ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This
is
an Assignment, Assumption and Recognition Agreement (this “AAR
Agreement”)
made
as of July 31, 2007, among HSBC Bank, National Association (the “Assignor”),
HSI
Asset Securitization Corporation (the “Assignee”),
Xxxxx
Fargo Bank, N.A. as Master Servicer (the “Master
Servicer”),
Deutsche Bank National Trust Company (the “Trustee”)
not
individually but solely as trustee on behalf of the HSI Asset Loan Obligation
Trust 2007-AR2 and Residential Funding Company, LLC (the “Company”).
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of the Assignor, as Owner in, and to the residential mortgage
loans (the “Assigned
Loans”)
listed
on Attachment 1 annexed hereto (the “Assigned
Loan Schedule”)
purchased by the Assignor from the Company pursuant to the certain Sale and
Servicing Agreement, Adjustable Rate Mortgage Loans, dated as of July 1, 2006
by
and between the Company and the Assignor (the “Servicing
Agreement”).
2. From
and
after the date hereof, the Company shall and does hereby recognize that the
Assignee will transfer the Assigned Loans and assign its rights under the
Servicing Agreement (solely to the extent set forth herein) and this AAR
Agreement to HSI Asset Loan Obligation Trust 2007-AR2 (the “Trust”)
created pursuant to a Pooling and Servicing Agreement, dated as of July 1,
2007
(the “Pooling
Agreement”),
among
the Assignee as Depositor, the Trustee, the Master Servicer, Xxxxx Fargo Bank,
N.A. as Securities Administrator (the “Securities
Administrator”)
and
Xxxxx Fargo Bank, N.A. as custodian (the “Custodian”).
The
Company hereby acknowledges and agrees that from and after the date hereof
(i) the Trust will be the owner of the Assigned Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of
the
Assignor insofar as they relate to the enforcement of the representations,
warranties and covenants with respect to the Assigned Loans, and the Trust
hereby acknowledges that it has assumed such representations, warranties and
covenants and that any claim by the Company with respect thereto shall be made
by written notice to the Trustee, (iii) the Trust shall have all the rights
and remedies available to the Assignor, insofar as they relate to the Assigned
Loans, under the Servicing Agreement, including, without limitation, the
enforcement of the document delivery requirements and remedies with respect
to
breaches of representations and warranties set forth in the Servicing Agreement,
and shall be entitled to enforce all of the obligations of the Company
thereunder insofar as they relate to the Assigned Loans, and (iv) all
references to the Purchaser (insofar as they relate to the rights, title and
interest and, with respect to obligations of the Purchaser, only insofar as
they
relate to the enforcement of the representations, warranties and covenants
of
the Company) under the Servicing Agreement insofar as they relate to the
Assigned Loans, shall be deemed to refer to the Trust. Neither the Company
nor
the Assignor shall amend or agree to amend, modify, waiver, or otherwise alter
any of the terms or provisions of the Servicing Agreement which amendment,
modification, waiver or other alteration would in any way affect the Assigned
Loans or the Company’s performance under the Servicing Agreement with respect to
the Assigned Loans without the prior written consent of the Assignee, the Master
Servicer and the Trustee. Any party requesting such amendment shall provide
to
the Assignee, the Master Servicer and the Trustee, at its own expense, an
opinion of counsel stating that (i) such amendment is permitted under the terms
of the Servicing Agreement and (ii) such amendment will not materially and
adversely affect the interests of the holders of any securities issued by the
Trust. The Company acknowledges that Xxxxx Fargo Bank, N.A. has been appointed
as the Master Servicer of the Assigned Loans pursuant to this AAR Agreement
and
therefore has the right to enforce all obligations of the Company as they relate
to the Assigned Loans under the Servicing Agreement and this AAR
Agreement.
