ACE SECURITIES CORP. Depositor OCWEN LOAN SERVICING, LLC a Servicer WELLS FARGO BANK, NATIONAL ASSOCIATION a Servicer WELLS FARGO BANK, NATIONAL ASSOCIATION Master Servicer and Securities Administrator HSBC BANK USA, NATIONAL ASSOCIATION Trustee...
EXHIBIT
4.1
ACE
SECURITIES CORP.
Depositor
OCWEN
LOAN SERVICING, LLC
a
Servicer
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
a
Servicer
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
Master
Servicer and Securities Administrator
HSBC
BANK
USA, NATIONAL ASSOCIATION
Trustee
Dated
as
of February 28, 2006
Asset
Backed Pass-Through Certificates
TABLE
OF
CONTENTS
ARTICLE
I
|
DEFINITIONS
|
SECTION
1.01 Defined
Terms.
SECTION
1.02 Allocation
of
Certain Interest Shortfalls.
SECTION
2.01 Conveyance
of
the Mortgage Loans.
SECTION
2.02 Acceptance
of
REMIC I by Trustee.
SECTION
2.03 Repurchase
or
Substitution of Mortgage Loans.
SECTION
2.04 Representations
and
Warranties of the Master Servicer.
SECTION
2.05 Representations,
Warranties and Covenants of Ocwen and Xxxxx Fargo.
SECTION
2.06 Issuance
of the REMIC I Regular Interests and the Class R-I Interest.
SECTION
2.07 Conveyance
of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.
SECTION
2.08 Issuance
of the Residual Certificates.
SECTION
2.09 Establishment
of the Trust.
SECTION
2.10 Purpose
and Powers of the Trust.
ARTICLE
III
|
ADMINISTRATION
AND SERVICING OF THE OCWEN MORTGAGE LOANS AND XXXXX FARGO MORTGAGE
LOANS;
ACCOUNTS
|
SECTION
3.01 Ocwen
and
Xxxxx Fargo to Act as a Servicer.
SECTION
3.02 Sub-Servicing
Agreement Between Each Servicer and Sub-Servicers.
SECTION
3.03 Successor
Sub-Servicers.
SECTION
3.04 No
Contractual Relationship Between Sub-Servicer, Subcontractor, Trustee or
the
Certificateholders.
SECTION
3.05 Assumption
or Termination of Sub-Servicing Agreement by Successor Servicer.
SECTION
3.06 Collection
of Certain Mortgage Loan Payments.
SECTION
3.07 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
SECTION
3.08 Collection
Accounts, Simple Interest Excess Sub-Account and Distribution Account.
SECTION
3.09 Withdrawals
from the Collection Accounts and Distribution Account.
SECTION
3.10 Investment
of Funds in the Investment Accounts.
SECTION
3.11 Maintenance
of Hazard Insurance, Errors and Omissions and Fidelity Coverage and Primary
Mortgage Insurance.
SECTION
3.12 Enforcement
of Due-on-Sale Clauses; Assumption Agreements.
SECTION
3.13 Realization
Upon Defaulted Mortgage Loans.
SECTION
3.14 Trustee
to Cooperate; Release of Mortgage Files.
SECTION
3.15 Servicing
Compensation.
SECTION
3.16 Collection
Account Statements.
SECTION
3.17 Annual
Statement as to Compliance.
SECTION
3.18 Assessments
of Compliance and Attestation Reports.
SECTION
3.19 Annual
Certification; Additional Information.
SECTION
3.20 Access
to
Certain Documentation.
SECTION
3.21 Title,
Management and Disposition of REO Property.
SECTION
3.22 Obligations
of Each Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
Interest Shortfalls.
SECTION
3.23 Obligations
of Each Servicer in Respect of Mortgage Rates and Monthly Payments.
SECTION
3.24 Reserve
Fund.
SECTION
3.25 Advance
Facility.
SECTION
3.26 The
Servicer’s Indemnification Obligation.
SECTION
4.01 Master
Servicer.
SECTION
4.02 REMIC-Related
Covenants.
SECTION
4.03 Monitoring
of the Servicers.
SECTION
4.04 Fidelity
Bond.
SECTION
4.05 Power
to Act;
Procedures.
SECTION
4.06 Due-on-Sale
Clauses; Assumption Agreements.
SECTION
4.07 Documents,
Records and Funds in Possession of Master Servicer To Be Held for Trustee.
SECTION
4.08 Standard
Hazard Insurance and Flood Insurance Policies.
SECTION
4.09 Presentment
of Claims and Collection of Proceeds.
SECTION
4.10 Maintenance
of Primary Mortgage Insurance Policies.
SECTION
4.11 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
SECTION
4.12 Realization
Upon Defaulted Mortgage Loans.
SECTION
4.13 Compensation
for the Master Servicer.
SECTION
4.14 REO
Property.
SECTION
4.15 Master
Servicer Annual Statement of Compliance.
SECTION
4.16 Master
Servicer Assessments of Compliance.
SECTION
4.17 Master
Servicer Attestation Reports.
SECTION
4.18 Annual
Certification.
SECTION
4.19 Obligation
of the Master Servicer in Respect of Prepayment Interest Shortfalls.
SECTION
4.20 Prepayment
Penalty Verification.
ARTICLE
V
|
PAYMENTS
TO CERTIFICATEHOLDERS
|
SECTION
5.01 Distributions.
SECTION
5.02 Statements
to Certificateholders.
SECTION
5.03 Servicer
Reports; P&I Advances.
SECTION
5.04 Allocation
of Realized Losses.
SECTION
5.05 Compliance
with Withholding Requirements.
SECTION
5.06 Reports
Filed with Securities and Exchange Commission.
ARTICLE
VI
|
THE
CERTIFICATES
|
SECTION
6.01 The
Certificates.
SECTION
6.02 Registration
of Transfer and Exchange of Certificates.
SECTION
6.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
SECTION
6.04 Persons
Deemed Owners.
SECTION
6.05 Certain
Available Information.
ARTICLE
VII
|
THE
DEPOSITOR, OCWEN, XXXXX FARGO AND THE MASTER
SERVICER
|
SECTION
7.01 Liability
of the Depositor, Ocwen, Xxxxx Fargo and the Master Servicer.
SECTION
7.02 Merger
or
Consolidation of the Depositor, Ocwen, Xxxxx Fargo or the Master Servicer.
SECTION
7.03 Limitation
on Liability of the Depositor, Ocwen, Xxxxx Fargo, the Master Servicer and
Others.
SECTION
7.04 Limitation
on
Resignation of Ocwen and Xxxxx Fargo.
SECTION
7.05 Limitation
on Resignation of the Master Servicer.
SECTION
7.06 Assignment
of
Master Servicing.
SECTION
7.07 Rights
of
the Depositor in Respect of Ocwen, Xxxxx Fargo and the Master Servicer.
SECTION
7.08 Duties
of
the Loan Performance Advisor.
SECTION
7.09 Limitation
Upon Liability of the Loan Performance Advisor.
SECTION
7.10 Removal
of
the Loan Performance Advisor.
SECTION
7.11 Transfer
of
Servicing by Sponsor.
ARTICLE
VIII
|
SECTION
8.01 Servicer
Events of Default.
SECTION
8.02 Master
Servicer to Act; Appointment of Successor.
SECTION
8.03 Notification
to Certificateholders.
SECTION
8.04 Waiver
of
Servicer Events of Default.
SECTION
9.01 Duties
of
Trustee and Securities Administrator.
SECTION
9.02 Certain
Matters Affecting Trustee and Securities Administrator.
SECTION
9.03 Trustee
and Securities Administrator not Liable for Certificates or Mortgage Loans.
SECTION
9.04 Trustee
and
Securities Administrator May Own Certificates.
SECTION
9.05 Fees
and
Expenses of Trustee, Custodians and Securities Administrator.
SECTION
9.06 Eligibility
Requirements for Trustee and Securities Administrator.
SECTION
9.07 Resignation
and Removal of Trustee and Securities Administrator.
SECTION
9.08 Successor
Trustee or Securities Administrator.
SECTION
9.09 Merger
or
Consolidation of Trustee or Securities Administrator.
SECTION
9.10 Appointment
of Co-Trustee or Separate Trustee.
SECTION
9.11 Appointment
of Office or Agency.
SECTION
9.12 Representations
and
Warranties.
ARTICLE
X
|
XXXXXXX
00.00 Xxxxxxxxxxx
Xxxx Xxxxxxxxxx or Liquidation of All Mortgage Loans.
SECTION
10.02 Additional
Termination Requirements.
ARTICLE
XI
|
SECTION
11.01 REMIC
Administration.
SECTION
11.02 Prohibited
Transactions and Activities.
SECTION
11.03 Indemnification.
ARTICLE
XII
|
MISCELLANEOUS
PROVISIONS
|
SECTION
12.01 Amendment.
SECTION
12.02 Recordation
of Agreement; Counterparts.
SECTION
12.03 Limitation
on
Rights of Certificateholders.
SECTION
12.04 Governing
Law.
SECTION
12.05 Notices.
SECTION
12.06 Severability
of Provisions.
SECTION
12.07 Notice
to
Rating Agencies.
SECTION
12.08 Article
and
Section References.
SECTION
12.09 Grant
of
Security Interest.
SECTION
12.10 Survival
of Indemnification.
SECTION
12.11 Servicing
Agreement.
SECTION
12.12 Intention
of the Parties and Interpretation.
Exhibits
Exhibit
A-1
|
Form
of Class A Certificate
|
Exhibit
A-2
|
Form
of Class M Certificate
|
Exhibit
A-3
|
Form
of Class CE-1 Certificate
|
Exhibit
A-4
|
Form
of Class CE-2 Certificate
|
Exhibit
A-5
|
Form
of Class P Certificate
|
Exhibit
A-6
|
Form
of Class R Certificate
|
Exhibit
B-1
|
Form
of Transferor Representation Letter and Form of Transferee Representation
Letter in Connection with Transfer of the Class CE-1 Certificates,
Class
CE-2 Certificates, Class P Certificates and Residual Certificates
Pursuant
to Rule 144A Under the Securities Act
|
Exhibit
B-2
|
Form
of Transferor Representation Letter and Form of Transferee Representation
Letter in Connection with Transfer of the Class CE-1 Certificates,
Class
CE-2 Certificates, Class P Certificates and Residual Certificates
Pursuant
to Rule 501 (a) Under the Securities Act
|
Exhibit
B-3
|
Form
of Transfer Affidavit and Agreement and Form of Transferor Affidavit
in
Connection with Transfer of Residual Certificates
|
Exhibit
C
|
Form
of Back-Up Certification
|
Exhibit
D
|
Form
of Power of Attorney
|
Exhibit
E
|
Servicing
Criteria
|
Exhibit
F
|
Mortgage
Loan Purchase Agreement
|
Exhibit
G
|
Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
|
Exhibit
H
|
Additional
Disclosure Notification
|
Schedule
1
|
Mortgage
Loan Schedule
|
Schedule
2
|
Prepayment
Charge Schedule
|
Schedule
3
|
Standard
File Layout - Delinquency Reporting
|
Schedule
4
|
Standard
File Layout - Master Servicing
|
Schedule
5
|
Standard
File Layout - Simple Interest Mortgage Loans
|
Schedule
6
|
Servicing
Advance Schedule
|
This
Pooling and Servicing Agreement, is dated and effective as of February 28,
2006, among ACE SECURITIES CORP., as Depositor, OCWEN LOAN SERVICING, LLC,
as a
Servicer, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as a Servicer, XXXXX FARGO
BANK, NATIONAL ASSOCIATION, as Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.
The
Depositor intends to sell pass-through certificates to be issued hereunder
in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest of the Trust Fund created hereunder. The Trust Fund will
consist of a segregated pool of assets comprised of the Mortgage Loans and
certain other related assets subject to this Agreement.
As
provided herein, the Trustee will elect to treat the segregated pool of assets
consisting of the Mortgage Loans and certain other related assets subject
to
this Agreement (other than the Reserve Fund) as a REMIC for federal income
tax
purposes, and such segregated pool of assets will be designated as “REMIC I”.
The Class R-I Interest will be the sole class of “residual interests” in REMIC I
for purposes of the REMIC Provisions (as defined herein). The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the
initial
Uncertificated Balance and, for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each
of the REMIC I Regular Interests (as defined herein). None of the REMIC I
Regular Interests will be certificated.
Designation
|
REMIC
I
Remittance
Rate
|
Initial
Uncertificated
Balance
|
Latest
Possible
Maturity
Date (1)
|
||||
I-LTAA
|
Variable(2)
|
$
|
166,709,682.60
|
February
2036
|
|||
I-LTA1A
|
Variable(2)
|
$
|
500,000.00
|
February
2036
|
|||
I-LTA1B
|
Variable(2)
|
$
|
690,780.00
|
February
2036
|
|||
I-LTM1
|
Variable(2)
|
$
|
182,020.00
|
February
2036
|
|||
I-LTM2
|
Variable(2)
|
$
|
107,170.00
|
February
2036
|
|||
I-LTM3
|
Variable(2)
|
$
|
63,790.00
|
February
2036
|
|||
I-LTM4
|
Variable(2)
|
$
|
25,520.00
|
February
2036
|
|||
I-LTM5
|
Variable(2)
|
$
|
34,020.00
|
February
2036
|
|||
I-LTZZ
|
Variable(2)
|
$
|
1,798,938.42
|
February
0000
|
|||
X-XXX
|
Variable(2)
|
$
|
100.00
|
February
2036
|
|||
I-LTCE2
|
Variable(2)
|
N/A(3)
|
February
2036
|
________________
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date immediately following the maturity date for the
Mortgage
Loan with the latest maturity date has been designated as the “latest
possible maturity date” for each REMIC I Regular
Interest.
|
(2)
|
Calculated
in accordance with the definition of “REMIC I Remittance Rate”
herein.
|
(3)
|
REMIC
I Regular Interest I-LTCE2 will not have an Uncertificated Balance,
but
will accrue interest on its Notional Amount calculated in accordance
with
the definition of “REMIC I Remittance Rate”
herein.
|
REMIC
II
As
provided herein, the Trustee will elect to treat the segregated pool of assets
consisting of the REMIC I Regular Interests as a REMIC for federal income
tax
purposes, and such segregated pool of assets will be designated as “REMIC II.”
The Class R-II Interest will evidence the sole class of “residual interests” in
REMIC II for purposes of the REMIC Provisions. The following table irrevocably
sets forth the designation, the Pass-Through Rate, the initial aggregate
Certificate Principal Balance and, for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date”
for the indicated Classes of Certificates.
Designation
|
Pass-Through
Rate
|
Initial
Aggregate
Certificate
Principal Balance
|
Latest
Possible
Maturity
Date (1)
|
||||
Class
A-1A
|
Variable(2)
|
$
|
50,000,000.00
|
February
2036
|
|||
Class
A-1B
|
Variable(2)
|
$
|
69,078,000.00
|
February
2036
|
|||
Class
M-1
|
Variable(2)
|
$
|
18,202,000.00
|
February
2036
|
|||
Class
M-2
|
Variable(2)
|
$
|
10,717,000.00
|
February
2036
|
|||
Class
M-3
|
Variable(2)
|
$
|
6,379,000.00
|
February
2036
|
|||
Class
M-4
|
Variable(2)
|
$
|
2,552,000.00
|
February
2036
|
|||
Class
M-5
|
Variable(2)
|
$
|
3,402,000.00
|
February
2036
|
|||
Class
P
|
N/A(3)
|
$
|
100.00
|
February
2036
|
|||
Class
CE-1
|
N/A(4)
|
$
|
9,781,921.02
|
February
2036
|
|||
Class
CE-2
|
N/A(5)
|
N/A(6)
|
February
2036
|
________________
(1) |
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date immediately following the maturity date for the
Mortgage
Loan with the latest maturity date has been designated as the “latest
possible maturity date” for each Class of
Certificates.
|
(2) |
Calculated
in accordance with the definition of “Pass-Through Rate”
herein.
|
(3) |
The
Class P Certificates will not accrue
interest.
|
(4) |
The
Class CE-1 Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE-1 Certificates
outstanding from time to time which shall equal the Uncertificated
Balance
of the REMIC I Regular Interests (other than REMIC I Regular Interest
I-LTP). The Class CE-1 Certificates will not accrue interest on
their
Certificate Principal Balance.
|
(5) |
The
Class CE-2 Certificates are an interest only class and for each
Distribution Date the Class CE-2 Certificates will be entitled
to receive
100% of the amounts distributed on REMIC I Regular Interest
I-LTCE2.
|
(6) |
For
federal income tax purposes, the Class CE-2 Certificates will not
have a
Certificate Principal Balance, but will have a Notional Amount
equal to
the Notional Amount of REMIC I Regular Interest
I-LTCE2.
|
As
of the
Cut-off Date, the Mortgage Loans had an aggregate Scheduled Principal Balance
equal to $170,112,021.02.
In
consideration of the mutual agreements herein contained, the Depositor, Ocwen,
Xxxxx Fargo, the Master Servicer, the Securities Administrator and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
SECTION
1.01 Defined
Terms.
Whenever
used in this Agreement, including, without limitation, in the Preliminary
Statement hereto, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations described herein shall be made on the basis of
a
360-day year consisting of twelve 30-day months.
“60-day
Delinquent Mortgage Loan”: With respect to any Mortgage Loan or any date of
determination, the excess, if any, of (i) the number of days the most delinquent
Monthly Payment for such Mortgage Loan was delinquent as of the close of
business on the last day of the related Due Period minus (ii) the number
of days
the most delinquent Monthly Payment for such Mortgage Loan was delinquent
as of
the close of business on the Cut-off Date, is greater than or equal to
60.
“Accepted
Master Servicing Practices”: With respect to any Mortgage Loan, as applicable,
either (x) those customary mortgage master servicing practices of prudent
mortgage servicing institutions that master service mortgage loans of the
same
type and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located, to the extent applicable to the Master Servicer
(except in its capacity as successor to a Servicer), or (y) as provided in
Section 3.01 hereof, but in no event below the standard set forth in clause
(x).
“Accepted
Servicing Practices”: As defined in Section 3.01.
“Account”:
The Collection Accounts and the Distribution Account as the context may
require.
“Accrued
Certificate Interest”: With respect to any Class A, Mezzanine, Class CE-1 or
Class CE-2 Certificate and each Distribution Date, interest accrued during
the
related Interest Accrual Period at the Pass-Through Rate for such Certificate
for such Distribution Date on the Certificate Principal Balance, in the case
of
the Class A Certificates and the Mezzanine Certificates, or on the Notional
Amount in the case of the Class CE-1 Certificates and the Class CE-2
Certificates, of such Certificate immediately prior to such Distribution
Date.
The Class P Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. All distributions of
interest on the Class A Certificates and the Mezzanine Certificates will
be
calculated on the basis of a 360-day year and the actual number of days in
the
applicable Interest Accrual Period. All distributions of interest on the
Class
CE-1 Certificates and Class CE-2 Certificates will be based on a 360 day
year
consisting of twelve 30 day months. Accrued Certificate Interest with respect
to
each Distribution Date, as to any Class A, Mezzanine or Class CE-1 Certificate
shall be reduced by an amount equal to the portion allocable to such Certificate
pursuant to Section 1.02 hereof, if any, of the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the
extent
not covered by payments pursuant to Section 3.22 or Section 4.19 of
this Agreement or pursuant to the Servicing Agreement and (b) the aggregate
amount of any Relief Act Interest Shortfall, if any, for such Distribution Date.
In addition, Accrued Certificate Interest with respect to each Distribution
Date, as to any Class CE-1 Certificate, shall be reduced by an amount equal
to
the portion allocable to such Class CE-1 Certificate of Realized Losses,
if any,
pursuant to Section 1.02 and Section 5.04 hereof.
“Additional
Disclosure Notification”: Has the meaning set forth in Section 5.06(a)(ii).
“Additional
Form 10-D Disclosure”: Has the meaning set forth in Section 5.06(a) of this
Agreement.
“Additional
Form 10-K Disclosure”: Has the meaning set forth in Section 5.06(d) of this
Agreement.
“Additional
Servicer”: Means each affiliate of a Servicer that Services any of the Mortgage
Loans and each Person who is not an affiliate of a Servicer that Services
the
Mortgage Loans. For clarification purposes, the Master Servicer and the
Securities Administrator are Additional Servicers.
“Adjustable
Rate Mortgage Loan”: Each of the Mortgage Loans identified in the Mortgage Loan
Schedule as having a Mortgage Rate that is subject to adjustment.
“Adjustment
Date”: With respect to each Adjustable Rate Mortgage Loan, the first day of the
month in which the Mortgage Rate of an Adjustable Rate Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following
the
Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
“Administration
Fees”: The sum of (i) the Servicing Fee, (ii) the Master Servicing Fee and (iii)
the Loan Performance Advisor Fee.
“Administration
Fee Rate”: The sum of (i) the Servicing Fee Rate, (ii) the Master Servicer Fee
Rate and (iii) the Loan Performance Advisor Fee Rate.
“Advance
Facility”: As defined in Section 3.25(a).
“Advance
Financing Person”: As defined in Section 3.25(a).
“Advance
Reimbursement Amounts”: As defined in Section 3.25(b).
“Affiliate”:
With respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For the purposes of
this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Aggregate
Loss Severity Percentage”: With respect to any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate amount
of
Realized Losses incurred on any Mortgage Loans from the Cut-off Date to the
last
day of the preceding calendar month and the denominator of which is the
aggregate principal balance of such Mortgage Loans immediately prior to the
liquidation of such Mortgage Loans.
“Agreement”:
This Pooling and Servicing Agreement, including all exhibits and schedules
hereto and all amendments hereof and supplements hereto.
“Allocated
Realized Loss Amount”: With respect to any Class of Mezzanine Certificates and
any Distribution Date, an amount equal to the sum of any Realized Loss allocated
to that Class of Certificates on the Distribution Date pursuant to
Section 5.04 and any Allocated Realized Loss Amount for that Class
remaining unpaid from the previous Distribution Date.
“Amounts
Held for Future Distribution”: As to any Distribution Date, the aggregate amount
held in the Custodial Account and the Collection Accounts at the close of
business on the immediately preceding Determination Date on account of (i)
all
Monthly Payments or portions thereof received in respect of the related Mortgage
Loans due after the related Due Period and (ii) Principal Prepayments and
Liquidation Proceeds received in respect of such Mortgage Loans after the
last
day of the related Prepayment Period.
“Annual
Statement of Compliance”: As defined in Section 3.17.
“Arrearages”:
With respect to each Mortgage Loan, the amount, if any, equal to the interest
portion of the payments due on such Mortgage Loan on or prior to the Cut-off
Date but not yet received by the related Servicer by such date, as shown
on the
Mortgage Loan Schedule.
“Assignment”:
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 and
assignment 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.
“Assignment
Agreement”: The Assignment, Assumption and Recognition Agreement, dated as of
March 27, 2006, by and among the Sponsor, the Depositor and SPS evidencing
the
assignment of the Servicing Agreement, to the extent of the servicing of
the SPS
Mortgage Loans, to the Depositor.
“Authorized
Officers:” A managing director of the whole loan trading desk and a managing
director in global markets.
“Available
Distribution Amount”: With respect to any Distribution Date, an amount equal to
(1) the sum of (a) the aggregate of the amounts on deposit in the Custodial
Account, the Collection Accounts and the Distribution Account as of the close
of
business on the related Servicer Remittance Date, (b) the aggregate of any
amounts deposited in the Distribution Account by the Servicers or the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution
Date
pursuant to Section 3.22 or Section 4.19 of this Agreement or pursuant
to the Servicing Agreement, (c) the aggregate of any P&I Advances for such
Distribution Date made by the Servicers pursuant to Section 5.03 of this
Agreement or pursuant to the Servicing Agreement and (d) the aggregate of
any
P&I Advances made by a successor Servicer (including the Master Servicer or
the Trustee) for such Distribution Date pursuant to Section 8.02 of this
Agreement or the Servicing Agreement, reduced (to an amount not less than
zero)
by (2) the portion of the amount described in clause (1)(a) above that
represents (i) Amounts Held for Future Distribution, (ii) Principal Prepayments
on the Mortgage Loans received after the related Prepayment Period (together
with any interest payments received with such Principal Prepayments to the
extent they represent the payment of interest accrued on the Mortgage Loans
during a period subsequent to the related Prepayment Period), (iii) Liquidation
Proceeds and Insurance Proceeds received in respect of the Mortgage Loans
after
the related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Servicers, the Trustee, the Master Servicer, the Securities
Administrator, the Custodians or the Loan Performance Advisor pursuant to
Section 3.09 or Section 9.05 of this Agreement or otherwise payable in
respect of Extraordinary Trust Fund Expenses or reimbursable or payable under
the Servicing Agreement, (v) the Loan Performance Advisor Fee, (vi) amounts
deposited in a Custodial Account, a Collection Account or the Distribution
Account in error, (vii) the amount of any Prepayment Charges collected by
the
Servicers in connection with the Principal Prepayment of any of the Mortgage
Loans and (viii) amounts reimbursable to a successor Servicer (including
the
Master Servicer or the Trustee) pursuant to Section 8.02 of this Agreement
or pursuant to the Servicing Agreement.
“Balloon
Mortgage Loan”: A Mortgage Loan that provides for the payment of the unamortized
principal balance of such Mortgage Loan in a single payment, that is
substantially greater than the preceding monthly payment at the maturity
of such
Mortgage Loan.
“Balloon
Payment”: A payment of the unamortized principal balance of a Mortgage Loan in a
single payment, that is substantially greater than the preceding Monthly
Payment
at the maturity of such Mortgage Loan.
“Bankruptcy
Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Book-Entry
Certificates”: The Offered Certificates for so long as the Certificates of such
Class shall be registered in the name of the Depository or its
nominee.
“Book-Entry
Custodian”: The custodian appointed pursuant to Section 6.01.
“Business
Day”: Any day other than a Saturday, a Sunday or a day on which banking or
savings and loan institutions in the States of Delaware, New York, Florida,
Maryland, Minnesota, Utah or in the city in which the Corporate Trust Office
of
the Trustee is located, are authorized or obligated by law or executive order
to
be closed.
“Cash-Out
Refinancing”: A Refinanced Mortgage Loan the proceeds of which are more than a
nominal amount in excess of the principal balance of any existing first mortgage
plus any subordinate mortgage on the related Mortgaged Property and related
closing costs.
“Certificate”:
Any one of ACE Securities Corp., Asset Backed Pass-Through Certificates,
Series
2006-SD1, Class A-1A, Class X-0X, Xxxxx X-0, Class M-2, Class M-3, Class
M-4,
Class M-5, Class CE-1, Class CE-2, Class P and Class R issued under this
Agreement.
“Certificate
Factor”: With respect to any Class of Certificates (other than the Residual
Certificates) as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (or Notional Amount, in the case of the Class CE-1
Certificates and Class CE-2 Certificates) of such Class of Certificates on
such
Distribution Date (after giving effect to any distributions of principal
and
allocations of Realized Losses resulting in reduction of the Certificate
Principal Balance (or Notional Amount, in the case of the Class CE-1
Certificates and Class CE-2 Certificates) of such Class of Certificates to
be
made on such Distribution Date), and the denominator of which is the initial
aggregate Certificate Principal Balance (or Notional Amount, in the case
of the
Class CE-1 Certificates and Class CE-2 Certificates) of such Class of
Certificates as of the Closing Date.
“Certificate
Margin”: With respect to the Class A-1A Certificates and, for purposes of the
definition of “Marker Rate”, REMIC I Regular Interest I-LTA1A, 0.13% in the case
of each Distribution Date through and including the Optional Termination
Date
and 0.26% in the case of each Distribution Date thereafter.
With
respect to the Class A-1B Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTA1B, 0.35% in the case of each
Distribution Date through and including the Optional Termination Date and
0.70%
in the case of each Distribution Date thereafter.
With
respect to the Class M-1 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM1, 0.62% in the case of each
Distribution Date through and including the Optional Termination Date and
0.93%
in the case of each Distribution Date thereafter.
With
respect to the Class M-2 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM2, 0.80% in the case of each
Distribution Date through and including the Optional Termination Date and
1.20%
in the case of each Distribution Date thereafter.
With
respect to the Class M-3 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM3, 2.10% in the case of each
Distribution Date through and including the Optional Termination Date and
2.60%
in the case of each Distribution Date thereafter.
With
respect to the Class M-4 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM4, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.00%
in the case of each Distribution Date thereafter.
With
respect to the Class M-5 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM5, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.00%
in the case of each Distribution Date thereafter.
“Certificateholder”
or “Holder”: The Person in whose name a Certificate is registered in the
Certificate Register, except that a Disqualified Organization or a Non-United
States Person shall not be a Holder of a Residual Certificate for any purposes
hereof, and solely for the purposes of giving any consent pursuant to this
Agreement, any Certificate registered in the name of or beneficially owned
by
the Depositor, the Sponsor, a Servicer, the Master Servicer, the Securities
Administrator, the Trustee or any Affiliate thereof shall be deemed not to
be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 12.01 of this Agreement. The Trustee and the Securities
Administrator may conclusively rely upon a certificate of the Depositor,
the
Sponsor, the Master Servicer, the Securities Administrator or a Servicer
in
determining whether a Certificate is held by an Affiliate thereof. All
references herein to “Holders” or “Certificateholders” shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through
the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a “Holder” or “Certificateholder” only the
Person in whose name a Certificate is registered in the Certificate
Register.
“Certificate
Owner”: With respect to a Book-Entry Certificate, the Person who is the
beneficial owner of such Certificate as reflected on the books of the Depository
or on the books of a Depository Participant or on the books of an indirect
participating brokerage firm for which a Depository Participant acts as
agent.
“Certificate
Principal Balance”: With respect to each Class A, Mezzanine or Class P
Certificate as of any date of determination, the Certificate Principal Balance
of such Certificate on the Distribution Date immediately prior to such date
of
determination plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04 of this Agreement,
minus all distributions allocable to principal made thereon and Realized
Losses
allocated thereto, if any, on such immediately prior Distribution Date (or,
in
the case of any date of determination up to and including the first Distribution
Date, the initial Certificate Principal Balance of such Certificate, as stated
on the face thereof). With respect to each Class CE-1 Certificate as of any
date
of determination, an amount equal to the Percentage Interest evidenced by
such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A, Mezzanine and Class P
Certificates then outstanding. The aggregate initial Certificate Principal
Balance of each Class of Regular Certificates is set forth in the Preliminary
Statement hereto.
“Certificate
Register”: The register maintained pursuant to Section 6.02 of this
Agreement.
“Certification
Parties”: Has the meaning set forth in Section 3.19 of this
Agreement.
“Certifying
Person”: Has the meaning set forth in Section 3.19 of this
Agreement.
“Class”:
Collectively, all of the Certificates bearing the same class
designation.
“Class
A
Certificates”: Any Class A-1A Certificate or Class A-1B
Certificate.
“Class
A
Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, the
excess of (x) the sum of the Certificate Principal Balances of the Class
A-1A
Certificates and the Class A-1B Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 36.20% and
(ii)
the aggregate Scheduled 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 Scheduled 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 the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
“Class
A-1A Certificate”: Any one of the Class A-1A Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
A-1B Certificate”: Any one of the Class A-1B Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
CE-1 Certificate”: Any one of the Class CE-1 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-3 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
CE-2 Certificate”: Any one of the Class CE-2 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-4 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-1 Certificate”: Any one of the Class M-1 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-1 Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, 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) 57.60%
and
(ii) the aggregate Scheduled 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 Scheduled 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 the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
“Class
M-2 Certificate”: Any one of the Class M-2 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-2 Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, 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) 70.20% and (ii) the aggregate Scheduled 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 Scheduled 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 the product
of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans
as of
the Cut-off Date.
“Class
M-3 Certificate”: Any one of the Class M-3 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-3 Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, 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) 77.70% and (ii) the aggregate Scheduled
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 Scheduled 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 the product of (i) 0.50% and (ii) the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date.
“Class
M-4 Certificate”: Any one of the Class M-4 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-4 Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, 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 Scheduled 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 Scheduled 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 the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
“Class
M-5 Certificate”: Any one of the Class M-5 Certificates executed and
authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a
Regular
Interest in REMIC II for purposes of the REMIC Provisions.
“Class
M-5 Principal Distribution Amount”: With respect to any Distribution Date on or
after the Stepdown Date and on which a Trigger Event is not in effect, 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 (v) 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) 84.70% and (ii) the aggregate Scheduled 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 Scheduled 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 the product
of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans
as of
the Cut-off Date.
“Class
P
Certificate”: Any one of the Class P Certificates executed and authenticated by
the Securities Administrator and delivered by the Trustee, substantially
in the
form annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC
II
for purposes of the REMIC Provisions.
“Class
R
Certificates”: Any one of the Class R Certificates executed and authenticated by
the Securities Administrator and delivered by the Trustee, substantially
in the
form annexed hereto as Exhibit A-6, and evidencing the Class R-I Interest
and
the Class R-II Interest.
“Class
R-I Interest”: The uncertificated residual interest in REMIC I.
“Class
R-II Interest”: The uncertificated residual interest in REMIC II.
“Closing
Date”: March 27, 2006.
“Code”:
The Internal Revenue Code of 1986, as amended from time to time.
“Collection
Account”: The separate account or accounts created and maintained, or caused to
be created and maintained, by each of Ocwen and Xxxxx Fargo pursuant to
Section 3.08(a) of this Agreement, which shall be entitled (i) with respect
to the Ocwen Mortgage Loans, “Ocwen Loan Servicing, LLC, as Servicer for HSBC
Bank USA, National Association, as Trustee, in trust for the registered holders
of ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD1, Asset Backed
Pass-Through Certificates” and (ii) with respect to the Xxxxx Fargo Mortgage
Loans, “Xxxxx Fargo Bank, National Association, as Servicer for HSBC Bank USA,
National Association, as Trustee, in trust for the registered holders of
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1, Asset Backed
Pass-Through Certificates. Any Collection Account must be an Eligible
Account.
“Commission”:
The Securities and Exchange Commission.
“Controlling
Person”: Means, with respect to any Person, any other Person who “controls” such
Person within the meaning of the Securities Act.
“Corporate
Trust Office”: The principal corporate trust office of the Trustee or the
Securities Administrator, as the case may be, at which, at any particular
time,
its corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument
is
located at (i) with respect to the Trustee, HSBC Bank USA, National Association,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ACE Securities Corp.,
2006-SD1, or at such other address as the Trustee may designate from time
to
time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicers or (ii) with respect to the
Securities Administrator, (A) for purposes of Certificate transfers and
surrender, Xxxxx Fargo Bank, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust (ACE 2006-SD1),
and (B) for all other purposes, Xxxxx Fargo Bank, National Association, X.X.
Xxx
00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust (ACE 2006-SD1) (or
for
overnight deliveries, at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust (ACE 2006-SD1)), or at such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Servicers and
the
Trustee.
“Corresponding
Certificate”: With respect to each REMIC I Regular Interest, as
follows:
REMIC
I Regular Interest
|
Class
|
|
REMIC
I Regular Interest I-LTA1A
|
A-1A
|
|
REMIC
I Regular Interest I-LTA1B
|
A-1B
|
|
REMIC
I Regular Interest I-LTM1
|
M-1
|
|
REMIC
I Regular Interest I-LTM2
|
M-2
|
|
REMIC
I Regular Interest I-LTM3
|
M-3
|
|
REMIC
I Regular Interest I-LTM4
|
M-4
|
|
REMIC
I Regular Interest I-LTM5
|
M-5
|
|
REMIC
I Regular Interest I-LTP
|
P
|
|
REMIC
I Regular Interest I-LTCE2
|
CE-2
|
|
“Credit
Enhancement Percentage”: For any Distribution Date is the percentage obtained by
dividing (x) the aggregate Certificate Principal Balance of the Subordinate
Certificates(which includes the Overcollateralization Amount) by (y) the
aggregate principal balance of the Mortgage Loans, calculated after taking
into
account collections of principal on the Mortgage Loans and distribution of
the
Principal Distribution Amount to the holders of the Certificates then entitled
to distributions of principal on the Distribution Date.
“Custodial
Account”: The separate account or accounts maintained by SPS under the Servicing
Agreement.
“Custodial
Agreement”: Any of (i) the DBNTC Custodial Agreement, (ii) the U.S. Bank
Custodial Agreement or (iii) the Xxxxx Fargo Custodial Agreement, or any
other
custodial agreement entered into after the date hereof with respect to any
Mortgage Loan subject to this Agreement.
“Custodian”:
Any of DBNTC, U.S. Bank or Xxxxx Fargo or any other custodian appointed under
any custodial agreement entered into after the date of this
Agreement.
“Cut-off
Date”: With respect to each Mortgage Loan, the close of business on
February 28, 2006. With respect to all Qualified Substitute Mortgage Loans,
their respective dates of substitution. References herein to the “Cut-off Date,”
when used with respect to more than one Mortgage Loan, shall be to the
respective Cut-off Dates for such Mortgage Loans.
“DBNTC”:
Deutsche Bank National Trust Company, a national banking association, or
its
successor in interest.
“DBNTC
Custodial Agreement”: The Custodial Agreement, dated as of February 28,
2006, among the Trustee, DBNTC, Ocwen and Xxxxx Fargo, as may be amended
from
time to time.
“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.
“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”: As defined in Section 6.01(b) of this
Agreement.
“Deleted
Mortgage Loan”: A Mortgage Loan replaced or to be replaced by a Qualified
Substitute Mortgage Loan.
“Delinquency
Percentage”: As of the last day of the related Due Period, the rolling six month
average of a fraction, expressed as a percentage, the numerator of which
is the
aggregate Scheduled Principal Balance of all 60-day Delinquent Mortgage Loans,
as of the close of business of the last day of the related Due Period, provided
that in the case of (i) Mortgage Loans that are the subject of forebearance
plans and (ii) Mortgage Loans with respect to which the related Mortgagor
is the
subject of bankruptcy proceedings, delinquency shall be deemed to mean
delinquency of the Monthly Payment due under the related forebearance plan
or
bankruptcy plan, as applicable, and the denominator of which is the aggregate
Scheduled Principal Balance of the Mortgage Loans and REO Properties as of
the
close of business of the last day of the related Due Period.
“Depositor”:
ACE Securities Corp., a Delaware corporation, or its successor in
interest.
“Depository”:
The Depository Trust Company, or any successor Depository hereafter named.
The
nominee of the initial Depository, for purposes of registering those
Certificates that are to be Book-Entry Certificates, is Cede & Co. The
Depository shall at all times be a “clearing corporation” as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York
and a “clearing agency” registered pursuant to the provisions of
Section 17A of the Exchange Act.
“Depository
Institution”: Any depository institution or trust company, including the
Trustee, that (a) is incorporated under the laws of the United States of
America
or any State thereof, (b) is subject to supervision and examination by federal
or state banking authorities and (c) has outstanding unsecured commercial
paper
or other short-term unsecured debt obligations (or, in the case of a depository
institution that is the principal subsidiary of a holding company, such holding
company has unsecured commercial paper or other short-term unsecured debt
obligations) that are rated at least A-1+ by S&P, F-1+ by Fitch and P-1 by
Xxxxx’x (or, if such Rating Agencies are no longer rating the Offered
Certificates, comparable ratings by any other nationally recognized statistical
rating agency then rating the Offered Certificates).
“Depository
Participant”: A broker, dealer, bank or other financial institution or other
Person for whom from time to time a Depository effects book-entry transfers
and
pledges of securities deposited with the Depository.
“Determination
Date”: With respect to (i) Ocwen and each 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 and
(ii) Xxxxx Fargo and each Distribution Date, the Business Day preceding the
related Servicer Remittance Date. With respect to SPS, the date specified
in the
Servicing Agreement. The Determination Date for purposes of Article X hereof
shall mean the 15th
day of
the month or, if such 15th
day is
not a Business Day, the first Business Day following such 15th
day.
“Directly
Operate”: With respect to any REO Property, the furnishing or rendering of
services to the tenants thereof, the management or operation of such REO
Property, the holding of such REO Property primarily for sale to customers,
the
performance of any construction work thereon or any use of such REO Property
in
a trade or business conducted by REMIC I other than through an Independent
Contractor; provided, however, that the related Servicer, on behalf of the
Trustee, shall not be considered to Directly Operate an REO Property solely
because the related Servicer establishes rental terms, chooses tenants, enters
into or renews leases, deals with taxes and insurance, or makes decisions
as to
repairs or capital expenditures with respect to such REO Property.
“Disqualified
Organization”: Any of the following: (i) the United States, any State or
political subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its activities are subject to tax and, except
for Xxxxxxx Mac, a majority of its board of directors is not selected by
such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers’ cooperatives described in Section 521 of the
Code) which is exempt from the tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, (v) an “electing large partnership” and
(vi) any other Person so designated by the Trustee based upon an Opinion
of
Counsel that the holding of an Ownership Interest in a Residual Certificate
by
such Person may cause any Trust REMIC or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability
for
any federal tax imposed under the Code that would not otherwise be imposed
but
for the Transfer of an Ownership Interest in a Residual Certificate to such
Person. The terms “United States,” “State” and “international organization”
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
“Distribution
Account”: The separate trust account or accounts created and maintained by the
Securities Administrator pursuant to Section 3.08(c) of this Agreement in
the name of the Securities Administrator for the benefit of the
Certificateholders and designated “Xxxxx Fargo Bank, National Association, in
trust for registered holders of ACE Securities Corp. Home Equity Loan Trust,
Series 2006-SD1”. Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.
