||||||||
|
Determining
current maximum probable exposure
|
X
|
|||||||
|
Determining
current significance percentage
|
X
|
M-18
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders,
including
proceedings known to be contemplated by governmental
authorities:
|
||||||||
|
Sponsor
|
X
|
|||||||
|
Depositor
|
X
|
|||||||
|
Issuing
entity
|
X
|
|||||||
|
Servicer,
affiliated Servicer, other Servicer servicing 20% or more of
pool assets
at time of report, other material servicers
|
X
|
|||||||
|
Trustee
|
X
|
|||||||
|
Custodian
|
X
|
|||||||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
M-19
|
Form
|
Item
|
Description
|
Servicer
|
Trustee
|
|
Depositor
|
Sponsor
|
Custodian
|
|
Sponsor
|
X
|
|||||||
|
Depositor
|
X
|
|||||||
|
Servicer,
affiliated Servicer, other Servicer servicing 20% or more of pool
assets
at time of report, other material servicers
|
X
|
|||||||
|
Trustee
|
X
(as to affiliations only)
|
|||||||
|
Custodian
|
X
(as to affiliations only)
|
|||||||
|
Credit
Enhancer/Support Provider
|
X
|
|||||||
|
Significant
Obligor
|
X
|
|||||||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
||||||
|
Item
1123 - Servicer Compliance Statement
|
X
|
M-20
EXHIBIT
N-1
FORM
OF
CERTIFICATION TO BE PROVIDED
BY
THE
DEPOSITOR WITH FORM 10-K
Re:
NovaStar Mortgage Funding Trust, Series 0000-0 (xxx "Xxxxxxx Xxxxxx")
Asset-Backed Certificates, Series 2007-1
I,
[identify the certifying individual], certify, that:
| 1. |
I
have reviewed this report on Form 10-K, and all reports on Form 10-D
required to be filed in respect of the period covered by this report
on
Form 10-K of NovaStar Mortgage Funding Trust, Series 0000-0, Xxxxx
Backed
Certificates, Series 0000-0 (xxx "Xxxxxxxx Xxx periodic
reports");
|
| 2. |
Based
on my knowledge, the Exchange Act periodic reports, taken as a whole,
do
not contain any untrue statement of a material fact or omit to state
a
material fact necessary to make the statements made, in light of
the
circumstances under which such statements were made, not misleading
with
respect to the period covered by this
report;
|
| 3. |
Based
on my knowledge, all of the payment, servicing and other information
required to be provided under Form 10-D for the period covered by
this
report is included in the Exchange Act periodic reports;
|
| 4. |
Based
on my knowledge and the servicer compliance statement required in
this
report under Item 1123 of Regulation AB, and except as disclosed
in the
Exchange Act periodic reports, the servicer has fulfilled its obligations
under the pooling and servicing agreement;
and
|
| 5. |
All
of the reports on assessment of compliance with servicing criteria
for
asset-backed securities and their related attestation reports on
assessment of compliance with servicing criteria for asset-backed
securities required to be included in this report in accordance with
Item
1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have
been
included as an exhibit to this report, except as otherwise disclosed
in
this report. Any material instances of noncompliance described in
such
reports have been disclosed in this report on From 10-K.
|
In
giving
the certifications above, I have reasonably relied on information provided
to me
by the following unaffiliated parties: [___________].
| NOVASTAR MORTGAGE FUNDING CORPORATION | ||
| |
|
|
| By: | ||
|
Name:
Title:
Date:
|
||
EXHIBIT
N-2
FORM
OF
CERTIFICATION TO BE PROVIDED TO THE
DEPOSITOR
BY THE [TRUSTEE][SERVICER]
Re: NovaStar
Mortgage Funding Trust, Series 0000-0 (xxx "Xxxxxxx Xxxxxx") Asset-Backed
Certificates, Series 2007-1
Reference
is made to the Pooling and Servicing Agreement, dated as of February 1, 2007
(the "Servicer Agreement"), by and among Deutsche Bank National Trust Company
(the "Trustee"), NovaStar Mortgage Funding Corporation, as depositor (the
"Depositor"), NovaStar Mortgage, Inc., as sponsor and servicer (the "Sponsor"
and the "Servicer", respectively) and U.S. Bank National Association, as
custodian (the "Custodian"). The [Trustee][Servicer] hereby certifies to the
Depositor and its officers, directors and affiliates, and with the knowledge
and
intent that they will rely upon this certification, that:
| (i) |
The
[Trustee][Servicer] has reviewed the annual report on Form 10-K for
the
fiscal year [ ], and all reports on Form 10-D containing distribution
reports filed in respect of periods included in the year covered
by that
annual report, relating to the above-referenced issuing
entity;
|
| (ii) |
Subject
to paragraph (iv), the distribution information [prepared and provided
by
the Trustee, as to the Trustee] in the distribution reports contained
in
all monthly Form 10-D's included in the year covered by the annual
report
on Form 10-K for the calendar year [___], taken as a whole, does
not
contain any untrue statement of a material fact or omit to state
a
material fact required by the Servicing Agreement to be included
therein
and 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 that annual
report;
|
| (iii) |
The
distribution information required to be provided by the
[Trustee][Servicer] under the Servicing Agreement is included in
these
reports; and
|
| (iv) |
In
compiling the distribution information and making the foregoing
certifications, the Trustee has relied upon information furnished
to it by
the Servicer under the Servicing Agreement or any Subservicer or
subcontractor. The Trustee shall have no responsibility or liability
for
any inaccuracy in such reports resulting from information so provided
by
the Servicer or any Subservicer or
subcontractor.