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3. The
Assignor warrants and represents to, and covenants with, the Assignee, the
Trust, the Trustee, the Company and the Master Servicer that:
(a) Attached
hereto as Attachment 2 is a true and accurate copy of the Servicing Agreement,
which agreement is in full force and effect as of the date hereof and the
provisions of which have not been waived, amended or modified in any respect,
nor has any notice of termination been given thereunder;
(b) Assignor
is the lawful owner of the Assigned Loans with full right to transfer the
Assigned Loans and any and all of its interests, rights and obligations under
the Servicing Agreement as they relate to the Assigned Loans, free and clear
of
any and all liens, claims and encumbrances; and upon the transfer of the
Assigned Loans to Assignee as contemplated herein, Assignee shall have good
title to each and every Assigned Loan, as well as any and all of Assignor's
interests, rights and obligations under the Servicing Agreement as they relate
to the Assigned Loans, free and clear of any and all liens, claims and
encumbrances;
(c) Assignor
has not received notice of, and has no knowledge of, any offsets, counterclaims
or other defenses available to the Company with respect to the Assigned Loans
or
the Servicing Agreement;
(d) Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged
sold or otherwise disposed of the Mortgage Loans or any interest in the Mortgage
Loans to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Mortgage Loans or any interest in the Mortgage Loans from,
or
otherwise approached or negotiated with respect to the Mortgage Loans, any
interest in the Mortgage Loans with, any Person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “Securities Act”) or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
Securities Act or require registration pursuant thereto.
(e) Assignor
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its formation, and has all requisite power and
authority to acquire, own and sell the Assigned Loans;
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(f) Assignor
has full power and authority to execute, deliver and perform its obligations
under this AAR Agreement, and to consummate the transactions set forth herein.
The consummation of the transactions contemplated by this AAR Agreement is
in
the ordinary course of Assignor's business and will not conflict with, or result
in a breach of, any of the terms, conditions or provisions of Assignor's charter
or by-laws or any legal restriction, or any material agreement or instrument
to
which Assignor is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
Assignor or its property is subject. The execution, delivery and performance
by
Assignor of this AAR Agreement and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of Assignor. This AAR Agreement has been duly executed and delivered by
Assignor and, upon the due authorization, execution and delivery by Assignee
and
Company, will constitute the valid and legally binding obligation of Assignor
enforceable against Assignor in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity regardless
of
whether enforceability is considered in a proceeding in equity or at law;
(g) No
material consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained or made
by
Assignor in connection with the execution, delivery or performance by Assignor
of this AAR Agreement, or the consummation by it of the transactions
contemplated hereby; and
(h) There
is
no action, suit, proceeding, investigation or litigation pending or, to
Assignor's knowledge, threatened, which either in any instance or in the
aggregate, if determined adversely to Assignor, would adversely affect
Assignor's execution or delivery of, or the enforceability of, this AAR
Agreement, or the Assignor's ability to perform its obligations under this
AAR
Agreement.
4. The
Assignee warrants and represents to, and covenants with, the Assignor, the
Master Servicer, the Trustee and the Company pursuant to Section 2.03 of the
Servicing Agreement that:
(a) The
Assignee agrees to be bound, as Owner by all of the terms, covenants and
conditions of the Servicing Agreement and the Assigned Loans and from and after
the date hereof, the Assignee assumes for the benefit of each of the Company
and
the Assignor all of the Assignor’s obligations as Owner thereunder;
(b) Assignee
understands that the Assigned Loans have not been registered under the
Securities Act or the securities laws of any state. Assignee is acquiring the
Assigned Loans not with a view to or for sale or other transfer in connection
with any distribution of the Assigned Loans in any manner that would violate
the
Securities Act or any applicable state securities law. Assignee considers itself
a substantial, sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of investment in the Assigned Loans. Assignee has been
furnished with all information regarding the Assigned Loans that it has
requested from Assignor or the Company. Neither the Assignee nor anyone acting
on its behalf has offered, transferred, pledged, sold or otherwise disposed
of
the Assigned Loans, any interest in the Assigned Loans to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the Assigned
Loans, any interest in the Assigned Loans from, or otherwise approached or
negotiated with respect to the Assigned Loans, any interest in the Assigned
Loans with, any Person in any manner, or made any general solicitation by means
of general advertising or in any other manner or taken any other action, which
would constitute a distribution of the Assigned Loans under the Securities
Act
or which would render the disposition of the Assigned Loans a violation of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to act,
in
such manner with respect to the Assigned Loans;
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(c) The
Assignee is either (i) not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
or
Section 4975 of the Internal Revenue Code of 1986 (the “Code”)(a
“Plan”)
and
not a Person acting, directly or indirectly, on behalf of or investing with
“plan assets” of any such Plan or (ii) an employee benefit plan that is subject
to ERISA and the assignment contemplated herein does not constitute and will
not
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code;
(d) The
Assignee shall indemnify the Company and hold it harmless against any loss,
liability or expense incurred in connection with any claim, demand, defense
or
assertion based on or grounded upon or resulting from a breach of the Assignee’s
representations, warranties and covenants set forth in this AAR
Agreement.