The Distribution Account must be an Eligible Account.
“Distribution
Date”: The 25th
day of
any month, or if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day,
commencing in April 2006.
“Due
Date”: With respect to each Distribution Date, the day of the month on which the
Monthly Payment is due on a Mortgage Loan during the related Due Period,
exclusive of any days of grace.
“Due
Period”: With respect to the Distribution Date in April 2006, the period
commencing on March 1, 2006 and ending on April 1, 2006, and with respect
to any
Distribution Date thereafter, the period commencing on the second day of
the
month immediately preceding the month in which such Distribution Date occurs
and
ending on the first day of the month in which such Distribution Date
occurs.
“Eligible
Account”: Any of (i) an account or accounts maintained with a Depository
Institution, (ii) an account or accounts the deposits in which are fully
insured
by the FDIC or (iii) a trust account or accounts maintained with a federal
depository institution or state chartered depository institution acting in
its
fiduciary capacity. Eligible Accounts may bear interest.
“ERISA”:
The Employee Retirement Income Security Act of 1974, as amended from time
to
time.
“Estate
in Real Property”: A fee simple estate in a parcel of land.
“Excess
Liquidation Proceeds”: To the extent that such amount is not required by law to
be paid to the related Mortgagor, the amount, if any, by which Liquidation
Proceeds with respect to a liquidated Mortgage Loan exceed the sum of (i)
the
outstanding principal balance of such Mortgage Loan and accrued but unpaid
interest at the related Net Mortgage Rate through the last day of the month
in
which the related Liquidation Event occurs, plus (ii) related liquidation
expenses or other amounts to which the related Servicer is entitled to be
reimbursed from Liquidation Proceeds with respect to such liquidated Mortgage
Loan pursuant to Section 3.09 of this Agreement or pursuant to the
Servicing Agreement.
“Excess
Servicing Fee”: As defined in Section 5.01(b) of this
Agreement.
“Exchange
Act”: Means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
“Extraordinary
Trust Fund Expense”: Any amounts payable or reimbursable to the Trustee, the
Master Servicer, the Securities Administrator, the Custodians, the Loan
Performance Advisor or any director, officer, employee or agent of any such
Person from the Trust Fund pursuant to the terms of this Agreement and any
amounts payable from the Distribution Account in respect of taxes pursuant
to
Section 11.01(g)(v) of this Agreement or pursuant to the Servicing
Agreement.
“Xxxxxx
Xxx”: Xxxxxx Xxx, formerly known as the Federal National Mortgage Association,
or any successor thereto.
“FDIC”:
Federal Deposit Insurance Corporation or any successor thereto.
“Final
Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO
Property (other than a Mortgage Loan or REO Property purchased by the Sponsor
or
the Terminator pursuant to or as contemplated by Section 2.03,
Section 3.13(c) or Section 10.01 of this Agreement), a determination
made by the related Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the related Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof
have
been so recovered, which determination shall be evidenced by a certificate
of a
Servicing Officer of the related Servicer delivered to the Master Servicer
and
maintained in its records.
“Fitch”:
Fitch Ratings or any successor thereto.
“Foreclosure
Restricted Mortgage Loans”: A Mortgage Loan that was 90 or more days delinquent
as of the Closing Date and which was not current under a repayment plan and
identified as such on the Mortgage Loan Schedule.
“Form
8-K
Disclosure Information”: Has the meaning set forth in Section
5.06(b).
“Xxxxxxx
Mac”: Xxxxxxx Mac, formerly known as 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 related
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate
Mortgage Loan.
“Independent”:
When used with respect to any accountants, a Person who is “independent” within
the meaning of Rule 2-01(B) of the Commission’s Regulation S-X. When used with
respect to any specified Person, any such Person who (a) is in fact independent
of the Depositor, the Master Servicer, the Securities Administrator, the
Servicers, the Sponsor, any originator and their respective Affiliates, (b)
does
not have any direct financial interest in or any material indirect financial
interest in the Depositor, the Master Servicer, the Securities Administrator,
the Servicers, the Sponsor, any originator or any Affiliate thereof, (c)
is not
connected with the Depositor, the Master Servicer, the Securities Administrator,
the Servicers, the Sponsor, any originator or any Affiliate thereof as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions and (d) is not a member of the immediate family
of
a Person defined on clause (b) or (c) above.
“Independent
Contractor”: Either (i) any Person (other than a Servicer) that would be an
“independent contractor” with respect to REMIC I within the meaning of
Section 856(d)(3) of the Code if REMIC I were a real estate investment
trust (except that the ownership tests set forth in that section shall be
considered to be met by any Person that owns, directly or indirectly, 35%
or
more of any Class of Certificates), so long as REMIC I does not receive or
derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm’s length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including any
Servicer) if the Trustee has received an Opinion of Counsel to the effect
that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated
to be
taken by an Independent Contractor will not cause such REO Property to cease
to
qualify as “foreclosure property” within the meaning of Section 860G(a)(8)
of the Code (determined without regard to the exception applicable for purposes
of Section 860D(a) of the Code), or cause any income realized in respect of
such REO Property to fail to qualify as Rents from Real Property.
“Index”:
As of any Adjustment Date, the index applicable to the determination of the
Mortgage Rate on each Adjustable Rate Mortgage Loan will generally be (i)
the
average of the interbank offered rates for six-month United States dollar
deposits in the London market as published in The Wall Street Journal and
as
most recently available either (a) as of the first Business Day 45 days prior
to
such Adjustment Date or (b) as of the first Business Day of the month preceding
the month of such Adjustment Date, as specified in the related Mortgage Note
or
(ii) the weekly average yield on United States Treasury Securities adjusted
to a
constant maturity of one year, as published in the Federal Reserve Statistical
Release H.15 (519) as most recently announced as of a date 45 days prior
to that
Adjustment Date.
“Insurance
Proceeds”: Proceeds of any title policy, hazard policy or other insurance
policy, covering a Mortgage Loan or the related Mortgaged Property, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor or a senior lienholder in
accordance with Accepted Servicing Practices, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
“Interest
Accrual Period”: With respect to any Distribution Date and the Offered
Certificates, the period commencing on the Distribution Date of the month
immediately preceding the month in which such Distribution Date occurs (or,
in
the case of the first Distribution Date, commencing on the Closing Date)
and
ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE-1 Certificates and Class CE-2 Certificates
and the REMIC I Regular Interests, the one-month period ending on the last
day
of the calendar month immediately preceding the month in which such Distribution
Date occurs.
“Interest
Carry Forward Amount”: With respect to any Distribution Date and any Class of
Offered Certificates, the sum of (i) the amount, if any, by which (a) the
Interest Distribution Amount for such Class as of the immediately preceding
Distribution Date exceeded (b) the actual amount distributed on such Class
in
respect of interest on such immediately preceding Distribution Date and (ii)
the
amount of any Interest Carry Forward Amount for such Class remaining unpaid
from
the previous Distribution Date, plus accrued interest on such sum calculated
at
the related Pass-Through Rate for the most recently ended Interest Accrual
Period.
“Interest
Determination Date”: With respect to the Class A Certificates, the Mezzanine
Certificates, REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular
Interest I-LTM5 and any Interest Accrual Period therefor, the second London
Business Day preceding the commencement of such Interest Accrual
Period.
“Interest
Distribution Amount”: With respect to any Distribution Date and any Class A
Certificate, any Mezzanine Certificate, any Class CE-1 Certificate and any
Class
CE-2 Certificate, the aggregate Accrued Certificate Interest on the Certificates
of such Class for such Distribution Date.
“Interest
Remittance Amount”: With respect to any Distribution Date, the portion of the
Available Distribution Amount for such Distribution Date that represents
interest received or advanced on the Mortgage Loans (other than any Simple
Interest Excess, if applicable, and net of the Administration Fees, Arrearages
collected by the Servicers and any Prepayment Charges and after taking into
account amounts payable or reimbursable to the Trustee, the Custodians, the
Securities Administrator, the Master Servicer, the Loan Performance Advisor
or
the Servicers pursuant to this Agreement, the Servicing Agreement or the
Custodial Agreements, as applicable), plus any amounts withdrawn from the
Simple
Interest Excess Sub-Account.
“Last
Scheduled Distribution Date”: The Distribution Date occurring in February 2036,
which is the Distribution Date immediately following the maturity date for
the
Mortgage Loan with the latest maturity date.
“Late
Collections”: With respect to any Mortgage Loan and any Due Period, all amounts
received subsequent to the Determination Date immediately following such
Due
Period with respect to such Mortgage Loan, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously
recovered.
“Liquidation
Event”: With respect to any Mortgage Loan, any of the following events: (i) such
Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made
as to
such Mortgage Loan or (iii) such Mortgage Loan is removed from REMIC I by
reason
of its being purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.13(c) or Section 10.01 of this Agreement.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01 of this Agreement.
“Liquidation
Proceeds”: The amount (other than Insurance Proceeds, amounts received in
respect of the rental of any REO Property prior to REO Disposition, or required
to be released to a Mortgagor or a senior lienholder in accordance with
applicable law or the terms of the related Mortgage Loan Documents) received
by
the related Servicer in connection with (i) the taking of all or a part of
a
Mortgaged Property by exercise of the power of eminent domain or condemnation
(other than amounts required to be released to the Mortgagor or a senior
lienholder), (ii) the liquidation of a defaulted Mortgage Loan through a
trustee’s sale, foreclosure sale or otherwise, (iii) the repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant to or
as
contemplated by Section 2.03, Section 3.13(c), Section 3.21 or
Section 10.01 of this Agreement or pursuant to the Servicing Agreement or
(iv) any Subsequent Recoveries.
“Loan
Performance Advisor”: MortgageRamp, Inc., a Delaware corporation, and its
successors and assigns.
“Loan
Performance Advisor Agreement”: The Loan Performance Advisor Agreement, dated
March 27, 2006, between the Depositor and the Loan Performance
Advisor.
“Loan
Performance Advisor Fee”: The amount payable to the Loan Performance Advisor on
each Distribution Date as compensation for all services rendered by it in
the
exercise and performance of any and all powers and duties of the Loan
Performance Advisor under the Loan Performance Monitoring Agreements, which
amount shall equal one twelfth of the product of (i) the Loan Performance
Advisor Fee Rate multiplied by (ii) the Scheduled Principal Balance of the
Mortgage Loans and any related REO Properties as of the first day of the
related
Due Period; provided,
however
that the
Loan Performance Advisor Fee for any Distribution Date shall not be lower
than
$1,500.00.
“Loan
Performance Advisor Fee Rate”: 0.015% per annum.
“Loan
Performance Monitoring Agreements”: The agreement between (i) the Loan
Performance Advisor and Ocwen and (ii) the Loan Performance Advisor and Xxxxx
Fargo, each regarding the loss mitigation and advisory services to be provided
by the Loan Performance Advisor.
“Loan-to-Value
Ratio”: As of any date of determination, the fraction, expressed as a
percentage, the numerator of which is the principal balance of the related
Mortgage Loan at such date and the denominator of which is the Value of the
related Mortgaged Property.
“London
Business Day”: Any day on which banks in the Cities of London and New York are
open and conducting transactions in United States dollars.
“Loss
Severity Percentage”: With respect to any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the amount of Realized
Losses incurred on a Mortgage Loan and the denominator of which is the principal
balance of such Mortgage Loan immediately prior to the liquidation of such
Mortgage Loan.
“Marker
Rate”: With respect to the Class CE-1 Certificates and any Distribution Date,
a
per annum rate equal to two (2) times the weighted average of the REMIC I
Remittance Rate for each of REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC
I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTZZ, with the rate
on
each such REMIC I Regular Interest (other than REMIC I Regular Interest I-LTZZ)
subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
Corresponding Certificates for the purpose of this calculation for such
Distribution Date and with the rate on REMIC I Regular Interest I-LTZZ subject
to a cap of zero for the purpose of this calculation; provided however, each
such cap for each REMIC I Regular Interest shall be multiplied by a fraction
the
numerator of which is the actual number of days in the related Interest Accrual
Period and the denominator of which is 30.
“Master
Servicer”: As of the Closing Date, Xxxxx Fargo Bank, National Association and
thereafter, its respective successors in interest who meet the qualifications
of
this Agreement. The Master Servicer and the Securities Administrator shall
at
all times be the same Person or an Affiliate.
“Master
Servicer Event of Default”: One or more of the events described in
Section 8.01(b) of this Agreement.
“Master
Servicer Fee Rate”: 0.0475% per annum.
“Master
Servicing Fee”: With respect to each Mortgage Loan and for any calendar month,
an amount equal to one twelfth of the product of the Master Servicer Fee
Rate
multiplied by the Scheduled Principal Balance of the Mortgage Loans as of
the
Due Date in the preceding calendar month.
“Maximum
I-LTZZ Uncertificated Interest Deferral Amount”: With respect to any
Distribution Date, the excess of (i) accrued interest at the REMIC I Remittance
Rate applicable to REMIC I Regular Interest I-LTZZ for such Distribution
Date on
a balance equal to the Uncertificated Balance of REMIC I Regular Interest
I-LTZZ
minus the REMIC I Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Interest on REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5 for such
Distribution Date, with the rate on each such REMIC I Regular Interest subject
to a cap equal to the lesser of (i) the related One-Month LIBOR Pass-Through
Rate and (ii) the related Net WAC Pass-Through Rate for the Corresponding
Certificates for the purpose of this calculation for such Distribution Date;
provided however, each such cap for each REMIC I Regular Interest shall be
multiplied by a fraction the numerator of which is the actual number of days
in
the related Interest Accrual Period and the denominator of which is
30.
“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.
“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 X-0, Xxxxx X-0, Class M-3, Class M-4 or Class M-5
Certificate.
“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
Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by the related
Mortgagor from time to time under the related Mortgage Note, a bankruptcy
or a
forebearance plan determined: (a) after giving effect to (i) any Deficient
Valuation and/or Debt Service Reduction with respect to such Mortgage Loan
and
(ii) any reduction in the amount of interest collectible from the related
Mortgagor pursuant to the Relief Act or similar state laws; (b) without giving
effect to any extension granted or agreed to by the related Servicer pursuant
to
Section 3.01 of this Agreement or pursuant to the Servicing Agreement; and
(c) on the assumption that all other amounts, if any, due under such Mortgage
Loan are paid when due.
“Moody’s”:
Xxxxx’x Investors Service, Inc. or any successor in interest.
“Mortgage”:
The mortgage, deed of trust or other instrument creating a first or second
lien
on, or first or second priority security interest in, a Mortgaged Property
securing a Mortgage Note.
“Mortgage
File”: The Mortgage Loan Documents pertaining to a particular Mortgage
Loan.
“Mortgage
Loan”: Each mortgage loan transferred and assigned to the Trustee and the
Mortgage Loan Documents for which have been delivered to the applicable
Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
related Custodial Agreement, as held from time to time as a part of the Trust
Fund, the Mortgage Loans so held being identified in the Mortgage Loan
Schedule.
“Mortgage
Loan Documents”: The documents evidencing or relating to each Mortgage Loan
delivered to the applicable Custodian under the related Custodial Agreement
on
behalf of the Trustee.
“Mortgage
Loan Purchase Agreement”: Shall mean the Mortgage Loan Purchase Agreement, dated
as of March 27, 2006, between the Depositor and the Sponsor, a copy of which
is
attached hereto as Exhibit F.
“Mortgage
Loan Schedule”: As of any date, the list of Mortgage Loans included in REMIC I
on such date, separately identifying the Mortgage Loans, attached hereto
as
Schedule 1. The Depositor shall deliver or cause the delivery of the initial
Mortgage Loan Schedule to the related Servicer, the Master Servicer, the
Custodians and the Trustee on the Closing Date. The Mortgage Loan Schedule
shall
set forth the following information with respect to each Mortgage
Loan:
(i) the
Mortgage Loan identifying number;
(ii) the
Mortgagor’s first and last name;
(iii) the
street address of the Mortgaged Property including the state and zip
code;
(iv) a
code
indicating whether the Mortgaged Property is owner-occupied;
(v) the
type
of Residential Dwelling constituting the Mortgaged Property;
(vi) the
original months to maturity;
(vii) the
original date of the Mortgage Loan and the remaining months to maturity from
the
Cut-off Date, based on the original amortization schedule;
(viii) the
Loan-to-Value Ratio at origination;
(ix) the
Mortgage Rate in effect immediately following the Cut-off Date;
(x) the
date
on which the first Monthly Payment was due on the Mortgage Loan;
(xi) the
stated maturity date;
(xii) the
amount of the Monthly Payment at origination;
(xiii) the
amount of the Monthly Payment (including as set forth in a forebearance plan
or
in connection with a bankruptcy proceeding) as of the Cut-off Date;
(xiv) the
last
Due Date on which a Monthly Payment was actually applied to the Scheduled
Principal Balance;
(xv) the
original principal amount of the Mortgage Loan;
(xvi) the
Scheduled Principal Balance of the Mortgage Loan as of the close of business
on
the Cut-off Date;
(xvii) with
respect to each Adjustable Rate Mortgage Loan, the first Adjustment
Date;
(xviii) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(xix) a
code
indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing);
(xx) with
respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate
under
the terms of the Mortgage Note;
(xxi) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate
under
the terms of the Mortgage Note;
(xxii) the
Mortgage Rate at origination;
(xxiii) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap;
(xxiv) with
respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date
immediately following the Cut-off Date;
(xxv) with
respect to each Adjustable Rate Mortgage Loan, the related Index;
(xxvi) the
date
on which the first Monthly Payment was due on the Mortgage Loan and, if such
date is not consistent with the Due Date currently in effect, such Due
Date;
(xxvii) a
code
indicating whether the Mortgage Loan is an Adjustable Rate Mortgage Loan
or a
fixed rate Mortgage Loan;
(xxviii) a
code
indicating the documentation style (i.e., full, stated or limited);
(xxix) a
code
indicating if the Mortgage Loan is subject to a primary insurance policy
or
lender paid mortgage insurance policy, the name of the insurer and, if
applicable, the rate payable in connection therewith;
(xxx) the
Appraised Value of the Mortgaged Property;
(xxxi) the
sale
price of the Mortgaged Property, if applicable;
(xxxii) a
code
indicating whether the Mortgage Loan is subject to a Prepayment Charge, the
term
of such Prepayment Charge and the amount of such Prepayment Charge;
(xxxiii) the
product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
(xxxiv) the
Mortgagor’s debt to income ratio;
(xxxv) the
FICO
score at origination;
(xxxvi) the
amount of any Arrearage;
(xxxvii) a
code
indicating a Foreclosure Restricted Mortgage Loan;
(xxxviii) whether
such Mortgage Loan is a Simple Interest Mortgage Loan;
(xxxix) the
Servicing Fee;
(xl) the
Servicer; and
(xli) the
Custodian.
The
Mortgage Loan Schedule shall set forth the following information with respect
to
the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number
of
Mortgage Loans; (2) the current principal balance of the Mortgage Loans;
(3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall
be
amended from time to time by the Depositor in accordance with the provisions
of
this Agreement. With respect to any Qualified Substitute Mortgage Loan, the
Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date
herein.
“Mortgage
Note”: The original executed note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
“Mortgage
Rate”: With respect to each Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note, which rate with respect to each
Adjustable Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth
in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall
be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded
to
the nearest 0.125% as provided in the Mortgage Note, of the related Index,
as
most recently available as of a date prior to the Adjustment Date as set
forth
in the related Mortgage Note, plus the related Gross Margin; provided that
the
Mortgage Rate on such Adjustable Rate Mortgage Loan on any Adjustment Date
shall
never be more than the lesser of (i) the sum of the Mortgage Rate in effect
immediately prior to the Adjustment Date plus the related Periodic Rate Cap,
if
any, and (ii) the related Maximum Mortgage Rate, and shall never be less
than
the greater of (i) the Mortgage Rate in effect immediately prior to the
Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related
Minimum
Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance
with
the immediately preceding sentence as of the date such Mortgage Loan became
an
REO Property.
“Mortgaged
Property”: The underlying property securing a Mortgage Loan, including any REO
Property, consisting of an Estate in Real Property, which may or may not
be
improved by a Residential Dwelling.
“Mortgagor”:
The obligor on a Mortgage Note.
“Net
Monthly Excess Cashflow”: With respect to any Distribution Date, the sum of (i)
the amount of any collections in respect of Arrearages on the Mortgage Loans,
(ii) any Overcollateralization Reduction Amount for such Distribution Date
and
(iii) the excess of (x) the Available Distribution Amount for such Distribution
Date over (y) the sum of (A) the aggregate Senior Interest Distribution Amount
payable to the Holders of the Class A Certificates, (B) the aggregate Interest
Distribution Amounts payable to the Holders of the Mezzanine Certificates
and
(C) the Principal Remittance Amount.
“Net
Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property)
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 Administration
Fee
Rate.
“Net
Simple Interest Excess”: As of any Distribution Date, an amount equal to the
excess, if any, of the aggregate amount of Simple Interest Excess with respect
to the Mortgage Loans over the amount of Simple Interest Shortfall with respect
to the Mortgage Loans.
“Net
Simple Interest Shortfall”: As of any Distribution Date, an amount equal to the
excess, if any, of the aggregate amount of Simple Interest Shortfall with
respect to the Mortgage Loans over the amount of Simple Interest Excess with
respect to the Mortgage Loans.
“Net
WAC
Pass-Through Rate”: The Net WAC Pass-Through Rate for any Distribution Date and
the Offered Certificates is a rate per annum (adjusted for the actual number
of
days elapsed in the related Interest Accrual Period) equal to the weighted
average of the Net Mortgage Rates on the then outstanding Mortgage Loans,
weighted based on their Scheduled Principal Balances as of the first day
of the
calendar month preceding the month in which such Distribution Date occurs.
For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates
on
the REMIC I Regular Interests, weighted on the basis of the Uncertificated
Balance of each such REMIC I Regular Interest.
“Net
WAC
Rate Carryover Amount”: With respect to any Offered Certificate and any
Distribution Date on which the Pass-Through Rate is limited to the applicable
Net WAC Pass-Through Rate, an amount equal to the sum of (i) the excess of
(x)
the amount of interest such Class would have been entitled to receive on
such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount
of
interest paid to such Class on such Distribution Date at the applicable Net
WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for
the
previous Distribution Date not previously distributed to such Class together
with interest thereon at a rate equal to the Pass-Through Rate for such Class
for the most recently ended Interest Accrual Period without taking into account
the applicable Net WAC Pass-Through Rate.
“New
Lease”: Any lease of REO Property entered into on behalf of REMIC I, including
any lease renewed or extended on behalf of REMIC I, if REMIC I has the right
to
renegotiate the terms of such lease.
“Nonrecoverable
P&I Advance”: Any P&I Advance previously made or proposed to be made in
respect of a Mortgage Loan or REO Property that, in the good faith business
judgment of the related Servicer or a successor to the related Servicer
(including the Trustee or the Master Servicer) will not or, in the case of
a
proposed P&I Advance, would not be ultimately recoverable from related Late
Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or
REO Property as provided herein or in the Servicing Agreement.
“Nonrecoverable
Servicing Advance”: Any Servicing Advance previously made or proposed to be made
in respect of a Mortgage Loan or REO Property that, in the good faith business
judgment of the related Servicer or a successor to a Servicer, will not or,
in
the case of a proposed Servicing Advance, would not be ultimately recoverable
from related Late Collections, Insurance Proceeds or Liquidation Proceeds
on
such Mortgage Loan or REO Property as provided herein or in the Servicing
Agreement.
“Non-United
States Person”: Any Person other than a United States Person.
“Notional
Amount”: With respect to the Class CE-1 Certificates and any Distribution Date,
the Uncertificated Balance of the REMIC I Regular Interests (other than REMIC
I
Regular Interest I-LTP) for such Distribution Date. As of the Closing Date,
the
Notional Amount of the Class CE-1 Certificates is equal to $170,111,921.02.
With
respect to the Class CE-2 Certificates and any Distribution Date, the Notional
Amount of REMIC I Regular Interest I-LTCE2 for such Distribution Date.
With
respect to REMIC I Regular Interest I-LTCE2 and any Distribution Date, the
sum
of the aggregate principal balances of the (i) Ocwen Mortgage Loans, (ii)
Xxxxx
Fargo Mortgage Loans and (iii) SPS Mortgage Loans for such Distribution
Date.
“Ocwen”:
Ocwen Loan Servicing, LLC or any successor thereto.
“Ocwen
Mortgage Loans”: The Mortgage Loans serviced by Ocwen pursuant to the terms of
this Agreement as specified on the Mortgage Loan Schedule.
“Ocwen
Servicing Fee Rate”: 0.40% per annum.
“Offered
Certificates”: The Class A Certificates and Mezzanine Certificates,
collectively.
“Officer’s
Certificate”: With respect to any Person, a certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of such Person (or in the case
of
a Person that is not a corporation, signed by the person or persons having
like
responsibilities).
“One-Month
LIBOR”: With respect to the Class A Certificates, the Mezzanine Certificates,
REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC
I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5 and any Interest Accrual Period therefor, the rate determined by the
Securities Administrator on the related Interest Determination Date on the
basis
of the offered rate for one-month U.S. dollar deposits, as such rate appears
on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the
rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Securities
Administrator will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the arithmetic mean
of
such offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the
related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on
the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above,
LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable
index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator’s subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.
“One-Month
LIBOR Pass-Through Rate”: With respect to the Class A-1A Certificates and, for
purposes of the definition of “Marker Rate”, REMIC I Regular Interest
I-LTA1A,
a per
annum rate equal to One-Month LIBOR plus the related Certificate
Margin.
With
respect to the Class A-1B Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTA1B, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-1 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM1, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-2 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM2, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-3 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-4 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM4, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-5 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC I Regular Interest I-LTM5, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
“Opinion
of Counsel”: A written opinion of counsel, who may, without limitation, be
salaried counsel for the Depositor, the related Servicer, the Securities
Administrator or the Master Servicer, 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 Distribution Date on which the aggregate principal
balance of the Mortgage Loans (and properties acquired in respect thereof)
remaining in the Trust Fund as of the last day of the related Due Period
is
reduced to less than or equal to 10% of the aggregate principal balance of
the
Mortgage Loans as of the Cut-off Date.
“Overcollateralization
Amount”: With respect to any Distribution Date, the excess, if any, of (a) the
sum of the aggregate Scheduled Principal Balances of the Mortgage Loans and
REO
Properties immediately following such Distribution Date over (b) the sum
of the
aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution
Date
(after taking into account the payment of the Principal Remittance Amount
on
such Distribution Date).
“Overcollateralization
Increase Amount”: With respect to any Distribution Date is the amount of Net
Monthly Excess Cashflow actually applied as an accelerated payment of principal
to the Classes of Offered Certificates then entitled to distributions of
principal to the extent the Required Overcollateralization Amount exceeds
the
Overcollateralization Amount.
“Overcollateralization
Reduction Amount”: With respect to any Distribution Date, the lesser of (i) the
amount by which the Overcollateralization Amount exceeds the Required
Overcollateralization Amount and (ii) the Principal Remittance Amount; provided
however that on any Distribution Date on which a Trigger Event is in effect,
the
Overcollateralization Reduction Amount shall equal zero.
“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.
“P&I
Advance”: As to any Mortgage Loan or REO Property, any advance made by a
Servicer in respect of any Determination Date pursuant to Section 5.03 of
this Agreement or pursuant to the Servicing Agreement, an Advance Financing
Person pursuant to Section 3.25 of this Agreement or in respect of any
Distribution Date by a successor Servicer pursuant to Section 8.02 of this
Agreement or pursuant to the Servicing Agreement (which advances shall not
include principal or interest shortfalls due to bankruptcy proceedings or
application of the Relief Act or similar state or local laws.)
“Pass-Through
Rate”: With respect to the Class A Certificates and the Mezzanine Certificates
and any Distribution Date, a rate per annum equal to the lesser of (i) the
One-Month LIBOR Pass-Through Rate for such Distribution Date and (ii) the
applicable Net WAC Pass- Through Rate for the Distribution Date.
With
respect to the Class CE-1 Certificates and any Distribution Date, a rate
per
annum equal to the percentage equivalent of a fraction, the numerator of
which
is the sum of the amounts calculated pursuant to clauses (i) through (x)
below,
and the denominator of which is the aggregate Uncertificated Balances of
REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC
I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTZZ. For purposes
of
calculating the Pass-Through Rate for the Class CE-1 Certificates, the numerator
is equal to the sum of the following components:
(i) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTAA minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest I-LTAA;
(ii) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTA1A minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTA1A;
(iii) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTA1B minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTA1B;
(iv) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTM1 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTM1;
(v) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTM2 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTM2;
(vi) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTM3 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTM3;
(vii) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTM4 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTM4;
(viii) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTM5 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTM5;
(ix) the
REMIC
I Remittance Rate for REMIC I Regular Interest I-LTZZ minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC I Regular
Interest I-LTZZ; and
(x) 100%
of
the interest on REMIC I Regular Interest I-LTP.
With
respect to the Class CE-2 Certificates and any Distribution Date, an amount
equal to 100% of the amounts distributed on REMIC I Regular Interest
I-LTCE2.
“PCAOB”:
Means the Public Company Accounting Oversight Board.
“Percentage
Interest”: With respect to any Class of Certificates (other than the Residual
Certificates), the undivided percentage ownership in such Class evidenced
by
such Certificate, 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 aggregate initial Certificate Principal Balance
or
Notional Amount of all of the Certificates of such Class. The Offered
Certificates are issuable only in minimum Percentage Interests corresponding
to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances
of
$20 and integral multiples thereof. The Class CE-1 Certificates and the Class
CE-2 Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Notional Amounts of $10,000 and integral
multiples of $1.00 in excess thereof; provided, however, that a single
Certificate of each such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Notional
Amount
of such Class or to an otherwise authorized denomination for such Class plus
such remainder. With respect to any Residual Certificate, the undivided
percentage ownership in such Class evidenced by such Certificate, as set
forth
on the face of such Certificate. The Residual Certificates are issuable in
Percentage Interests of 20% and integral multiples of 5% in excess
thereof.
“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 Adjustable
Rate
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
Investments”: Any one or more of the following obligations or securities
acquired at a purchase price of not greater than par, regardless of whether
issued by the Depositor, Ocwen, Xxxxx Fargo, the Master Servicer, the Trustee
or
any of their respective Affiliates:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit
of
the United States;
(ii) (A)
demand and time deposits in, certificates of deposit of, bankers’ acceptances
issued by or federal funds sold by any depository institution or trust company
(including the Trustee or its agent 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 (or, if the only Rating Agency is S&P, in the case of the principal
depository institution in a depository institution holding company, debt
obligations of the depository institution holding company) or its ultimate
parent has a short-term uninsured debt rating in the highest available rating
category of Xxxxx’x, Fitch and S&P and provided that each such investment
has an original maturity of no more than 365 days; and provided further that,
if
the only Rating Agency is S&P and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations of
such
subsidiary are not separately rated, the applicable rating shall be that
of the
bank holding company; and, provided further that, if the original maturity
of
such short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating
of such
institution shall be A-1+ in the case of S&P if S&P is the Rating
Agency; and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(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 principal) rated A-1+ or higher by S&P, F-1 or
higher by Fitch and A-2 or higher by Xxxxx’x, provided, however, that collateral
transferred pursuant to such repurchase obligation must be of the type described
in clause (i) above and must (A) be valued daily at current market prices
plus
accrued interest, (B) pursuant to such valuation, be equal, at all times,
to
105% of the cash transferred by a party in exchange for such collateral and
(C)
be delivered to such party or, if such party is supplying the collateral,
an
agent for such party, 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 that are issued by any corporation
incorporated under the laws of the United States of America and that are
rated
by each Rating Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not
more
than 30 days after the date of acquisition thereof) that is rated by each
Rating
Agency that rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units
of
money market funds that have been rated “AAA” by Fitch (if rated by Fitch),
“AAA” by S&P or “Aaa” by Xxxxx’x including any such money market fund
managed or advised by the Master Servicer, the Trustee or any of their
Affiliates; and
(vii) if
previously confirmed in writing to the Trustee, any other demand, money market
or time deposit, or any other obligation, security or investment, as may
be
acceptable to the Rating Agencies as a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of the
Class
A Certificates;
provided,
however, that no instrument described hereunder shall evidence either the
right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of
the
yield to maturity at par of the underlying obligations.
“Permitted
Transferee”: Any Transferee of a Residual Certificate other than a Disqualified
Organization or Non-United States Person.
“Person”:
Any individual, limited liability company, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof.
“Plan”:
Any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject
to
ERISA or Section 4975 of the Code.
“Prepayment
Assumption”: A prepayment rate for the Mortgage Loans of 25% CPR. The Prepayment
Assumption is used solely for determining the accrual of original issue discount
on the Certificates for federal income tax purposes. A CPR (or Constant
Prepayment Rate) represents an annualized constant assumed rate of prepayment
each month of a pool of mortgage loans relative to its outstanding principal
balance for the life of such pool.
“Prepayment
Charge”: With respect to any Principal Prepayment, any prepayment premium,
penalty or charge payable by a Mortgagor in connection with any Principal
Prepayment on a Mortgage Loan pursuant to the terms of the related Mortgage
Note.
“Prepayment
Charge Schedule”: As of any date, the list of Mortgage Loans providing for a
Prepayment Charge included in the Trust Fund on such date, attached hereto
as
Schedule 2 (including the prepayment charge summary attached thereto). The
Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule
to the related Servicer, the Master Servicer and the Trustee on the Closing
Date. The Prepayment Charge Schedule shall set forth the following information
with respect to each Prepayment Charge:
(i) the
Mortgage Loan identifying number;
(ii) a
code
indicating the type of Prepayment Charge;
(iii) the
date
on which the first Monthly Payment was due on the related Mortgage
Loan;
(iv) the
term
of the related Prepayment Charge;
(v) the
original Scheduled Principal Balance of the related Mortgage Loan;
and
(vi) the
Scheduled Principal Balance of the related Mortgage Loan as of the Cut-off
Date.
“Prepayment
Interest Excess”: With respect to each Ocwen Mortgage Loan or Xxxxx Fargo
Mortgage Loan that was the subject of a Principal Prepayment in full during
the
portion of the related Prepayment Period occurring between the first day
of the
calendar month in which such Distribution Date occurs and (i) with respect
to
Ocwen, the Determination Date of the calendar month in which such Distribution
Date occurs, and (ii) with respect to Xxxxx Fargo, the 13th
day of
the month in which such Distribution Date occurs, an amount equal to interest
(to the extent received) at the applicable Net Mortgage Rate on the amount
of
such Principal Prepayment for the number of days commencing on the first
day of
the calendar month in which such Distribution Date occurs and ending on the
last
date through which interest is collected from the related Mortgagor. Ocwen
and
Xxxxx Fargo may withdraw such Prepayment Interest Excess from the related
Collection Account in accordance with Section 3.09(a)(x) of this Agreement.
The entitlement of SPS, if any, with respect to Prepayment Interest Excess
is
set forth in the Servicing Agreement.
“Prepayment
Interest Shortfall”: With respect to any Distribution Date, for each such
Mortgage Loan that was the subject of a Principal Prepayment in full or in
part
during the portion of the related Prepayment Period occurring between the
first
day of the related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs that was applied
by
the related Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding the Due Date in the succeeding Prepayment
Period, an amount equal to interest at the applicable Net Mortgage Rate on
the
amount of such Principal Prepayment for the number of days commencing on
the
date on which the prepayment is applied and ending on the last day of the
calendar month preceding such Distribution Date. The obligations of Ocwen,
Xxxxx
Fargo and the Master Servicer in respect of any Prepayment Interest Shortfall
are set forth in Section 3.22 and Section 4.19, respectively of this
Agreement. The obligations of SPS in respect of any Prepayment Interest
Shortfalls are set forth in the Servicing Agreement.
“Prepayment
Period”: With respect to (i) the Ocwen Mortgage Loans and any Distribution Date,
the calendar month preceding the month in which the related Distribution
Date
occurs with respect to Principal Prepayments in part, and the period beginning
on the 16th
day of
the month preceding the related Distribution Date (or, the period commencing
on
the Cut-off Date, in connection with the first Prepayment Period) and ending
on
the 15th day of the month in which such Distribution Date occurs with respect
to
Principal Prepayments in full, (ii) the Xxxxx Fargo Mortgage Loans, the calendar
month preceding the month in which the related Distribution Date occurs with
respect to Principal Prepayments in part, and the period beginning on the
14th
day of
the month preceding the related Distribution Date (or the period commencing
on
the Cut-off Date, in connection with the first Prepayment Period) and ending
on
the 13th
day of
the month in which such Distribution Date occurs with respect to Principal
Prepayments in full. With respect to the SPS Mortgage Loans, the period
specified in the Servicing Agreement.
“Principal
Prepayment”: Any voluntary 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
Distribution Amount”: With respect to any Distribution Date will be the sum of
(i) the principal portion of all Monthly Payments on the Mortgage Loans due
during the related Due Period, whether or not received on or prior to the
related Determination Date; (ii) the principal portion of all proceeds received
in respect of the repurchase of a Mortgage Loan or, in the case of a
substitution, certain amounts representing a principal adjustment, during
the
immediately preceding calendar month pursuant to or as contemplated by
Section 2.03, Section 3.13(c) and Section 10.01 of this
Agreement; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries,
and
all Principal Prepayments in full and in part received during the related
Prepayment Period, to the extent applied as recoveries of principal on the
Mortgage Loans, net in each case of payments or reimbursements to the Trustee,
the Custodians, the Master Servicer, the Loan Performance Advisor, the
Securities Administrator or the Servicers and (iv) the amount of any
Overcollateralization Increase Amount for such Distribution Date minus (v)
the
amount of any Overcollateralization Reduction Amount for such Distribution
Date.
“Principal
Remittance Amount”: With respect to any Distribution Date will be the sum of the
amounts described in clauses (i) through (iii) of the definition of Principal
Distribution Amount.
“Purchase
Price”: With respect to any Mortgage Loan or REO Property to be purchased
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or
Section 10.01 of this Agreement, and as confirmed by a certification of a
Servicing Officer of the related Servicer to the Trustee, an amount equal
to the
sum of (i) 100% of the Scheduled Principal Balance thereof as of the date
of
purchase (or such other price as provided in Section 10.01 of this
Agreement), (ii) in the case of (x) a Mortgage Loan, accrued interest on
such
Scheduled Principal Balance at the applicable Net Mortgage Rate in effect
from
time to time from the Due Date as to which interest was last covered by a
payment by the Mortgagor or a P&I Advance by a Servicer, which payment or
P&I Advance had as of the date of purchase been distributed pursuant to
Section 5.01 of this Agreement, through the end of the calendar month in
which the purchase is to be effected and (y) an REO Property, the sum of
(1)
accrued interest on such Scheduled Principal Balance at the applicable Net
Mortgage Rate in effect from time to time from the Due Date as to which interest
was last covered by a payment by the Mortgagor or a P&I Advance by a
Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total
of all
net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 5.01 of this Agreement, (iii) any unreimbursed
Servicing Advances and P&I Advances (including Nonrecoverable P&I
Advances and Nonrecoverable Servicing Advances) and any unpaid Servicing
Fees
allocable to such Mortgage Loan or REO Property, (iv) any amounts previously
withdrawn from the related Collection Account pursuant to
Section 3.09(a)(ix) and Section 3.13(b) of this Agreement or the
Custodial Account pursuant to corresponding sections of the Servicing Agreement
and (v) in the case of a Mortgage Loan required to be purchased pursuant
to
Section 2.03 of this Agreement, expenses reasonably incurred or to be
incurred by a Servicer or the Trustee in respect of the breach or defect
giving
rise to the purchase obligation and any costs and damages incurred by the
Trust
Fund and the Trustee in connection with any violation by any such Mortgage
Loan
of any predatory or abusive lending law.
“QIB”:
As
defined in Section 6.01(d).
“Qualified
Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage
Loan pursuant to the terms of this Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance, after application
of
all scheduled payments of principal and interest due during or prior to the
month of substitution, not in excess of the Scheduled Principal Balance of
the
Deleted Mortgage Loan as of the Due Date in the calendar month during which
the
substitution occurs, (ii) have a Mortgage Rate not less than (and not more
than
one percentage point in excess of) the Mortgage Rate of the Deleted Mortgage
Loan, (iii) if the mortgage loan is an Adjustable Rate Mortgage Loan, have
a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) if the mortgage loan is an Adjustable Rate Mortgage Loan,
have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the
Deleted Mortgage Loan, (v) if the mortgage loan is an Adjustable Rate Mortgage
Loan, have a Gross Margin equal to the Gross Margin of the Deleted Mortgage
Loan, (vi) if the mortgage loan is an Adjustable Rate Mortgage Loan, have
a next
Adjustment Date not more than two months later than the next Adjustment Date
on
the Deleted Mortgage Loan, (vii) have a remaining term to maturity not greater
than (and not more than one year less than) that of the Deleted Mortgage
Loan,
(viii) have the same Due Date as the Due Date on the Deleted Mortgage Loan,
(ix)
have a Loan-to-Value Ratio as of the date of substitution equal to or lower
than
the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x)
be
secured by the same lien priority on the related Mortgaged Property as the
Deleted Mortgage Loan, (xi) have a credit grade at least equal to the credit
grading assigned on the Deleted Mortgage Loan, (xii) be a “qualified mortgage”
as defined in the REMIC Provisions and (xiii) conform to each representation
and
warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Mortgage Loan. In the event that one or more mortgage
loans are substituted for one or more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Mortgage Rates described in clause (ii) hereof shall
be
determined on the basis of weighted average Mortgage Rates, the terms described
in clause (vii) hereof shall be determined on the basis of weighted average
remaining term to maturity, the Loan-to-Value Ratios described in clause
(ix)
hereof shall be satisfied as to each such mortgage loan, the credit grades
described in clause (x) hereof shall be satisfied as to each such mortgage
loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
as
the case may be.