|
| [DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Trustee][NOVASTAR MORTGAGE, INC., as Servicer] | ||
| |
|
|
| By: | ||
|
Name:
|
|
|
| Title: |
|
|
|
|
||
EXHIBIT
O
OFFICER'S
CERTIFICATE REGARDING
ANNUAL
STATEMENT OF COMPLIANCE
NovaStar
Mortgage Funding Trust, Series 2007-1
Asset-Backed
Certificates, Series 2007-1
I,
_____________________, hereby certify that I am a duly appointed
__________________________ of NovaStar Mortgage, Inc. (the "Servicer"), and
further certify as follows:
| 1. |
This
certification is being made pursuant to the terms of the Pooling
and
Servicing Agreement, dated as of February 1, 2007 (the "Servicing
Agreement"), by and among Deutsche Bank National Trust Company (the
"Trustee"), NovaStar Mortgage Funding Corporation, as depositor (the
"Depositor"), NovaStar Mortgage, Inc., as sponsor and servicer (the
"Sponsor" and the "Servicer", respectively) and U.S. Bank National
Association, as custodian (the
"Custodian").
|
| 2. |
I
have reviewed the activities of the Servicer during the preceding
calendar
year and the Servicer's performance under the Servicing Agreement
has been
made under my supervision and to the best of my knowledge, based
on such
review, the Servicer has fulfilled all of its obligations under the
Servicing Agreement in all material respects throughout the
year.
|
Capitalized
terms not otherwise defined herein have the meanings set forth in the Servicing
Agreement.
Date:
Name:
Title:
EXHIBIT
P
FORM
OF
LIMITED
POWER OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a national
banking association organized and existing under the laws of the United States,
having its principal place of business at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx,
Xxxxxxxxxx, 00000, as Trustee (the "Trustee") pursuant to that Pooling and
Servicing Agreement dated as of February 1, 2007 (the "Agreement") among
NovaStar Mortgage Funding Corporation, as depositor, NovaStar Mortgage, Inc.,
as
servicer and sponsor, U.S. Bank National Association, as custodian and Deutsche
Bank National Trust Company, as trustee, hereby constitutes and appoints the
Servicer, by and through the Servicer's officers, the Trustee's true and lawful
Attorney-in-Fact, in the Trustee's name, place and stead and for the Trustee's
benefit, in connection with all mortgage loans serviced by the Servicer pursuant
to the Agreement solely for the purpose of performing such acts and executing
such documents in the name of the Trustee necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust"
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which NovaStar Mortgage, Inc. is acting
as the Servicer.
This
Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the
contrary:
|
1.
|
The
modification or re-recording of a Mortgage or Deed of Trust, where
said
modification or re-recording is solely for the purpose of correcting
the
Mortgage or Deed of Trust to conform same to the original intent
of the
parties thereto or to correct title errors discovered after such
title
insurance was issued; provided that (i) said modification or
re-recording, in either instance, does not adversely affect the
lien of
the Mortgage or Deed of Trust as insured and (ii) otherwise conforms
to the provisions of the Agreement.
|
|
2.
|
The
subordination of the lien of a Mortgage or Deed of Trust to an
easement in
favor of a public utility company of a government agency or unit
with
powers of eminent domain; this section shall include, without limitation,
the execution of partial satisfactions/releases, partial reconveyances
or
the execution or requests to trustees to accomplish
same.
|
|
3.
|
The
conveyance of the properties to the mortgage insurer, or the closing
of
the title to the property to be acquired as real estate owned,
or
conveyance of title to real estate
owned.
|
|
4.
|
The
completion of loan assumption
agreements.
|
|
5.
|
The
full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
|
|
6.
|
The
assignment of any Mortgage or Deed of Trust and the related Mortgage
Note,
in connection with the repurchase of the mortgage loan secured
and
evidenced thereby.
|
|
7.
|
The
full assignment of a Mortgage or Deed of Trust upon payment and
discharge
of all sums secured thereby in conjunction with the refinancing
thereof,
including, without limitation, the assignment of the related Mortgage
Note.
|
|
8.
|
With
respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a
deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the
following
acts:
|
|
a.
|
the
substitution of trustee(s) serving under a Deed of Trust, in accordance
with state law and the Deed of
Trust;
|
|
b.
|
the
preparation and issuance of statements of breach or
non-performance;
|
|
c.
|
the
preparation and filing of notices of default and/or notices of
sale;
|
|
d.
|
the
cancellation/rescission of notices of default and/or notices of
sale;
|
|
e.