(e) Assignee
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization and has all requisite power and authority
to
acquire and own the Assigned Loans;
(f) Assignee
has full power and authority to execute, deliver and perform its obligations
under this AAR Agreement, and to consummate the transactions set forth herein.
The consummation of the transactions contemplated by this AAR Agreement is
in
the ordinary course of Assignee's business and will not conflict with, or result
in a breach of, any of the terms, conditions or provisions of Assignee's
organizational
documentation or
any
legal restriction, or any material agreement or instrument to which Assignee
is
now a party or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which Assignee or its property
is
subject. The execution, delivery and performance by Assignee of this AAR
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of Assignee.
This
AAR Agreement has been duly executed and delivered by Assignee and, upon the
due
authorization, execution and delivery by Assignor and Company, will constitute
the valid and legally binding obligation of Assignee enforceable against
Assignee in accordance with its terms except as enforceability may be limited
by
bankruptcy, reorganization, insolvency, moratorium or other similar laws now
or
hereafter in effect relating to creditors’ rights generally, and by general
principles of equity regardless of whether enforceability is considered in
a
proceeding in equity or at law;
4
(g) No
material consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained or made
by
Assignee in connection with the execution, delivery or performance by Assignee
of this AAR Agreement, or the consummation by it of the transactions
contemplated hereby; and
(h) There
is
no action, suit, proceeding, investigation or litigation pending or, to
Assignee's knowledge, threatened, which either in any instance or in the
aggregate, if determined adversely to Assignee, would adversely affect
Assignee's execution or delivery of, or the enforceability of, this AAR
Agreement, or the Assignee's ability to perform its obligations under this
AAR
Agreement.
5. The
Company and the Assignor hereby agree to amend the terms of the Servicing
Agreement solely with respect to the Assigned Loans as follows:
(a)
the
following definition shall be added to Section 1.01 “Securities
Administrator:
Xxxxx
Fargo Bank, N.A.”;
(b) the
definition of Eligible Account in Section 1.01 shall be replaced with the
following definition; “Eligible
Account:
Either
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated A-1 by Standard
& Poor's or Prime-1 by Xxxxx'x Investors Service (or a comparable rating if
another rating agency is specified by the Initial Owner by written notice to
the
Company) at the time any amounts are held on deposit therein, or (ii) a trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity; provided,
however, that if any account maintained pursuant to this Agreement no longer
complies with this definition of Eligible Account, then such account shall
promptly (and in any case within 30 calendar days) be transferred to an Eligible
Account. Eligible Accounts may bear interest.”
(c) the
reference to “Owner” in the fourth paragraph of Section 3.02 shall be deleted
and replaced with “Depositor, Master Servicer and Securities Administrator”, and
the reference to “Owner” in the fifth paragraph of Section 3.02 shall be replace
with “Master Servicer”;
(d) the
reference to “Owner” in Section 3.07(i) shall be replaced with “Master
Servicer”;
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(e) Section
3.08 shall be amended so that the following paragraph is added immediately
after
the last paragraph of Section 3.08; “provided that for all investments permitted
in (i) through (vi) above with terms greater than 60 days, if the depository
institution’s short-term rating falls below “A-1” (or below “A+” if it has no
short-term rating), the account must be moved within 60 days to another
depository institution that has a short term-rating of at least “A-1” (or “A+”
or higher if it has no short-term rating).”