“Rate/Term
Refinancing”: A Refinanced Mortgage Loan, the proceeds of which are not more
than a nominal amount in excess of the existing first mortgage loan and any
subordinate mortgage loan on the related Mortgaged Property and related closing
costs, and were used exclusively (except for such nominal amount) to satisfy
the
then existing first mortgage loan and any subordinate mortgage loan of the
Mortgagor on the related Mortgaged Property and to pay related closing
costs.
“Rating
Agency or Rating Agencies”: Fitch, Xxxxx’x and S&P or their successors. If
such agencies or their successors are no longer in existence, “Rating Agencies”
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which designation
shall be given to the Trustee and the Servicers.
“Realized
Loss”: With respect to each Mortgage Loan as to which a Final Recovery
Determination has been made, an amount (not less than zero), as reported
by the
related Servicer to the Master Servicer (in substantially the form of Schedule
4
hereto, or another form mutually acceptable to the related Servicer and the
Master Servicer), equal to (i) the unpaid principal balance of such Mortgage
Loan as of the commencement of the calendar month in which the Final Recovery
Determination was made, plus (ii) accrued interest from the Due Date as to
which
interest was last paid by the Mortgagor through the end of the calendar month
in
which such Final Recovery Determination was made, calculated in the case
of each
calendar month during such period (A) at an annual rate equal to the annual
rate
at which interest was then accruing on such Mortgage Loan and (B) on a principal
amount equal to the Scheduled Principal Balance of such Mortgage Loan as
of the
close of business on the Distribution Date during such calendar month, plus
(iii) any amounts previously withdrawn from the related Collection Account
or
the Custodial Account in respect of such Mortgage Loan pursuant to
Section 3.09(a)(ix) and Section 3.13(b) of this Agreement or pursuant
to corresponding sections of the Servicing Agreement, minus (iv) the proceeds,
if any, received in respect of such Mortgage Loan during the calendar month
in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the related Servicer with respect to such Mortgage Loan
pursuant to Section 3.09(a)(iii) of this Agreement or pursuant to the
Servicing Agreement.
With
respect to any REO Property as to which a Final Recovery Determination has
been
made, an amount (not less than zero) equal to (i) the unpaid principal balance
of the related Mortgage Loan as of the date of acquisition of such REO Property
on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to
which
interest was last paid by the Mortgagor in respect of the related Mortgage
Loan
through the end of the calendar month immediately preceding the calendar
month
in which such REO Property was acquired, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at
which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Scheduled Principal Balance of the related Mortgage Loan
as
of the close of business on the Distribution Date during such calendar month,
plus (iii) REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was acquired
and
ending with the calendar month in which such Final Recovery Determination
was
made, plus (iv) any amounts previously withdrawn from the related Collection
Account or the Custodial Account in respect of the related Mortgage Loan
pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this Agreement
or pursuant to corresponding sections of the Servicing Agreement, as applicable,
minus (v) the aggregate of all P&I Advances and Servicing Advances (in the
case of Servicing Advances, without duplication of amounts netted out of
the
rental income, Insurance Proceeds and Liquidation Proceeds described in clause
(vi) below) made by the related Servicer in respect of such REO Property
or the
related Mortgage Loan for which the related Servicer has been or, in connection
with such Final Recovery Determination, will be reimbursed pursuant to
Section 3.21 of this Agreement or pursuant to the Servicing Agreement out
of rental income, Insurance Proceeds and Liquidation Proceeds received in
respect of such REO Property, minus (vi) the total of all net rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property that has been, or in connection with such Final Recovery Determination,
will be transferred to the Distribution Account pursuant to Section 3.21 of
this Agreement or pursuant to the Servicing Agreement.
With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation.
With
respect to each Mortgage Loan which has become the subject of a Debt Service
Reduction, the portion, if any, of the reduction in each affected Monthly
Payment attributable to a reduction in the Mortgage Rate imposed by a court
of
competent jurisdiction. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
To
the
extent the related Servicer receives Subsequent Recoveries, with respect
to any
Mortgage Loan, the amount of Realized Loss with respect to that Mortgage
Loan
will be reduced to the extent such recoveries are applied to reduce the
Certificate Principal Balance of any Class of Certificates on any Distribution
Date.
“Record
Date”: With respect to each Distribution Date and the Offered Certificates, the
Business Day immediately preceding such Distribution Date for so long as
such
Certificates are Book-Entry Certificates. With respect to each Distribution
Date
and any other Class of Certificates, including any Definitive Certificates,
the
last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
“Reference
Banks”: Barclays Bank PLC, The Tokyo Mitsubishi Bank and National Westminster
Bank PLC and their successors in interest; provided, however, that if any
of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Securities Administrator 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 Depositor or any Affiliate thereof and
(iii)
which have been designated as such by the Securities Administrator.
“Refinanced
Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase
the related Mortgaged Property.
“Regular
Certificate”: Any Class A Certificate, Mezzanine Certificate, Class CE-1
Certificate, Class CE-2 Certificate or Class P Certificate.
“Regular
Interest”: A “regular interest” in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
“Regulation
AB”: Means Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
“Regulation
S Permanent Global Certificate”: As defined in
Section 6.01(c).
“Regulation
S Temporary Global Certificate”: As defined in
Section 6.01(c).
“Release
Date”: The 40th day after the later of (i) commencement of the offering of the
Class CE-1 Certificates or the Class CE-2 Certificates and (ii) the Closing
Date.
“Relevant
Servicing Criteria”: Means the Servicing Criteria applicable to the various
parties, as set forth on Exhibit E attached hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the
Master
Servicer, the Securities Administrator, the Trustee or the Servicer, the
term
“Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing
Criteria applicable to such parties.
“Relief
Act”: The Servicemembers Civil Relief Act, as amended, or similar state or local
laws.
“Relief
Act Interest Shortfall”: With respect to any Distribution Date and any Mortgage
Loan, any reduction in the amount of interest collectible on such Mortgage
Loan
for the most recently ended Due Period as a result of the application of
the
Relief Act.
“REMIC”:
A “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
“REMIC
I”: The segregated pool of assets subject hereto, constituting the primary
trust
created hereby and to be administered hereunder, with respect to which a
REMIC
election is to be made, consisting of: (i) such Mortgage Loans and Prepayment
Charges as from time to time are subject to this Agreement, together with
the
Mortgage Files relating thereto, and together with all collections thereon
and
proceeds thereof; (ii) any REO Property, together with all collections thereon
and proceeds thereof; (iii) the Trustee’s rights with respect to the Mortgage
Loans under all insurance policies required to be maintained pursuant to
this
Agreement and any proceeds thereof; (iv) the Depositor’s rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby), the Assignment Agreement and the Servicing Agreement; and (v) the
Collection Accounts, the Custodial Account, the Distribution Account and
any REO
Account, and such assets that are deposited therein from time to time and
any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, REMIC I
specifically excludes (i) all Prepayment Charges payable in connection with
Principal Prepayments made before the Cut-off Date, and (ii) the Reserve
Fund
and any amounts on deposit therein from time to time and any proceeds
thereof.
“REMIC
I
Interest Loss Allocation Amount”: With respect to any Distribution Date, an
amount equal to (a) the product of (i) the aggregate Scheduled Principal
Balance
of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC
I
Remittance Rate for REMIC I Regular Interest I-LTAA minus the Marker Rate,
divided by (b) 12.
“REMIC
I
Overcollateralization Amount”: With respect to any date of determination, (i) 1%
of the aggregate Uncertificated Balances of the REMIC I Regular Interests
(other
than the REMIC I Regular Interest I-LTP) minus (ii) the aggregate of the
Uncertificated Balances of REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4
and
REMIC I Regular Interest I-LTM5, in each case as of such date of
determination.
“REMIC
I
Principal Loss Allocation Amount”: With respect to any Distribution Date, an
amount equal to (a) the product of (i) the aggregate Scheduled Principal
Balance
of the Mortgage Loans and REO Properties then outstanding and (ii) 1 minus
a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Balances of REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC
I Regular Interest I-LTM5 and the denominator of which is the aggregate of
the
Uncertificated Balances of REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC
I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTZZ.
“REMIC
I
Regular Interest”: Any of the separate non-certificated beneficial ownership
interests in REMIC I issued hereunder and designated as a “regular interest” in
REMIC I. Each REMIC I Regular Interest shall accrue interest at the related
REMIC I Remittance Rate in effect from time to time, and shall be entitled
to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Balance as set forth
in the
Preliminary Statement hereto. The designations for the respective REMIC I
Regular Interests are set forth in the Preliminary Statement
hereto.
“REMIC
I
Regular Interest I-LTAA”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTAA shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTA1A”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTA1A shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTA1B”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTA1B shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTM1”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM1 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTM2”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM2 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTM3”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM3 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTM4”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM4 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTM5”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM5 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTP”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTP shall accrue interest
at the
related REMIC I Remittance Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTZZ”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTZZ shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time, and shall
be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance
as
set forth in the Preliminary Statement hereto.
“REMIC
I
Regular Interest I-LTCE2”: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTCE2 shall accrue interest
at
the related REMIC I Remittance Rate in effect from time to time. REMIC I
Regular
Interest I-LTCE2 shall not be entitled to distributions of
principal.
“REMIC
I
Remittance Rate”: With respect to REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5,
REMIC
I Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP, the weighted
average of the Net Mortgage Rates of the Mortgage Loans. With respect to
REMIC I
Regular Interest I-LTCE2, a weighted average per annum rate, determined on
a
Mortgage Loan by Mortgage Loan basis (and solely with respect to the Ocwen
Mortgage Loans, Xxxxx Fargo Mortgage Loans and SPS Mortgage Loans), equal
to the
excess, if any, of (i) the excess of (a) the Mortgage Rate for each such
Mortgage Loan over (b) the sum of the (x) Ocwen Servicing Fee Rate, Xxxxx
Fargo
Servicing Fee Rate or SPS Servicing Fee Rate, as applicable, and provided,
however, that each such rate shall be subject to a cap equal to the Servicing
Fee Rate, (y) the Master Servicing Fee Rate and (z) Loan Performance Advisor
Fee
Rate, over (ii) the Net Mortgage Rate of each such Mortgage Loan.
“REMIC
I
Required Overcollateralization Amount”: 1% of the Required Overcollateralization
Amount.
“REMIC
II”: The segregated pool of assets consisting of all of the REMIC I Regular
Interests conveyed in trust to the Trustee, for the benefit of the REMIC
II
Certificateholders pursuant to Section 2.07 of this Agreement, and all amounts
deposited therein, with respect to which a separate REMIC election is to
be
made.
“REMIC
II
Certificate”: Any Regular Certificate or Class R Certificate.
“REMIC
II
Certificateholder”: The Holder of any REMIC II Certificate.
“REMIC
Provisions”: Provisions of the federal income tax law relating to real estate
mortgage investment conduits, which appear at Section 860A through 860G of
the
Code, and related provisions, and proposed, temporary and final regulations
and
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
“Remittance
Report”: A report by Ocwen or Xxxxx Fargo pursuant to Section 5.03(a) of
this Agreement or by SPS pursuant to the Servicing Agreement.
“Rents
from Real Property”: With respect to any REO Property, gross income of the
character described in Section 856(d) of the Code as being included in the
term “rents from real property.”
“REO
Account”: The account or accounts maintained, or caused to be maintained, by
Ocwen or Xxxxx Fargo in respect of an REO Property pursuant to Section 3.21
of this Agreement or by SPS pursuant to the Servicing Agreement.
“REO
Disposition”: The sale or other disposition of an REO Property on behalf of
REMIC I.
“REO
Imputed Interest”: As to any REO Property, for any calendar month during which
such REO Property was at any time part of REMIC I, one month’s interest at the
applicable Net Mortgage Rate on the Scheduled Principal Balance of such REO
Property (or, in the case of the first such calendar month, of the related
Mortgage Loan, if appropriate) as of the close of business on the Distribution
Date in such calendar month.
“REO
Principal Amortization”: With respect to any REO Property, for any calendar
month, the excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form
of
rental income, sale proceeds (including, without limitation, that portion
of the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 of this Agreement that
is allocable to such REO Property) or otherwise, net of any portion of such
amounts (i) payable in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to Ocwen
or
Xxxxx Fargo, as applicable, pursuant to Section 3.21(d) of this Agreement
or SPS pursuant to the Servicing Agreement for unpaid Servicing Fees in respect
of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over
(b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.
“REO
Property”: A Mortgaged Property acquired by a Servicer or its nominee on behalf
of REMIC I through foreclosure or deed-in-lieu of foreclosure, as described
in
Section 3.21 of this Agreement or by SPS pursuant to the Servicing
Agreement.
“Reportable
Event”: Has the meaning set forth in Section 5.06(b) of this
Agreement.
“Required
Overcollateralization Amount”: With respect to any Distribution Date (i) prior
to the Stepdown Date, the product of (a) 5.75%
(which
shall build to 7.65%) and (b) the aggregate Scheduled Principal Balance of
the
Mortgage Loans as of the Cut-off Date, (ii) on or after the Stepdown Date
provided a Trigger Event is not in effect, the greater of (a) the product
of (x)
15.30% and (y) the aggregate Scheduled Principal Balance of the Mortgage
Loans
as of the last day of the related Due Period and (b) an amount equal to the
product of (x) 0.50% and (y) the aggregate Scheduled Principal Balance of
the
Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date
and a Trigger Event is in effect, the Required Overcollateralization Amount
for
the immediately preceding Distribution Date. Notwithstanding the foregoing,
on
and after any Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates and the Mezzanine
Certificates to zero, the Required Overcollateralization Amount shall be
zero.
“Reserve
Fund”: A fund created pursuant to Section 3.24 which shall be an asset of
the Trust Fund but which shall not be an asset of any Trust REMIC.
“Reserve
Interest Rate”: With respect to any Interest Determination Date, the rate per
annum that the Securities Administrator determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of
1/16%) of the one-month U.S. dollar lending rates which New York City banks
selected by the Securities Administrator, after consultation with the Depositor,
are quoting on the relevant Interest Determination Date to the principal
London
offices of leading banks in the London interbank market or (ii) in the event
that the Securities Administrator can determine no such arithmetic mean,
the
lowest one-month U.S. dollar lending rate which New York City banks selected
by
the Securities Administrator are quoting on such Interest Determination Date
to
leading European banks.
“Residential
Dwelling”: Any one of the following: (i) a detached one-family dwelling, (ii) a
detached two- to four-family dwelling, (iii) a one-family dwelling unit in
a
Xxxxxx Xxx eligible condominium project, (iv) a cooperative, (v) a townhouse,
(vi) a manufactured home, or (vii) a detached one-family dwelling in a planned
unit development, none of which is a mobile home.
“Residual
Certificate”: Any one of the Class R Certificates.
“Residual
Interest”: The sole class of “residual interests” in a REMIC within the meaning
of Section 860G(a)(2) of the Code.
“Responsible
Officer”: When used with respect to the Trustee, any officer of the Trustee
having direct responsibility for the administration of this Agreement and,
with
respect to a particular matter, to whom such matter is referred because of
such
officer’s knowledge of and familiarity with the particular subject.
“Rule
144A”: As defined in Section 6.01(d).
“S&P”:
Standard and Poor’s Ratings Service, a division of the XxXxxx-Xxxx Companies,
Inc.
“Xxxxxxxx-Xxxxx
Act”: Means the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the
Commission promulgated thereunder (including any interpretations thereof
by the
Commission’s staff).
“Xxxxxxxx-Xxxxx
Certification”: A written certification signed by an officer of the Master
Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended
from
time to time, and (ii) Exchange Act Rules 13a-14(d) and 15d-14(d), as in
effect
from time to time; provided that if, after the Closing Date (a) the
Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Rules referred to in clause
(ii)
are modified or superceded by any subsequent statement, rule or regulation
of
the Commission or any statement of a division thereof, or (c) any future
releases, rules and regulations are published by the Commission from time
to
time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous that then form of the required certification as of
the
Closing Date, the Xxxxxxxx-Xxxxx Certification shall be as agreed to by the
Master Servicer, the Depositor and the Sponsor following a negotiation in
good
faith to determine how to comply with any such new requirements.
“Scheduled
Principal Balance”: With respect to any Mortgage Loan: (a) as of the Cut-off
Date, the outstanding principal balance of such Mortgage Loan as of such
date as
set forth on the Mortgage Loan Schedule; (b) as of any Due Date subsequent
to
the Cut-off Date up to and including the Due Date in the calendar month in
which
a Liquidation Event occurs with respect to such Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the Cut-off Date, minus the
sum of
(i) the principal portion of each Monthly Payment due on or before such Due
Date
but subsequent to the Cut-off Date, whether or not received, (ii) the principal
portion of all Monthly Payments due before the Cut-off Date and collected
by the
related Servicer after the Cut-off Date, (iii) all Principal Prepayments
received before such Due Date but after the Cut-off Date, (iv) the principal
portion of all Liquidation Proceeds and Insurance Proceeds received before
such
Due Date but after the Cut-off Date, net of any portion thereof that represents
principal due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) on a Due Date occurring on or before the date
on
which such proceeds were received and (v) any Realized Loss incurred with
respect thereto as a result of a Deficient Valuation occurring before such
Due
Date, but only to the extent such Realized Loss represents a reduction in
the
portion of principal of such Mortgage Loan not yet due (without regard to
any
acceleration of payments under the related Mortgage and Mortgage Note) as
of the
date of such Deficient Valuation; and (c) as of any Due Date subsequent to
the
occurrence of a Liquidation Event with respect to such Mortgage Loan, zero.
With
respect to any REO Property: (a) as of any Due Date subsequent to the date
of
its acquisition on behalf of the Trust Fund up to and including the Due Date
in
the calendar month in which a Liquidation Event occurs with respect to such
REO
Property, an amount (not less than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan as of the Due Date in the calendar month
in
which such REO Property was acquired, minus the aggregate amount of REO
Principal Amortization, if any, in respect of REO Property for all previously
ended calendar months; and (b) as of any Due Date subsequent to the occurrence
of a Liquidation Event with respect to such REO Property, zero.
“Securities
Act”: The Securities Act of 1933, as amended and the rules and regulations
thereunder.
“Securities
Administrator”: As of the Closing Date, Xxxxx Fargo Bank, National Association
and thereafter, its respective successors in interest that meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person or Affiliates.
“Senior
Interest Distribution Amount”: With respect to any Distribution Date, an amount
equal to the sum of (i) the Interest Distribution Amount for such Distribution
Date for the Class A Certificates and (ii) the Interest Carry Forward Amount,
if
any, for such Distribution Date for the Class A Certificates.
“Servicer”:
Ocwen, Xxxxx Fargo or SPS, or any successor thereto appointed hereunder or
under
the Servicing Agreement, as applicable, in connection with the servicing
and
administration of the related Mortgage Loans.
“Servicer
Event of Default”: One or more of the events described in
Section 8.01(a).
“Servicer
Remittance Date”: With respect to any Distribution Date and (i) (A) Xxxxx Fargo,
on or before the close of business on the 22nd day of the month in which
such
Distribution Date occurs and (B) Ocwen, on or before 12:00 noon New York
time on
the 22nd day of the month in which such Distribution Date occurs; provided
that
if such 22nd day of a given month is not a Business Day, the Servicer Remittance
Date for such month shall be the Business Day immediately preceding such
22nd
day and (ii) SPS, as set forth in the Servicing Agreement.
“Servicer
Report”: A report (substantially in the form of Schedules 3, 4 and 5 hereto) or
otherwise in form and substance acceptable to the related Servicer, the Master
Servicer and the Securities Administrator on an electronic data file or tape
prepared by the related Servicer pursuant to Section 5.03(a) of this
Agreement or pursuant to the Servicing Agreement, as applicable, with such
additions, deletions and modifications as agreed to by the Master Servicer,
the
Securities Administrator and the related Servicer.
“Service(s)(ing)”:
Means, in accordance with Regulation AB, the act of servicing and administering
the Mortgage Loans or any other assets of the Trust by an entity that meets
the
definition of “servicer’ set forth in Item 1101 of Regulation AB and is subject
to the disclosure requirements set forth in Item 1108 of Regulation AB. For
clarification purposes, any uncapitalized occurrence of this term shall have
the
meaning commonly understood by participants in the residential mortgage-backed
securitization market.
“Servicing
Advances”: The
customary and reasonable “out-of-pocket” costs and expenses incurred prior to or
on or after the Cut-off Date (the amounts incurred prior to the Cut-off Date
shall be identified on the Servicing Advance Schedule by (a) the related
Servicer with respect to any Mortgage Loans that were transferred to such
Servicer prior to the Cut-off Date and/or (b) the Depositor with respect
to any
Mortgage Loans that were transferred to the related Servicer after the Cut-off
Date, as applicable) by a Servicer in connection with a default, delinquency
or
other unanticipated event by such Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any enforcement
or
judicial proceedings, including but not limited to foreclosures, in respect
of a
particular Mortgage Loan, including any expenses incurred in relation to
any
such proceedings that result from the Mortgage Loan being registered on the
MERS® System, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property, (iv) the performance of its
obligations under Section 3.01, Section 3.07, Section 3.11,
Section 3.13 and Section 3.21 of this Agreement or under the Servicing
Agreement, as applicable, and (v) obtaining any legal documentation required
to
be included in the Mortgage File and/or correcting any outstanding title
issues
(i.e. any lien or encumbrance on the Mortgaged Property that prevents the
effective enforcement of the intended lien position) reasonably necessary
for
the related Servicer to perform its obligations under this Agreement or under
the Servicing Agreement, as applicable. Servicing Advances also include any
reasonable “out-of-pocket” cost and expenses (including legal fees) incurred by
the related Servicer in connection with executing and recording instruments
of
satisfaction, deeds of reconveyance or Assignments to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement or under the
Servicing Agreement, as applicable. The Servicers shall not be required to
make
any Nonrecoverable Servicing Advances.
“Servicing
Advance Schedule”: With respect to any Servicing Advances incurred prior to the
Cut-off Date, the schedule or schedules provided by (a) the related Servicer
with respect to any Mortgage Loans that were transferred to such Servicer
prior
to the Cut-off Date and/or (b) the Depositor with respect to any Mortgage
Loans
that were transferred to the related Servicer after the Cut-off Date, as
applicable, to the Master Servicer and, if such schedule is provided by the
Depositor, the related Servicer, on the earlier of the date on which such
Servicer seeks reimbursement for a Servicing Advance made prior to the Cut-off
Date, which schedule or schedules shall contain the information set forth
on
Schedule 6.
“Servicing
Agreement”: The Servicing Agreement, dated as of February 28, 2006, by and
between the Sponsor and SPS, as modified by the Assignment
Agreement.
“Servicing
Criteria”: Means the criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.
“Servicing
Fee”: With respect to each Mortgage Loan and for any calendar month, an amount
equal to one-twelfth of the product of the Servicing Fee Rate multiplied
by the
Scheduled Principal Balance of the Mortgage Loans as of the Due Date in the
preceding calendar month. The Servicing Fee is payable solely from collections
of interest on the Mortgage Loans or as otherwise provided herein or in the
Servicing Agreement; provided, however, the Servicers shall only be entitled
to
a portion of the servicing fee calculated at the Ocwen Servicing Fee Rate,
the
Xxxxx Fargo Servicing Fee Rate or the SPS Servicing Fee Rate, as
applicable.
“Servicing
Fee Rate”: 0.50% per annum.
“Servicing
Function Participant”: Means any Sub-Servicer, Subcontractor or any other
Person, other than each Servicer, the Master Servicer, each Custodian, the
Trustee and the Securities Administrator, that is determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, without regard to any threshold referenced therein.
“Servicing
Officer”: Any officer of the related Servicer or Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose
name
and specimen signature appear on a list of Servicing Officers furnished by
the
related Servicer or the Master Servicer to the Trustee, the Master Servicer
(in
the case of a Servicer), the Securities Administrator and the Depositor on
the
Closing Date, as such list may from time to time be amended.
“Simple
Interest Excess”: As of any Determination Date for each Simple Interest
Qualifying Loan, the excess, if any, of (i) the portion of the Monthly Payment
received from the Mortgagor for such Mortgage Loan allocable to interest
with
respect to the related Due Period, over (ii) 30 days’ interest on the Scheduled
Principal Balance of such Mortgage Loan at the Mortgage Rate.
“Simple
Interest Excess Sub-Account”: The sub-account of the Collection Account
established by each of Ocwen and Xxxxx Fargo pursuant to Section 3.08(b).
Each Simple Interest Excess Sub-Account shall be an Eligible
Account.
“Simple
Interest Mortgage Loan”: Any Mortgage Loan for which the interest due thereon is
calculated based on the actual number of days elapsed between the date on
which
interest was last paid through the date on which the most current payment
is
received and identified as such on the Mortgage Loan Schedule.
“Simple
Interest Qualifying Loan”: As of any Determination Date, any Simple Interest
Mortgage Loan that was neither prepaid in full during the related Due Period,
nor delinquent with respect to a payment that became due during the related
Due
Period as of the close of business on the Determination Date following such
Due
Period.
“Simple
Interest Shortfall”: As of any Determination Date for each Simple Interest
Qualifying Loan, the excess, if any, of (i) 30 days’ interest on the Scheduled
Principal Balance of such Mortgage Loan at the Mortgage Rate, over (ii) the
portion of the Monthly Payment received from the Mortgagor for such Mortgage
Loan allocable to interest with respect to the related Due Period.
“Single
Certificate”: With respect to any Class of Certificates (other than the Residual
Certificates), a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance of $1,000. With respect to the Residual Certificates, a hypothetical
Certificate of such Class evidencing a 100% Percentage Interest in such
Class.
“Sponsor”:
DB Structured Products, Inc. or its successor in interest, in its capacity
as
seller under the Mortgage Loan Purchase Agreement.
“SPS”:
Select Portfolio Servicing, Inc. or any successor thereto.
“SPS
Mortgage Loans”: The Mortgage Loans being serviced by SPS pursuant to the
Servicing Agreement.
“SPS
Servicing Fee Rate”: 0.40% per annum.
“Startup
Day”: With respect to each Trust REMIC, the day designated as such pursuant to
Section 11.01(b) hereof.
“Stepdown
Date”: The earlier to occur of (i) the later to occur of (a) the Distribution
Date occurring in April 2009 and (b) the first Distribution Date on which
the
Credit Enhancement Percentage (calculated for this purpose only after taking
into account collections of principal on the Mortgage Loans but prior to
any
distribution of the Principal Distribution Amount to the holders of the
Certificates then entitled to distributions of principal on such Distribution
Date) is equal to or greater than 63.80% and (ii) the first Distribution
Date
following the Distribution Date on which the Certificate Principal Balance
of
the Class A Certificates has been reduced to zero.
“Subcontractor”:
means any vendor, subcontractor or other Person that is not responsible for
the
overall servicing of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans
under
the direction or authority of any Servicer (or a Sub-Servicer of any Servicer),
the Master Servicer, the Trustee, the Custodian or the Securities
Administrator.
“Subordinate
Certificates”: Collectively, the Mezzanine Certificates and the Class CE-1
Certificates.
“Subsequent
Recoveries”: As of any Distribution Date, amounts received during the related
Prepayment Period by the related Servicer specifically related to a defaulted
Mortgage Loan or disposition of an REO Property prior to the related Prepayment
Period that resulted in a Realized Loss, after the liquidation or disposition
of
such defaulted Mortgage Loan, net of any amounts reimbursable to such Servicer
related to obtaining such Subsequent Recovery.
“Sub-Servicer”:
Means any Person that (i) is considered to be a Servicing Function Participant,
(ii) services Mortgage Loans on behalf of any Servicer, the Master Servicer,
the
Securities Administrator or the Trustee, and (iii) is responsible for the
performance (whether directly or through sub-servicers or Subcontractors)
of
Servicing functions required to be performed under this Agreement or any
related
Sub-Servicing Agreement that is identified in Item 1122(d) of Regulation
AB.
“Sub-Servicing
Agreement”: The written contract between a Servicer and a Sub-Servicer relating
to servicing and administration of certain Mortgage Loans as provided in
Section 3.02 of this Agreement or the Servicing Agreement, as
applicable.
“Substitution
Shortfall Amount”: As defined in Section 2.03 of this
Agreement.
“Tax
Returns”: The federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit 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
on
behalf of the Trust REMICs under the REMIC Provisions, together with any
and all
other information reports 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 designated as page “3750” on the Dow Xxxxx Telerate
Capital Markets Report (or such other page as may replace page 3750 on that
report for the purpose of displaying London interbank offered rates of major
banks).
“Termination
Price”: As defined in Section 10.01.
“Terminator”:
As defined in Section 10.01.
“Transfer”:
Any direct or indirect transfer, sale, pledge, hypothecation, or other form
of
assignment of any Ownership Interest in a Certificate.
“Transferee”:
Any Person who is acquiring by Transfer any Ownership Interest in a
Certificate.
“Transferor”:
Any Person who is disposing by Transfer of any Ownership Interest in a
Certificate.
“Trigger
Event”: A Trigger Event has occurred with respect to a Distribution Date on or
after the Stepdown Date if either (x) the Delinquency Percentage exceeds
25.00%
of the Senior Credit Enhancement Percentage with respect to such Distribution
Date or (y) the aggregate amount of Realized Losses incurred since the Cut-off
Date through the last day of the related Due Period divided by the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution
Date:
Distribution
Date
|
Percentage
|
|
April
2008 to March 2009
|
2.50%,
plus 1/12 of 2.25% for each month thereafter
|
|
April
2009 to March 2010
|
4.75%,
plus 1/12 of 1.75% for each month thereafter
|
|
April
2010 to March 2011
|
6.50%,
plus 1/12 of 1.25% for each month thereafter
|
|
April
2011 to March 2012
|
7.75%,
plus 1/12 of 0.50% for each month thereafter
|
|
April
2012 and thereafter
|
8.25%,
|
|
“Trust”:
ACE Securities Corp., Home Equity Loan Trust, Series 2006-SD1, the trust
created
hereunder.
“Trust
Fund”: Collectively, all of the assets of REMIC I, REMIC II and the Reserve Fund
and any amounts on deposit therein and any proceeds thereof, and the Prepayment
Charges.
“Trust
REMIC”: REMIC I or REMIC II.
“Trustee”:
HSBC Bank USA, National Association a national banking association, or its
successor in interest, or any successor trustee appointed as herein
provided.
“Uncertificated
Balance”: The principal amount of each of the REMIC I Regular Interests
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC I Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial uncertificated
balance. On each Distribution Date, the Uncertificated Balance of each REMIC
I
Regular Interest shall be reduced by all distributions of principal made
on such
REMIC I Regular Interest on such Distribution Date pursuant to Section 5.01
of
this Agreement and, if and to the extent necessary and appropriate, shall
be
further reduced on such Distribution Date by Realized Losses as provided
in
Section 5.04 of this Agreement and the Uncertificated Balance of REMIC I
Regular
Interest I-LTZZ shall be increased by interest deferrals as provided in Section
5.01(a)(1)(i) of this Agreement. The Uncertificated Balance of each REMIC
I
Regular Interest shall never be less than zero.
“Uncertificated
Interest”: With respect to any REMIC I Regular Interest for any Distribution
Date, one month’s interest at the REMIC I Remittance Rate applicable to such
REMIC I Regular Interest for such Distribution Date, accrued on the
Uncertificated Balance thereof immediately prior to such Distribution Date.
Uncertificated Interest in respect of each REMIC I Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as to any
REMIC
I Regular Interest, shall be reduced by an amount equal to the sum of (a)
the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to
the extent not covered by payments pursuant to Section 3.22 or Section 4.19
of
this Agreement or pursuant to the Servicing Agreement and (b) the aggregate
amount of any Relief Act Interest Shortfall, if any allocated, in each case,
to
such REMIC I Regular Interest or REMIC I Regular Interest pursuant to Section
1.02 of this Agreement. In addition, Uncertificated Interest with respect
to
each Distribution Date, as to any Uncertificated REMIC Regular Interest,
shall
be reduced by Realized Losses, if any, allocated to such Uncertificated REMIC
Regular Interest pursuant to Section 1.02 and Section 5.04 of this
Agreement.
“Uninsured
Cause”: Any cause of damage to a Mortgaged Property such that the complete
restoration of such property is not fully reimbursable by the hazard insurance
policies required to be maintained pursuant to Section 3.11 of this
Agreement.
“United
States Person”: 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 (except, in the case of
a
partnership, to the extent provided in regulations) provided that, for purposes
solely of the restrictions on the transfer of any Class R Certificate, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership either directly or through
any
entity that is not a corporation for United States federal income tax purposes
are required to be United States Persons, or an estate whose income is subject
to United States federal income tax regardless of its source, 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 the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, a trust which
was in
existence on August 20, 1996 (other than a trust treated as owned by the
grantor
under subpart E of part I of subchapter J of chapter I of the Code), and
which
was treated as a United States person on August 20, 1996 may elect to continue
to be treated as a United States person notwithstanding the previous sentence.
The term “United States” shall have the meaning set forth in Section 7701
of the Code.
“U.S.
Bank”: U.S. Bank National Association, or any successor thereto.
“U.S.
Bank Custodial Agreement”: The Custodial Agreement dated as of February 28,
2006, among the Trustee, Ocwen, SPS and U.S. Bank, as may be amended or
supplemented from time to time.
“Value”:
With respect to any Mortgaged Property, the lesser of (i) the lesser of (a)
the
value thereof as determined by an appraisal made for the related originator
of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of Xxxxxx Mae and Xxxxxxx Mac
and (b)
the value thereof as determined by a review appraisal conducted by the related
originator of the Mortgage Loan in accordance with the related originator’s
underwriting guidelines, (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, (A) in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the lesser of (1) the value determined
by an appraisal made for the related originator of the Mortgage Loan of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of Xxxxxx Mae and Xxxxxxx
Mac and (2) the value thereof as determined by a review appraisal conducted
by
the related originator of the Mortgage Loan in accordance with the related
originator’s underwriting guidelines, and (B) in the case of a Mortgage Loan
originated in connection with a “lease-option purchase,” such value of the
Mortgaged Property is based on the lower of the value determined by an appraisal
made for the related originator of such Mortgage Loan at the time of origination
or the sale price of such Mortgaged Property if the “lease option purchase
price” was set less than 12 months prior to origination, and is based on the
value determined by an appraisal made for the originator of such Mortgage
Loan
at the time of origination if the “lease option purchase price” was set 12
months or more prior to origination and (iii) the value determined pursuant
to a
broker’s price opinion or an automated value model conducted on behalf of the
Sponsor.
“Verification
Report”: As defined in Section 4.20.
“Voting
Rights”: The portion of the voting rights of all of the Certificates which is
allocated to any such Certificate. With respect to any date of determination,
98% of all Voting Rights will be allocated among the Holders of the Class
A
Certificates, the Mezzanine Certificates and the Class CE-1 Certificates
in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates, 1% of all Voting Rights will be allocated among
the
Holders of the Class P Certificates and 1% of all Voting Rights will be
allocated among the Holders of the Class R Certificates. The Voting Rights
allocated to each Class of Certificate shall be allocated among Holders of
each
such Class in accordance with their respective Percentage Interests as of
the
most recent Record Date.
“Xxxxx
Fargo”: Xxxxx Fargo Bank, National Association or any successor thereto, in its
capacity as a Servicer hereunder or a Custodian under the Xxxxx Fargo Custodial
Agreement.
“Xxxxx
Fargo Additional Servicing Fee”: With respect to each Xxxxx Fargo Mortgage Loan
and for any calendar month, an amount equal to one-twelfth of the product
of the
Xxxxx Fargo Additional Servicing Fee Rate multiplied by the Scheduled Principal
Balance of the Xxxxx Fargo Mortgage Loans as of the Due Date in the preceding
calendar month.
“Xxxxx
Fargo Additional Servicing Fee Rate”: The Xxxxx Fargo Servicing Fee Rate minus
the Servicing Fee Rate.
“Xxxxx
Fargo Custodial Agreement”: The Custodial Agreement dated as of
February 28, 2006, among the Trustee, Xxxxx Fargo as a Servicer and a
Custodian and Ocwen, as may be amended or supplemented from time to
time.
“Xxxxx
Fargo Mortgage Loans”: The Mortgage Loans serviced by Xxxxx Fargo pursuant to
the terms of this Agreement as specified on the Mortgage Loan
Schedule.
“Xxxxx
Fargo Servicing Fee Rate”: 0.70% per annum.
SECTION
1.02 Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of Accrued Certificate Interest and the
amount of the Interest Distribution Amount for the Class A, Mezzanine and
Class
CE-1 Certificates for any Distribution Date, (1) the aggregate amount of
any
Prepayment Interest Shortfalls (to the extent not covered by payments by
the
related Servicer pursuant to Section 3.22 of this Agreement or pursuant to
the Servicing Agreement or by the Master Servicer pursuant to Section 4.19
of this Agreement) and any Relief Act Interest Shortfalls incurred in respect
of
the Mortgage Loans for any Distribution Date shall be allocated first, to
the
Class CE-1 Certificates, second, to the Class M-5 Certificates, third, to
the
Class M-4 Certificates, fourth, to the Class M-3 Certificates, fifth, to
the
Class M-2 Certificates, sixth, to the Class M-1 Certificates and seventh,
to the
Class A Certificates (on a pro rata basis, based on their respective Senior
Interest Distribution Amounts before such reduction), on a pro rata basis,
in
each case based on, and to the extent of, one month’s interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount, as applicable, of each such Certificate and (2)
the
aggregate amount of any Realized Losses allocated to the Mezzanine Certificates
and Net WAC Rate Carryover Amounts paid to the Class A Certificates and the
Mezzanine Certificates incurred for any Distribution Date shall be allocated
to
the Class CE-1 Certificates on a pro rata basis based on, and to the extent
of,
one month’s interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount thereof, as
applicable.
For
purposes of calculating the amount of Uncertificated Interest for the REMIC
I
Regular Interests for any Distribution Date, the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by
the
related Servicer pursuant to Section 3.22 of this Agreement or the Servicing
Agreement or by the Master Servicer pursuant to Section 4.19 of this Agreement)
and any Relief Act Interest Shortfalls incurred in respect of the Mortgage
Loans
for any Distribution Date shall be allocated among REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5 and REMIC I Regular Interest I-LTZZ pro rata based on, and
to
the extent of, one month’s interest at the then applicable respective REMIC I
Remittance Rate on the respective Uncertificated Balance of each such REMIC
I
Regular Interest.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL
ISSUANCE OF CERTIFICATES
SECTION
2.01 Conveyance
of the Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, on behalf
of the
Trust, 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 the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights (but not the obligations)
of the Depositor under the Mortgage Loan Purchase Agreement and the Assignment
Agreement (including, without limitation the right to enforce the obligations
of
the other parties thereto thereunder) and the right to all other assets included
or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor and the Servicers on or with respect
to the
Mortgage Loans (including all payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date, but not paid by the related
Mortgagors by such date). The Depositor herewith delivers to the Trustee
and the
Servicers a copy of the Mortgage Loan Purchase Agreement.
In
connection with such transfer and assignment, the Depositor does hereby deliver
to, and deposit with the related Custodian pursuant to the related Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the “Mortgage Loan Documents”). In
connection with such delivery and as further described in the Custodial
Agreements, the Custodians will be required to review such Mortgage Loan
Documents and deliver to the Trustee, the Depositor, the related Servicer
and
the Sponsor certifications (in the forms attached to the Custodial Agreements)
with respect to such review with exceptions noted thereon. In addition, under
the Custodial Agreements the Depositor will be required to cure certain defects
with respect to the Mortgage Loan Documents for the related Mortgage Loans
after
the delivery thereof by the Depositor to the Custodians as more particularly
set
forth therein.
Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge
that
the functions of the Trustee with respect to the custody, acceptance, inspection
and release of the Mortgage Files, including, but not limited to certain
insurance policies and documents contemplated by Section 4.11 of this
Agreement, and preparation and delivery of the certifications shall be performed
by the Custodians pursuant to the terms and conditions of the Custodial
Agreements.
The
Depositor shall deliver or cause the related originator to deliver to the
related Servicer copies of all trailing documents required to be included
in the
related Mortgage File at the same time the originals or certified copies
thereof
are delivered to the Trustee or Custodians, such documents including the
mortgagee policy of title insurance and any Mortgage Loan Documents upon
return
from the recording office. The Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing their obligations under
this
Agreement or the Servicing Agreement, as applicable.