|
the
taking of deed in lieu of foreclosure;
and
|
|
f.
|
the
preparation and execution of such other documents and performance
of such
other actions as may be necessary under the terms of the Mortgage,
Deed of
Trust or state law to expeditiously complete said transactions in
paragraphs 8.a. through 8.e. above.
|
|
9.
|
With
respect to the sale of property acquired through a foreclosure
or deed-in
lieu of foreclosure, including, without limitation, the execution
of the
following documentation:
|
|
a.
|
listing
agreements;
|
|
b.
|
purchase
and sale agreements;
|
|
x.
|
xxxxx/warranty/quit
claim deeds or any other deed causing the transfer of title of the
property to a party contracted to purchase
same;
|
|
d.
|
escrow
instructions; and
|
|
e.
|
any
and all documents necessary to effect the transfer of
property.
|
|
10.
|
The
modification or amendment of escrow agreements established for
repairs to
the mortgaged property or reserves for replacement of personal
property.
|
The
undersigned gives said Attorney-in-Fact full power and authority to execute
such
instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby
does
ratify and confirm to all that said Attorney-in-Fact shall be effective as
of
[DATE].
This
appointment is to be construed and interpreted as a limited power of attorney.
The enumeration of specific items, rights, acts or powers herein is not intended
to, nor does it give rise to, and it is not to be construed as a general power
of attorney.
Nothing
contained herein shall (i) limit in any manner any indemnification provided
by the Servicer to the Trustee under the Agreement, or (ii) be construed to
grant the Servicer the power to initiate or defend any suit, litigation or
proceeding in the name of Deutsche Bank National Trust Company except as
specifically provided for herein. If the Servicer receives any notice of suit,
litigation or proceeding in the name of Deutsche Bank National Trust Company,
then the Servicer shall promptly forward a copy of same to the
Trustee.
This
limited power of attorney is not intended to extend the powers granted to the
Servicer under the Agreement or to allow the Servicer to take any action with
respect to Mortgages, Deeds of Trust or Mortgage Notes not authorized by the
Agreement.
The
Servicer hereby agrees to indemnify and hold the Trustee and its directors,
officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred
by
reason or result of or in connection with the exercise by the Servicer of the
powers granted to it hereunder. The foregoing indemnity shall survive the
termination of this Limited Power of Attorney and the Agreement or the earlier
resignation or removal of the Trustee under the Agreement.
This
Limited Power of Attorney is entered into and shall be governed by the laws
of
the State of New York, without regard to conflicts of law principles of such
state.
Third
parties without actual notice may rely upon the exercise of the power granted
under this Limited Power of Attorney; and may be satisfied that this Limited
Power of Attorney shall continue in full force and effect and has not been
revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN
WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee has caused its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by a duly elected and authorized signatory
this [___] day of [______] 20[__].
| Deutsche Bank National Trust Company, as Trustee | ||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Acknowledged
and Agreed
NovaStar
Mortgage, Inc., as Servicer
|
By:
|
|||
|
Name:
Title:
|
STATE
OF
CALIFORNIA
COUNTY
OF
____________
On
________________, _____, before me, the undersigned, a Notary Public in and
for
said state, personally appeared ________________________________ of Deutsche
Bank National Trust Company, as Trustee, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed that same in his/her authorized capacity, and that by his/her
signature on the instrument the entity upon behalf of which the person acted
and
executed the instrument.
WITNESS
my hand and official seal.
(SEAL)
____________________________________
Notary
Public, State of California
EXHIBIT
Q
FORM
OF REALLOCATION NOTICE
|
To:
|
Deutsche
Bank National Trust Company
|
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration - NS0701
NovaStar
Mortgage Funding Corporation, as depositor (the "Depositor")
under
the Pooling and Servicing Agreement, dated as of February 1, 2007 (the
"Pooling
and Servicing Agreement")
by and
among the Depositor, NovaStar Mortgage, Inc., as Servicer and as Sponsor, U.S.
Bank National Association, as Custodian and Deutsche Bank National Trust
Company, as Trustee, relating to NovaStar Mortgage Funding Trust, Series 2007-1
(the "Trust")
does
hereby:
| · |
certify
that it and/or its Affiliates (as identified to the Trustee) is the
beneficial owner of at least ___% Percentage Interest in each of
the Class
DSI Certificates and Class N Certificates relating to the following
Class:
[M-10 or M-11]; and
|
| · |
direct
the Trustee to allocate all future distributions on ___% Percentage
Interest of such Class DSI and Class N Certificates relating to the
following Class: [M-10 or M-11] to the ___
Class.
|
The
Depositor hereby indemnifies the Trustee for any losses to which the Trustee
may
be exposed as a result of following the directions of the Depositor set forth
herein.
Capitalized
terms used herein and not otherwise defined herein have the meanings set forth
in the Pooling and Servicing Agreement.
| NOVASTAR MORTGAGE FUNDING CORPORATION | ||
| |
|
|
| By: | ||
|
Name: _____________________________________
Title: ______________________________________
Date:_______________________________________
|
||