(f) the
references to “Owner” in the tenth and thirteenth lines of Section 3.12(b) shall
be replaced with “Master Servicer”;
(g) Section
3.12(c) shall be amended as follows:
(i)
the
phrase “Owner may, at the Owner’s sole option” found in the first and second
lines thereof shall be replaced with “Master Servicer or Depositor, each at its
sole option, may”;
(ii)
the
first reference to “Owner” found in the tenth line thereof shall be replaced
with “Master Servicer”; and
(iii)
the
reference to “Owner” found at the beginning of the last sentence thereof shall
be replaced with phrase “Depositor or Master Servicer, as the case may
be,”;
(h) all
references to “Owner” found in Section 3.13 shall be replaced with “Master
Servicer”;
(i) the
first
paragraph of Section 4.01 shall be deleted in its entirety and replaced with
“On
each Remittance Date, the Company shall distribute to the Master Servicer in
accordance with the wire transfer instructions provided by the Master Servicer
the Remittance Amount.”;
(j) the
second paragraph of Section 4.01 shall be amended so that the reference to
“Owner” found in the first, seventh and tenth line of that paragraph are
replaced with “Master Servicer” and so that the reference to “Owner” in the
third lines thereof shall be replaced with “Depositor”;
(k) Section
4.02 shall be amended so that all references to “Owner” shall be replaced with
“Master Servicer”;
(l) Section
4.03 shall be amended so that all references to “Owner” shall be replaced with
“Master Servicer”;
(m) all
references to “Owner” in Section 6.01 shall be replaced by “Master
Servicer”;
(n)
the
reference to “Owner” in Section 7.01 shall be replaced with “Master Servicer or
Depositor”;
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(o) The
reference to the phrase “Company’s servicing compensation” found in the second
to last line of the first paragraph of Section 3.06 shall be deleted in its
entirety and shall be replaced with the phrase “Servicing Fee paid to the
Company and the Subservicing Fee, if any, paid to the Subservicer (as such
terms
are defined as of the date of this AAR Agreement); and
(p) Exhibit
G
to the Servicing Agreement shall be amended so that the intersection of the
row
labeled “1122(d)(2)(vi)” and the column labeled “Applicable Servicing Criteria”
shall contain a check xxxx.
6. It
is
expressly understood and agreed by the parties hereto that insofar as this
AAR
Agreement is executed by the Trustee: (i) this AAR Agreement is executed and
delivered by Deutsche Bank National Trust Company, not individually or
personally but solely as Trustee on behalf of the Trust, in the exercise of
the
powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements by Deutsche Bank National Trust
Company, is made and intended for the purpose of binding on the Trust, (iii)
nothing herein shall be construed as creating any liability on the part of
Deutsche Bank National Trust Company, individually or personally, to perform
any
covenant either expressed or implied contained herein, all such liability,
if
any, being expressly waived by the parties hereto and such waiver shall bind
any
third party making a claim by or through one of the parties hereto, and (iv)
under no circumstances shall Deutsche Bank National Trust Company be personally
liable for the payment of any indebtedness or expenses (including but not
limited to any amounts to be paid under the Servicing Agreement and Section
4(d)
hereof), or to be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under
the
Servicing Agreement or any related documents.
7. Capitalized
words and phrases used but not otherwise defined in this Assignment and
Assumption Agreement shall have the respective meanings assigned to them in
the
Servicing Agreement.
7
IN
WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed by their duly authorized officers as of the date first
above written.
|
HSBC
BANK USA, NATIONAL ASSOCIATION,
as
Assignor
|
|||
| By: /s/ Xxxxxxx Xxxxxx | |||
|
Name:
Xxxxxxx Xxxxxx
Title:
Officer #15568
|
| By: /s/ Xxxxxx Xxxxx | |||
|
Name:
Xxxxxx Xxxxx
Title:
Vice President
|
|
RESIDENTIAL
FUNDING COMPANY, LLC
|
|||
| By: /s/ Xxxxxxx Xxxxxxxx | |||
|
Name:
Xxxxxxx Xxxxxxxx
Title:
Associate
|
| DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Trustee
|
|||
| By: /s/ Xxxxxxx Xxxxx | |||
|
Name:
Xxxxxxx Xxxxx
Title:
Vice President
|
|
XXXXX
FARGO BANK, N.A.,
as
Master Servicer
|
|||
| By: /s/ Xxxxxx Xxxx | |||
|
Name:
Xxxxxx Xxxx
Title:
Vice President
|
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