The
Mortgage Loans permitted by the terms of this Agreement to be included in
the
Trust are limited to (i) Mortgage Loans (which the Depositor acquired pursuant
to the Mortgage Loan Purchase Agreement, which contains, among other
representations and warranties, a representation and warranty of the Sponsor
that no Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act,
effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9)
or a
“high risk home loan” under the Illinois High Risk Home Loan Act, effective as
of January 1, 2004), and (ii) Qualified Substitute Mortgage Loans (which,
by
definition as set forth herein and referred to in the Mortgage Loan Purchase
Agreement, are required to conform to, among other representations and
warranties, the representation and warranty of the Sponsor that no Qualified
Substitute Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act,
effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9)).
The
Depositor and the Trustee on behalf of the Trust understand and agree that
it is
not intended that any Mortgage Loan be included in the Trust that is a
“High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective
November 27, 2003, as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home
Loan
Practices Act, effective November 7, 2004 (Mass. Xxx. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005
(Ind.
Code Xxx. Sections 24-9-1 through 24-9-9) or a “high risk home loan” under the
Illinois High Risk Home Loan Act, effective as of January 1, 2004.
SECTION
2.02 Acceptance
of REMIC I by Trustee.
The
Trustee acknowledges receipt, subject to the provisions of Section 2.01
hereof and Section 2 of the Custodial Agreements, of the Mortgage Loan
Documents and all other assets included in the definition of “REMIC I” under
clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the
Distribution Account) and declares that it holds (or the applicable Custodian
on
its behalf holds) and will hold such documents and the other documents delivered
to it constituting a Mortgage Loan Document, and that it holds (or the
applicable Custodian on its behalf holds) or will hold all such assets and
such
other assets included in the definition of “REMIC I” in trust for the exclusive
use and benefit of all present and future Certificateholders.
SECTION
2.03 Repurchase
or Substitution of Mortgage Loans.
(a) Upon
discovery or receipt of notice (i) of any materially defective document in
a
Mortgage File or that a document is missing from a Mortgage File, other than
a
defective or missing document with respect to the Mortgage Loans listed on
Schedule A to the Mortgage Loan Purchase Agreement, or (ii) of a breach by
the
Sponsor of any representation, warranty or covenant under the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan that materially and adversely
affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, which notice shall be provided in accordance with
Section 9.02(a)(viii), the Trustee shall promptly notify the Sponsor and
the related Servicer of such defect, missing document or breach and request
that
the Sponsor deliver such missing document, cure such defect or breach within
sixty (60) days from the date the Sponsor was notified 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
Trustee shall enforce the obligations of the Sponsor under the Mortgage Loan
Purchase Agreement to repurchase such Mortgage Loan from REMIC I at the Purchase
Price within ninety (90) days after the date on which the Sponsor was notified
of such missing document, defect or breach, if and to the extent that the
Sponsor is obligated to do so under the Mortgage Loan Purchase Agreement.
The
Purchase Price for the repurchased Mortgage Loan shall be remitted to the
related Servicer for deposit in the related Collection Account or the Custodial
Account, as applicable, and the Trustee, upon receipt of written certification
from the related Servicer of such deposit, shall release or cause the applicable
Custodian (upon receipt of a request for release in the form attached to
the
related Custodial Agreement) to 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, representation or warranty, 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 shall not have any
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in
the
Mortgage Loan Purchase Agreement, the Sponsor may cause such Mortgage Loan
to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan)
and
substitute one or more Qualified Substitute Mortgage Loans in the manner
and
subject to the limitations set forth in Section 2.03(b) of this Agreement.
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
respecting such omission, defect or breach available to the Trustee and the
Certificateholders.
In
addition, promptly upon the earlier of discovery by a Servicer or receipt
of
notice by a Servicer of the breach of the representation or covenant of the
Sponsor set forth in Section 5(xvii)
of the
Mortgage Loan Purchase Agreement which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
such Servicer shall promptly notify the Sponsor and the Trustee of such breach.
The Trustee shall enforce the obligations of the Sponsor under the Mortgage
Loan
Purchase Agreement to remedy such breach to the extent and in the manner
set
forth in the Mortgage Loan Purchase Agreement.
(b) Any
substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage
Loans
made pursuant to Section 2.03(a) of this Agreement must be effected prior
to the date which is two years after the Startup Day for REMIC I.
As
to any
Deleted Mortgage Loan for which the Sponsor substitutes a Qualified Substitute
Mortgage Loan or Loans, such substitution shall be effected by the Sponsor
delivering to the Trustee or the applicable Custodian on behalf of the Trustee,
for such Qualified 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 of the Custodial Agreements, as applicable, together with an
Officers’ Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution.
The
applicable Custodian on behalf of the Trustee shall acknowledge receipt of
such
Qualified Substitute Mortgage Loan or Loans and, within ten (10) Business
Days
thereafter, review such documents and deliver to the Depositor, the Trustee
and
the related Servicer, with respect to such Qualified Substitute Mortgage
Loan or
Loans, an initial certification pursuant to the related Custodial Agreement,
with any applicable exceptions noted thereon. Within one year of the date
of
substitution, the applicable Custodian on behalf of the Trustee shall deliver
to
the Depositor, the Trustee and the related Servicer a final certification
pursuant to the related Custodial Agreement with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans
in the
month of substitution are not part of REMIC I and will be retained by the
Sponsor. For the month of substitution, distributions to Certificateholders
will
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before
the
Due Date in 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 Depositor 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 Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage
Loan
Schedule to the Trustee and the related Servicer. Upon such substitution,
such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the
Trust
Fund and shall be subject in all respects to the terms of this Agreement
and the
Mortgage Loan Purchase Agreement, including all applicable representations
and
warranties thereof included herein or in the Mortgage Loan Purchase
Agreement.
For
any
month in which the Sponsor substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the related Servicer will
determine the amount (the “Substitution Shortfall Amount”), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate of, as to each such Qualified Substitute Mortgage Loan, the Scheduled
Principal Balance thereof as of the date of substitution, together with one
month’s interest on such Scheduled Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing
Advances) related thereto. On the date of such substitution, the Sponsor
will
deliver or cause to be delivered to the related Servicer for deposit in the
related Collection Account or the Custodial Account an amount equal to the
Substitution Shortfall Amount, if any, and the Trustee or the applicable
Custodian on behalf of the Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans, upon receipt of a request for release
in the
form attached to the related Custodial Agreement and certification by the
related Servicer of such deposit, 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,
representation or warranty, 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 any Trust REMIC, including without limitation,
any federal tax imposed on “prohibited transactions” under
Section 860F(a)(1) of the Code or on “contributions after the startup date”
under Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificate is outstanding.
(c) Upon
discovery by the Depositor, the Sponsor, a Servicer 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 (2) Business Days give written notice thereof to the other parties.
In connection therewith, the Sponsor shall repurchase or substitute one or
more
Qualified Substitute Mortgage Loans for the affected Mortgage Loan within
ninety
(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
(i) the Sponsor if the affected Mortgage Loan’s status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Sponsor under the Mortgage Loan Purchase Agreement or (ii) the
Depositor, if the affected Mortgage Loan’s status as a non-qualified mortgage
does not result from a breach of a representation or warranty. Any such
repurchase or substitution shall be made in the same manner as set forth
in
Section 2.03(a) of this Agreement. 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.
(d) With
respect to a breach of the representations made pursuant to Section 5(xvii)
of the Mortgage Loan Purchase Agreement that materially and adversely affects
the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Sponsor shall be required to take the actions set
forth
in this Section 2.03 of this Agreement.
(e) Within
ninety (90) days of the earlier of discovery by Ocwen or Xxxxx Fargo or receipt
of notice by Ocwen or Xxxxx Fargo of the breach of any representation, warranty
or covenant of Ocwen or Xxxxx Fargo, as applicable, set forth in
Section 2.05 of this Agreement, which materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan or Prepayment Charge,
Ocwen or Xxxxx Fargo, as applicable, shall cure such breach in all material
respects.
SECTION
2.04 Representations
and Warranties of the Master Servicer.
The
Master Servicer hereby represents, warrants and covenants to Ocwen, Xxxxx
Fargo,
the Depositor and the Trustee, for the benefit of each of the Trustee and
the
Certificateholders, that as of the Closing Date or as of such date specifically
provided herein:
(i) The
Master Servicer is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly
authorized and qualified to transact any and all business contemplated by
this
Agreement to be conducted by the Master Servicer;
(ii) The
Master Servicer has the full power and authority to conduct its business
as
presently conducted by it and to execute, deliver and perform, and to enter
into
and consummate, all transactions contemplated by this Agreement. The Master
Servicer has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity;
(iii) The
execution and delivery of this Agreement by the Master Servicer, the
consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of the charter and by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration
of,
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be
bound,
or any statute, order or regulation applicable to the Master Servicer of
any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement
or
instrument, or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or
assets of the Master Servicer taken as a whole;
(iv) The
Master Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by it and contained
in this Agreement;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) There
are
no actions or proceedings against, or investigations known to it of, the
Master
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the
Master
Servicer of its obligations under, or validity or enforceability of, this
Agreement; and
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer with, this Agreement or
the
consummation by it of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been
obtained prior to the Closing Date.
It
is
understood and agreed that the representations, warranties and covenants
set
forth in this Section 2.04 shall survive the resignation or termination of
the parties hereto and the termination of this Agreement and shall inure
to the
benefit of the Trustee, the Depositor and the Certificateholders.
SECTION
2.05 Representations,
Warranties and Covenants of Ocwen and Xxxxx Fargo.
(a) Ocwen
hereby represents, warrants and covenants to the Master Servicer, Xxxxx Fargo,
the Securities Administrator, the Depositor and the Trustee, for the benefit
of
each of such Persons and the Certificateholders that as of the Closing Date
or
as of such date specifically provided herein:
(i) Ocwen
is
a limited liability company duly organized and validly existing under the
laws
of the jurisdiction of its formation, and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to be conducted
by
Ocwen in any state in which a Mortgaged Property related to an Ocwen Mortgage
Loan is located or is otherwise not required under applicable law to effect
such
qualification and, in any event, is in compliance with the doing business
laws
of any such State, to the extent necessary to ensure its ability to enforce
each
Ocwen Mortgage Loan and to service the Ocwen Mortgage Loans in accordance
with
the terms of this Agreement;
(ii) Ocwen
has
the full power and authority to conduct its business as presently conducted
by
it and to execute, deliver and perform, and to enter into and consummate,
all
transactions contemplated by this Agreement. Ocwen has duly authorized the
execution, delivery and performance of this Agreement, has duly executed
and
delivered this Agreement, and this Agreement, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal,
valid
and binding obligation of Ocwen, enforceable against it in accordance with
its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity;
(iii) The
execution and delivery of this Agreement by Ocwen, the servicing of the Ocwen
Mortgage Loans by Ocwen hereunder, the consummation by Ocwen of any other
of the
transactions herein contemplated, and the fulfillment of or compliance with
the
terms hereof are in the ordinary course of business of Ocwen and will not
(A)
result in a breach of any term or provision of the charter or by-laws of
Ocwen
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which Ocwen is a party or by which it may be bound, or any
statute, order or regulation applicable to Ocwen of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over Ocwen;
and
Ocwen is not a party to, bound by, or in breach or violation of any indenture
or
other agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it, which materially and adversely
affects or, to Ocwen’s knowledge, would in the future materially and adversely
affect, (x) the ability of Ocwen to perform its obligations under this
Agreement, (y) the business, operations, financial condition, properties
or
assets of Ocwen taken as a whole or (z) the legality, validity or enforceability
of this Agreement;
(iv) Ocwen
does not believe, nor does it have any reason or cause to believe, that it
cannot perform each and every covenant made by it and contained in this
Agreement;
(v) No
litigation is pending against Ocwen that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or the ability
of
Ocwen to service the Ocwen Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(vi) There
are
no actions or proceedings against, or investigations known to it of, Ocwen
before any court, administrative or other tribunal (A) that might prohibit
its
entering into this Agreement, (B) seeking to prevent the consummation of
the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by Ocwen of its obligations
under, or the validity or enforceability of, this Agreement;
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by Ocwen of,
or
compliance by Ocwen with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the Closing Date;
(viii) Ocwen
has
fully furnished and will continue to fully furnish, in accordance with the
Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files
to
Equifax, Experian and Trans Union Credit Information Company or their successors
on a monthly basis;
(ix) Ocwen
will not waive any Prepayment Charge related to an Ocwen Mortgage Loan other
than in accordance with the standard set forth in Section 3.01 of this
Agreement; and
(x) Ocwen
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
Ocwen
Mortgage Loans that are registered with MERS.
(b) Xxxxx
Fargo hereby represents, warrants and covenants to the Master Servicer, Ocwen,
the Securities Administrator, the Depositor and the Trustee, for the benefit
of
each of such Persons and the Certificateholders that as of the Closing Date
or
as of such date specifically provided herein:
(i) Xxxxx
Fargo is a national banking association duly organized and validly existing
under the laws of the United States of America and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be
conducted by Xxxxx Fargo in any state in which a Mortgaged Property related
to a
Xxxxx Fargo Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Xxxxx Fargo Mortgage Loan and to service
the
Xxxxx Fargo Mortgage Loans in accordance with the terms of this
Agreement;
(ii) Xxxxx
Fargo has the full power and authority to conduct its business as presently
conducted by it and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. Xxxxx Fargo
has
duly authorized the execution, delivery and performance of this Agreement,
has
duly executed and delivered this Agreement, and this Agreement, assuming
due
authorization, execution and delivery by the other parties hereto, constitutes
a
legal, valid and binding obligation of Xxxxx Fargo, enforceable against it
in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of
equity;
(iii) The
execution and delivery of this Agreement by Xxxxx Fargo, the servicing of
the
Xxxxx Fargo Mortgage Loans by Xxxxx Fargo hereunder, the consummation by
Xxxxx
Fargo of any other of the transactions herein contemplated, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of business
of
Xxxxx Fargo and will not (A) result in a breach of any term or provision
of the
charter or by-laws of Xxxxx Fargo or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any
other material agreement or instrument to which Xxxxx Fargo is a party or
by
which it may be bound, or any statute, order or regulation applicable to
Xxxxx
Fargo of any court, regulatory body, administrative agency or governmental
body
having jurisdiction over Xxxxx Fargo; and Xxxxx Fargo is not a party to,
bound
by, or in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any
court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to Xxxxx Fargo’s knowledge,
would in the future materially and adversely affect, (x) the ability of Xxxxx
Fargo to perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of Xxxxx Fargo taken
as a
whole or (z) the legality, validity or enforceability of this
Agreement;
(iv) Xxxxx
Fargo does not believe, nor does it have any reason or cause to believe,
that it
cannot perform each and every covenant made by it and contained in this
Agreement;
(v) No
litigation is pending against Xxxxx Fargo that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of Xxxxx Fargo to service the Xxxxx Fargo Mortgage Loans or to perform
any of its other obligations hereunder in accordance with the terms
hereof;
(vi) There
are
no actions or proceedings against, or investigations known to it of, Xxxxx
Fargo
before any court, administrative or other tribunal (A) that might prohibit
its
entering into this Agreement, (B) seeking to prevent the consummation of
the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by Xxxxx Fargo of its
obligations under, or the validity or enforceability of, this
Agreement;
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by Xxxxx Fargo
of,
or compliance by Xxxxx Fargo with, this Agreement or the consummation by
it of
the transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the Closing Date;
(viii) Xxxxx
Fargo has fully furnished and will continue to fully furnish, in accordance
with
the Fair Credit Reporting Act and its implementing regulations, accurate
and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company or
their
successors on a monthly basis;
(ix) Xxxxx
Fargo will not waive any Prepayment Charge related to a Xxxxx Fargo Mortgage
Loan other than in accordance with the standard set forth in Section 3.01
of this Agreement; and
(x) Xxxxx
Fargo 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 Xxxxx Fargo Mortgage Loans that are registered with MERS.
(c) Notwithstanding
anything to the contrary contained in this Agreement, if the covenant of
Ocwen
or Xxxxx Fargo set forth in clause (ix) of Section 2.05(a) or (b) above is
breached, Ocwen or Xxxxx Fargo, as applicable will pay the amount of such
waived
Prepayment Charge, from its own funds without any right of reimbursement,
for
the benefit of the Holders of the Class P Certificates, by depositing such
amount into the related Collection Account within ninety (90) days of the
earlier of discovery by Ocwen or Xxxxx Fargo, as applicable, or receipt of
notice by Ocwen or Xxxxx Fargo, as applicable, of such breach. Furthermore,
notwithstanding any other provisions of this Agreement, any payments made
by
Ocwen or Xxxxx Fargo, as applicable, in respect of any waived Prepayment
Charges
pursuant to this paragraph shall be deemed to be paid outside of the Trust
Fund.
(d) It
is
understood and agreed that the representations, warranties and covenants
set
forth in this Section 2.05 shall survive the resignation or termination of
the parties hereto, the termination of this Agreement and the delivery of
the
Mortgage Files to the related Custodian and shall inure to the benefit of
the
Trustee, the Master Servicer, the Securities Administrator, the Depositor
and
the Certificateholders. Upon discovery by any such Person or Ocwen or Xxxxx
Fargo, as applicable, of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value
of any
Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two (2) Business Days following such
discovery) to the Trustee. Subject to Section 8.01 of this Agreement,
unless such breach shall not be susceptible of cure within ninety (90) days,
the
obligation of Ocwen or Xxxxx Fargo, as applicable, set forth in
Section 2.03(e) of this Agreement to cure breaches shall constitute the
sole remedy against Ocwen or Xxxxx Fargo, as applicable, available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders respecting a breach of the representations, warranties
and
covenants contained in this Section 2.05.
SECTION
2.06 Issuance
of the REMIC I Regular Interests and the Class R-I Interest.
The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to the applicable Custodian on its behalf of the Mortgage Loan Documents,
subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the related Custodial Agreement, together with the assignment
to it of all other assets included in REMIC I, the receipt of which is hereby
acknowledged. The interests evidenced by the Class R-I Interest, together
with
the REMIC I Regular Interests, constitute the entire beneficial ownership
interest in REMIC I. The rights of the Holders of the Class R-I Interest
and
REMIC I (as holder of the REMIC I Regular Interests) to receive distributions
from the proceeds of REMIC I in respect of the Class R-I Interest and the
REMIC
I Regular Interests, respectively, and all ownership interests evidenced
or
constituted by the Class R-I Interest and the REMIC I Regular Interests,
shall
be as set forth in this Agreement.
SECTION
2.07 Conveyance
of the REMIC I Regular Interests; Acceptance of REMIC I by the
Trustee.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC I
Regular
Interests for the benefit of the Class R-II Interest and REMIC II (as holder
of
the REMIC I Regular Interests). The Trustee acknowledges receipt of the REMIC
I
Regular Interests and declares that it holds and will hold the same in trust
for
the exclusive use and benefit of all present and future Holders of the Class
R-II Interest and REMIC II (as holder of the REMIC I Regular Interests).
The
rights of the Holder of the Class R-II Interest and REMIC II (as holder of
the
REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC
II in respect of the Class R-II Interest and the Regular Certificates,
respectively, and all ownership interests evidenced or constituted by the
Class
R-II Interest and the Regular Certificates, shall be as set forth in this
Agreement. The Class R-II Interest and the Regular Certificates shall constitute
the entire beneficial ownership interest in REMIC II.
SECTION
2.08 Issuance
of the Residual Certificates.
The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests
and,
concurrently therewith and in exchange therefor, pursuant to the written
request
of the Depositor executed by an officer of the Depositor, the Securities
Administrator has executed and authenticated and the Trustee has delivered
to or
upon the order of the Depositor, the Class R Certificates in authorized
denominations. The Class R Certificates evidence ownership in the Class R-I
Interest and the Class R-II Interest.
SECTION
2.09 Establishment
of the Trust.
The
Depositor does hereby establish, pursuant to the further provisions of this
Agreement and the laws of the State of New York, an express trust to be known,
for convenience, as “ACE Securities Corp., Home Equity Loan Trust, Series
2006-SD1” and does hereby appoint HSBC Bank USA, National Association as Trustee
in accordance with the provisions of this Agreement.
SECTION
2.10 Purpose
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as
may be
required in connection with conservation of the Trust Fund and the making
of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. The Trustee shall
not cause the trust to engage in any activity other than in connection with
the
foregoing or other than as required or authorized by the terms of this Agreement
(or those ancillary thereto) while any Certificate is outstanding, and this
Section 2.10 may not be amended, without the consent of the Certificateholders
evidencing 51% or more of the aggregate voting rights of the
Certificates.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF THE OCWEN MORTGAGE LOANS
AND
XXXXX
FARGO MORTGAGE LOANS; ACCOUNTS
SECTION
3.01 Ocwen
and Xxxxx Fargo to Act as a Servicer.
The
obligations of each of Ocwen and Xxxxx Fargo hereunder to service and administer
the Mortgage Loans shall be limited to the Ocwen Mortgage Loans and the Xxxxx
Fargo Mortgage Loans, respectively, and with respect to the duties and
obligations of each Servicer references herein to the related Mortgage Loans
shall be limited to the Ocwen Mortgage Loans (and the related proceeds thereof
and related REO Properties) in the case of Ocwen, and the Xxxxx Fargo Mortgage
Loans (and the related proceeds thereof and related REO Properties) in the
case
of Xxxxx Fargo, and in no event shall either Servicer have any responsibility
or
liability with respect to any Mortgage Loans serviced by the other Servicer
hereunder. In addition, from and after the Closing Date, the SPS Mortgage
Loans
will be serviced and administered by SPS pursuant to the Servicing Agreement,
and neither Ocwen nor Xxxxx Fargo will have any responsibility to service
or
administer such Mortgage Loans or have any other obligation with respect
to such
Mortgage Loans (including reporting or remitting funds to the Master Servicer).
Except as otherwise expressly stated herein, references in this Article III
to
“Servicer” shall refer to Ocwen or Xxxxx Fargo, as the case may be, and any
successor thereto as a Servicer.
From
and
after the Closing Date with respect to the Ocwen Mortgage Loans and the Xxxxx
Fargo Mortgage Loans, Ocwen and Xxxxx Fargo shall service and administer
the
related Mortgage Loans on behalf of the Trust Fund and in the best interests
of
and for the benefit of the Certificateholders (as determined by the related
Servicer in its reasonable judgment) in accordance with the terms of this
Agreement and the respective Mortgage Loans and all applicable law and
regulations and, to the extent consistent with such terms, in the same manner
in
which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of
prudent
mortgage lenders and loan servicers administering similar mortgage loans
but
without regard to:
(i) any
relationship that the related Servicer or any Affiliate of the related Servicer
may have with the related Mortgagor;
(ii) the
ownership of any Certificate by the related Servicer or any Affiliate of
the
related Servicer;
(iii) the
related Servicer’s obligation to make P&I Advances or Servicing Advances;
or
(iv) the
related Servicer’s right to receive compensation for its services
hereunder.
To
the
extent consistent with the foregoing, the related Servicer shall also seek
to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes with respect to the related Mortgage Loans and shall waive
(or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and such waiver is related to a default or reasonably foreseeable
default and would, in the reasonable judgment of the related Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan and, if such waiver is made in connection
with a refinancing of the related Mortgage Loan, such refinancing is related
to
a default or a reasonably foreseeable default, (ii) such Prepayment Charge
is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law or (iii)
the
collection of such Prepayment Charge would be considered “predatory” pursuant to
written guidance published or issued by any applicable federal, state or
local
regulatory authority acting in its official capacity and having jurisdiction
over such matters. Notwithstanding any provision in this Agreement to the
contrary, in the event the Prepayment Charge payable under the terms of the
Mortgage Note is less than the amount of the Prepayment Charge set forth
in the
Prepayment Charge Schedule or other information provided to the related
Servicer, the related Servicer shall not have any liability or obligation
with
respect to such difference (including any obligation to recalculate any
prepayment charges), and in addition shall not have any liability or obligation
to pay the amount of any uncollected Prepayment Charge if the failure to
collect
such amount is the direct result of inaccurate or incomplete information
on the
Prepayment Charge Schedule.
Subject
only to the above-described servicing standards (the “Accepted Servicing
Practices”) and the terms of this Agreement and of the respective Mortgage
Loans, the related Servicer shall have full power and authority, to do or
cause
to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable with the goal of
maximizing proceeds of the Mortgage Loan. Without limiting the generality
of the
foregoing, the related Servicer in its own name is hereby authorized and
empowered by the Trustee when the related Servicer believes it appropriate
in
its best judgment, to execute and deliver, on behalf of the Trust Fund, the
Certificateholders and the Trustee or any of them, and upon written notice
to
the Trustee, any and all instruments of satisfaction or cancellation, or
of
partial or full release or discharge or subordination, and all other comparable
instruments, with respect to the Mortgage Loans and the Mortgaged Properties
and
to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure
so
as to convert the ownership of such properties, and to hold or cause to be
held
title to such properties, on behalf of the Trustee, for the benefit of the
Trust
Fund and the Certificateholders. The related Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided
to
them thereby. The related Servicer shall also comply in the performance of
this
Agreement with all reasonable rules and requirements of each insurer under
any
standard hazard insurance policy. Subject to Section 3.14 of this
Agreement, the Trustee shall execute, at the written request of a Servicer,
and
furnish to the related Servicer a power of attorney in the form of Exhibit
D
hereto and other documents necessary or appropriate to enable the related
Servicer to carry out its servicing and administrative duties hereunder or
under
the Servicing Agreement, as applicable, and furnished to the Trustee by the
related Servicer, and the Trustee shall not be liable for the actions of
the
related Servicer under such powers of attorney and shall be indemnified by
the
related Servicer for any cost, liability or expense incurred by the Trustee
in
connection with the related Servicer’s use or misuse of any such power of
attorney.
Each
Servicer further is hereby authorized and empowered in its own name or in
the
name of the Sub-Servicer, when such Servicer or the Sub-Servicer, as the
case
may be, 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 reasonable expenses incurred
in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS® System, shall be reimbursable by the Trust Fund to such
Servicer.
In
accordance with Accepted Servicing Practices, the related Servicer shall
make or
cause to be made Servicing Advances as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties, which
Servicing Advances shall be reimbursable in the first instance from related
collections from the related Mortgagors pursuant to Section 3.07 of this
Agreement, and further as provided in Section 3.09 of this Agreement;
provided, however, the related Servicer shall only make such Servicing Advance
if the related Mortgagor has not made such payment and if the failure to
make
such Servicing Advance would result in the loss of the related Mortgaged
Property due to a tax sale or foreclosure as result of a tax lien; provided,
however, that each Servicer shall be required to make such Servicing Advances
only to the extent that such Servicing Advances, in the good faith judgment
of
such Servicer, will be recoverable by such Servicer out of Insurance Proceeds,
Liquidation Proceeds, or otherwise out of the proceeds of the related Mortgage
Loan. Any cost incurred by the related Servicer in effecting the payment
of
taxes and assessments on a Mortgaged Property shall not, for the purpose
of
calculating the Scheduled Principal Balance of such Mortgage Loan or
distributions to Certificateholders, be added to the unpaid principal balance
of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan
so permit.
The
parties to this Agreement acknowledge that Servicing Advances shall be
reimbursable pursuant to Section 3.09 of this Agreement, and agree that no
Servicing Advance shall be rejected or disallowed by any party unless it
has
been shown that such Servicing Advance was not made in accordance with the
terms
of this Agreement. Notwithstanding the foregoing, the parties hereto understand
and agree that, with respect to any Mortgage Loan (1) the Master Servicer
shall
not approve the reimbursement of any Servicing Advance made with respect
to such
Mortgage Loan prior to the Cut-off Date (each, a “Pre-Cut-off Date Advance”)
unless and until it has received a Servicing Advance Schedule listing the
amount
of Pre-Cut-off Date Advances made in respect of such Mortgage Loan from (a)
the
related Servicer with respect to any Mortgage Loans that were transferred
to
such Servicer prior to the Cut-off Date and/or (b) the Depositor with respect
to
any Mortgage Loans that were transferred to the related Servicer after the
Cut-off Date, as applicable, (2) the aggregate Pre-Cut-off Date Advances
reimbursable hereunder with respect to such Mortgage Loan shall not exceed
the
amount of Pre-Cut-off Date Advances for such Mortgage Loan shown on the
Servicing Advance Schedule delivered to the Master Servicer, (3) the Depositor
shall be deemed to have agreed with and approved the Pre-Cut-off Date Advances
shown on any Servicing Advance Schedule furnished to the Master Servicer
and (4)
the Master Servicer will have no liability to the Depositor, any Servicer
or any
other Person, including any Certificateholder, for approving reimbursement
of
related Pre-Cut-off Date Advances so long as the aggregate amount of such
advances reimbursed hereunder does not exceed of the amount of Pre-Cut-off
Date
Advances for such Mortgage Loan shown on the Servicing Advance
Schedule.
Notwithstanding
anything in this Agreement to the contrary, the related Servicer may not
make
any future advances with respect to a Mortgage Loan and the related Servicer
shall not permit any modification with respect to any Mortgage Loan serviced
by
such Servicer that would change the Mortgage Rate, reduce or increase the
principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such related Mortgage Loan
(unless, as provided in Section 3.06 of this Agreement, the related
Mortgagor is in default with respect to the related Mortgage Loan or such
default is, in the judgment of the related Servicer, reasonably foreseeable)
or
any modification, waiver or amendment of any term of any Mortgage Loan that
would both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury
regulations promulgated thereunder) and (B) cause any Trust REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition
of any
tax on “prohibited transactions” or “contributions after the startup date” under
the REMIC Provisions.
In
the
event that the Mortgage Loan Documents relating to any Mortgage Loan contain
provisions requiring the related Mortgagor to arbitrate disputes (at the
option
of the Trustee, on behalf of the Trust), the Trustee hereby authorizes the
related Servicer to waive the Trustee’s right or option to arbitrate disputes
and to send written notice of such waiver to the Mortgagor, although the
Mortgagor may still require arbitration at its option.
SECTION
3.02 Sub-Servicing
Agreement Between Each Servicer and Sub-Servicers.
(a) Each
Servicer may arrange for the subservicing of any Mortgage Loan by a Sub-Servicer
pursuant to a Sub-Servicing Agreement; provided that such sub-servicing
arrangement and the terms of the related Sub-Servicing Agreement must provide
for the servicing of such Mortgage Loans in a manner consistent with the
servicing arrangements contemplated hereunder and the related Servicer shall
cause any Sub-Servicer to comply with the provisions of this Agreement
(including, without limitation, to provide the information required to be
delivered under Sections 3.17, 3.18 and 3.19 hereof), to the same extent
as if
such Sub-Servicer were the Servicer. The related Servicer shall be responsible
for obtaining from each Sub-Servicer and delivering to the Master Servicer
any
annual statement of compliance, assessment of compliance, attestation report
and
Xxxxxxxx-Xxxxx related certification as and when required to be delivered.
Each
Sub-Servicer shall be (i) authorized to transact business in the state or
states
where the related Mortgaged Properties it is to service are situated, if
and to
the extent required by applicable law to enable the Sub-Servicer to perform
its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Xxxxxxx
Mac or Xxxxxx Xxx approved mortgage servicer. Notwithstanding the provisions
of
any Sub-Servicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the related Servicer or a Sub-Servicer
or
reference to actions taken through the related Servicer or otherwise, the
related Servicer shall remain obligated and liable to the Depositor, the
Trustee
and the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution
of
such obligation or liability by virtue of such Sub-Servicing Agreement or
arrangements or by virtue of indemnification from the Sub-Servicer and to
the
same extent and under the same terms and conditions as if the related Servicer
alone were servicing and administering the Mortgage Loans. Every Sub-Servicing
Agreement entered into by the related Servicer shall contain a provision
giving
the successor Servicer the option to terminate such agreement in the event
a
successor Servicer is appointed. All actions of each Sub-Servicer performed
pursuant to the related Sub-Servicing Agreement shall be performed as an
agent
of the related Servicer with the same force and effect as if performed directly
by the related Servicer.
(b) Notwithstanding
the foregoing, each Servicer shall be entitled to outsource one or more separate
servicing functions to a Subcontractor that does not meet the eligibility
requirements for a Sub-Servicer, so long as such outsourcing does not constitute
the delegation of such Servicer’s obligation to perform all or substantially all
of the servicing of the related Mortgage Loans to such Subcontractor. The
related Servicer shall promptly, upon request, provide to the Master Servicer,
the Trustee and the Depositor a written description (in form and substance
reasonably satisfactory to the Master Servicer, the Trustee and the Depositor)
of the role and function of each Subcontractor utilized by the related Servicer,
specifying (i) the identity of each such Subcontractor “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments
of
compliance provided by each Subcontractor identified pursuant to clause (i)
of
this subsection; provided, however, that the Servicer shall not be required
to
provide the information in clauses (i) or (ii) of this subsection until such
time that the applicable assessment of compliance is due pursuant to Section
3.18 of this Agreement. The use by a Servicer of any such Subcontractor shall
not release such Servicer from any of its obligations hereunder and such
Servicer shall remain responsible hereunder for all acts and omissions of
such
Subcontractor as fully as if such acts and omissions were those of such
Servicer, and such Servicer shall pay all fees and expenses of the Subcontractor
from such Servicer’s own funds.
(c) As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the related Servicer shall cause any such Subcontractor used
by
such Servicer for the benefit of the Master Servicer, the Trustee and the
Depositor to comply with the provisions of Sections 3.18 and 3.19 of this
Agreement to the same extent as if such Subcontractor were the related Servicer.
The related Servicer shall be responsible for obtaining from each such
Subcontractor and delivering to the Master Servicer, the Trustee and any
Depositor any assessment of compliance, attestation report and Xxxxxxxx-Xxxxx
related certification required to be delivered by such Subcontractor under
Sections 3.18 and 3.19, in each case as and when required to be
delivered.
(d) For
purposes of this Agreement, the related Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans that are received by a Sub-Servicer regardless of whether such payments
are remitted by the Sub-Servicer to such Servicer.
SECTION
3.03 Successor
Sub-Servicers.
Any
Sub-Servicing Agreement shall provide that the related Servicer shall be
entitled to terminate any Sub-Servicing Agreement and to either itself directly
service the related Mortgage Loans or enter into a Sub-Servicing Agreement
with
a successor Sub-Servicer which qualifies under Section 3.02 of this Agreement.
Any Sub-Servicing Agreement shall include the provision that such agreement
may
be immediately terminated by any successor to the related Servicer without
fee
or, in the event a termination fee exists, such fee shall be payable by the
related Servicer from its own funds without reimbursement therefor, in
accordance with the terms of this Agreement, in the event that the related
Servicer (or any successor to the related Servicer) shall, for any reason,
no
longer be the Servicer of the related Mortgage Loans (including termination
due
to a Servicer Event of Default). Each Servicer shall be entitled to enter
into
an agreement with its Sub-Servicer and Subcontractor for indemnification
of such
Servicer or Subcontractor, as applicable, by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION
3.04 No
Contractual Relationship Between Sub-Servicer, Subcontractor, Trustee or
the
Certificateholders.
Any
Sub-Servicing Agreement and any other transactions or services relating to
the
Mortgage Loans involving a Sub-Servicer or a Subcontractor, as applicable,
shall
be deemed to be between the Sub-Servicer or Subcontractor, as applicable,
and
the related Servicer alone, and the Master Servicer, the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no
claims,
rights, obligations, duties or liabilities with respect to any Sub-Servicer
or
Subcontractor except as set forth in Section 3.05 of this
Agreement.
SECTION
3.05 Assumption
or Termination of Sub-Servicing Agreement by Successor
Servicer.
In
connection with the assumption of the responsibilities, duties and liabilities
and of the authority, power and rights of the related Servicer hereunder
by a
successor Servicer (which may be the Trustee or the Master Servicer) pursuant
to
Section 8.02 of this Agreement, it is understood and agreed that the
related Servicer’s rights and obligations under any Sub-Servicing Agreement then
in force between the related Servicer and a Sub-Servicer shall be assumed
simultaneously by such successor Servicer without act or deed on the part
of
such successor Servicer; provided, however, that any successor Servicer may
terminate the Sub-Servicer.
The
related Servicer shall, upon the reasonable request of the Master Servicer,
but
at its own expense, deliver to the assuming party documents and records relating
to each Sub-Servicing Agreement and an accounting of amounts collected and
held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Sub-Servicing Agreement to the assuming party.
The
Servicing Fee payable to any such successor Servicer shall be payable from
payments received on the Mortgage Loans in the amount and in the manner set
forth in this Agreement.
SECTION
3.06 Collection
of Certain Mortgage Loan Payments.
Each
Servicer shall make reasonable efforts to collect all payments called for
under
the terms and provisions of the related Mortgage Loans, and shall, to the
extent
such procedures shall be consistent with this Agreement and Accepted Servicing
Practices, follow such collection procedures as it would follow with respect
to
mortgage loans comparable to the Mortgage Loans and held for its own account.
Consistent with the foregoing, each Servicer may in its discretion (i) waive
any
late payment charge or, if applicable, penalty interest or (ii) extend the
due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than one-hundred and eighty (180) days; provided that any extension
pursuant to this clause shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder. Notwithstanding
the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the related Servicer, such default is reasonably foreseeable, the related
Servicer, consistent with Accepted Servicing Practices may waive, modify
or vary
any term of such Mortgage Loan (including, but not limited to, modifications
that change the Mortgage Rate, forgive the payment of principal or interest
or
extend the final maturity date of such Mortgage Loan), accept payment from
the
related Mortgagor of an amount less than the Scheduled Principal Balance
in
final satisfaction of such Mortgage Loan, or consent to the postponement
of
strict compliance with any such term or otherwise grant indulgence to any
Mortgagor if in the related Servicer’s determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of
the
Certificateholders (taking into account any estimated Realized Loss that
might
result absent such action). No Servicer shall be required to institute or
join
in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant
to
which such payment is required is prohibited by applicable law.
SECTION
3.07 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
To
the
extent the terms of a Mortgage provide for Escrow Payments, the related Servicer
shall establish and maintain one or more accounts (the “Servicing Accounts”),
into which all collections from the related Mortgagors (or related advances
from
Sub-Servicers) for the payment of taxes, assessments, fire, flood, and hazard
insurance premiums, and comparable items for the account of the Mortgagors
(“Escrow Payments”) shall be deposited and retained. Servicing Accounts shall be
Eligible Accounts. The related Servicer shall deposit in the clearing account
in
which it customarily deposits payments and collections on mortgage loans
in
connection with its mortgage loan servicing activities on a daily basis,
and in
no event more than one Business Day after the related Servicer’s receipt
thereof, all Escrow Payments collected on account of the related Mortgage
Loans
and shall thereafter deposit such Escrow Payments in the Servicing Accounts,
in
no event later than the second Business Day after the deposit of good funds
into
the clearing account, and retain therein, all Escrow Payments collected on
account of the Mortgage Loans, for the purpose of effecting the timely payment
of any such items as required under the terms of this Agreement. Withdrawals
of
amounts from a Servicing Account may be made by the related Servicer only
to (i)
effect timely payment of taxes, assessments, fire, flood, and hazard insurance
premiums, and comparable items; (ii) reimburse itself out of related collections
for any Servicing Advances made prior to the Cut-off Date by the Sponsor
or the
related Servicer to the extent not previously reimbursed or following the
Cut-off Date by the related Servicer pursuant to Section 3.01 of this
Agreement (with respect to taxes and assessments) and Section 3.11 of this
Agreement (with respect to fire, flood and hazard insurance); (iii) refund
to
Mortgagors any sums as may be determined to be overages; (iv) for application
to
restore or repair the related Mortgaged Property in accordance with Section
3.11; (v) pay interest, if required and as described below, to Mortgagors
on
balances in the Servicing Account; or, only to the extent not required to
be
paid to the related Mortgagors, to pay itself interest on balances in the
Servicing Account; or (vi) clear and terminate the Servicing Account at the
termination of the related Servicer’s obligations and responsibilities in
respect of the related Mortgage Loans under this Agreement in accordance
with
Article X. As part of its servicing duties, the related Servicer shall pay
to
the Mortgagors interest on funds in Servicing Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their own funds,
without any reimbursement therefor. Notwithstanding the foregoing, the Servicers
shall not be obligated to collect Escrow Payments if the related Mortgage
Loan
does not require such payments, but the related Servicer shall nevertheless
be
obligated to make Servicing Advances as provided in Section 3.01 and
Section 3.11 of this Agreement. In the event a Servicer shall deposit in
the Servicing Accounts any amount not required to be deposited therein, it
may
at any time withdraw such amount from the related Servicing Accounts, any
provision to the contrary notwithstanding.
To
the
extent that a Mortgage does not provide for Escrow Payments, the related
Servicer (i) shall determine whether any such payments are made by the Mortgagor
in a manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and
(ii)
shall ensure that all insurance required to be maintained on the Mortgaged
Property pursuant to this Agreement is maintained. If any such payment has
not
been made and the related Servicer receives notice of a tax lien with respect
to
the Mortgage Loan being imposed, the related Servicer shall, promptly and
to the
extent required to avoid loss of the Mortgaged Property, advance or cause
to be
advanced funds necessary to discharge such lien on the Mortgaged Property
unless
the related Servicer determines the advance to be nonrecoverable. Each Servicer
assumes full responsibility for the payment of all such bills and shall effect
payments of all such bills irrespective of the Mortgagor’s faithful performance
in the payment of same or the making of the Escrow Payments and shall make
Servicing Advances to effect such payments subject to its determination of
recoverability.
SECTION
3.08 Collection
Accounts, Simple Interest Excess Sub-Account and Distribution
Account.
(a) On
behalf
of the Trust Fund, each Servicer shall establish and maintain one or more
“Collection Accounts”, held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, each Servicer shall deposit
or
cause to be deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage
loan
servicing activities on a daily basis, and in no event more than one (1)
Business Day after such Servicer’s receipt thereof, and shall thereafter deposit
in the related Collection Account, in no event later than two (2) Business
Days
after the deposit of good funds into the clearing account, as and when received
or as otherwise required hereunder, the following payments and collections
received or made by it on or subsequent to the Cut-off Date:
(i) all
payments on account of principal, including Principal Prepayments, on the
related Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee payable
to
such Servicer and any Prepayment Interest Excess) on each related Mortgage
Loan;
(iii) all
Insurance Proceeds and Liquidation Proceeds (other than proceeds collected
in
respect of any particular REO Property) and all Subsequent Recoveries with
respect to the related Mortgage Loans;
(iv) any
amounts required to be deposited by the related Servicer pursuant to
Section 3.10 of this Agreement in connection with any losses realized on
Permitted Investments with respect to funds held in the related Collection
Account;
(v) any
amounts required to be deposited by the related Servicer pursuant to the
second
paragraph of Section 3.11(a) of this Agreement in respect of any blanket
policy deductibles;
(vi) any
Purchase Price or Substitution Shortfall Amount delivered to the related
Servicer and all proceeds (net of amounts payable or reimbursable to the
related
Servicer, the Master Servicer, the Trustee, the Custodians or the Securities
Administrator) of the related Mortgage Loans purchased in accordance with
Section 2.03, Section 3.13 or Section 10.01 of this Agreement;
and
(vii) any
Prepayment Charges collected by the related Servicer in connection with the
Principal Prepayment of any of the related Mortgage Loans or amounts required
to
be deposited by the related Servicer in connection with a breach of its
obligations under Section 2.05 of this Agreement.
The
foregoing requirements for deposit in the related Collection Account shall
be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, assumption
fees or other similar fees need not be deposited by the related Servicer
in the
related Collection Account and may be retained by the related Servicer as
additional servicing compensation. In the event a Servicer shall deposit
in the
related Collection Account any amount not required to be deposited therein,
it
may at any time withdraw such amount from such Collection Account, any provision
herein to the contrary notwithstanding.
(b) Except
as
set forth below, no later than the Closing Date, each Servicer servicing
Simple
Interest Mortgage Loans shall establish and maintain a sub-account of the
related Collection Account titled “[Servicer’s name], Simple Interest Excess
Sub-Account in trust for the Holders of ACE Securities Corp. Home Equity
Loan
Trust, Series 2006-SD1, Asset Backed Pass-Through Certificates”. The related
Servicer shall, on each Determination Date transfer from the Collection Account
to the Simple Interest Excess Sub-Account all Net Simple Interest Excess,
if
any, pursuant to Section 3.09(a)(xi) of this Agreement, and shall maintain
a record of all such deposits. In lieu of establishing a Simple Interest
Excess
Sub-Account, each Servicer may maintain any Net Simple Interest Excess in
the
Collection Account and maintain a separate accounting therefor.
The
related Servicer shall withdraw amounts on deposit in the Simple Interest
Excess
Sub-Account or in the related Collection Account (in respect of any Net Simple
Interest Excess) on each Determination Date for deposit to the Distribution
Account in an amount equal to the lesser of (i) the amount on deposit therein,
and (ii) the Net Simple Interest Shortfall for such Distribution
Date.
The
related Servicer shall remit to the Securities Administrator which shall
thereupon distribute to the Class CE-1 Certificateholder, based on the
information provided to it by such Servicer, the amount of any Net Simple
Interest Excess remaining in the Simple Interest Excess Sub-Account or in
the
related Collection Account, as applicable, on the Distribution Date each
year
occurring in December, commencing in December 2006. Such distributions shall
be
deemed to be made on a first-in, first-out basis. In addition, the related
Servicer shall clear and terminate the Simple Interest Excess Sub-Account,
if
any, upon the termination of this Agreement and retain any funds remaining
therein.
(c) On
behalf
of the Trust Fund, the Securities Administrator shall establish and maintain
one
or more accounts (such account or accounts, the “Distribution Account”), held in
trust for the benefit of the Trustee, the Trust Fund and the Certificateholders.
On behalf of the Trust Fund, SPS shall deliver funds to the Securities
Administrator for deposit in the Distribution Account as specified in the
Servicing Agreement, and Ocwen and Xxxxx Fargo shall deliver to the Securities
Administrator in immediately available funds for deposit in the Distribution
Account on the Servicer Remittance Date and with respect to Ocwen on or before
12:00 noon New York time on the Servicer Remittance Date, that portion of
the
Available Distribution Amount (calculated without regard to the references
in
clause (2) of the definition thereof to amounts that may be withdrawn from
the
Distribution Account) for the related Distribution Date then on deposit in
the
related Collection Account and the amount of all Prepayment Charges collected
by
Ocwen or Xxxxx Fargo in connection with the Principal Prepayment of any of
the
related Mortgage Loans then on deposit in the related Collection Account
and the
amount of any funds reimbursable to an Advance Financing Person pursuant
to
Section 3.25 of this Agreement. If the balance on deposit in a Collection
Account exceeds $100,000 as of the commencement of business on any Business
Day
and such Collection Account constitutes an Eligible Account solely pursuant
to
clause (ii) of the definition of “Eligible Account,” the related Servicer shall,
on or before 5:00 p.m. New York time on such Business Day, withdraw from
such
Collection Account any and all amounts payable or reimbursable to the Depositor,
such Servicer, the Trustee, the Master Servicer, the Securities Administrator
or
the Sponsor pursuant to Section 3.09 of this Agreement and shall pay such
amounts to the Persons entitled thereto or shall establish a separate Collection
Account (which shall also be an Eligible Account) and withdraw from the existing
Collection Account the amount on deposit therein in excess of $100,000 and
deposit such excess in the newly created Collection Account.
With
respect to any remittance received by the Securities Administrator after
the
Servicer Remittance Date on which such payment was due, the Securities
Administrator shall send written notice thereof to the related Servicer.
The
related Servicer shall pay to the Securities Administrator interest on any
such
late payment by such Servicer at an annual rate equal to Prime Rate (as defined
in The Wall Street Journal) plus one percentage point, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall
be paid
by the related Servicer to the Securities Administrator on the date such
late
payment is made and shall cover the period commencing with the day following
the
Servicer Remittance Date and ending with the Business Day on which such payment
is made, both inclusive. The payment by the related Servicer of any such
interest, or the failure of the Securities Administrator to notify the related
Servicer of such interest, shall not be deemed an extension of time for payment
or a waiver of any Event of Default by the related Servicer.
(d) Funds
in
each Collection Account in each Simple Interest Excess Sub-Account and funds
in
the Distribution Account may be invested in Permitted Investments in accordance
with the provisions set forth in Section 3.10 of this Agreement. The
related Servicer shall give notice to the Trustee, the Securities Administrator
and the Master Servicer of the location of the Collection Account maintained
by
it when established and prior to any change thereof. The Securities
Administrator shall give notice to the Servicers and the Depositor of the
location of the Distribution Account when established and prior to any change
thereof.
(e) Funds
held in a Collection Account at any time may be delivered by the related
Servicer in immediately available funds to the Securities Administrator for
deposit in the Distribution Account. In the event a Servicer shall deliver
to
the Securities Administrator for deposit in the Distribution Account any
amount
not required to be deposited therein, it may at any time request that the
Securities Administrator withdraw such amount from the Distribution Account
and
remit to it any such amount, any provision herein to the contrary
notwithstanding. In no event shall the Securities Administrator incur liability
as a result of withdrawals from the Distribution Account at the direction
of a
Servicer in accordance with the immediately preceding sentence. In addition,
each Servicer shall deliver to the Securities Administrator no later than
the
Servicer Remittance Date the amounts set forth in clauses (i) through (iv)
below:
(i) any
P&I Advances, as required pursuant to Section 5.03 of this
Agreement;
(ii) any
amounts required to be deposited pursuant to Section 3.21(d) or 3.21(f) of
this Agreement in connection with any REO Property;
(iii) any
amounts to be paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01 of this Agreement; and
(iv) any
amounts required to be deposited pursuant to Section 3.22 of this Agreement
in connection with any Prepayment Interest Shortfalls.
SECTION
3.09 Withdrawals
from the Collection Accounts and Distribution Account.
(a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 5.03
of this Agreement:
(i) to
remit
to the Securities Administrator for deposit in the Distribution Account the
amounts required to be so remitted pursuant to Section 3.08(c) of this
Agreement or permitted to be so remitted pursuant to the first sentence of
Section 3.08(e) of this Agreement;
(ii) subject
to Section 3.13(d) of this Agreement, to reimburse itself (including any
successor Servicer) for P&I Advances made by it, but only to the extent of
amounts received which represent Late Collections (net of the related Servicing
Fees payable to such Servicer) of Monthly Payments on related Mortgage Loans
with respect to which such P&I Advances were made in accordance with the
provisions of Section 5.03 of this Agreement;
(iii) subject
to Section 3.13(d) of this Agreement, to pay itself any unpaid Servicing
Fees payable to such Servicer and reimburse itself any unreimbursed Servicing
Advances made by the Sponsor or the related Servicer prior to or following
the
Cut-off Date with respect to each Mortgage Loan, but only to the extent of
any
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan or rental or other income from the related REO
Property;
(iv) to
pay to
itself as servicing compensation (in addition to the Servicing Fee payable
to
such Servicer) on the Servicer Remittance Date any interest or investment
income
earned on funds deposited in the related Collection Account and the Simple
Interest Excess Sub-Account;
(v) to
pay to
itself or the Sponsor, as the case may be, with respect to each Mortgage
Loan
that has previously been purchased or replaced pursuant to Section 2.03 or
Section 3.13(c) of this Agreement all amounts received thereon not included
in the Purchase Price or the Substitution Shortfall Amount;
(vi) to
reimburse itself (including any successor Servicer) for
(A)
any
P&I Advance or Servicing Advance previously made by it, which the related
Servicer has determined to be a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance in accordance with the provisions of
Section 5.03 of this Agreement; provided however, that a Servicer shall not
be entitled to reimbursement for any Servicing Advance made prior to the
Cut-off
Date if such Servicer determines that such Servicing Advance constitutes
a
Nonrecoverable Servicing Advance;
(B)
any
unpaid Servicing Fees payable to such Servicer to the extent not recoverable
from Liquidation Proceeds, Insurance Proceeds or other amounts received with
respect to the related Mortgage Loan under Section 3.08(a)(iii) of this
Agreement; or
(C)
any
P&I Advance or Servicing Advance made with respect to a delinquent Mortgage
Loan which Mortgage Loan has been modified by the Servicer in accordance
with
the terms of this Agreement; provided that the Servicer shall only reimburse
itself for such P&I Advances and Servicing Advances at the time of such
modification or as otherwise provided in Section 3.09.
(vii) to
reimburse itself or the Depositor for expenses incurred by or reimbursable
to
itself or the Depositor, as the case may be, pursuant to Section 3.01 or
Section 7.03 of this Agreement;
(viii) to
reimburse itself or the Trustee, as the case may be, for expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement that were included in the
Purchase Price of the related Mortgage Loan, including any expenses arising
out
of the enforcement of the purchase obligation;
(ix) to
pay,
or to reimburse itself for advances in respect of, expenses incurred in
connection with any Mortgage Loan pursuant to Section 3.13(b) of this
Agreement;
(x) to
pay to
itself any Prepayment Interest Excess on the related Mortgage Loans to the
extent not retained pursuant to Section 3.08(a)(ii) of this
Agreement;
(xi) to
deposit in the Simple Interest Excess Sub-Account any amount required to
be
deposited therein pursuant to Section 3.08(b) of this Agreement;
and
(xii) to
clear
and terminate the related Collection Account pursuant to Section 10.01 of
this Agreement.
Each
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
related Collection Account, to the extent held by or on behalf of it, pursuant
to subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix), (x) and (xi)
above.
(b) The
Securities Administrator shall, from time to time, make withdrawals from
the
Distribution Account, for any of the following purposes, without
priority:
(i) to
make
distributions to Certificateholders in accordance with Section 5.01 of this
Agreement;
(ii) to
pay to
itself, the Custodians and the Master Servicer amounts to which it is entitled
pursuant to Section 9.05 or any other provision of this Agreement and any
Extraordinary Trust Fund Expenses;
(iii) to
reimburse itself or the Master Servicer pursuant to Section 8.02 of this
Agreement;
(iv) [reserved];
(v) to
pay
any amounts in respect of taxes pursuant to Section 11.01(g)(v) of this
Agreement;
(vi) to
pay
the Master Servicing Fee to the Master Servicer;
(vii) to
pay
the Loan Performance Advisor Fee to the Loan Performance Advisor;
(viii) to
pay
the Xxxxx Fargo Additional Servicing Fee to Xxxxx Fargo pursuant to Section
5.01(b) of this Agreement;
(ix) to
pay
the Excess Servicing Fee, if any, to the Class CE-2 Certificateholder pursuant
to Section 5.01(b) of this Agreement; and
(x) to
clear
and terminate the Distribution Account pursuant to Section 10.01 of this
Agreement.
SECTION
3.10 Investment
of Funds in the Investment Accounts.
(a) Each
Servicer may direct, by means of written directions (which may be standing
directions), any depository institution maintaining the related Collection
Account or Simple Interest Excess Sub-Account to invest the funds in such
Collection Account or Simple Interest Excess Sub-Account (for purposes of
this
Section 3.10, an “Investment Account”) in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(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 Securities Administrator is the obligor thereon,
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 Securities Administrator
is
the obligor on such Permitted Investment. Amounts in the Distribution Account
may be invested in Permitted Investments as directed in writing by the Master
Servicer and maturing, unless payable on demand, (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 Securities Administrator is the obligor thereon, 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 Securities Administrator is the obligor thereon.
All
such Permitted Investments shall be held to maturity, unless payable on demand.
Any investment of funds shall be made in the name of the Trustee (in its
capacity as such) or in the name of a nominee of the Trustee. The Securities
Administrator shall be entitled to sole possession over each such investment
in
the Distribution Account and, subject to subsection (b) below, the income
thereon, and any certificate or other instrument evidencing any such investment
shall be delivered directly to the Securities Administrator or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit
in a
Collection Account are at any time invested in a Permitted Investment payable
on
demand, the party with investment discretion over such Investment Account
shall:
(x) consistent
with any notice required to be given thereunder, demand that payment thereon
be
made on the last day such Permitted Investment may otherwise mature hereunder
in
an amount equal to the lesser of (1) all amounts then payable thereunder
and (2)
the amount required to be withdrawn on such date; and
(y) demand
payment of all amounts due thereunder promptly upon receipt by such party
of
written notice from the related Servicer that such Permitted Investment would
not constitute a Permitted Investment in respect of funds thereafter on deposit
in the Investment Account.
(b) All
income and gain realized from the investment of funds deposited in the related
Collection Account or Simple Interest Excess Sub-Account shall be for the
benefit of the related Servicer and shall be subject to its withdrawal in
accordance with Section 3.09 of this Agreement. Each Servicer shall deposit
in the related Collection Account or Simple Interest Excess Sub-Account the
amount of any loss incurred in respect of any such Permitted Investment made
with funds in such account immediately upon realization of such loss. All
earnings and gain realized from the investment of funds deposited in the
Distribution Account shall be for the benefit of the Master Servicer. The
Master
Servicer shall remit from its own funds for deposit into the Distribution
Account the amount of any loss incurred on Permitted Investments in the
Distribution Account.
(c) Except
as
otherwise expressly provided in this Agreement, if any default occurs in
the
making of a payment due under any Permitted Investment, or if a default occurs
in any other performance required under any Permitted Investment, the Trustee
may and, subject to Section 9.01 and Section 9.02(a)(v) of this
Agreement, shall, at the written direction of the related Servicer, take
such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
(d) The
Trustee, the Master Servicer or their respective Affiliates are permitted
to
receive additional compensation that could be deemed to be in the Trustee’s or
the Master Servicer’s economic self-interest for (i) serving as investment
adviser, administrator, shareholder servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates
to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not
be
considered an amount that is reimbursable or payable to the Trustee or the
Master Servicer pursuant to Section 3.09 or Section 3.10 of this
Agreement or otherwise payable in respect of Extraordinary Trust Fund Expenses.
Such additional compensation shall not be an expense of the Trust
Fund.
SECTION
3.11 Maintenance
of Hazard Insurance, Errors and Omissions and Fidelity Coverage and Primary
Mortgage Insurance.
(a) The
terms
of each Mortgage Note require the related Mortgagor to maintain fire, flood
and
hazard insurance policies. To the extent such policies are not maintained,
the
related Servicer shall cause to be maintained for each Mortgaged Property
related to a Mortgage Loan serviced by such Servicer fire and hazard insurance
with extended coverage as is customary in the area where the Mortgaged Property
is located in an amount which is at least equal to the lesser of the current
principal balance of such Mortgage Loan and the amount necessary to compensate
fully for any damage or loss to the improvements which are a part of such
property on a replacement cost basis, in each case in an amount not less
than
such amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. Each Servicer shall also
cause
to be maintained fire and hazard insurance on each REO Property with extended
coverage as is customary in the area where the Mortgaged Property is located
in
an amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding principal balance of the related Mortgage Loan at the time it
became
an REO Property. Each Servicer will comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any such
hazard
policies. Any amounts to be collected by the related Servicer under any such
policies (other than amounts to be applied to the restoration or repair of
the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with Accepted Servicing Practices, subject to the
terms
and conditions of the related Mortgage and Mortgage Note) shall be deposited
in
the related Collection Account, subject to withdrawal pursuant to
Section 3.09 of this Agreement, if received in respect of a Mortgage Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.21 of
this Agreement, if received in respect of an REO Property. Any cost incurred
by
a Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the
terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be
in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register
by
the Federal Emergency Management Agency as having special flood hazards,
the
related Servicer will cause to be maintained a flood insurance policy in
respect
thereof. Such flood insurance shall be in an amount equal to the lesser of
(i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under
the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
In
the
event that a Servicer shall obtain and maintain a blanket policy with an
insurer
having a General Policy Rating of B:VI or better in Best’s Key Rating Guide or
otherwise acceptable to Xxxxxx Xxx or Xxxxxxx Mac insuring against hazard
losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations to cause fire and hazard insurance to be maintained on the
Mortgaged Properties, it being understood and agreed that such policy may
contain a deductible clause, in which case the related Servicer shall, in
the
event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences
of this
Section 3.11, and there shall have been one or more losses which would have
been covered by such policy, deposit to the related Collection Account from
its
own funds the amount not otherwise payable under the blanket policy because
of
such deductible clause. In connection with its activities as administrator
and
servicer of the Mortgage Loans, the related Servicer agrees to prepare and
present, on behalf of itself, the Trustee, the Trust Fund and the
Certificateholders, claims under any such blanket policy in a timely fashion
in
accordance with the terms of such policy.
(b) Each
Servicer shall keep in force during the term of this Agreement a policy or
policies of insurance covering errors and omissions for failure in the
performance of its respective obligations under this Agreement, which policy
or
policies shall be in such form and amount that would meet the requirements
of
Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the Mortgage Loans,
unless
the related Servicer has obtained a waiver of such requirements from Xxxxxx
Mae
or Xxxxxxx Mac. Each Servicer shall also maintain a fidelity bond in the
form
and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx Mac,
unless
the related Servicer has obtained a waiver of such requirements from Xxxxxx
Mae
or Xxxxxxx Mac. A Servicer shall be deemed to have complied with this provision
if an Affiliate of such Servicer, has such errors and omissions and fidelity
bond coverage and, by the terms of such insurance policy or fidelity bond,
the
coverage afforded thereunder extends to such Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days’ prior written notice to the Trustee.
(c) The
Servicers shall not take any action that would result in noncoverage under
any
applicable primary mortgage insurance policy of any loss which, but for the
actions of the related Servicer would have been covered thereunder. Each
Servicer shall use its best efforts to keep in force and effect any applicable
primary mortgage insurance policy and, to the extent that the related Mortgage
Loan requires the Mortgagor to maintain such insurance, any other primary
mortgage insurance applicable to any Mortgage Loan. Except as required by
applicable law or the related Mortgage Loan Documents, the Servicers shall
not
cancel or refuse to renew any such primary mortgage insurance policy that
is in
effect at the date of the initial issuance of the related Mortgage Note and
is
required to be kept in force hereunder.
Each
Servicer agrees to present on behalf of the Trustee and the Certificateholders
claims to the applicable insurer under any primary mortgage insurance policies
and, in this regard, to take such reasonable action as shall be necessary
to
permit recovery under any primary mortgage insurance policies respecting
defaulted Mortgage Loans. Pursuant to Section 3.08 of this Agreement, any
amounts collected by a Servicer under any primary mortgage insurance policies
shall be deposited in the related Collection Account, subject to withdrawal
pursuant to Section 3.09 of this Agreement. Notwithstanding any provision
to the contrary, a Servicer shall not have any responsibility with respect
to a
primary mortgage insurance policy unless such Servicer has been made aware
of
such policy, as reflected on the Mortgage Loan Schedule or otherwise and
have
been provided with adequate information to administer such policy.
(d) A
Servicer need not obtain the approval of the Master Servicer prior to releasing
any Insurance Proceeds to the Mortgagor to be applied to the restoration
or
repair of the Mortgaged Property if such release is in accordance with Accepted
Servicing Practices. At a minimum, each Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds in excess
of $10,000:
(i) such
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(ii) such
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens; and
(iii) pending
repairs or restoration, such Servicer shall place the Insurance Proceeds
in the
related Escrow Account, if any.
SECTION
3.12 Enforcement
of Due-on-Sale Clauses; Assumption Agreements.
Each
Servicer shall, to the extent it has knowledge of any conveyance of any
Mortgaged Property by any related Mortgagor (whether by absolute conveyance
or
by contract of sale, and whether or not the Mortgagor remains or is to remain
liable under the Mortgage Note and/or the Mortgage), exercise its rights
to
accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause, if
any, applicable thereto; provided, however, that the related Servicer shall
not
exercise any such rights if prohibited by law from doing so. If a Servicer
reasonably believes that it is unable under applicable law to enforce such
“due-on-sale” clause, or if any of the other conditions set forth in the proviso
to the preceding sentence apply, the related Servicer shall make reasonable
efforts to enter into an assumption and modification agreement from or with
the
person to whom such property has been conveyed or is proposed to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and,
to the
extent permitted by applicable state law, the Mortgagor remains liable thereon.
The related Servicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Mortgagor
is released from liability and such person is substituted as the Mortgagor
and
becomes liable under the Mortgage Note, provided that no such substitution
shall
be effective unless such person satisfies the then current underwriting criteria
of the related Servicer for mortgage loans similar to the Mortgage Loans.
In
connection with any assumption or substitution, the related Servicer shall
apply
such underwriting standards and follow such practices and procedures as shall
be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The related Servicer shall not
take
or enter into any assumption and modification agreement, however, unless
(to the
extent practicable in the circumstances) it shall have received confirmation,
in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the related Servicer in respect of an assumption
or
substitution of liability agreement will be retained by such Servicer as
additional servicing compensation. In connection with any such assumption,
no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The related Servicer
shall notify the Trustee (or the applicable Custodian) that any such
substitution or assumption agreement has been completed by forwarding to
the
Trustee (or the applicable Custodian) the executed original of such substitution
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File
to
the same extent as all other documents and instruments constituting a part
thereof.
Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the related
Servicer shall not be deemed to be in default, breach or any other violation
of
its obligations hereunder by reason of any assumption of a Mortgage Loan
by
operation of law or by the terms of the Mortgage Note or any assumption which
the related Servicer may be restricted by law from preventing, for any reason
whatever. For purposes of this Section 3.12, the term “assumption” is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION
3.13 Realization
Upon Defaulted Mortgage Loans.
(a) Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert the ownership
of
properties securing such of the Mortgage Loans as come into and continue
in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.06 of this Agreement. Each
Servicer shall be responsible for all costs and expenses incurred by it in
any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the related Servicer as contemplated
in
Section 3.09 and Section 3.21 of this Agreement. The foregoing is
subject to the provision that, in any case in which a Mortgaged Property
shall
have suffered damage from an Uninsured Cause, the related Servicer shall
not be
required to expend its own funds toward the restoration of such property
unless
it shall determine in its discretion that such restoration will increase
the
proceeds of liquidation of the related Mortgage Loan after reimbursement
to
itself for such expenses.
(b) Notwithstanding
the foregoing provisions of this Section 3.13 or any other provision of
this Agreement, with respect to any Mortgage Loan as to which a Servicer
has
received actual notice of, or has actual knowledge of, the presence of any
toxic
or hazardous substance on the related Mortgaged Property, such Servicer shall
not, on behalf of the Trust Fund, either (i) obtain title to such Mortgaged
Property as a result of or in lieu of foreclosure or otherwise, or (ii)
otherwise acquire possession of, or take any other action with respect to,
such
Mortgaged Property, if, as a result of any such action, the Trust Fund, the
Trustee or the Certificateholders would be considered to hold title to, to
be a
“mortgagee-in-possession” of, or to be an “owner” or “operator” of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time,
or any comparable law, unless such Servicer has also previously determined,
based on its reasonable judgment and a prudent report prepared by an Independent
Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Trust Fund to
take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any
federal, state or local law or regulation, or that if any such materials
are
present for which such action could be required, that it would be in the
best
economic interest of the Trust Fund to take such actions with respect to
the
affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 3.13 shall
be advanced by the related Servicer, subject to such Servicer’s right to be
reimbursed therefor from the related Collection Account as provided in
Section 3.09(a)(ix) of this Agreement, such right of reimbursement being
prior to the rights of Certificateholders to receive any amount in the related
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.
If
the
related Servicer determines, as described above, that it is in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
any
such Mortgaged Property into compliance with applicable environmental laws,
or
to take such action with respect to the containment, clean-up or remediation
of
hazardous substances, hazardous materials, hazardous wastes, or petroleum-based
materials affecting any such Mortgaged Property, then such Servicer shall
take
such action as it deems to be in the best economic interest of the Trust
Fund.
The cost of any such compliance, containment, cleanup or remediation shall
be
advanced by the related Servicer, subject to such Servicer’s right to be
reimbursed therefor from the Collection Account as provided in
Section 3.09(a)(iii) or Section 3.09(a)(ix) of this Agreement, such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the related Collection Account received in respect
of the
affected Mortgage Loan or other Mortgage Loans.
(c) The
Class
CE-1 Certificateholder shall have the right to purchase from REMIC I any
Mortgage Loan which was not delinquent as of the Closing Date but which becomes
delinquent in payment by 90 days or more and, in the event that the Class
CE-1
Certificateholder fails to exercise such option, Ocwen shall have the right
to
purchase from REMIC I any such Mortgage Loan, which Ocwen determines in good
faith will otherwise become subject to foreclosure proceedings (evidence
of such
determination to be delivered in writing to the Trustee, in form and substance
satisfactory to Ocwen and the Trustee prior to purchase). The Purchase Price
for
any Mortgage Loan purchased pursuant to this clause (c) shall be (i) remitted
to
the Securities Administrator for deposit into the Distribution Account with
respect to a purchase by the Class CE-1 Certificateholder or (ii) deposited
in
the related Collection Account with respect to a purchase by Ocwen, and the
Trustee, upon receipt of written certification from the Securities Administrator
or Ocwen, as applicable, of such deposit, shall release or cause to be released
to the Class CE-1 Certificateholder or Ocwen, as applicable, the related
Mortgage File and the Trustee shall execute and deliver such instruments
of
transfer or assignment, in each case without recourse, representation or
warranty, as the Class CE-1 Certificateholder or Ocwen, as applicable, shall
furnish and as shall be necessary to vest in the Class CE-1 Certificateholder
or
Ocwen, as applicable, title to any Mortgage Loan released pursuant
hereto.
(d) Proceeds
received in connection with any Final Recovery Determination, as well as
any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds, in respect of any Mortgage Loan, will be applied in
the
following order of priority: first, to reimburse the related Servicer for
any
related unreimbursed Servicing Advances and P&I Advances, pursuant to
Section 3.09(a)(ii) or Section 3.09(a)(iii) of this Agreement; second,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date
on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than
the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount
of such recovery will be allocated by the related Servicer as follows: first,
to
unpaid Servicing Fees; and second, to the balance of the interest then due
and
owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall
be reimbursed to the related Servicer pursuant to Section 3.09(a)(iii) of
this Agreement. The portion of the recovery allocated to interest (net of
unpaid
Servicing Fees) and the portion of the recovery allocated to principal of
the
Mortgage Loan shall be applied as follows: first, to reimburse the related
Servicer for any related xxxxxxxxxxxx X&X Advances or Servicing Advances in
accordance with Section 3.09(a)(ii) and Section 3.09(a)(iii) of this
Agreement and any other amounts reimbursable to such Servicer pursuant to
Section 3.09 of this Agreement, and second, as part of the amounts to be
transferred to the Distribution Account in accordance with Section 3.08(c)
of this Agreement.
(e) Notwithstanding
the foregoing provisions of this Section 3.13 or any other provision of
this Agreement, no Servicer shall acquire title to a Mortgaged Property related
to a Foreclosure Restricted Mortgage Loan if acquiring title to such Mortgaged
Property would cause the adjusted basis (for federal income tax purposes)
of the
Mortgaged Properties in respect of Foreclosure Restricted Mortgage Loans
that
are currently owned by REMIC I after foreclosure (along with any other assets
owned by REMIC I other than “qualified mortgages” and “permitted investments”
within the meaning of Section 860G of the Internal Revenue Code) to exceed
0.75% of the adjusted basis of the assets in REMIC I. Instead, such Servicer
shall dispose of the Foreclosure Restricted Mortgage Loan for cash in a
foreclosure sale. In addition, if such Servicer determines that, following
a
distribution on any Distribution Date, the adjusted basis of the REO Properties
relating to such Foreclosure Restricted Mortgage Loans (along with any other
assets owned by REMIC I other than “qualified mortgages” and “permitted
investments” within the meaning of Section 860G of the Internal Revenue
Code) exceeds 1.0% of the adjusted basis of the assets of REMIC I immediately
after the Distribution Date, then prior to the next Distribution Date, such
Servicer shall dispose of enough of such REO Properties for cash, so that
the
adjusted basis of such REO Properties relating to Foreclosure Restricted
Mortgage Loans (along with any other assets owned by REMIC I other than
“qualified mortgages” and “permitted investments” within the meaning of
Section 860G of the Internal Revenue Code) will be less than 1.0% of the
adjusted basis of the assets of REMIC I. In either event, such Servicer is
permitted to acquire (for its own account and not on behalf of the Trust
Fund)
the REO Property at the foreclosure sale for an amount not less than the
greater
of: (i) the highest amount bid by any other person at the foreclosure sale,
or
(ii) the estimated fair market value of the REO Property, as determined by
such
Servicer in good faith. These restrictions will be lifted with respect to
a
Foreclosure Restricted Mortgage Loan if such Mortgage Loan becomes current
for
three consecutive Monthly Payments.
The
Servicers and the Master Servicer agree to cooperate in providing each Servicer
with the information regarding the Foreclosure Restricted Mortgage Loans
serviced by the other Servicer in order to comply with this Section
3.13(e).
SECTION
3.14 Trustee
to Cooperate; Release of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by a
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes for payment to Certificateholders on the next
Distribution Date, the related Servicer will promptly furnish to the applicable
Custodian, on behalf of the Trustee, two copies of a request for release
substantially in the form attached to the related Custodial Agreement signed
by
a Servicing Officer or in a mutually agreeable electronic format which will,
in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
related
Collection Account have been or will be so deposited) and shall request that
such Custodian, on behalf of the Trustee, deliver to the related Servicer
the
related Mortgage File. Upon receipt of such certification and request, the
applicable Custodian, on behalf of the Trustee, shall within five (5) Business
Days release the related Mortgage File to the related Servicer and the Trustee
and the applicable Custodian shall have no further responsibility with regard
to
such Mortgage File. Upon any such payment in full, the related Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment,
as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed
that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the related Collection
Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by the related Servicer (in form reasonably acceptable
to the Trustee) and as are necessary to the prosecution of any such proceedings.
The applicable Custodian, on behalf of the Trustee, shall, upon the request
of
the related Servicer, and delivery to the applicable Custodian of two copies
of
a request for release signed by a Servicing Officer substantially in the
form
attached to the related Custodial Agreement (or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate
from
a Servicing Officer), release within five (5) Business Days the related Mortgage
File held in its possession or control to the related Servicer. Such trust
receipt shall obligate the related Servicer to return the Mortgage File to
the
applicable Custodian on behalf of the Trustee, when the need therefor by
such
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in
which
case, upon receipt of a certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the applicable
Custodian, on behalf of the Trustee, to the related Servicer.
Notwithstanding
the foregoing, in connection with a Principal Prepayment in full of any Mortgage
Loan, the Master Servicer may request release of the related Mortgage File
from
the applicable Custodian, in accordance with the provisions of the related
Custodial Agreement, in the event the related Servicer fails to do
so.
Upon
written certification of a Servicing Officer, the Trustee shall execute and
deliver to the related Servicer, any court pleadings, requests for trustee’s
sale or other documents prepared and delivered to the Trustee and reasonably
acceptable to it and necessary to the foreclosure or trustee’s sale in respect
of a Mortgaged Property or to any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except
for the termination of such a lien upon completion of the foreclosure or
trustee’s sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the related Servicer shall have the right to execute any and
all
such court pleadings, requests and other documents as attorney-in-fact for,
and
on behalf of the Trustee. Notwithstanding the preceding sentence, the Trustee
shall in no way be liable or responsible for the willful malfeasance of the
Servicer, or for any wrongful or negligent actions taken by the Servicer,
while
the Servicer is acting in its capacity as attorney-in-fact for and on behalf
of
the Trustee.
SECTION
3.15 Servicing
Compensation.
As
compensation for its activities hereunder, Xxxxx Fargo shall be entitled
to the
Servicing Fee calculated at the Servicing Fee Rate and Ocwen shall be entitled
to a Servicing Fee calculated at the Ocwen Servicing Fee Rate with respect
to
each Mortgage Loan serviced by such Servicer payable solely from payments
of
interest in respect of such Mortgage Loan, subject to Section 3.22 of this
Agreement. In addition, the related Servicer shall be entitled to recover
unpaid
Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the extent
permitted by Section 3.09(a)(iii) of this Agreement and out of amounts
derived from the operation and sale of an REO Property to the extent permitted
by Section 3.21 of this Agreement. Subject to Section 3.25 of this
Agreement, the right to receive the Servicing Fee may not be transferred
in
whole or in part except in connection with the transfer of all of the related
Servicer’s responsibilities and obligations under this Agreement to the extent
permitted herein.
Additional
servicing compensation in the form of assumption fees, late payment charges,
customary real estate referral fees and other miscellaneous fees (other than
Prepayment Charges), and ancillary income shall be retained by the related
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.09(a)(iv) of
this Agreement to withdraw from the related Collection Account and pursuant
to
Section 3.21(b) of this Agreement to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.10 of this Agreement. In addition, each
Servicer shall be entitled to retain or withdraw from the related Collection
Account, pursuant to Section 3.09(a)(x) of this Agreement, any Prepayment
Interest Excess with respect to the Mortgage Loans serviced by it as additional
servicing compensation. Each Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and
shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION
3.16 Collection
Account Statements.
Upon
request, not later than fifteen days after each Distribution Date,
each
Servicer shall forward to the Master Servicer and with respect to Ocwen,
to the
Securities Administrator, the Trustee and the Depositor a statement prepared
by
the institution at which the related Collection Account is maintained setting
forth the status of the related Collection Account as of the close of business
on such Distribution Date and showing, for the period covered by such statement,
the aggregate amount of deposits into and withdrawals from the related
Collection Account of each category of deposit specified in Section 3.08(a)
of this Agreement and each category of withdrawal specified in Section 3.09
of this Agreement. The Master Servicer shall forward the statement provided
by
Xxxxx Fargo pursuant to the preceding sentence to the Securities Administrator,
the Trustee and the Depositor, upon request, within a reasonable time after
its
receipt of such statement from Xxxxx Fargo. Copies of such statement and
any
similar statements provided by the Servicers shall be provided by the Securities
Administrator to any Certificateholder and to any Person identified to the
Securities Administrator as a prospective transferee of a Certificate, upon
request at the expense of the requesting party, provided such statement is
delivered by the related Servicer to the Securities Administrator.
SECTION
3.17 Annual
Statement as to Compliance.
(a) Each
Servicer shall deliver (and shall cause any Additional Servicer engaged by
it to
deliver) to the Master Servicer and the Depositor on or before March 15 of
each
year, commencing in March 2007, an Officer’s Certificate stating, as to the
signer thereof, that (A) a review of such party’s activities during the
preceding calendar year or portion thereof and of such Servicer’s performance
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, has been made under such officer’s supervision and (B) to
the best of such officer’s knowledge, based on such review, such party has
fulfilled all its obligations under this Agreement, or such other applicable
agreement in the case of an Additional Servicer, in all material respects
throughout such year or portion thereof, or, if there has been a failure
to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof. Promptly
after
receipt of each such Officer’s Certificate from a Servicer or any Additional
Servicer engaged by a Servicer, the Depositor shall review such Officer’s
Certificate and, if applicable, consult with each such party, as applicable,
as
to the nature of any failures by such party, in the fulfillment of any of
such
Servicer’s obligations hereunder or, in the case of an Additional Servicer,
under such other applicable agreement.
(b) Failure
of a Servicer to comply timely with this Section 3.17 shall be deemed a Servicer
Event of Default as to such Servicer, automatically, without notice and without
any cure period, and the Master Servicer may, in addition to whatever rights
the
Master Servicer may have under this Agreement and at law or in equity or
to
damages, including injunctive relief and specific performance, terminate
all the
rights and obligations of such Servicer under this Agreement and in and to
the
Mortgage Loans and the proceeds thereof without compensating such Servicer
for
the same (other than the Servicer’s right to reimbursement of xxxxxxxxxxxx
X&X Advances and Servicing Advances and accrued and unpaid Servicing Fees in
the manner provided in this Agreement). This paragraph shall supersede any
other
provision in this Agreement or any other agreement to the contrary.
SECTION
3.18 Assessments
of Compliance and Attestation Reports.
(a) By
March
15 of each year, commencing in March 2007, each Servicer, at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged
by it
to furnish, each at its own expense, to the Master Servicer, a report on
an
assessment of compliance with the Relevant Servicing Criteria that contains
(A)
a statement by such party of its responsibility for assessing compliance
with
the Relevant Servicing Criteria, (B) a statement that such party used the
Relevant Servicing Criteria to assess compliance with the Relevant Servicing
Criteria, (C) such party’s assessment of compliance with the Relevant Servicing
Criteria as of and for the fiscal year covered by the Form 10-K required
to be
filed pursuant to Section 5.06(d), including, if there has been any material
instance of noncompliance with the Relevant Servicing Criteria, a discussion
of
each such failure and the nature and status thereof, and (D) a statement
that a
registered public accounting firm has issued an attestation report on such
party’s assessment of compliance with the Relevant Servicing Criteria as of and
for such period. Notwithstanding the foregoing, neither Servicer nor any
Servicing Function Participant engaged by a Servicer shall be required to
deliver any assessments until March 31st
in any
given year so long as it has not received written confirmation from the
Depositor that a Form 10-K is required to be filed in respect of the Trust
for
the preceding calendar year, however, notwithstanding anything herein to
the
contrary, no Subcontractor will be required to deliver any assessments in
any
such given year in which the Form 10-K is not required to be filed.
(b) By
March
15 of each year, commencing in March 2007, each Servicer, at its own expense,
shall cause, and each Servicer shall cause any Servicing Function Participant
engaged by it to cause, each at its own expense, a registered public accounting
firm (which may also render other services to such Servicer or such other
Servicing Function Participants, as the case may be) and that is a member
of the
American Institute of Certified Public Accountants to furnish a report to
the
Master Servicer, to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes
an
assertion that such party has complied with the Relevant Servicing Criteria,
and
(ii) on the basis of an examination conducted by such firm in accordance
with
standards for attestation engagements issued or adopted by the PCAOB, it
is
expressing an opinion as to whether such party’s compliance with the Relevant
Servicing Criteria was fairly stated in all material respects, or it cannot
express an overall opinion regarding such party’s assessment of compliance with
the Relevant Servicing Criteria. In the event that an overall opinion cannot
be
expressed, such registered public accounting firm shall state in such report
why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language. Notwithstanding the
foregoing, neither Servicer nor any Servicing Function Participant engaged
by a
Servicer shall be required to deliver or cause the delivery of such reports
until March 31st
in any
given year so long as such Servicer has not received written confirmation
from
the Depositor that a Form 10-K is required to be filed in respect of the
Trust
for the preceding fiscal year, however, notwithstanding anything herein to
the
contrary, no Subcontractor will be required to deliver any report in any
such
given year in which the Form 10-K is not required to be filed..
(c) Failure
of a Servicer to comply timely with this Section 3.18 shall be deemed a Servicer
Event of Default as to such Servicer, automatically, without notice and without
any cure period, and the Master Servicer may, in addition to whatever rights
the
Master Servicer may have under this Agreement and at law or in equity or
to
damages, including injunctive relief and specific performance, terminate
all the
rights and obligations of such Servicer under this Agreement and in and to
the
Mortgage Loans and the proceeds thereof without compensating such Servicer
for
the same (other than the Servicer’s right to reimbursement of xxxxxxxxxxxx
X&X Advances and Servicing Advances and accrued and unpaid Servicing Fees in
the manner provided for in this Agreement). This paragraph shall supersede
any
other provision in this Agreement or any other agreement to the
contrary.
SECTION
3.19 Annual
Certification; Additional Information.
(a) Each
Servicer shall and shall cause any Servicing Function Participant 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 Trust is subject to
the reporting requirements of the Exchange Act a certification (each, a “Back-Up
Certification”), in the form attached hereto as Exhibit C, 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 officer
of the Master Servicer in charge of the master servicing function shall serve
as
the Certifying Person on behalf of the Trust. In the event a Servicer or
any
Servicing Function Participant engaged by it is terminated or resigns pursuant
to the terms of this Agreement, or any applicable Sub-Servicing agreement,
as
the case may be, such party shall provide a Back-Up Certification to the
Certifying Person pursuant to this Section 3.19 with respect to the period
of
time it was subject to this Agreement or any applicable Sub-Servicing Agreement,
as the case may be.
(b) Each
Servicer shall indemnify and hold harmless the Master Servicer, the Securities
Administrator, the Trustee, the Depositor and their respective officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach
by
such Servicer or any of its officers, directors, agents or affiliates of
its
obligations under this Section 3.19 or such Servicer’s negligence, bad
faith or willful misconduct in connection therewith. Such indemnity shall
survive the termination or resignation of the parties hereto or the termination
of this Agreement. If the indemnification provided for herein is unavailable
or
insufficient to hold harmless the Master Servicer, the Securities Administrator,
the Trustee and the Depositor, then the related Servicer agrees that it shall
contribute to the amount paid or payable by the Master Servicer, the Securities
Administrator, the Trustee and the Depositor as a result of the losses, claims,
damages or liabilities of the Master Servicer, the Securities Administrator,
the
Trustee and the Depositor in such proportion as is appropriate to reflect
the
relative fault of the Master Servicer, the Securities Administrator, the
Trustee
and the Depositor on the one hand and the related Servicer on the other in
connection with a breach of such Servicer’s obligations under this
Section 3.19.
(c) Each
Servicer shall provide to the Master Servicer prompt notice of the occurrence
of
any of the following:
(i) any
Servicer Event of Default under the terms of this Agreement, any merger,
consolidation or sale of substantially all of the assets of such Servicer,
such
Servicer’s engagement of any Sub-Servicer to perform or assist in the
performance of any of such Servicer’s obligations under this Agreement, any
material litigation involving such Servicer that is material to the
Certificateholders, and to the extent disclosure is required under Regulation
AB, any affiliation or other significant relationship between such Servicer
and
the Sponsor, the Depositor, the Master Servicer, the Securities Administrator,
the Trustee, the Custodians, another Servicer, Quick Loan Funding Inc., Fremont
Investment & Loan, Madison Equity LLC, WMC Mortgage Corp. and Imperial
Lending LLC.
(ii) If
the
Servicer has knowledge of the occurrence of any of the events described in
this
clause (ii), then no later than ten days prior to the deadline for the filing
of
any Distribution Report on Form 10-D in respect of the Trust, such Servicer
shall provide to the Master Servicer notice of the occurrence of any of the
following events along with all information, data, and materials related
thereto
as may be required to be included in the related Distribution Report on Form
10-D (as specified in the provisions of Regulation AB referenced
below):
(A) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments relating to the Mortgage Loans serviced by the Servicer
during the distribution period or that have cumulatively become material
over
time (Item 1121(a)(11) of Regulation AB);
(B) material
breaches of pool asset representations or warranties or servicer transaction
covenants relating to the Mortgage Loans serviced by the Servicer (Item
1121(a)(12) of Regulation AB); and
(C) any
material pool asset changes (such as, additions, substitutions or repurchases)
relating to the Mortgage Loans serviced by the Servicer (Item 1121(a)(14)
of
Regulation AB).
(d) Each
Servicer shall provide to the Master Servicer and the Securities Administrator
such additional information as the Master Servicer and the Securities
Administrator may reasonably request, including evidence of the authorization
of
the person signing any certification or statement, financial information
and
reports and of the fidelity bond and errors and omissions insurance policy
required to be maintained by such Servicer pursuant to this Agreement, and
such
other information related to such Servicer or its performance
hereunder.
SECTION
3.20 Access
to Certain Documentation.
Each
Servicer shall provide to the Office of Thrift Supervision, the FDIC, and
any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificate Owner, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations.
Such
access shall be afforded without charge, but only upon reasonable request
and
during normal business hours at the offices of the related Servicer designated
by it. Nothing in this Section 3.20 shall limit the obligation of the
related Servicer to comply with any applicable law prohibiting disclosure
of
information regarding the Mortgagors and the failure of such Servicer to
provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 3.20 shall
require any Servicer to collect, create, collate or otherwise generate any
information that it does not generate in its usual course of business. The
Servicers shall not be required to make copies of or ship documents to any
Person unless provisions have been made for the reimbursement of the costs
thereof.
SECTION
3.21 Title,
Management and Disposition of REO Property.
(a) The
deed
or certificate of sale of any REO Property shall be taken in the name of
the
Trustee, or its nominee, on behalf of the Trust Fund and for the benefit
of the
Certificateholders. The related Servicer, on behalf of REMIC I, shall either
sell any REO Property by the close of the third calendar year following the
calendar year in which REMIC I acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal
Revenue Service, no later than sixty (60) days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless such Servicer had delivered to the Trustee an Opinion
of
Counsel, addressed to the Trustee and the Depositor, to the effect that the
holding by REMIC I of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC created
hereunder of taxes on “prohibited transactions” thereof, as defined in
Section 860F of the Code, or cause any Trust REMIC hereunder to fail to
qualify as a REMIC under Federal law at any time that any Certificates are
outstanding. Each Servicer shall manage, conserve, protect and operate each
REO
Property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to
fail
to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any Trust REMIC
created hereunder of any “income from non-permitted assets” within the meaning
of Section 860F(a)(2)(B) of the Code, or any “net income from foreclosure
property” which is subject to taxation under the REMIC Provisions.
(b) Each
Servicer shall segregate and hold all funds collected and received in connection
with the operation of any REO Property separate and apart from its own funds
and
general assets and shall establish and maintain with respect to REO Properties
an account held in trust for the Trustee, on behalf of the Trust Fund and
for
the benefit of the Certificateholders (the “REO Account”), which shall be an
Eligible Account. The related Servicer shall be permitted to allow the related
Collection Account to serve as the REO Account, subject to the maintenance
of
separate ledgers for each REO Property. The related Servicer shall be entitled
to retain or withdraw any interest income paid on funds deposited in the
REO
Account.
(c) Each
Servicer shall have full power and authority, subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things
in
connection with any REO Property as are consistent with the manner in which
such
Servicer manages and operates similar property owned by it or any of its
Affiliates, all on such terms and for such period as such Servicer deems
to be
in the best interests of Certificateholders. In connection therewith, the
related Servicer shall deposit, or cause to be deposited in the clearing
account
in which it customarily deposits payments and collections on mortgage loans
in
connection with its mortgage loan servicing activities on a daily basis,
and in
no event more than one Business Day after such Servicer’s receipt thereof, and
shall thereafter deposit in the REO Account, in no event more than two Business
Days after the deposit of good funds into the clearing account, all revenues
received by it with respect to an REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such
REO
Property including, without limitation:
(i) all
insurance premiums due and payable in respect of such REO Property;
(ii) all
real
estate taxes and assessments in respect of such REO Property that may result
in
the imposition of a lien thereon; and
(iii) all
costs
and expenses necessary to maintain such REO Property.
To
the
extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the related Servicer shall
advance from its own funds such amount as is necessary for such purposes
if, but
only if, such Servicer would make such advances if such Servicer owned the
REO
Property and if in such Servicer’s judgment, the payment of such amounts will be
recoverable from the rental or sale of the REO Property.
Subject
to compliance with applicable laws and regulations as shall at any time be
in
force, and notwithstanding the foregoing, the related Servicer, on behalf
of the
Trust Fund, shall not:
(i) enter
into, renew or extend any New Lease with respect to any REO Property, if
the New
Lease by its terms will give rise to any income that does not constitute
Rents
from Real Property;
(ii) permit
any amount to be received or accrued under any New Lease other than amounts
that
will constitute Rents from Real Property;
(iii) authorize
or permit any construction on any REO Property, other than the completion
of a
building or other improvement thereon, and then only if more than ten percent
of
the construction of such building or other improvement was completed before
default on the related Mortgage Loan became imminent, all within the meaning
of
Section 856(e)(4)(B) of the Code; or
(iv) allow
any
Person to Directly Operate any REO Property on any date more than ninety
(90)
days after its date of acquisition by the Trust Fund;
unless,
in any such case, the related Servicer has obtained an Opinion of Counsel,
provided to such Servicer and the Trustee, to the effect that such action
will
not cause such REO Property to fail to qualify as “foreclosure property” within
the meaning of Section 860G(a)(8) of the Code at any time that it is held
by REMIC I, in which case such Servicer may take such actions as are specified
in such Opinion of Counsel.
Each
Servicer may contract with any Independent Contractor for the operation and
management of any REO Property, provided that:
(i) the
terms
and conditions of any such contract shall not be inconsistent
herewith;
(ii) any
such
contract shall require, or shall be administered to require, that the
Independent Contractor pay all costs and expenses incurred in connection
with
the operation and management of such REO Property, including those listed
above
and remit all related revenues (net of such costs and expenses) to such Servicer
as soon as practicable, but in no event later than thirty days following
the
receipt thereof by such Independent Contractor;
(iii) none
of
the provisions of this Section 3.21(c) relating to any such contract or to
actions taken through any such Independent Contractor shall be deemed to
relieve
the Servicer of any of its duties and obligations to the Trustee on behalf
of
the Trust Fund and for the benefit of the Certificateholders with respect
to the
operation and management of any such REO Property; and
(iv) Such
Servicer shall be obligated with respect thereto to the same extent as if
it
alone were performing all duties and obligations in connection with the
operation and management of such REO Property.
Each
Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of such Servicer by such Independent Contractor,
and nothing in this Agreement shall be deemed to limit or modify such
indemnification. The related Servicer shall be solely liable for all fees
owed
by it to any such Independent Contractor, irrespective of whether such
Servicer’s compensation pursuant to Section 3.15 of this Agreement is
sufficient to pay such fees. Any such agreement shall include a provision
that
such agreement may be immediately terminated by any successor servicer
(including the Master Servicer) without fee, in the event the related Servicer
shall for any reason, no longer be the Servicer of the Mortgage Loans (including
termination due to a Servicer Event of Default).
(d) In
addition to the withdrawals permitted under Section 3.21(c) of this
Agreement, each Servicer may from time to time make withdrawals from the
related
REO Account for any REO Property: (i) to pay itself unpaid Servicing Fees
in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect
of
such REO Property or the related Mortgage Loan. On the Servicer Remittance
Date,
the related Servicer shall withdraw from each REO Account maintained by it
and
deposit into the Distribution Account in accordance with
Section 3.08(e)(ii) of this Agreement, for distribution on the related
Distribution Date in accordance with Section 5.01 of this Agreement, the
income from the related REO Property received during the prior calendar month,
net of any withdrawals made pursuant to Section 3.21(c) of this Agreement
or this Section 3.21(d).
(e) Subject
to the time constraints set forth in Section 3.21(a) of this Agreement,
each REO Disposition shall be carried out by the related Servicer at such
price
and upon such terms and conditions as such Servicer shall deem necessary
or
advisable, as shall be normal and usual in accordance with Accepted Servicing
Practices.
(f) The
proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any
payment
or reimbursement to the related Servicer as provided above, shall be deposited
in the Distribution Account in accordance with Section 3.08(e)(ii) of this
Agreement on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance with
Section 5.01 of this Agreement. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
(g) Each
Servicer shall file information returns (and shall provide a certification
of a
Servicing Officer to the Master Servicer that such filings have been made)
with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION
3.22 Obligations
of Each Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
Interest Shortfalls.
Each
Servicer shall deliver to the Securities Administrator for deposit into the
Distribution Account on the Servicer Remittance Date and with respect to
Ocwen
on or before 12:00 noon New York time on the Servicer Remittance Date from
its
own funds an amount equal to the lesser of (i) the aggregate amount of the
Prepayment Interest Shortfalls attributable to Principal Prepayments in full
on
the Mortgage Loans for the related Distribution Date resulting solely from
voluntary Principal Prepayments received by the related Servicer during the
portion of the Prepayment Period occurring from (i) with respect to Xxxxx
Fargo,
the 14th
day of
the month preceding the month in which the related Distribution Date occurs
and
ending on the last day of the month preceding the month in which the related
Distribution Date occurs and (ii) with respect to Ocwen, the 16th
day of
the month preceding the month in which the related Distribution Date occurs
and
ending on the last day of the month preceding the month in which the related
Distribution Date occurs and (ii) the aggregate amount of the related Servicing
Fees payable to the related Servicer on such Distribution Date with respect
to
the related Mortgage Loans. The Servicers shall not have the right to
reimbursement for any amounts remitted to the Securities Administrator in
respect of this Section 3.22. The Servicers shall not be obligated to pay
the amounts set forth in this Section 3.22 with respect to shortfalls
resulting from the application of the Relief Act.
In
the
event that a shortfall in any collection on or liability with respect to
any
Mortgage Loan results from or is attributable to adjustments to Mortgage
Rates,
Monthly Payments or Scheduled Principal Balances that were made by the related
Servicer in a manner not consistent with the terms of the related Mortgage
Note
and this Agreement, such Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Securities Administrator for deposit in
the
Distribution Account from its own funds the amount of any such shortfall
and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Securities
Administrator, the Master Servicer, the Depositor and any successor servicer
in
respect of any such liability. Such indemnities shall survive the termination
or
discharge of this Agreement. Notwithstanding the foregoing, this
Section 3.23 shall not limit the ability of the related Servicer to seek
recovery of any such amounts from the related Mortgagor under the terms of
the
related Mortgage Note and Mortgage, to the extent permitted by applicable
law.
SECTION
3.24 Reserve
Fund.
(a) No
later
than the Closing Date, the Securities Administrator shall establish and maintain
a separate, segregated trust account entitled, “Reserve Fund, Xxxxx Fargo Bank,
National Association, in trust for the registered holders of ACE Securities
Corp. Home Equity Loan Trust, Series 2006-SD1, Asset Backed Pass-Through
Certificates.” On the Closing Date, the Depositor will deposit, or cause to be
deposited, into the Reserve Fund $1,000.
(b) On
each
Distribution Date, the Securities Administrator shall deposit into the Reserve
Fund the amounts described in clause sixth
of
Section 5.01(a)(5) of this Agreement, rather than distributing such amounts
to the Class CE-1 Certificateholders, and in clause seventh
of
Section 5.01(a)(5) of this Agreement. On each such Distribution Date, the
Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates and the Mezzanine Certificates and will
distribute such amounts to the Holders of the Class A Certificates and the
Mezzanine Certificates, in the amounts and priorities set forth in
Section 5.01(a) of this Agreement. If no Net WAC Rate Carryover Amounts are
payable on a Distribution Date, the Securities Administrator shall deposit,
into
the Reserve Fund on behalf of the Class CE-1 Certificateholders, from amounts
otherwise distributable to the Class CE-1 Certificateholders, an amount such
that when added to other amounts already on deposit in the Reserve Fund,
the
aggregate amount on deposit therein is equal to $1,000.
(c) It
is the
intention of the parties hereto that, for federal and state income and state
and
local franchise tax purposes, the Reserve Fund be disregarded as an entity
separate from the Holder of the Class CE-1 Certificates unless and until
the
date when either (a) there is more than one Class CE-1 Certificateholder
or (b)
any Class of Certificates in addition to the Class CE-1 Certificates is
recharacterized as an equity interest in the Reserve Fund for federal income
tax
purposes, in which case it is the intention of the parties hereto that, for
federal and state income and state and local franchise tax purposes, the
Reserve
Fund be treated as a partnership. All amounts deposited into the Reserve
Fund
(other than the initial deposit therein of $1,000) shall be treated as amounts
distributed by REMIC II to the Holders of the Class CE-1 Certificates. Upon
the
termination of the Trust Fund, or the payment in full of the Class A
Certificates and the Mezzanine Certificates, all amounts remaining on deposit
in
the Reserve Fund will be released by the Trust Fund and distributed to the
Class
CE-1 Certificateholders or their designees. The Reserve Fund will be part
of the
Trust Fund but not part of any REMIC and any payments to the Holders of the
Class A Certificates or the Mezzanine Certificates of Net WAC Rate Carryover
Amounts will not be payments with respect to a “regular interest” in a REMIC
within the meaning of Code Section 860(G)(a)(1).
(d) By
accepting a Class CE-1 Certificate, each Class CE-1 Certificateholder hereby
agrees that the Securities Administrator will deposit into the Reserve Fund
the
amounts described above on each Distribution Date rather than distributing
such
amounts to the Class CE-1 Certificateholders. By accepting a Class CE-1
Certificate, each Class CE-1 Certificateholder further agrees that its agreement
to such action by the Securities Administrator is given for good and valuable
consideration, the receipt and sufficiency of which is acknowledged by such
acceptance.
(e) At
the
direction of the Holders of a majority in Percentage Interest in the Class
CE-1
Certificates, the Securities Administrator shall direct any depository
institution maintaining the Reserve Fund to invest the funds in such account
in
one or more Permitted Investments bearing interest or sold at a discount,
and
maturing, unless payable on demand, (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
Securities Administrator 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 Securities Administrator
or
an Affiliate manages or advises such investment. All income and gain earned
upon
such investment shall be deposited into the Reserve Fund. In no event shall
the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class
CE-1 Certificates fail to provide investment instructions, funds on deposit
in
the Reserve Fund shall be held uninvested by the Securities Administrator
without liability for interest or compensation.
(f) For
federal tax return and information reporting, the right of the Class A
Certificateholders and the Mezzanine Certificateholders to receive payments
from
the Reserve Fund in respect of any Net WAC Rate Carryover Amount shall be
assigned a value of $1,000.00.
SECTION
3.25 Advance
Facility.
(a) Notwithstanding
anything to the contrary contained herein, (i) each Servicer is hereby
authorized to enter into an advance facility (“Advance Facility”) but no more
than two Advance Facilities without the prior written consent of the Trustee,
which consent shall not be unreasonably withheld, under which (A) such Servicer
sells, assigns or pledges to an advancing person (an “Advance Financing Person”)
its rights under this Agreement to be reimbursed for any P&I Advances or
Servicing Advances and/or (B) an Advance Financing Person agrees to finance
some
or all P&I Advances or Servicing Advances required to be made by such
Servicer pursuant to this Agreement and (ii) each Servicer is hereby authorized
to assign its rights to the Servicing Fee (which rights shall terminate upon
the
resignation, termination or removal of such Servicer pursuant to the terms
of
this Agreement); it being understood that neither the Trust Fund nor any
party
hereto shall have a right or claim (including without limitation any right
of
offset) to any amounts for reimbursement of P&I Advances or Servicing
Advances so assigned or to the portion of the Servicing Fee so assigned.
Subject
to the provisions of the first sentence of this Section 3.25(a), no consent
of the Depositor, Trustee, Master Servicer, Certificateholders or any other
party is required before the related Servicer may enter into an Advance
Facility, but such Servicer shall provide notice to the Depositor, Master
Servicer and the Trustee of the existence of any such Advance Facility promptly
upon the consummation thereof stating (a) the identity of the Advance Financing
Person and (b) the identity of any Person (“Servicer’s Assignee”) who has the
right to receive amounts in reimbursement of previously xxxxxxxxxxxx X&X
Advances or Servicing Advances. Notwithstanding the existence of any Advance
Facility under which an advancing person agrees to finance P&I Advances
and/or Servicing Advances on the related Servicer’s behalf, such Servicer shall
remain obligated pursuant to this Agreement to make P&I Advances and
Servicing Advances pursuant to and as required by this Agreement, and shall
not
be relieved of such obligations by virtue of such Advance Facility.
(b) Reimbursement
amounts (“Advance Reimbursement Amounts”) shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which the related Servicer would be permitted to reimburse
itself in accordance with this Agreement, assuming such Servicer had made
the
related P&I Advance(s) and/or Servicing Advance(s).
(c) Each
Servicer shall maintain and provide to any successor Servicer (with, upon
request, a copy to 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.
(d) Reimbursement
amounts distributed with respect to each Mortgage Loan shall be allocated
to
outstanding xxxxxxxxxxxx X&X Advances or Servicing Advances (as the case may
be) made with respect to that Mortgage Loan on a “first-in, first out” (FIFO)
basis. The documentation establishing any Advance Facility shall require
the
related Servicer to provide to the related advancing person or its designee
loan-by-loan information with respect to each such reimbursement amount
distributed to such advancing person or Advance Facility trustee on each
Distribution Date, to enable the advancing person or Advance Facility trustee
to
make the FIFO allocation of each such reimbursement amount with respect to
each
Mortgage Loan. The related Servicer shall remain entitled to be reimbursed
by
the advancing person or Advance Facility trustee for all P&I Advances and
Servicing Advances funded by the related Servicer to the extent the related
rights to be reimbursed therefor have not been sold, assigned or pledged
to an
advancing person.
(e) Any
amendment to this Section 3.25 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 3.25, including amendments to add
provisions relating to a successor Servicer, may be entered into by the Trustee,
the Depositor and the related Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
provided, that the Trustee has been provided an Opinion of Counsel that such
amendment is authorized hereunder and has no material adverse effect on the
Certificateholders, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust
Fund; provided, further, that the amendment shall not be deemed to adversely
affect in any material respect the interests of the Certificateholders if
the
Person requesting the amendment obtains a letter from each Rating Agency
(instead of obtaining an Opinion of Counsel to such effect) stating that
the
amendment would not result in the downgrading or withdrawal of the respective
ratings then assigned to the Certificates; it being understood and agreed
that
any such rating letter in and of itself will not represent a determination
as to
the materiality of any such amendment and will represent a determination
only as
to the credit issues affecting any such rating. Prior to entering into an
Advance Facility, the related Servicer shall notify the lender under such
facility in writing that: (a) the P&I Advances and/or Servicing Advances
financed by and/or pledged to the lender are obligations owed to such Servicer
on a non-recourse basis payable only from the cash flows and proceeds received
under this Agreement for reimbursement of P&I Advances and/or Servicing
Advances only to the extent provided herein, and neither the Master Servicer,
the Securities Administrator, the Trustee nor the Trust are otherwise obligated
or liable to repay any P&I Advances and/or Servicing Advances financed by
the lender; (b) such Servicer will be responsible for remitting to the lender
the applicable amounts collected by it as Servicing Fees and as reimbursement
for P&I Advances and/or Servicing Advances funded by the lender, as
applicable, subject to the restrictions and priorities created in this
Agreement; and (c) neither the Master Servicer, the Securities Administrator
nor
the Trustee shall have any responsibility to calculate any amount payable
under
an Advance Facility or to track or monitor the administration of the financing
arrangement between such Servicer and the lender or the payment of any amount
under an Advance Facility.
(f) The
related Servicer shall indemnify the Master Servicer, the Securities
Administrator, the Trustee and the Trust Fund for any cost, liability or
expense
relating to the Advance Facility including, without limitation, a claim,
pending
or threatened, by an Advance Financing Person.
SECTION
3.26 The
Servicer’s Indemnification Obligation.
Each
Servicer agrees to indemnify the Trustee, the Master Servicer and the Securities
Administrator, from, and hold the Trustee, Master Servicer and the Securities
Administrator harmless against, any loss, liability or expense (including
reasonable attorney’s fees and expenses) incurred by any such Person by reason
of such Servicer’s willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement or by reason of such Servicer’s
reckless disregard of its obligations and duties under this Agreement. Such
indemnity shall survive the termination or discharge of this Agreement and
the
resignation or removal of the related Servicer, the Trustee, the Master Servicer
and the Securities Administrator. Any payment hereunder made by the related
Servicer to any such Person shall be from such Servicer’s own funds, without
reimbursement from REMIC I therefor.
ARTICLE
IV
ADMINISTRATION
AND MASTER SERVICING
OF
THE
MORTGAGE LOANS BY THE MASTER SERVICER
SECTION
4.01 Master
Servicer.
The
Master Servicer shall, from and after the Closing Date, supervise, monitor
and
oversee the obligations of Ocwen and Xxxxx Fargo under this Agreement and
SPS
under the Servicing Agreement to service and administer the related Mortgage
Loans in accordance with the terms of this Agreement and the Servicing Agreement
and shall have full power and authority to do any and all things which it
may
deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicers
as
necessary from time-to-time to carry out the Master Servicer’s obligations
hereunder, shall receive, review and evaluate all reports, information and
other
data provided to the Master Servicer by the Servicers and shall cause the
Servicers to perform and observe the covenants, obligations and conditions
to be
performed or observed by the related Servicer under this Agreement or the
Servicing Agreement, as applicable. The Master Servicer shall independently
and
separately monitor each Servicer’s servicing activities with respect to each
related Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis and coordinate
corrective adjustments to each Servicer’s and Master Servicer’s records, and
based on such reconciled and corrected information, prepare the statements
specified in Section 5.03 and any other information and statements required
to be provided by the Master Servicer hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of each Servicer to the Distribution Account pursuant to the
terms
hereof based on information provided to the Master Servicer by each Servicer.
The
Trustee shall furnish the Servicers and the Master Servicer with any limited
powers of attorney in the form set forth on Exhibit D hereto or attached
to the
Servicing Agreement, as applicable, and other documents in a form acceptable
to
the Trustee, and necessary or appropriate to enable the Servicers and the
Master
Servicer to service and administer the related Mortgage Loans and REO
Properties. The Trustee shall have no responsibility for any action of the
Master Servicer or the Servicers pursuant to any such limited power of attorney
and shall be indemnified by the Master Servicer or the related Servicer,
as
applicable, for any cost, liability or expense incurred by the Trustee in
connection with such Person’s misuse of any such power of attorney.
The
Trustee, the Custodians and the Securities Administrator shall provide access
to
the records and documentation in possession of the Trustee, the Custodians
or
the Securities Administrator regarding the related Mortgage Loans and REO
Property and the servicing thereof to the Certificateholders, the FDIC, and
the
supervisory agents and examiners of the FDIC, such access being afforded
only
upon reasonable prior written request and during normal business hours at
the
office of the Trustee, the Custodians or the Securities Administrator; provided,
however, that, unless otherwise required by law, none of the Trustee, the
Custodians or the Securities Administrator shall be required to provide access
to such records and documentation if the provision thereof would violate
the
legal right to privacy of any Mortgagor. The Custodians shall allow
representatives of the Trustee and the Securities Administrator to photocopy
any
of the records and documentation and shall provide equipment for that purpose
at
a charge that covers the Custodians’ actual costs.
The
Trustee shall execute and deliver to the Servicers or the Master Servicer
upon
request any court pleadings, requests for trustee’s sale or other documents
necessary or desirable to (i) the foreclosure or trustee’s sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or any other Mortgage Loan Document; (iii)
obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other
rights or remedies provided by the Mortgage Note or any other Mortgage Loan
Document or otherwise available at law or equity.
SECTION
4.02 REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee and the Securities Administrator
shall act in accordance herewith to treat such REMIC as a REMIC, and the
Trustee
and the Securities Administrator shall comply with any directions of the
Sponsor, the Servicers or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale
of
all or any portion of the Mortgage Loans or of any investment of deposits
in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.03 of this Agreement, as applicable, accept any contribution to
any REMIC after the Startup Day without receipt of a Opinion of Counsel stating
that such contribution will not result in an Adverse REMIC Event as defined
in
Section 11.01(f) of this Agreement.
SECTION
4.03 Monitoring
of the Servicers.
(a) The
Master Servicer shall be responsible for monitoring the compliance by Ocwen
and
Xxxxx Fargo with their duties under this Agreement and SPS with its duties
under
the Servicing Agreement. In the review of the related Servicer’s activities, the
Master Servicer may rely upon an officer’s certificate of the related Servicer
with regard to such Servicer’s compliance with the terms of this Agreement or
the Servicing Agreement, as applicable. In the event that the Master Servicer,
in its judgment, determines that a Servicer should be terminated in accordance
with the terms hereof or the terms of the Servicing Agreement or that a notice
should be sent pursuant to the terms hereof or the terms of the Servicing
Agreement with respect to the occurrence of an event that, unless cured,
would
constitute a Servicer Event of Default, or an event of default under the
Servicing Agreement, the Master Servicer shall notify the related Servicer,
the
Sponsor and the Trustee thereof and (i) with respect to Ocwen or SPS, the
Master
Servicer shall issue such notice or take such other action as it deems
appropriate and (ii) with respect to Xxxxx Fargo, the Trustee shall issue
such
notice or take such other action as it deems appropriate.
(b) The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of Ocwen under this Agreement and SPS under
the
Servicing Agreement. The Trustee, for the benefit of the Certificateholders,
shall enforce the obligations of Xxxxx Fargo under this Agreement. In the
event
that Ocwen fails to perform its obligations in accordance with this Agreement
the Master Servicer shall, subject to this Section and Article VIII, terminate
the rights and obligations of Ocwen hereunder in accordance with the provisions
of Article VIII of this Agreement. In the event that Xxxxx Fargo fails to
perform its obligations in accordance with this Agreement the Trustee shall,
subject to this Section and Article VIII, terminate the rights and obligations
of Xxxxx Fargo hereunder in accordance with the provisions of Article VIII
of
this Agreement. In the event that SPS fails to perform its obligations in
accordance with the Servicing Agreement, the Master Servicer shall terminate
the
rights and obligations of such Servicer as servicer in accordance with the
Servicing Agreement. Such enforcement, including, without limitation, the
legal
prosecution of claims and the pursuit of other appropriate remedies, shall
be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the
owner
of the related Mortgage Loans. Except as set forth below, the Master Servicer
shall pay the costs of such enforcement at its own expense, provided that
the
Master Servicer and the Trustee shall not be required to prosecute or defend
any
legal action except to the extent that the Master Servicer or the Trustee,
as
applicable, shall have received reasonable indemnity for its costs and expenses
in pursuing such action. To the extent that such costs and expenses are not
indemnified by Ocwen, Xxxxx Fargo or SPS hereunder or under the Servicing
Agreement, then the Trustee and the Master Servicer shall be indemnified
for
such costs and expenses out of the Trust Fund.
(c) The
Master Servicer or, in the case of Xxxxx Fargo, the Trustee, shall be entitled
to be reimbursed by the related Servicer (or from amounts on deposit in the
Distribution Account if the related Servicer is unable to fulfill its
obligations hereunder or under the Servicing Agreement) for all reasonable
out-of-pocket or third party costs associated with the transfer of servicing
from the predecessor Servicer (or if the predecessor Servicer is the Master
Servicer, from the related Servicer immediately preceding the Master Servicer),
including without limitation, any reasonable out-of-pocket or third party
costs
or expenses associated with the complete transfer of all servicing data and
the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer or, in the case of Xxxxx Fargo, the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable
a
successor servicer (which may be the Master Servicer except with respect
to the
Xxxxx Fargo Mortgage Loans) to service the related Mortgage Loans properly
and
effectively, upon presentation of reasonable documentation of such costs
and
expenses.
(d) The
Master Servicer shall require the Servicers to comply with the remittance
requirements and other obligations set forth in this Agreement and the Servicing
Agreement, as applicable.
(e) If
the
Master Servicer acts as successor to a Servicer, it will not assume liability
for the representations and warranties of the terminated Servicer. The Master
Servicer shall not act as a successor to Xxxxx Fargo in its capacity as the
Servicer of the Xxxxx Fargo Mortgage Loans.
SECTION
4.04 Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with
respect to all directors, officers, employees and other Persons acting on
such
Master Servicer’s behalf, and covering errors and omissions in the performance
of the Master Servicer’s obligations hereunder. The errors and omissions
insurance policy and the fidelity bond shall be in such form and amount
generally acceptable for entities serving as master servicers or
trustees.
SECTION
4.05 Power
to Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Article XI, to do any and all things that it may deem necessary or desirable
in
connection with the master servicing and administration of the Mortgage Loans,
including but not limited to the power and authority (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers
of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages,
(iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv)
to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan, in each case, in accordance with the
provisions of this Agreement; provided, however, that the Master Servicer
shall
not (and, consistent with its responsibilities under Section 4.03, shall
not permit a Servicer) knowingly or intentionally take any action, or fail
to
take (or fail to cause to be taken) any action reasonably within its control
and
the scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause REMIC
I or
REMIC II to fail to qualify as a REMIC or result in the imposition of a tax
upon
the Trust Fund (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions
to a REMIC set forth in Section 860G(d) of the Code) unless the Master
Servicer has received an Opinion of Counsel (but not at the expense of the
Master Servicer) to the effect that the contemplated action will not cause
REMIC
I or REMIC II to fail to qualify as a REMIC or result in the imposition of
a tax
upon REMIC I or REMIC II, as the case may be. The Trustee shall furnish the
Master Servicer, upon written request from a Servicing Officer, with any
powers
of attorney prepared and delivered to it and reasonably acceptable to it
by
empowering the Master Servicer or the Servicers to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release
or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property,
and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with this Agreement or the
Servicing Agreement, and the Trustee shall execute and deliver such other
documents prepared and delivered to it and reasonably acceptable to it, as
the
Master Servicer or the related Servicer may request, to enable the Master
Servicer to master service and administer the related Mortgage Loans and
carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for the use
or
misuse of any such powers of attorney or such other executed documents delivered
by the Trustee pursuant to this paragraph by the Master Servicer or the
Servicers and shall be indemnified by the Master Servicer or the related
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person’s use or misuse of any such power of
attorney or such other executed documents delivered by the Trustee pursuant
to
this paragraph). If the Master Servicer or the Trustee has been advised that
it
is likely that the laws of the state in which action is to be taken prohibit
such action if taken in the name of the Trustee or that the Trustee would
be
adversely affected under the “doing business” or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee
in
the appointment of a co-trustee pursuant to Section 9.10. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action
in
the name of the Trustee, be deemed to be the agent of the Trustee.
SECTION
4.06 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicers to enforce such clauses in accordance
with
this Agreement or the Servicing Agreement. If applicable law prohibits the
enforcement of a due-on-sale clause or such clause is otherwise not enforced
in
accordance with this Agreement or the Servicing Agreement and, as a consequence,
a Mortgage Loan is assumed, the original Mortgagor may be released from
liability in accordance with this Agreement or the Servicing
Agreement.
(a) The
Master Servicer shall transmit to the Trustee or the applicable Custodian
such
documents and instruments coming into the possession of the Master Servicer
from
time to time as are required by the terms hereof to be delivered to the Trustee
or the applicable Custodian. Any funds received by the Master Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be remitted to the Securities Administrator for deposit
in
the Distribution Account. The Master Servicer shall, and, subject to
Section 3.20 of this Agreement or, to the extent provided therein, the
Servicing Agreement, shall cause the Servicers to provide access to information
and documentation regarding the Mortgage Loans to the Trustee, its agents
and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations,
banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners
of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or
other
regulatory authority, such access to be afforded without charge but only
upon
reasonable request in writing and during normal business hours at the offices
of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
(b) All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be remitted to the Securities Administrator for deposit in
the
Distribution Account.
For
each
Mortgage Loan, the Master Servicer shall enforce the obligation of Ocwen
and
Xxxxx Fargo under this Agreement and SPS under the Servicing Agreement to
maintain or cause to be maintained standard fire and casualty insurance and,
where applicable, flood insurance, all in accordance with the provisions
of this
Agreement or the Servicing Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth
in Section 3.11 of the Agreement or the eligibility requirements set forth
in the Servicing Agreement, as applicable, and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained
on
property acquired in respect of a defaulted loan, other than pursuant to
such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
SECTION
4.09 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall enforce each Servicer’s obligations under this Agreement
or under the Servicing Agreement, as applicable, to prepare and present on
behalf of the Trustee and the Certificateholders all claims under the insurance
policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured’s claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Servicer and remitted to the Master Servicer)
in
respect of such policies, bonds or contracts shall be promptly deposited
in the
Distribution Account upon receipt, except that any amounts realized that
are to
be applied to the repair or restoration of the related Mortgaged Property
as a
condition precedent to the presentation of claims on the related Mortgage
Loan
to the insurer under any applicable insurance policy need not be so deposited
or
remitted.
SECTION
4.10 Maintenance
of Primary Mortgage Insurance Policies.
(a) The
Master Servicer shall not take, or permit a Servicer to take (to the extent
such
action is prohibited by this Agreement or the Servicing Agreement), any action
that would result in noncoverage under any primary mortgage insurance policy
of
any loss which, but for the actions of the Master Servicer or the related
Servicer, as applicable, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause the Servicers to keep in force
and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), primary mortgage insurance applicable to each Mortgage
Loan in accordance with the provisions of this Agreement or the Servicing
Agreement. The Master Servicer shall not, and shall not permit the Servicers
to,
cancel or refuse to renew any primary mortgage insurance policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of
this
Agreement or the Servicing Agreement.
(b) The
Master Servicer agrees to cause the Servicers to present, on behalf of the
Trustee and the Certificateholders, claims to the insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable
action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans.
The
Trustee or the applicable Custodian, as applicable, shall retain possession
and
custody of the originals (to the extent available) of any primary mortgage
insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to
time
as contemplated by this Agreement. Until all amounts distributable in respect
of
the Certificates have been distributed in full and the Master Servicer and
the
Servicers have otherwise fulfilled their respective obligations under this
Agreement or the Servicing Agreement, as applicable, the Trustee or the
applicable Custodian shall also retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions of this
Agreement and the related Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the applicable
Custodian, upon the execution or receipt thereof the originals of any primary
mortgage insurance policies, any certificates of renewal, and such other
documents or instruments that constitute Mortgage Loan Documents that come
into
the possession of the Master Servicer from time to time.
SECTION
4.12 Realization
Upon Defaulted Mortgage Loans.
Subject
to Section 3.13(e) of this Agreement, the Master Servicer shall cause the
Servicers to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as
come
into and continue in default and as to which no satisfactory arrangements
can be
made for collection of delinquent payments, all in accordance with this
Agreement or the Servicing Agreement, as applicable.
SECTION
4.13 Compensation
for the Master Servicer.
As
compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Master Servicing Fee and the income from
investment of or earnings on the funds from time to time in the Distribution
Account, as provided in Section 3.10 of this Agreement. The Master
Servicing Fee payable to the Master Servicer in respect of any Distribution
Date
shall be reduced in accordance with Section 4.19 of this Agreement. The
Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
SECTION
4.14 REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of
any
related Mortgage Loan, the deed or certificate of sale shall be issued to
the
Trustee, or to its nominee, on behalf of the related Certificateholders.
The
Master Servicer shall cause the Servicers to sell, any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement or the Servicing Agreement, as applicable. Further, the Master
Servicer shall cause the Servicers to sell any REO Property prior to three
years
after the end of the calendar year of its acquisition by REMIC I unless (i)
the
Trustee shall have been supplied by the related Servicer with an Opinion
of
Counsel to the effect that the holding by the Trust Fund of such REO Property
subsequent to such three-year period will not result in the imposition of
taxes
on “prohibited transactions” of any REMIC hereunder as defined in
Section 860F of the Code or cause any REMIC hereunder to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case
the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel) or (ii) the related Servicer
shall have applied for, prior to the expiration of such three-year period,
an
extension of such three-year period in the manner contemplated by
Section 856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable extension period. The Master Servicer shall cause
the
related Servicer to protect and conserve, such REO Property in the manner
and to
the extent required by this Agreement or the Servicing Agreement, as applicable,
in accordance with the REMIC Provisions and in a manner that does not result
in
a tax on “net income from foreclosure property” or cause such REO Property to
fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code.
(b) The
Master Servicer shall cause the Servicers to deposit all funds collected
and
received in connection with the operation of any REO Property in the REO
Account
or in the account designated for such amounts under the Servicing
Agreement.
SECTION
4.15 Master
Servicer Annual Statement of Compliance.
(a) The
Master Servicer and the Securities Administrator shall deliver (or otherwise
make available) (and the Master Servicer and Securities Administrator shall
cause any Additional Servicer or Servicing Function Participant engaged by
it to
deliver) to the Depositor and the Securities Administrator, and in the case
of
the Master Servicer, to the Trustee, on or before March 15 of each year,
commencing in March 2007, an Officer’s Certificate stating, as to the signer
thereof, that (A) a review of such party’s activities during the preceding
calendar year or portion thereof and of such party’s performance under this
Agreement, or such other applicable agreement in the case of an Additional
Servicer or Servicing Function Participant, has been made under such officer’s
supervision and (B) to the best of such officer’s knowledge, based on such
review, such party has fulfilled all its obligations under this Agreement,
or
such other applicable agreement in the case of an Additional Servicer or
Servicing Function Participant, in all material respects throughout such
year or
portion thereof, or, if there has been a failure to fulfill any such obligation
in any material respect, specifying each such failure known to such officer
and
the nature and status thereof.
(b) The
Master Servicer shall include all annual statements of compliance received
by it
from the Servicers with its own annual statement of compliance to be submitted
to the Securities Administrator pursuant to this Section.
(c) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by such parties is terminated, assigns its rights
and obligations under, or resigns pursuant to the terms of this Agreement,
or
any applicable agreement in the case of a Servicing Function Participant,
as the
case may be, such party shall provide an Officer’s Certificate pursuant to this
Section 4.15(c) or to such applicable agreement, as the case may be,
notwithstanding any such termination, assignment or resignation.
(d) Failure
of the Master Servicer to comply timely with this Section 4.15 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
(e) Copies
of
such Master Servicer annual statements of compliance shall be provided to
any
Certificateholder upon request, by the Master Servicer or by the Trustee
at the
Master Servicer’s expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee
with
such statement or (ii) the Trustee shall be unaware of the Master Servicer’s
failure to provide such statement).
SECTION
4.16 Master
Servicer Assessments of Compliance.
(a) By
March
15 of each year, commencing in March 2007, the Master Servicer and the
Securities Administrator, each at its own expense, shall furnish, or otherwise
make available, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the Securities
Administrator and the Depositor, a report on an assessment of compliance
with
the Relevant Servicing Criteria that contains (A) a statement by such party
of
its responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Relevant Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such party’s
assessment of compliance with the Relevant Servicing Criteria as of and for
the
fiscal year covered by the Form 10-K required to be filed pursuant to Section
5.06(d), including, if there has been any material instance of noncompliance
with the Relevant Servicing Criteria, a discussion of each such failure and
the
nature and status thereof, and (D) a statement that a registered public
accounting firm has issued an attestation report on such party’s assessment of
compliance with the Relevant Servicing Criteria as of and for such
period.
(b) No
later
than the end of each fiscal year for the Trust for which a Form 10-K is required
to be filed, the Master Servicer shall forward to the Securities Administrator
and the Depositor the name of each Servicing Function Participant engaged
by it
and what Relevant Servicing Criteria will be addressed in the report on
assessment of compliance prepared by such Servicing Function Participant.
When
the Master Servicer and the Securities Administrator (or any Servicing Function
Participant engaged by them) submit their assessments to the Securities
Administrator, such parties will also at such time include the assessment
(and
attestation pursuant to Section 4.17) of each Servicing Function Participant
engaged by it.
(c) Promptly
after receipt of each such report on assessment of compliance, (i) the Depositor
shall review each such report and, if applicable, consult with the Master
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by such parties as to the nature of any material instance of
noncompliance with the Relevant Servicing Criteria by each such party, and
(ii)
the Securities Administrator shall confirm that the assessments, taken as
a
whole, address all of the Servicing Criteria and taken individually address
the
Relevant Servicing Criteria for each party as set forth on Exhibit E and
notify
the Depositor of any exceptions.
(d) The
Master Servicer shall include all annual reports on assessment of compliance
received by it from the Servicers with its own assessment of compliance to
be
submitted to the Securities Administrator pursuant to this Section.
(e) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by the parties is terminated, assigns its rights
and obligations under, or resigns pursuant to the terms of this Agreement,
or
any other applicable agreement, as the case may be, such party shall provide
a
report on assessment of compliance pursuant to this Section 4.16 or to such
other applicable agreement, notwithstanding any such termination, assignment
or
resignation.
(f) Failure
of the Master Servicer to comply timely with this Section 4.16 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
(g) Delivery
under this Section 4.16 of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein
or
determinable from information contained therein, including the Master Servicer’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on an Officer’s
Certificate).
SECTION
4.17 Master
Servicer Attestation Reports.
(a) By
March
15 of each year, commencing in March 2007, the Master Servicer and the
Securities Administrator, each at its own expense, shall cause, and each
such
party shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Securities Administrator,
or
such other Servicing Function Participants, as the case may be) and that
is a
member of the American Institute of Certified Public Accountants to furnish
an
attestation report to the Securities Administrator and the Depositor, to
the
effect that (i) it has obtained a representation regarding certain matters
from
the management of such party, which includes an assertion that such party
has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the PCAOB, it is expressing an opinion as
to
whether such party’s compliance with the Relevant Servicing Criteria was fairly
stated in all material respects, or it cannot express an overall opinion
regarding such party’s assessment of compliance with the Relevant Servicing
Criteria. In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it was unable
to express such an opinion. Such report must be available for general use
and
not contain restricted use language.
(b) Promptly
after receipt of each such assessment of compliance and attestation report
from
the Master Servicer, the Securities Administrator or any Servicing Function
Participant engaged by such parties, the Securities Administrator shall confirm
that each assessment submitted pursuant to Section 4.16 is coupled with an
attestation meeting the requirements of this Section and notify the Depositor
of
any exceptions.
(c) The
Master Servicer shall include each such attestation received by it from the
Servicers with its own attestation to be submitted to the Securities
Administrator pursuant to this Section.
(d) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by the parties is terminated assigns its rights
and
under, or resigns pursuant to the terms of this Agreement, or any applicable
agreement in the case of a Servicing Function Participant, as the case may
be,
such party shall cause a registered public accounting firm to provide an
attestation pursuant to this Section 4.17, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
(e) Failure
of the Master Servicer to comply timely with this Section 4.17 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
SECTION
4.18 Annual
Certification.
Each
Form
10-K required to be filed for the Trust pursuant to Section 5.06 shall include
a
certification (the “Xxxxxxxx-Xxxxx Certification”) required to be included
therewith pursuant to the Xxxxxxxx-Xxxxx Act. Each of the Master Servicer
and
the Securities Administrator shall provide, and shall cause any Servicing
Function Participant 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 Trust is subject to the reporting requirements of the Exchange
Act
and otherwise within a reasonable period of time upon request, a certification
(each, a “Back-Up Certification”), in the form attached hereto as Exhibit C,
upon which the Certifying Person, the entity for which the Certifying Person
acts as an officer, and such entity’s officers, directors and Affiliates
(collectively with the Certifying Person, “Certification Parties”) can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf
of the
Trust. Such officer of the Certifying Person can be contacted by e-mail at
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by parties is terminated or resigns pursuant
to the
terms of this Agreement, or any applicable Sub-Servicing Agreement, as the
case
may be, such party shall provide a Back-Up Certification to the Certifying
Person pursuant to this Section 4.18 with respect to the period of time it
was
subject to this Agreement or any applicable Sub-Servicing Agreement, as the
case
may be. Notwithstanding the foregoing, (i) the Master Servicer and the
Securities Administrator shall not be required to deliver a Back-Up
Certification to each other if both are the same Person and the Master Servicer
is the Certifying Person and (ii) the Master Servicer shall not be obligated
to
sign the Xxxxxxxx-Xxxxx Certification in the event that it does not receive
any
Back-Up Certification required to be furnished to it pursuant to this section
or
any servicing agreement.
In
the
event of any Prepayment Interest Shortfalls, the Master Servicer shall deposit
into the Distribution Account not later than the related Distribution Date
an
amount equal to the lesser of (i) the aggregate amounts required to be paid
by
the Servicers with respect to Prepayment Interest Shortfalls attributable
to
Principal Prepayments in full on the Mortgage Loans for the related Distribution
Date, and not so paid by the Servicers and (ii) the aggregate amount of the
related Master Servicing Fees for such Distribution Date, without reimbursement
therefor.
SECTION
4.20 Prepayment
Penalty Verification.
On
or
prior to each Servicer Remittance Date, each Servicer shall provide, in an
electronic format acceptable to the Master Servicer, the data necessary for
the
Master Servicer to perform its verification duties set forth in this
Section 4.20. The Master Servicer or a third party reasonably acceptable to
the Master Servicer and the Depositor (the “Verification Agent”) will perform
such verification duties and will use its best efforts to issue its findings
in
a report (the “Verification Report”) delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution
Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer
and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to the
related
Servicer and shall notify such Servicer if the Master Servicer has determined
that such Servicer did not deliver the appropriate Prepayment Charge to the
Securities Administrator in accordance with this Agreement. Such written
notification from the Master Servicer shall include the loan number, prepayment
penalty code and prepayment penalty amount as calculated by the Master Servicer
or the Verification Agent, as applicable, of each Mortgage Loan for which
there
is a discrepancy. If the related Servicer agrees with the verified amounts,
such
Servicer shall adjust the immediately succeeding Servicer Report and the
amount
remitted to the Securities Administrator with respect to prepayments
accordingly. If the related Servicer disagrees with the determination of
the
Master Servicer, such Servicer shall, within five (5) Business Days of its
receipt of the Verification Report, notify the Master Servicer of such
disagreement and provide the Master Servicer with detailed information to
support its position. The related Servicer and the Master Servicer shall
cooperate to resolve any discrepancy on or prior to the immediately succeeding
Servicer Remittance Date, and such Servicer will indicate the effect of such
resolution on the related Servicer Report and shall adjust the amount remitted
with respect to prepayments on such Servicer Remittance Date
accordingly.
During
such time as the related Servicer and the Master Servicer are resolving
discrepancies with respect to the Prepayment Charges, no payments in respect
of
any disputed Prepayment Charges will be remitted to the Securities Administrator
for deposit in the Distribution Account and the Master Servicer shall not
be
obligated to deposit such payments, unless otherwise required pursuant to
Section 8.01 hereof. In connection with such duties, the Master Servicer
shall be able to rely solely on the information provided to it by the related
Servicer in accordance with this Section. The Master Servicer shall not be
responsible for verifying the accuracy of any of the information provided
to it
by the related Servicer.
ARTICLE
V
PAYMENTS
TO CERTIFICATEHOLDERS
SECTION
5.01 Distributions.
(a) (1)
On
each Distribution Date, the following amounts, in the following order of
priority, shall be distributed by REMIC I to REMIC II on account of the REMIC
I
Regular Interests or withdrawn from the Distribution Account and distributed
to
the holders of the Class R Certificates, in respect of the Class R-I Interest,
as the case may be:
(i) to
Holders of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC
I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTZZ, REMIC I Regular Interest I-LTCE2 and REMIC I Regular Interest I-LTP,
pro
rata,
in an
amount equal to (A) the Uncertificated Interest for such Distribution Date,
plus
(B) any amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Interest in respect of REMIC I Regular
Interest I-LTZZ shall be reduced when the REMIC I Overcollateralization Amount
is less than the REMIC I Required Overcollateralization Amount, by the lesser
of
(x) the amount of such difference and (y) the Maximum I-LTZZ Uncertificated
Interest Deferral Amount and such amount will be payable to the Holders of
REMIC
I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5,
in
the same proportion as the Overcollateralization Increase Amount is allocated
to
the Corresponding Certificates and the Uncertificated Balance of REMIC I
Regular
Interest I-LTZZ shall be increased by such amount;
(ii) to
the
Holders of REMIC I Regular Interests, in an amount equal to the remainder
of the
Available Distribution Amount for such Distribution Date after the distributions
made pursuant to clause (i) above, allocated as follows:
(A) 98.00%
of
such remainder to the Holders of REMIC I Regular Interest I-LTAA, until the
Uncertificated Balance of such Uncertificated REMIC I Regular Interest is
reduced to zero;
(B) 2.00%
of
such remainder first to the Holders of REMIC I Regular Interest I-LTA1A,
REMIC I
Regular Interest I-LTA1B, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4 and REMIC I Regular Interest I-LTM5, 1.00% of and in the same proportion
as principal payments are allocated to the Corresponding Certificates, until
the
Uncertificated Balances of such REMIC I Regular Interests are reduced to
zero
and second to the Holders of REMIC I Regular Interest I-LTZZ, until the
Uncertificated Balance of such REMIC I Regular Interest is reduced to
zero;
(C) to
the
Holders of REMIC I Regular Interest I-LTP, (1) on each Distribution Date,
100%
of the amount paid in respect of Prepayment Charges and (2) on the Distribution
Date immediately following the expiration of the latest Prepayment Charge
as
identified on the Prepayment Charge Schedule or any Distribution Date thereafter
until $100 has been distributed pursuant to this clause; then
(D) any
remaining amount to the Holders of the Class R-I Interest, in respect of
the
Class R-I Interest;
provided,
however, that 98.00% and 2.00% of any principal payments that are attributable
to an Overcollateralization Reduction Amount shall be allocated to Holders
of
REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ,
respectively.
Notwithstanding
the distributions described in Section 5.01(a)(1), distributions of funds
shall
be made to Certificateholders only in accordance with Section 5.01(a)(2)
through
(5) and Section 5.01(b).
(2) On
each
Distribution Date, the Securities Administrator shall withdraw from the
Distribution Account to the extent on deposit therein an amount equal to
the
Interest Remittance Amount and make the following disbursements and transfers
in
the order of priority described below, in each case to the extent of the
Interest Remittance Amount remaining for such Distribution Date:
first,
concurrently, to the Holders of the Class A-1A Certificates and the Class
A-1B
Certificates, the Senior Interest Distribution Amount allocable to each such
Class, on a pro rata basis, based on the entitlement of each such
Class;
second,
sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates, in that order, the Interest Distribution Amount
allocable to each such Class; and
third,
the
portion, if any, of the Interest Remittance Amount remaining after application
pursuant to clauses first
and
second
above,
will be applied as part of the Net Monthly Excess Cashflow for such Distribution
Date, as described in Section 5.01(a)(5) below.
(3) On
each
Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger
Event
is in effect, the Securities Administrator shall withdraw from the Distribution
Account to the extent on deposit therein an amount equal to the Principal
Distribution Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:
first,
sequentially, to the Holders of the Class A-1A Certificates and the Class
A-1B
Certificates, in that order, until the Certificate Principal Balance of the
each
such Class has been reduced to zero; and
second,
sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero.
(4) On
each
Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger
Event is not in effect, the Securities Administrator shall withdraw from
the
Distribution Account to the extent on deposit therein an amount equal to
the
Principal Distribution Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:
first,
sequentially, to the Holders of the Class A-1A Certificates and the Class
A-1B
Certificates, in that order, the Class A Principal Distribution Amount, until
the Certificate Principal Balance of the each such Class has been reduced
to
zero;
second,
to the
Holders of the Class M-1 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the amount distributed to the Holders
of
the Class A Certificates under clause first
above,
and (y) the Class M-1 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-1 Certificates has been reduced to
zero;
third,
to the
Holders of the Class M-2 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Holders of the Class A Certificates under clause first
above
and to the Holders of the Class M-1 Certificates under clause second
above,
and (y) the Class M-2 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to
zero;
fourth,
to the
Holders of the Class M-3 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Holders of the Class A Certificates under clause first
above,
to the Holders of the Class M-1 Certificates under clause second
above
and to the Holders of the Class M-2 Certificates under clause third
above,
and (y) the Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
fifth,
to the
Holders of the Class M-4 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Holders of the Class A Certificates under clause first
above,
to the Holders of the Class M-1 Certificates under clause second
above,
to the Holders of the Class M-2 Certificates under clause third
above
and to the Holders of the Class M-3 Certificates under clause fourth
above
and (y) the Class M-4 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced to
zero;
sixth,
to the
Holders of the Class M-5 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Holders of the Class A Certificates under clause first
above,
to the Holders of the Class M-1 Certificates under clause second
above,
to the Holders of the Class M-2 Certificates under clause third
above,
to the Holders of the Class M-3 Certificates under clause fourth
above
and to the Holders of the Class M-4 Certificates under clause fifth
above
and (y) the Class M-5 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced to zero;
and
seventh,
the
portion, if any, of the Principal Distribution Amount remaining after
application pursuant to clauses first
through
sixth
above,
will be applied as part of the Net Monthly Excess Cashflow for such Distribution
Date, as described in Section 5.01(a)(5) below.
(5) On
each
Distribution Date, the Net Monthly Excess Cashflow (or, in the case of clause
first
below,
the Net Monthly Excess Cashflow exclusive of any Overcollateralization Reduction
Amount) shall be distributed as follows:
first,
to the
Holders of the Class or Classes of Certificates then entitled to receive
distributions in respect of principal, in an amount equal to the
Overcollateralization Increase Amount for such Distribution Date, which shall
be
included in the Principal Distribution Amount and paid in accordance with
the
priorities set forth in Section 5.01(a)(3) and Section 5.01(a)(4)
above;
second,
sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates, in that order, in an amount equal to the Interest
Carry Forward Amount allocable to each such Class;
third,
sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates, in that order, in an amount equal to the Allocated
Realized Loss Amount allocable to each such Class;
fourth,
concurrently, to the Holders of the Class A Certificates, in an amount equal
to
such Certificates’ allocated share of any Prepayment Interest Shortfalls on the
Mortgage Loans to the extent not covered by payments pursuant to
Section 3.22 or 4.19 of this Agreement or pursuant to the Servicing
Agreement and any shortfalls resulting from the application of the Relief
Act or
similar state or local law or the bankruptcy code with respect to the Mortgage
Loans to the extent not previously reimbursed pursuant to Section 1.02 of
this Agreement;
fifth,
sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates, in an amount equal to each such Certificates’
allocated share of any Prepayment Interest Shortfalls on the Mortgage Loans
to
the extent not covered by payments pursuant to Section 3.22 or 4.19 of this
Agreement or pursuant to the Servicing Agreement and any shortfalls resulting
from the application of the Relief Act or similar state or local law or the
bankruptcy code with respect to the Mortgage Loans to the extent not previously
reimbursed pursuant to Section 1.02 of this Agreement;
sixth,
to the
Reserve Fund, the amount by which the Net WAC Rate Carryover Amounts, if
any,
with respect to the Offered Certificates exceeds the amount in the Reserve
Fund
that was not distributed on prior Distribution Dates;
seventh,
to the
Holders of the Class CE-1 Certificates the sum of (a) the Interest Distribution
Amount and (b) any Overcollateralization Reduction Amount, in each case,
for
such Distribution Date; and
eighth,
, to the
Holders of the Class R Certificates, in respect of the Class R-II Interest,
any
remaining amounts; provided that if such Distribution Date is the Distribution
Date immediately following the expiration of the latest Prepayment Charge
term
as identified on the Mortgage Loan Schedule or any Distribution Date thereafter,
then any such remaining amounts will be distributed first, to the Holders
of the
Class P Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; and second, to the Holders of the Class R
Certificates.
The
Class
CE-1 Certificates are intended to receive all principal and interest received
by
the Trust on the Mortgage Loans that is not otherwise distributable to any
other
Class of Regular Certificates or REMIC Regular Interests. If the Securities
Administrator determines that the Residual Certificates are entitled to any
distributions on any Distribution Date other than the final Distribution
Date,
the Securities Administrator, prior to any such distribution to any Residual
Certificate, shall notify the Depositor of such impending distribution. Upon
such notification, the Depositor will prepare and request that the other
parties
hereto enter into an amendment to this Agreement pursuant to Section 12.01,
to revise such mistake in the distribution provisions. The consent of the
Holder
of the Class R Certificate is not required in connection with any such
amendment,
On
each
Distribution Date, after making the distributions of the Available Distribution
Amount as set forth above, the Securities Administrator will first, withdraw
from the Reserve Fund all income from the investment of funds in the Reserve
Fund and distribute such amount to the Holders of the Class CE-1 Certificates,
and second, withdraw from the Reserve Fund, to the extent of amounts remaining
on deposit therein, the amount of any Net WAC Rate Carryover Amount for such
Distribution Date and distribute such amount first, concurrently to the Class
A
Certificates, on a pro
rata
basis;
second, to the Class M-1 Certificates, third, to the Class M-2 Certificates,
fourth, to the Class M-3 Certificates, fifth, to the Class M-4 Certificates
and
sixth, to the Class M-5 Certificates,, in each case to the extent any Net
WAC
Rate Carryover Amount is allocable to each such Class.
(b) On
each
Distribution Date, for so long as Ocwen is the Servicer of the Ocwen Mortgage
Loans, Xxxxx Fargo is the Servicer of the Xxxxx Fargo Mortgage Loans or SPS
is
the servicer of the SPS Mortgage Loans, the Securities Administrator shall
distribute to the Holders of the Class CE-2 Certificates, with respect to
each
such Mortgage Loan, one-twelfth of the product of (i) the excess of the
Servicing Fee Rate over the Ocwen Servicing Fee Rate, the Xxxxx Fargo Servicing
Fee Rate and the SPS Servicing Fee Rate, as applicable, if any, multiplied
by
(ii) the Scheduled Principal Balance of the related Mortgage Loan as of the
Due
Date in the preceding calendar month (the “Excess Servicing Fee”); provided,
however, that by accepting a Class CE-2 Certificate, each Class CE-2
Certificateholder hereby agrees that prior to distribution by the Securities
Administrator of the Excess Servicing Fee to the Class CE-2 Certificateholder,
any Excess Servicing Fee will be paid to Xxxxx Fargo to pay the Xxxxx Fargo
Additional Servicing Fee and, provided further, that in the event the Excess
Servicing Fee is not sufficient to pay the Xxxxx Fargo Additional Servicing
Fee
to Xxxxx Fargo, the Class CE-2 Certificateholder shall remit to the Securities
Administrator for deposit into the Distribution Account such shortfall amount
prior to the following Distribution Date. With respect to any successor servicer
and the Xxxxx Fargo Mortgage Loans, such successor servicer shall not be
entitled to the Xxxxx Fargo Additional Servicing Fee. On each Distribution
Date,
the Securities Administrator shall withdraw any amounts then on deposit in
the
Distribution Account that represent Prepayment Charges and shall distribute
such
amounts to the Class P Certificateholders as described above.
(c) All
distributions made with respect to each Class of Certificates on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Payments in
respect of each Class of Certificates on each Distribution Date will be made
to
the Holders of the respective Class of record on the related Record Date
(except
as otherwise provided in Section 5.01(e) or Section 10.01 of this
Agreement respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates,
and
shall be made by wire transfer of immediately available funds to the account
of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator
in
writing at least five Business Days prior to the Record Date immediately
prior
to such Distribution Date and is the registered owner of Certificates having
an
initial aggregate Certificate Principal Balance that is in excess of the
lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but
only
upon presentment and surrender of such Certificate at the Corporate Trust
Office
of the Securities Administrator or such other location specified in the notice
to Certificateholders of such final distribution.
Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting 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. None of the Trustee, the
Depositor, the Servicers, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(d) The
rights of the Certificateholders to receive distributions in respect of the
Certificates, and all interests of the Certificateholders in such distributions,
shall be as set forth in this Agreement. None of the Holders of any Class
of
Certificates, the Trustee, the Servicers, the Securities Administrator or
the
Master Servicer shall in any way be responsible or liable to the Holders
of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(e) Except
as
otherwise provided in Section 10.01 of this Agreement, whenever the
Securities Administrator expects that the final distribution with respect
to any
Class of Certificates will be made on the next Distribution Date, the Securities
Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the
Securities Administrator expects that the final distribution with respect
to
such Class of Certificates will be made on such Distribution Date but only
upon
presentation and surrender of such Certificates at the office of the Securities
Administrator therein specified, and
(ii) no
interest shall accrue on such Certificates from and after the end of the
related
Interest Accrual Period.
Any
funds
not distributed to any Holder or Holders of Certificates of such Class on
such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust by
the
Securities Administrator and credited to the account of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has
been
given pursuant to this Section 5.01(e) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Securities Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto.
If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Securities Administrator shall, directly
or through an agent, mail a final notice to the remaining non-tendering
Certificateholders concerning surrender of their Certificates but shall continue
to hold any remaining funds for the benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting
such
Certificateholders shall be paid out of the assets remaining in such trust
fund.
If within one year after the final notice any such Certificates shall not
have
been surrendered for cancellation, the Securities Administrator shall pay
to the
Depositor all such amounts, and all rights of non-tendering Certificateholders
in or to such amounts shall thereupon cease. No interest shall accrue or
be
payable to any Certificateholder on any amount held in trust by the Securities
Administrator as a result of such Certificateholder’s failure to surrender its
Certificate(s) on the final Distribution Date for final payment thereof in
accordance with this Section 5.01(e). Any such amounts held in trust by the
Securities Administrator shall be held uninvested in an Eligible
Account.
(f) Notwithstanding
anything to the contrary herein, (i) in no event shall the Certificate Principal
Balance of a Class A Certificate or a Mezzanine Certificate be reduced more
than
once in respect of any particular amount both (a) allocated to such Certificate
in respect of Realized Losses pursuant to Section 5.04 of this Agreement
and (b) distributed to the Holder of such Certificate in reduction of the
Certificate Principal Balance thereof pursuant to this Section 5.01 from
Net Monthly Excess Cashflow and (ii) in no event shall the Uncertificated
Balance of a REMIC Regular Interest be reduced more than once in respect
of any
particular amount both (a) allocated to such REMIC Regular Interest in respect
of Realized Losses pursuant to Section 5.04 of this Agreement and (b)
distributed on such REMIC Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 5.01.
SECTION
5.02 Statements
to Certificateholders.
On
each
Distribution Date, the Securities Administrator (based on the information
set
forth in the Servicer Reports for such Distribution Date and information
provided by the Trustee) shall make available to each Holder of the Certificates
and each Servicer, a statement as to the distributions made on such Distribution
Date setting forth:
(i) the
amount of the distribution made on such Distribution Date to the Holders
of the
Certificates of each Class allocable to principal, and the amount of the
distribution made on such Distribution Date to the Holders of the Class P
Certificates allocable to Prepayment Charges;
(ii) the
amount of the distribution made on such Distribution Date to the Holders
of the
Certificates of each Class allocable to interest;
(iii) the
aggregate Servicing Fee received by the Servicers and Master Servicing Fee
received by the Master Servicer during the related Due Period;
(iv) applicable
Interest Accrual Periods and general Distribution Dates;
(v) the
total
cash flows received and the general sources thereof;
(vi) the
amount, if any, of other fees or expenses accrued and paid, with an
identification of the payee and the general purpose of such fees;
(vii) the
amount of the related distribution to Holders of the Certificates (by class)
allocable to principal, separately identifying (A) the aggregate amount of
any
Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein and (C) any Overcollateralization
Increase Amount included therein;
(viii) the
Interest Carry Forward Amounts and any Net WAC Rate Carryover Amounts for
the
related Certificates (if any);
(ix) the
aggregate amount of P&I Advances included in the distributions on the
Distribution Date (including the general purpose of such P&I
Advances);
(x) the
number and aggregate principal balance of any Mortgage Loans that were (A)
delinquent (exclusive of Mortgage Loans in foreclosure) using the “OTS” method
(1) one scheduled payment is delinquent, (2) two scheduled payments are
delinquent, (3) three scheduled payments are delinquent and (4) foreclosure
proceedings have been commenced, and loss information for the
period;
(xi) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date;
(xii) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the loan number and Scheduled Principal Balance of, and Realized Loss
on,
such Mortgage Loan as of the end of the related Prepayment Period;
(xiii) the
total
number and principal balance of any real estate owned, or REO Properties,
as of
the end of the related Prepayment Period;
(xiv) whether
the Stepdown Date has occurred and whether Trigger Event is in
effect;
(xv) the
cumulative Realized Losses through the end of the preceding month;
(xvi) if
available, the book value of any REO Property as of the close of business
on the
last Business Day of the calendar month preceding the Distribution
Date;
(xvii) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period and the aggregate amount of any Prepayment Charges received in respect
thereof;
(xviii) the
aggregate amount of Realized Losses incurred during the related Prepayment
Period and the aggregate amount of Realized Losses incurred since the Closing
Date;
(xix) the
aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the
Distribution Account for such Distribution Date;
(xx) the
Certificate Principal Balance of the related Certificates before and after
giving effect to the distribution of principal and allocation of Allocated
Realized Loss Amounts on such Distribution Date;
(xxi) the
number and Scheduled Principal Balance of all the Mortgage Loans for the
following Distribution Date;
(xxii) the
three-month rolling average of the percent equivalent of a fraction, the
numerator of which is the aggregate Scheduled Principal Balance of the Mortgage
Loans that are 60 days or more delinquent or are in bankruptcy or foreclosure
or
are REO Properties, and the denominator of which is the Scheduled Principal
Balances of all of the Mortgage Loans;
(xxiii) the
Certificate Factor for each such Class of Certificates applicable to such
Distribution Date;
(xxiv) the
Interest Distribution Amount in respect of the Class A Certificates, the
Mezzanine Certificates and the Class CE-1 Certificates for such Distribution
Date and the Interest Carry Forward Amount, if any, with respect to the Class
A
Certificates and the Mezzanine Certificates on such Distribution Date, and
in
the case of the Class A Certificates and the Mezzanine Certificates separately
identifying any reduction thereof due to allocations of Prepayment Interest
Shortfalls and interest shortfalls including the following: Realized Losses,
Relief Act Interest Shortfalls and Net WAC Rate Carryover Amounts;
(xxv) the
aggregate amount of any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by payments by Ocwen and Xxxxx Fargo pursuant
to
Section 3.22 of this Agreement, the Master Servicer pursuant to
Section 4.19 of this Agreement or SPS pursuant to the Servicing
Agreement;
(xxvi) the
aggregate amount of Relief Act Interest Shortfalls for such Distribution
Date;
(xxvii) the
amount of, if any, of Net Monthly Excess Cashflow or excess spread and the
application of such Net Monthly Excess Cashflow;
(xxviii) the
Required Overcollateralization Amount and the Credit Enhancement Percentage
for
such Distribution Date;
(xxix) the
Overcollateralization Increase Amount, if any, for such Distribution
Date;
(xxx) the
Overcollateralization Reduction Amount, if any, for such Distribution
Date;
(xxxi) the
Net
WAC Rate Carryover Amount, if any, outstanding after reimbursements therefor
on
such Distribution Date;
(xxxii) the
respective Pass-Through Rates applicable to the Class A Certificates, the
Mezzanine Certificates and the Class CE-1 Certificates for such Distribution
Date;
(xxxiii) the
amount of any deposit to the Reserve Fund contemplated by
Section 3.24(b);
(xxxiv) the
balance of the Reserve Fund prior to the deposit or withdrawal of any amounts
on
such Distribution Date;
(xxxv) the
amount of any deposit to the Reserve Fund pursuant to clause
sixth
of
Section 5.01(a)(5);
(xxxvi) the
balance of the Reserve Fund after all deposits and withdrawals on such
Distribution Date;
(xxxvii) the
Loss
Severity Percentage with respect to each Mortgage Loan;
(xxxviii) the
Aggregate Loss Severity Percentage;
(xxxix) the
amount of the Prepayment Charges remitted by the Servicers; and
(xl) the
number and aggregate unpaid principal balance of (a) Mortgage Loans with
respect
to which bankruptcy protection is in force that are delinquent 60 or more
days
under an applicable bankruptcy plan as of the last day of the preceding calendar
month and (b) Mortgage Loans that are the subject of forebearance plans that
are
delinquent 60 or more days under an applicable forebearance plan as of the
last
day of the preceding calendar month.
The
Securities Administrator will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to the Certificateholders and the Rating Agencies via
the
Securities Administrator’s internet website. The Securities Administrator’s
internet website shall initially be located at http:\\xxx.xxxxxxx.xxx and
assistance in using the website can be obtained by calling the Securities
Administrator’s customer service desk at 0-000-000-0000. Parties that are unable
to use the above distribution options are entitled to have a paper copy mailed
to them via first class mail by calling the customer service desk and indicating
such. The Securities Administrator shall have the right to change the way
such
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Securities Administrator
shall provide timely and adequate notification to all above parties regarding
any such changes.
In
the
case of information furnished pursuant to subclauses (i) and (ii) above,
the
amounts shall be expressed as a dollar amount per Single Certificate of the
relevant Class.
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall furnish upon request to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information set forth in subclauses (i) through (iii) above, aggregated
for
such calendar year or applicable portion thereof during which such person
was a
Certificateholder. Such obligation of the Securities Administrator shall
be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to
any
requirements of the Code as from time to time are in force.
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall furnish upon request to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
The
Securities Administrator shall, upon request, furnish to each Certificateholder
during the term of this Agreement, such periodic, special, or other reports
or
information, whether or not provided for herein, as shall be reasonable with
respect to the Certificateholder, as applicable, or otherwise with respect
to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder, in accordance with such reasonable
and
explicit instructions and directions as the Certificateholder may
provide.
On
each
Distribution Date the Securities Administrator shall provide Bloomberg Financial
Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable
to
the Securities Administrator and Bloomberg.
SECTION
5.03 Servicer
Reports; P&I Advances.
(a) On
the
18th calendar day of each month, and if the 18th calendar day is not a Business
Day, the immediately following Business Day and with respect to Ocwen on
or
before 12:00 noon New York time, each Servicer shall deliver to the Master
Servicer and the Securities Administrator by telecopy or electronic mail
(or by
such other means as such Servicer, the Master Servicer and the Securities
Administrator may agree from time to time) a remittance report containing
such
information with respect to the related Mortgage Loans and the related
Distribution Date as is reasonably available to such Servicer as the Master
Servicer or the Securities Administrator may reasonably require so as to
enable
the Master Servicer to master service the Mortgage Loans and oversee the
servicing by such Servicer and the Securities Administrator to fulfill its
obligations hereunder with respect to securities and tax reporting.
Any
report delivered by a Servicer pursuant to this Section 5.03(a) shall
include the amount collected by such Servicer in respect of Arrearages and
principal due on the Mortgage Loans prior to the Cut-off Date.
(b) The
amount of P&I Advances to be made by the related Servicer on any
Distribution Date shall equal, subject to Section 5.03(d), (i) with respect
to the Mortgage Loans other than the Simple Interest Mortgage Loans, the
aggregate amount of Monthly Payments (net of the related Servicing Fees),
due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent as of the close of business on the related
Determination Date, (ii) with respect to the Simple Interest Mortgage Loans,
thirty (30) days’ interest (net of the related Servicing Fees) on each such
Simple Interest Mortgage Loan for which the Monthly Payment was due during
the
related Due Period which Monthly Payments were delinquent as of the close
of
business on the related Determination Date and (iii) with respect to each
REO
Property which was acquired during or prior to the related Prepayment Period
and
as to which an REO Disposition did not occur during the related Prepayment
Period, an amount equal to the excess, if any, of the REO Imputed Interest
on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property deposited in the related Collection Account
pursuant to Section 3.21 of this Agreement for distribution on such
Distribution Date; provided, however, no Servicer shall be required to make
P&I Advances with respect to any Monthly Payments due on a Mortgage Loan
prior to the Cut-off Date, any Relief Act Interest Shortfalls, shortfalls
due to
bankruptcy proceedings or with respect to Prepayment Interest Shortfalls
in
excess of its obligations under Section 3.22 of this Agreement. For
purposes of the preceding sentence, the Monthly Payment on each Balloon Mortgage
Loan with a delinquent Balloon Payment is equal to the assumed monthly payment
that would have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Mortgage Loan. Notwithstanding the
generality of the foregoing, for purposes of a Servicer’s determination of
whether or not a P&I Advance is required to be made on a Mortgage Loan for
which the Mortgagor has failed to make one or more Monthly Payments due on
such
Mortgage Loan on or prior to the Cut-off Date, any payment in an amount
equal to a Monthly Payment received by the related Servicer during the Due
Period relating to such Servicer Remittance Date shall be deemed to be the
Monthly Payment due during such Due Period and the related Servicer shall
not be
required to make a P&I Advance with respect to such Mortgage Loan. In
addition, no portion of such Monthly Payment received on such Mortgage Loan
will
constitute the receipt of an Arrearage with respect to such Mortgage Loan
unless
all Monthly Payments required to be made on such Mortgage Loan for all prior
Due
Periods occurring subsequent to the Cut-off Date have been received by the
related Servicer.
On
the
Servicer Remittance Date and with respect to Ocwen by 12:00 noon New York
time
on the Servicer Remittance Date, each Servicer shall remit in immediately
available funds to the Securities Administrator for deposit in the Distribution
Account an amount equal to the aggregate amount of P&I Advances, if any, to
be made in respect of the Mortgage Loans serviced by such Servicer for the
related Distribution Date either (i) from its own funds or (ii) from the
related
Collection Account, to the extent of any Amounts Held For Future Distribution
on
deposit therein (in which case it will cause to be made an appropriate entry
in
the records of the related Collection Account that Amounts Held For Future
Distribution have been, as permitted by this Section 5.03, used by the
related Servicer in discharge of any such P&I Advance) or (iii) in the form
of any combination of (i) and (ii) aggregating the total amount of P&I
Advances to be made by the related Servicer with respect to the Mortgage
Loans.
In addition, the related Servicer shall have the right to reimburse itself
for
any outstanding P&I Advance made from its own funds from Amounts Held for
Future Distribution. Any Amounts Held For Future Distribution used by the
related Servicer to make P&I Advances or to reimburse itself for outstanding
P&I Advances shall be appropriately reflected in such Servicer’s records and
replaced by such Servicer by deposit in the related Collection Account no
later
than the close of business on the Servicer Remittance Date immediately following
the Due Period or Prepayment Period for which such amounts relate. The
Securities Administrator will notify the related Servicer and the Master
Servicer by the close of business on the Business Day prior to the Distribution
Date in the event that the amount remitted by the related Servicer to the
Securities Administrator on such date is less than the P&I Advances required
to be made by such Servicer for the related Distribution Date.
(c) The
obligation of each Servicer to make such P&I Advances with respect to the
Mortgage Loans serviced by such Servicer is mandatory, notwithstanding any
other
provision of this Agreement but subject to (d) below, and, with respect to
any
Mortgage Loan or REO Property, shall continue until a Final Recovery
Determination in connection therewith or the removal thereof from the Trust
Fund
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding
anything herein to the contrary, no P&I Advance or Servicing Advance shall
be required to be made hereunder by any Servicer if such P&I Advance or
Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively. The determination by the
related
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
Servicing Advance or that any proposed P&I Advance or Servicing Advance, if
made, would constitute a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance, respectively, shall be evidenced by a certification of
a
Servicing Officer delivered to the Master Servicer.
(e) Subject
to and in accordance with the provisions of Article VIII of this Agreement,
in
the event a Servicer fails to make any required P&I Advance, then the Master
Servicer (in its capacity as successor servicer) or any other successor Servicer
shall be required to make such P&I Advance on the Distribution Date on which
the related Servicer was required to make such Advance, subject to its
determination of recoverability. Subject to and in accordance with the
provisions of Article VIII of this Agreement, in the event Xxxxx Fargo fails
to
make any required P&I Advance, then the successor servicer shall be required
to make such P&I Advance on the Distribution Date on which Xxxxx Fargo was
required to make such Advance, subject to its determination of recoverability.
In addition, in the event that SPS fails to make a required P&I Advance
under the Servicing Agreement, the Master Servicer (in its capacity as successor
Servicer) will be required to make such P&I Advance on the Distribution Date
on which such Servicer was required to make such P&I Advance, subject to its
determination of recoverability.
SECTION
5.04 Allocation
of Realized Losses.
(a) On
or
before 12:00 noon New York time on the 18th calendar day of each month, and
if
the 18th calendar day is not a Business Day, the immediately following Business
Day, the related Servicer shall determine as to each Mortgage Loan serviced
by
such Servicer and any related REO Property and include in the monthly remittance
report provided to the Master Servicer and the Securities Administrator
(substantially in the form of Schedule 4 hereto), such information as is
reasonably available to the related Servicer, as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the Mortgage Loans and oversee the servicing by
the
related Servicer and the Securities Administrator to fulfill its obligations
hereunder with respect to securities and tax reporting, which shall include,
but
not be limited to: (i) the total amount of Realized Losses, if any, incurred
in
connection with any Final Recovery Determinations made during the related
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and allocable to principal. Prior to each Determination
Date, the Servicers shall also determine as to each Mortgage Loan: (i) the
total
amount of Realized Losses, if any, incurred in connection with any Deficient
Valuations made during the related Prepayment Period; and (ii) the total
amount
of Realized Losses, if any, incurred in connection with Debt Service Reductions
in respect of Monthly Payments due during the related Due Period.
(b) All
Realized Losses on the Mortgage Loans allocated to any REMIC I Regular Interest
pursuant to Section 5.04(c) of this Agreement for each Distribution Date
will first, cause a reduction in Net Monthly Excess Cashflow for that
Distribution Date and second, cause a reduction in the Overcollateralization
Amount for that Distribution Date until reduced to zero. To the extent that
Realized Losses on a Distribution Date cause the aggregate Certificate Principal
Balance of the Offered Certificates (after taking into account all distributions
on such Distribution Date) to exceed the aggregate Scheduled Principal Balance
of the Mortgage Loans as of the last day of the related Due Period, such
excess
shall be allocated by the Securities Administrator as follows: first, to
the
Class M-5 Certificates, until the Certificate Principal Balance of the Class
M-5
Certificates has been reduced to zero; second, to the Class M-4 Certificates,
until the Certificate Principal Balance of the Class M-4 Certificates has
been
reduced to zero; third, to the Class M-3 Certificates, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
of the Class M-2 Certificates has been reduced to zero; and fifth, to the
Class
M-1 Certificates, until the Certificate Principal Balance of the Class M-1
Certificates 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.
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. No allocations of any Realized Losses shall be made
to the
Certificate Principal Balances of the Class A Certificates or the Class P
Certificates.
As
used
herein, an allocation of a Realized Loss on a “pro rata basis” among two or more
specified Classes of Certificates means an allocation on a pro rata basis,
among
the various Classes so specified, to each such Class of Certificates on the
basis of their then outstanding Certificate Principal Balances prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder
will
be allocated among the, Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.
In
addition, in the event that a Servicer receives any Subsequent Recoveries,
such
Servicer shall deposit such funds into the related Collection Account pursuant
to Section 3.08 of this Agreement or into the Custodial Account pursuant to
the Servicing Agreement. If, after taking into account such Subsequent
Recoveries the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Mezzanine Certificates with the highest payment priority to
which
Realized Losses have been allocated, but not by more than the amount of Realized
Losses previously allocated to that Class of Mezzanine Certificates pursuant
to
this Section 5.04 and not previously reimbursed to such Class of Mezzanine
Certificates with Net Monthly Excess Cashflow pursuant to clause third
of
Section 5.01(a)(5) of this Agreement. The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Certificate
Principal Balance of the Mezzanine Certificates, beginning with the Class
of
Mezzanine Certificates with the next highest payment priority, up to the
amount
of such Realized Losses previously allocated to such Class of Mezzanine
Certificates pursuant to this Section 5.04 and not previously reimbursed to
such Class of Mezzanine Certificates with Net Monthly Excess Cashflow pursuant
to clause third
of
Section 5.01(a)(5). Holders of such Certificates will not be entitled to
any payment in respect of current interest on the amount of such increases
for
any Interest Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Mezzanine Certificate of such Class in accordance
with
its respective Percentage Interest.
(c) All
Realized Losses on the Mortgage Loans shall be allocated by the Securities
Administrator, on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC I Regular Interest I-LTAA and REMIC I Regular
Interest I-LTZZ up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98.00% and 2.00%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Balances
of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC
I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM5 has been reduced
to
zero; fourth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA,
REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I
Regular Interest I-LTM4 has been reduced to zero; fifth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3
and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced
to zero; sixth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of
REMIC
I Regular Interest I-LTM2 has been reduced to zero; and seventh, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM1 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM1 has been reduced to zero.
SECTION
5.05 Compliance
with Withholding Requirements.
Notwithstanding
any other provision of this Agreement, the Trustee and the Securities
Administrator shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that
the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event
the
Securities Administrator does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant
to
federal withholding requirements, the Securities Administrator shall indicate
the amount withheld to such Certificateholders.
(a) (i)Within
15
days after each Distribution Date (subject to permitted extensions under
the
Exchange Act), the Securities Administrator shall prepare and file on behalf
of
the Trust any Form 10-D required by the Exchange Act, in form and substance
as
required by the Exchange Act. The Securities Administrator shall file each
Form
10-D with a copy of the related Monthly Statement attached thereto. Any
disclosure in addition to the Monthly Statement that is required to be included
on Form 10-D (“Additional Form 10-D Disclosure”) shall be reported by the
parties set forth on Exhibit G to the Depositor and the Securities Administrator
and directed and approved by the Depositor pursuant to the following paragraph,
and the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except
as
set forth in the next paragraph.
(ii) As
set
forth on Exhibit G hereto, within 5 calendar days after the related Distribution
Date, (A) certain parties to the ACE Securities Corp., Home Equity Loan Trust,
Series 2006-SD1 transaction shall be required to provide to the Securities
Administrator and the Depositor, to the extent known by a responsible officer
thereof, in XXXXX-compatible form, or in such other form as otherwise agreed
upon by the Securities Administrator and such party, the form and substance
of
any Additional Form 10-D Disclosure, if applicable, together with an Additional
Disclosure Notification in the form of Exhibit H hereto (an “Additional
Disclosure Notification”) and (B) 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 Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
(iii) After
preparing the Form 10-D, the Securities Administrator shall upon request,
forward electronically a copy of the Form 10-D to the Depositor (provided
that
such Form 10-D includes any Additional Form 10-D Disclosure). Within two
(2)
Business Days after receipt of such copy but no later than the 12th
calendar
day after the Distribution Date, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 10-D. In the absence of receipt of any written
changes or approval by the due date specified herein, or if the Depositor
does
not request a copy of a Form 10-D, the Securities Administrator shall be
entitled to assume that such Form 10-D is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 10-D.
A duly
authorized representative of the Master Servicer shall sign each Form 10-D.
If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs
to be
amended, the Securities Administrator will follow the procedures set forth
in
Section 5.06(c)(ii). Promptly (but no later than 1 Business Day) after filing
with the Commission, the Securities Administrator will make available on
its
internet website a final executed copy of each Form 10-D filed by the Securities
Administrator. Each party to this Agreement acknowledges that the performance
by
the Securities Administrator and the Master Servicer of their duties under
this
Section 5.06(a) related to the timely preparation, execution and filing of
Form
10-D is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties as set forth in this Agreement. Neither
the
Securities Administrator nor the Master Servicer shall have any liability
for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 10-D, where such
failure results from the Securities Administrator’s inability or failure to
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-D, not resulting from
its
own negligence, bad faith or willful misconduct.
(b) (i)Within
four (4) Business Days after the occurrence of an event requiring disclosure
on
Form 8-K (each such event, a “Reportable Event”), and if requested by the
Depositor, the Securities Administrator shall prepare and file on behalf
of the
Trust a Form 8-K, as required by the Exchange Act, provided
that the
Depositor shall file the initial Form 8-K in connection with the issuance
of the
Certificates. Any disclosure or information related to a Reportable Event
or
that is otherwise required to be included on Form 8-K (“Form 8-K Disclosure
Information”) shall be reported by the parties set forth on Exhibit G to the
Depositor and the Securities Administrator and directed and approved by the
Depositor pursuant to the following paragraph, and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or
prepare
any Form 8-K Disclosure Information or any Form 8-K, except as set forth
in the
next paragraph.
(ii) As
set
forth on Exhibit G hereto, for so long as the Trust is subject to the Exchange
Act reporting requirements, no later than the close of business New York
City
time on the 2nd Business Day after the occurrence of a Reportable Event (i)
the
parties to the ACE Securities Corp., Home Equity Loan Trust, Series 2006-SD1
transaction shall be required to provide to the Securities Administrator
and the
Depositor, to the extent known by a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by
the
Securities Administrator and such party, the form and substance of any Form
8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification, and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor will be responsible for any reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection
with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph.
(iii) After
preparing the Form 8-K, the Securities Administrator shall upon request,
forward
electronically a copy of the Form 8-K to the Depositor. Promptly, but no
later
than the close of business on the third Business Day after the Reportable
Event,
the Depositor shall notify the Securities Administrator in writing (which
may be
furnished electronically) of any changes to or approval of such Form 8-K.
In the
absence of receipt of any written changes or approval by the third Business
Day,
or if the Depositor does not request a copy of a Form 8-K, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final
form
and the Securities Administrator may proceed with the execution and filing
of
the Form 8-K. A duly authorized representative of the Master Servicer shall
sign
each Form 8-K. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 5.06(c)(ii). Promptly (but no later than
1
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website a final executed copy of each
Form
8-K that has been prepared and filed by the Securities Administrator. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their duties under this Section
5.06(b) related to the timely preparation, execution and filing of Form 8-K
is
contingent upon such parties strictly observing all applicable deadlines
in the
performance of their duties under this Agreement. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 8-K, where such failure results from
the
Securities Administrator’s inability or failure to receive, on a timely basis,
any information from any other party hereto needed to prepare, execute or
arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(c) (i)On
or
prior to January 30th of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 suspension notification relating to the automatic suspension
of reporting in respect of the Trust under the Exchange Act.
(ii) In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator will
promptly notify electronically the Depositor. In the case of Form 10-D and
10-K,
the parties to this Agreement will cooperate to prepare and file a Form 12b-25
and a 10-DA and 10-KA, as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of
all required Form 8-K Disclosure Information and upon the approval and direction
of the Depositor, include such disclosure information on the next Form 10-D.
In
the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended
in connection with any Additional Form 10-D Disclosure (other than for the
purpose of restating any Monthly Report), any Additional Form 10-K Disclosure
or
any Form 8-K Disclosure Information or any amendment to such disclosure,
the
Securities Administrator will notify electronically the Depositor only if
the
amendment pertains to an additional reporting item being revised and/or amended
on such form, but not if an amendment is being filed as a result of a Remittance
Report revision, and the Depositor will cooperate with the Securities
Administrator in preparing any necessary 8-KA, 10-DA or 10-KA. Any Form 15,
Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by a duly
authorized representative, or senior officer in charge of the master servicing,
as applicable, of the Master Servicer. The parties to this Agreement acknowledge
that the performance by the Securities Administrator and the Master Servicer
of
their duties under this Section 5.06(c) related to the timely preparation,
execution and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K,
10-D or 10-K is contingent upon each such party performing its duties under
this
Agreement. Neither the Master Servicer nor the Securities Administrator shall
have any liability for any loss, expense, damage, claim arising out of or
with
respect to any failure to properly prepare, execute and/or timely file any
such
Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where
such
failure results from the Securities Administrator’s inability or failure to
receive, on a timely basis, any information from any other party hereto needed
to prepare, execute or arrange for execution or file such Form 15, Form 12b-25
or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(d) (i)On
or
prior to the 90th
day
after the end of each fiscal year of the Trust or such earlier date as may
be
required by the Exchange Act (the “10-K Filing Deadline”) (it being understood
that the fiscal year for the Trust ends on December 31st
of each
year), commencing in March 2007, the Securities Administrator shall prepare
and
file on behalf of the Trust a Form 10-K, in form and substance as required
by
the Exchange Act. Each such Form 10-K shall include the following items,
in each
case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (i) an annual
compliance statement for each Servicer, each Additional Servicer, the Master
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by such parties (each, a “Reporting Servicer”) as described under
Section 3.17 and Section 4.15, (ii)(A) the annual reports on assessment of
compliance with servicing criteria for each Reporting Servicer, as described
under Section 3.18 and Section 4.16, and in such other agreements and (B)
if
each Reporting Servicer’s report on assessment of compliance with servicing
criteria described under Section 3.18 and Section 4.16 identifies any material
instance of noncompliance, disclosure identifying such instance of
noncompliance, or if each Reporting Servicer’s report on assessment of
compliance with servicing criteria described under Section 3.18 and Section
4.16
is not included as an exhibit to such Form 10-K, disclosure that such report
is
not included and an explanation why such report is not included, (iii)(A)
the
registered public accounting firm attestation report for each Reporting
Servicer, as described under Section 3.18 and Section 4.17, or in such other
agreement and (B) if any registered public accounting firm attestation report
described under Section 3.18 and Section 4.17 identifies any material instance
of noncompliance, disclosure identifying such instance of noncompliance,
or if
any such registered public accounting firm attestation report is not included
as
an exhibit to such Form 10-K, disclosure that such report is not included
and an
explanation why such report is not included, and (iv) a Xxxxxxxx-Xxxxx
Certification as described in Section 3.20 and Section 4.18 (provided, however,
that the Securities Administrator, at its discretion, may omit from the Form
10-K any annual compliance statement, assessment of compliance or attestation
report that is not required to be filed with such Form 10-K pursuant to
Regulation AB). Any disclosure or information in addition to (i) through
(iv)
above that is required to be included on Form 10-K (“Additional Form 10-K
Disclosure”) shall be reported by the parties set forth on Exhibit G to the
Depositor and the Securities Administrator and directed and approved by the
Depositor pursuant to the following paragraph, and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or
prepare
any Additional Form 10-K Disclosure, except as set forth in the next
paragraph.
(ii) As
set
forth on Exhibit G hereto, no later than March 15 of each year that the Trust
is
subject to the Exchange Act reporting requirements, commencing in 2007, (i)
the
parties to the ACE Securities Corp., Home Equity Loan Trust, Series 2006-SD1
transaction shall be required to provide to the Securities Administrator
and the
Depositor, to the extent known by a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by
the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, together with an Additional
Disclosure Notification, and (ii) the Depositor will approve, as to form
and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-K Disclosure on Form 10-K. The Depositor will be responsible for
any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.
(iii) After
preparing the Form 10-K, the Securities Administrator shall upon request,
forward electronically a copy of the Form 10-K to the Depositor. Within three
(3) Business Days after receipt of such copy, but in no event later than
March
25th
of each
year that the Trust is subject to the Exchange Act reporting requirements,
the
Depositor shall notify the Securities Administrator in writing (which may
be
furnished electronically) of any changes to or approval of such Form 10-K.
In
the absence of receipt of any written changes or approval by March 25th,
or if
the Depositor does not request a copy of a Form 10-K, the Securities
Administrator shall be entitled to assume that such Form 10-K is in final
form
and the Securities Administrator may proceed with the execution and filing
of
the Form 10-K. A senior officer of the Master Servicer in charge of the master
servicing function shall sign the Form 10-K. If a Form 10-K cannot be filed
on
time or if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 5.06(c)(ii).
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Securities Administrator will make available on its internet website
a final
executed copy of each Form 10-K filed by the Securities Administrator. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under
this
Section 5.06(d) related to the timely preparation, execution and filing of
Form
10-K is contingent upon such parties (and any Additional Servicer or Servicing
Function Participant) strictly observing all applicable deadlines in the
performance of their duties under this Section 5.06(d), Section 3.17, Section
3.18, Section 3.19, Section 4.16, Section 4.17 and Section 4.18. Neither
the
Master Servicer nor the Securities Administrator shall have any liability
for
any loss, expense, damage or claim arising out of or with respect to any
failure
to properly prepare, execute and/or timely file such Form 10-K, where such
failure results from the Securities Administrator’s inability or failure to
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-K, not resulting from
its
own negligence, bad faith or willful misconduct.
(e) The
Securities Administrator shall indemnify and hold harmless the Depositor,
the
Trustee and their respective officers, directors and Affiliates from and
against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising
out
of or based upon a breach of the Master Servicer’s obligations under this
Section 5.06 or the Master Servicer’s negligence, bad faith or willful
misconduct in connection therewith.
(f) Notwithstanding
the provisions of Section 12.01, this Section 5.06 may be amended without
the
consent of the Certificateholders.
ARTICLE
VI
SECTION
6.01 The
Certificates.
(a) The
Certificates in the aggregate will represent the entire beneficial ownership
interest in the Mortgage Loans and all other assets included in REMIC I and
REMIC II.
The
Certificates will be substantially in the forms annexed hereto as Exhibits
A-1
through A-6. The Certificates of each Class will be issuable in registered
form
only, in denominations of authorized Percentage Interests as described in
the
definition thereof. Each Certificate will share ratably in all rights of
the
related Class.
Upon
original issue, the Certificates shall be executed and authenticated by the
Securities Administrator and delivered by the Trustee to and upon the written
order of the Depositor. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trust by the Securities Administrator
by an
authorized signatory. Certificates bearing the manual or facsimile signatures
of
individuals who were at any time the proper officers of the Securities
Administrator shall bind the Trust, notwithstanding that such individuals
or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided herein
executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
(b) The
Class
A Certificates and the Mezzanine Certificates shall initially be issued as
one
or more Certificates held by the Book-Entry Custodian or, if appointed to
hold
such Certificates as provided below, the Depository and registered in the
name
of the Depository or its nominee and, except as provided below, registration
of
such Certificates may not be transferred by the Securities Administrator
except
to another Depository that agrees to hold such Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to such Certificates
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to definitive, fully registered Certificates
(“Definitive Certificates”) in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in
the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing
such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents
or
of brokerage firms for which it acts as agent in accordance with the
Depository’s normal procedures. The Securities Administrator is hereby initially
appointed as the Book-Entry Custodian and hereby agrees to act as such in
accordance herewith and in accordance with the agreement that it has with
the
Depository authorizing it to act as such. The Book-Entry Custodian may, and,
if
it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Servicers
and,
if the Trustee is not the Book-Entry Custodian, the Trustee, any other transfer
agent (including the Depository or any successor Depository) to act as
Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of
its
duties or responsibilities by reason of any such appointment of other than
the
Depository. If the Securities Administrator resigns or is removed in accordance
with the terms hereof, the successor Securities Administrator or, if it so
elects, the Depository shall immediately succeed to its predecessor’s duties as
Book-Entry Custodian. The Depositor shall have the right to inspect, and
to
obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.
(c) The
Class
CE-1 Certificates and the Class CE-2 Certificates initially offered and sold
in
offshore transactions in reliance on Regulation S shall be issued in the
form of
a temporary global certificate in definitive, fully registered form (each,
a
“Regulation S Temporary Global Certificate”), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as
nominee of the Depository for the account of designated agents holding on
behalf
of Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02.
After the expiration of the Release Date, a beneficial interest in a Regulation
S Temporary Global Certificate may be exchanged for a beneficial interest
in the
related permanent global certificate of the same Class (each, a “Regulation S
Permanent Global Certificate”), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be
deposited with the Securities Administrator or an agent of the Securities
Administrator as custodian for the Depository and registered in the name
of Cede
& Co. as nominee of the Depository.
(d) The
Class
CE-1, Class CE-2 and Class P Certificates offered and sold to Qualified
Institutional Buyers (“QIBs”) in reliance on Rule 144A under the Securities Act
(“Rule 144A”) will be issued in the form of Definitive
Certificates.
(e) The
Trustee, the Servicers, the Securities Administrator, the Master Servicer
and
the Depositor may for all purposes (including the making of payments due
on the
Book-Entry Certificates and global certificates) deal with the Depository
as the
authorized representative of the Certificate Owners with respect to the
Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect
to
the Book-Entry Certificates and global certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository
as
Holder of the Book-Entry Certificates and global certificates with respect
to
any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Securities Administrator may
establish a reasonable record date in connection with solicitations of consents
from or voting by Certificateholders and shall give notice to the Depository
of
such record date.
If
(i)(A)
the Depositor advises the Securities Administrator in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate
a
qualified successor, (ii) the Depositor at its option advises the Securities
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event
of
Default, Certificate Owners representing in the aggregate not less than 51%
of
the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of
a
book-entry system through the Depository is no longer in the best interests
of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. The Holder of a Regulation S Permanent Global Certificate
may request that its interest in a global certificate be exchanged for a
Definitive Certificate. Upon surrender to the Securities Administrator of
the
Book-Entry Certificates or Regulation S Permanent Global Certificate by the
Book-Entry Custodian or the Depository or the Regulation S Permanent Global
Certificate by the Depository, as applicable, accompanied by registration
instructions from the Depository for registration of transfer, the Securities
Administrator shall cause the Definitive Certificates to be issued. Such
Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate or a Regulation S Permanent Global Certificate, as applicable,
in an
amount less than $10,000 immediately prior to the issuance of a Definitive
Certificate shall be issued in a minimum denomination equal to the amount
represented by such Book-Entry Certificate or Regulation S Permanent Global
Certificate, as applicable. None of the Depositor, the Servicers, the Master
Servicer, the Securities Administrator or the Trustee shall be liable for
any
delay in the delivery of such instructions and may conclusively rely on,
and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon
or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Securities Administrator, to the extent applicable with respect to
such
Definitive Certificates, and the Securities Administrator shall recognize
the
Holders of the Definitive Certificates as Certificateholders
hereunder.
SECTION
6.02 Registration
of Transfer and Exchange of Certificates.
(a) The
Securities Administrator shall cause to be kept at one of the offices or
agencies to be appointed by the Securities Administrator in accordance with
the
provisions of Section 9.11 of this Agreement, a Certificate Register for
the Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration
of
Certificates and of transfers and exchanges of Certificates as herein
provided.
(b) No
transfer of any Class CE-1 Certificate, Class CE-2 Certificate, Class P
Certificate or Residual Certificate shall be made unless that transfer is
made
pursuant to an effective registration statement under the Securities Act
of
1933, as amended (the “Securities Act”), and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In
the
event that such a transfer of a Class CE-1 Certificate, Class CE-2 Certificate,
Class P Certificate or Residual Certificate is to be made without registration
or qualification (other than in connection with the initial transfer of any
such
Certificate by the Depositor), the Securities Administrator shall require
receipt of: (i) if such transfer is purportedly being made in reliance upon
Rule
144A under the Securities Act, written certifications from the Certificateholder
desiring to effect the transfer and from such Certificateholder’s prospective
transferee, substantially in the form attached hereto as Exhibit B-1; (ii)
if
such transfer is purportedly being made in reliance upon Rule 501(a) under
the
Securities Act, written certifications from the Certificateholder desiring
to
effect the transfer and from such Certificateholder’s prospective transferee,
substantially in the form attached hereto as Exhibit B-2; (iii) with respect
to
any Class CE-1, Class CE-2 or Class P Certificate, if such transfer is
purportedly being made in reliance or Regulation S, a written certification
from
the prospective transferee, substantially in the form of Exhibit B-1 and
(iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicers), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer
and/or
such Certificateholder’s prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the Securities Act or any other securities laws or to take any action not
otherwise required under this Agreement to permit the transfer of such
Certificates without registration or qualification. Any Certificateholder
desiring to effect the transfer of any such Certificate shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Master Servicer, the
Securities Administrator and the Servicers against any liability that may
result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
A
holder
of a beneficial interest in a Regulation S Temporary Global Certificate must
provide Euroclear or Clearstream, as the case may be, with a certificate
in the
form of Annex A to Exhibit B-1 hereto certifying that the beneficial owner
of
the interest in such Global Certificate is not a U.S. Person (as defined
in
Regulation S), and Euroclear or Clearstream, as the case may be, must provide
to
the Trustee and Securities Administrator a certificate in the form of Exhibit
B-1 hereto prior to (i) the payment of interest or principal with respect
to
such holder’s beneficial interest in the Regulation S Temporary Global
Certificate and (ii) any exchange of such beneficial interest for a beneficial
interest in a Regulation S Permanent Global Certificate.
(c) No
transfer of a Class CE-1 Certificate, Class CE-2 Certificate, Class P
Certificate or Residual Certificate or any interest therein shall be made
to any
Plan subject to ERISA or Section 4975 of the Code, any Person acting,
directly or indirectly, on behalf of any such Plan or any Person 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 (“Plan Assets”) unless
the Securities Administrator is provided with an Opinion of Counsel on which
the
Depositor, the Master Servicer, the Securities Administrator, the Trustee
and
the Servicers may rely, which establishes to the satisfaction of the Securities
Administrator that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor,
the Servicers, the Trustee, the Master Servicer, the Securities Administrator
or
the Trust Fund to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, any Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Trust Fund. An Opinion of Counsel will not be required
in
connection with the initial transfer of any such Certificate by the Depositor
to
an affiliate of the Depositor (in which case, the Depositor or any affiliate
thereof shall have deemed to have represented that such affiliate is not
a Plan
or a Person investing Plan Assets) and the Securities Administrator shall
be
entitled to conclusively rely upon a representation (which, upon the request
of
the Securities Administrator, shall be a written representation) from the
Depositor of the status of such transferee as an affiliate of the
Depositor.
Each
holder of a Mezzanine Certificate or any interest therein shall be deemed
to
have represented, by virtue of its acquisition or holding of that Certificate
or
interest therein, that either (i) it is not a plan investor or (ii)(1) it
is an
insurance company, (2) the source of the funds used to acquire or hold the
Certificate or interest therein is an “insurance company general account,” as
such term is defined in PTCE 95-60, and (3) the conditions in Sections I
and III
of PTCE 95-60 have been satisfied.
If
any
Certificate or any interest therein is acquired or held in violation of the
conditions described in this Section 6.02(c), the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate,
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any Certificate
or
interest therein was effected in violation of the conditions described in
this
Section 6.02(c) shall indemnify and hold harmless the Depositor, the
Trustee, the Servicers, the Master Servicer, the Securities Administrator
and
the Trust Fund from and against any and all liabilities, claims, costs or
expenses incurred by those parties as a result of that acquisition or
holding.
(d) (i)
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
authorized the Securities Administrator or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute
all
instruments of Transfer and to do all other things necessary in connection
with
any such sale. The rights of each Person acquiring any Ownership Interest
in a
Residual Certificate are expressly subject to the following
provisions:
(A) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status as a Permitted
Transferee.
(B) In
connection with any proposed Transfer of any Ownership Interest in a Residual
Certificate, the Securities Administrator shall require delivery to it, and
shall not register the Transfer of any Residual Certificate until its receipt
of, an affidavit and agreement (a “Transfer Affidavit and Agreement,” in the
form attached hereto as Exhibit B-3) from the proposed Transferee, in form
and
substance satisfactory to the Securities Administrator, representing and
warranting, among other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the Residual Certificate
that
is the subject of the proposed Transfer as a nominee, trustee or agent for
any
Person that is not a Permitted Transferee, that for so long as it retains
its
Ownership Interest in a Residual Certificate, it will endeavor to remain
a
Permitted Transferee, and that it has reviewed the provisions of this
Section 6.02(d) and agrees to be bound by them.
(C) Notwithstanding
the delivery of a Transfer Affidavit and Agreement by a proposed Transferee
under clause (B) above, if an authorized officer of the Securities Administrator
who is assigned to this transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest in
a
Residual Certificate and (Y) not to transfer its Ownership Interest unless
it
provides a Transferor Affidavit (in the form attached hereto as Exhibit B-2)
to
the Securities Administrator stating that, among other things, it has no
actual
knowledge that such other Person is not a Permitted Transferee.
(E) Each
Person holding or acquiring an Ownership Interest in a Residual Certificate,
by
purchasing an Ownership Interest in such Certificate, agrees to give the
Securities Administrator written notice that it is a “pass-through interest
holder” within the meaning of temporary Treasury regulation
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Residual Certificate, if it is, or is holding an Ownership
Interest in a Residual Certificate on behalf of, a “pass-through interest
holder.”
(ii) The
Securities Administrator will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement and all
of
such other documents as shall have been reasonably required by the Securities
Administrator as a condition to such registration. In addition, no Transfer
of a
Residual Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such Certificate
to
the effect that such Transferee is a Permitted Transferee.
(iii) (A)
If
any purported Transferee shall become a Holder of a Residual Certificate
in
violation of the provisions of this Section 6.02(d), then the last
preceding Permitted Transferee shall be restored, to the extent permitted
by
law, to all rights as holder thereof retroactive to the date of registration
of
such Transfer of such Residual Certificate. The Securities Administrator
shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section 6.02(d)
or for making any payments due on such Certificate to the holder thereof
or for
taking any other action with respect to such holder under the provisions
of this
Agreement.
(B) If
any
purported Transferee shall become a holder of a Residual Certificate in
violation of the restrictions in this Section 6.02(d) and to the extent
that the retroactive restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be invalid, illegal
or
unenforceable, then the Securities Administrator shall have the right, without
notice to the holder or any prior holder of such Residual Certificate, to
sell
such Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose. Such
purported Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Securities Administrator.
Such purchaser may be the Securities Administrator itself or any Affiliate
of
the Securities Administrator. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Securities Administrator or
its
Affiliates), expenses and taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and conditions of any
sale
under this clause (iii)(B) shall be determined in the sole discretion of
the
Securities Administrator, and the Securities Administrator shall not be liable
to any Person having an Ownership Interest in a Residual Certificate as a
result
of its exercise of such discretion.
(iv) The
Securities Administrator shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions all information necessary
to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record holders
at any time any Person which is a Disqualified Organization. Reasonable
compensation for providing such information may be charged or collected by
the
Securities Administrator.
(v) The
provisions of this Section 6.02(d) set forth prior to this subsection (v)
may be modified, added to or eliminated, provided that there shall have been
delivered to the Securities Administrator at the expense of the party seeking
to
modify, add to or eliminate any such provision the following:
(A) written
notification from each Rating Agency to the effect that the modification,
addition to or elimination of such provisions will not cause such Rating
Agency
to downgrade its then-current ratings of any Class of Certificates;
and
(B) an
Opinion of Counsel, in form and substance satisfactory to the Securities
Administrator, to the effect that such modification of, addition to or
elimination of such provisions will not cause any Trust REMIC to cease to
qualify as a REMIC and will not cause any Trust REMIC, as the case may be,
to be
subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person that is not a Permitted Transferee or a Person other
than the prospective transferee to be subject to a REMIC-tax caused by the
Transfer of a Residual Certificate to a Person that is not a Permitted
Transferee.
(e) Subject
to the preceding subsections, upon surrender for registration of transfer
of any
Certificate at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11 of this Agreement, the Securities
Administrator shall execute, authenticate and deliver, in the name of the
designated Transferee or Transferees, one or more new Certificates of the
same
Class of a like aggregate Percentage Interest.
(f) At
the
option of the Holder thereof, any Certificate may be exchanged for other
Certificates of the same Class with authorized denominations and a like
aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Securities Administrator maintained
for
such purpose pursuant to Section 9.11 of this Agreement. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator
shall
execute, authenticate and deliver, the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument
of
transfer in the form satisfactory to the Securities Administrator duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
with respect to each Class R Certificate, the holder thereof may exchange,
in
the manner described above, such Class R Certificate for two separate
certificates, each representing such holder's respective Percentage Interest
in
the Class R-I Interest and the Class R-II Interest, respectively, in each
case
that was evidenced by the Class R Certificate being exchanged.
(g) No
service charge to the Certificateholders shall be made for any transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(h) All
Certificates surrendered for transfer and exchange shall be canceled and
destroyed by the Securities Administrator in accordance with its customary
procedures.
SECTION
6.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(i)
any mutilated Certificate is surrendered to the Securities Administrator,
or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof,
and
(ii) there is delivered to the Securities Administrator such security or
indemnity as may be required by it to save it harmless, then, in the absence
of
actual knowledge by the Securities Administrator that such Certificate has
been
acquired by a protected purchaser, the Securities Administrator, shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class
and
of like denomination and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Securities Administrator may require
the
payment of a sum sufficient to cover any tax or other governmental charge
that
may be imposed in relation thereto and any other expenses (including the
fees
and expenses of the Securities Administrator) connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the applicable REMIC created
hereunder, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION
6.04 Persons
Deemed Owners.
The
Depositor, the Servicers, the Trustee, the Master Servicer, the Securities
Administrator and any agent of any of them may treat the Person in whose
name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 5.01 and for all other
purposes whatsoever, and none of the Depositor, the Servicers, the Trustee,
the
Master Servicer, the Securities Administrator or any agent of any of them
shall
be affected by notice to the contrary.
SECTION
6.05 Certain
Available Information.
On
or
prior to the date of the first sale of any Class CE-1 Certificate, Class
CE-2
Certificate, Class P Certificate or Residual Certificate to an Independent
third
party, the Depositor shall provide to the Securities Administrator ten copies
of
any private placement memorandum or other disclosure document used by the
Depositor in connection with the offer and sale of such Certificate. In
addition, if any such private placement memorandum or disclosure document
is
revised, amended or supplemented at any time following the delivery thereof
to
the Securities Administrator, the Depositor promptly shall inform the Securities
Administrator of such event and shall deliver to the Securities Administrator
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Securities Administrator shall maintain
at
its office as set forth in Section 12.05 hereof and shall make available
free of charge during normal business hours for review by any Holder of a
Certificate or any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Class CE-1
Certificate, Class CE-2 Certificate, Class P Certificate or Residual
Certificate, the related private placement memorandum or other disclosure
document relating to such Class of Certificates, in the form most recently
provided to the Securities Administrator; and (ii) in all cases, (A) this
Agreement and any amendments hereof entered into pursuant to Section 12.01
of this Agreement, (B) all monthly statements required to be delivered to
Certificateholders of the relevant Class pursuant to Section 5.02 of this
Agreement since the Closing Date, and all other notices, reports, statements
and
written communications delivered to the Certificateholders of the relevant
Class
pursuant to this Agreement since the Closing Date and (C) any copies of all
Officers’ Certificates of a Servicer since the Closing Date delivered to the
Master Servicer to evidence such Person’s determination that any P&I Advance
or Servicing Advance was, or if made, would be a Nonrecoverable P&I Advance
or Nonrecoverable Servicing Advance. Copies and mailing of any and all of
the
foregoing items will be available from the Securities Administrator upon
request
at the expense of the Person requesting the same.
ARTICLE
VII
THE
DEPOSITOR, OCWEN, XXXXX FARGO AND THE MASTER SERVICER
SECTION
7.01 Liability
of the Depositor, Ocwen, Xxxxx Fargo and the Master Servicer.
The
Depositor, Ocwen, Xxxxx Fargo and the Master Servicer each shall be liable
in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor,
Servicer and Master Servicer and undertaken hereunder by the Depositor, the
related Servicer and the Master Servicer herein.
SECTION
7.02 Merger
or Consolidation of the Depositor, Ocwen, Xxxxx Fargo or the Master
Servicer.
Subject
to the following paragraph, the Depositor will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation. Subject to the following paragraph, Ocwen
will keep in full effect its existence, rights and franchises as a limited
liability company and Xxxxx Fargo will keep in full effect its existence,
rights
and franchises as a national banking association. Subject to the following
paragraph, the Master Servicer will keep in full effect its existence, rights
and franchises as a national banking association. The Depositor, Ocwen, Xxxxx
Fargo and the Master Servicer each will obtain and preserve its qualification
to
do business as a foreign entity in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Agreement, the Certificates or any of the Mortgage Loans and to perform its
respective duties under this Agreement.
The
Depositor, Ocwen, Xxxxx Fargo or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all
of
its assets to any Person, in which case any Person resulting from any merger
or
consolidation to which the Depositor, Ocwen, Xxxxx Fargo or the Master Servicer
shall be a party, or any Person succeeding to the business of the Depositor,
such Servicer or the Master Servicer, shall be the successor of the Depositor,
such Servicer or the Master Servicer, as the case may be, hereunder, without
the
execution or filing of any paper or any further act on the part of any of
the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that any successor to Ocwen, Xxxxx Fargo or the Master Servicer
shall
meet the eligibility requirements set forth in clauses (i) and (iii) of the
last
paragraph of Section 8.02(a) or Section 7.06 of this
Agreement.
SECTION
7.03 Limitation
on Liability of the Depositor, Ocwen, Xxxxx Fargo, the Master Servicer and
Others.
None
of
the Depositor, Ocwen, Xxxxx Fargo, the Securities Administrator, the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, Ocwen, Xxxxx Fargo or the Master Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Depositor Ocwen, Xxxxx Fargo, the Securities
Administrator, the Master Servicer or any such person against any breach
of
warranties, representations or covenants made herein or against any specific
liability imposed on any such Person pursuant hereto or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Depositor, Ocwen, Xxxxx Fargo, the
Securities Administrator, the Master Servicer and any director, officer,
employee or agent of the Depositor, Ocwen, Xxxxx Fargo, the Securities
Administrator and the Master Servicer may rely in good faith on any document
of
any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, Ocwen, Xxxxx Fargo,
the
Securities Administrator, the Master Servicer and any director, officer,
employee or agent of the Depositor, Ocwen, Xxxxx Fargo, the Securities
Administrator or the Master Servicer shall be indemnified and held harmless
by
the Trust Fund against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement, the Certificates or any
Loan
Performance Monitoring Agreement or any loss, liability or expense incurred
other than by reason of willful misfeasance, bad faith or gross negligence
in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, Ocwen, Xxxxx Fargo,
the
Securities Administrator or the Master Servicer shall be under any obligation
to
appear in, prosecute or defend any legal action unless such action is related
to
its respective duties under this Agreement and, in its opinion, does not
involve
it in any expense or liability; provided, however, that each of the Depositor,
Ocwen, Xxxxx Fargo, the Securities Administrator and the Master Servicer
may in
its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In
such
event, the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and
the
Depositor, Ocwen, Xxxxx Fargo, the Securities Administrator and the Master
Servicer shall be entitled to be reimbursed therefor from the related Collection
Account or the Distribution Account as and to the extent provided in Article
III
and Article IV of this Agreement, any such right of reimbursement being prior
to
the rights of the Certificateholders to receive any amount in the Collection
Accounts and the Distribution Account.
Notwithstanding
anything to the contrary contained herein, Ocwen and Xxxxx Fargo shall not
be
liable for any actions or inactions prior to the Cut-off Date of any prior
servicer of the Mortgage Loans and the Master Servicer shall not be liable
for
any action or inaction of the Servicers, except to the extent expressly provided
herein, or the Loan Performance Monitoring Agreements.
SECTION
7.04 Limitation
on Resignation of Ocwen and Xxxxx Fargo.
(a) Except
as
expressly provided herein, Ocwen and Xxxxx Fargo shall not assign all or
substantially all of its rights under this Agreement or the servicing hereunder
or delegate all or substantially all of its duties hereunder nor sell or
otherwise dispose of all or substantially all of its property or assets without,
in each case, the prior written consent of the Master Servicer, which consent
shall not be unreasonably withheld; provided, that in each case, there must
be
delivered to the Trustee and the Master Servicer a letter from each Rating
Agency to the effect that such transfer of servicing or sale or disposition
of
assets will not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates. Notwithstanding the foregoing,
Ocwen and Xxxxx Fargo, without the consent of the Trustee or the Master
Servicer, may retain third-party contractors to perform certain servicing
and
loan administration functions, including without limitation hazard insurance
administration, tax payment and administration, flood certification and
administration, collection services and similar functions, provided, however,
that the retention of such contractors by the related Servicer shall not
limit
the obligation of such Servicer to service the related Mortgage Loans pursuant
to the terms and conditions of this Agreement. Neither Ocwen nor Xxxxx Fargo
shall resign from the obligations and duties hereby imposed on it except
by
consent of the Master Servicer or upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of Ocwen or Xxxxx Fargo
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the related Servicer and delivered to the Trustee and the Rating
Agencies. No resignation of Ocwen or Xxxxx Fargo shall become effective until
the Master Servicer or a successor Servicer shall have assumed the related
Servicer’s responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under
this
Agreement.
(b) Except
as
expressly provided herein, neither Ocwen nor Xxxxx Fargo shall assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed
by
the related Servicer hereunder. The foregoing prohibition on assignment shall
not prohibit the related Servicer from designating a Sub-Servicer as payee
of
any indemnification amount payable to the related Servicer hereunder; provided,
however, that as provided in Section 3.02 of this Agreement, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto
shall not be required to recognize any Sub-Servicer as an indemnitee under
this
Agreement.
SECTION
7.05 Limitation
on Resignation of the Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall
be
evidenced by an Opinion of Counsel to such effect obtained at the expense
of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee
or a
successor Master Servicer meeting the criteria specified in Section 7.06 of
this Agreement shall have assumed the Master Servicer’s responsibilities,
duties, liabilities (other than those liabilities arising prior to the
appointment of such successor) and obligations under this
Agreement.
SECTION
7.06 Assignment
of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement; provided,
however, that: (i) the purchaser or transferee accept in writing such assignment
and delegation and assume the obligations of the Master Servicer hereunder
(a)
shall have a net worth of not less than $25,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (b) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (c) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as master servicer
under this Agreement, any custodial agreement from and after the effective
date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each
Rating
Agency’s rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter
to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver
to the
Trustee an Officer’s Certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement
have
been completed and such action is permitted by and complies with the terms
of
this Agreement. No such assignment or delegation shall affect any liability
of
the Master Servicer arising out of acts or omissions prior to the effective
date
thereof.
Each
of
the Master Servicer and any Servicer that is a party hereto shall afford
(and
any Sub-Servicing Agreement or sub-contracting agreement shall provide that
each
Sub-Servicer or Subcontractor, as applicable, shall afford) the Depositor
and
the Trustee, upon reasonable notice, during normal business hours, access
to all
records maintained by the Master Servicer or the related Servicer (and any
such
Sub-Servicer or Subcontractor, as applicable) in respect of the related
Servicer’s rights and obligations hereunder and access to officers of the Master
Servicer or such Servicer (and those of any such Sub-Servicer or Subcontractor,
as applicable) responsible for such obligations, and the Master Servicer
shall
have access to all such records maintained by such Servicer and any
Sub-Servicers or Subcontractors. Upon request, each of the Master Servicer
and
the related Servicer shall furnish to the Depositor and the Trustee its (and
any
such Sub-Servicer’s or Subcontractor’s) most recent financial statements and
such other information relating to the Master Servicer’s or such Servicer’s
capacity to perform its obligations under this Agreement as it possesses
(and
that any such Sub-Servicer or Subcontractor possesses). To the extent that
the
Master Servicer, Ocwen or Xxxxx Fargo informs the Depositor and the Trustee
that
such information is not otherwise available to the public, the Depositor
and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer’s or the related Servicer’s written
consent, except as required pursuant to this Agreement or to the extent that
it
is appropriate to do so (i) to its legal counsel, auditors, taxing authorities
or other governmental agencies and the Certificateholders, (ii) pursuant
to any
law, rule, regulation, order, judgment, writ, injunction or decree of any
court
or governmental authority having jurisdiction over the Depositor and the
Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known,
or
information obtained by the Trustee from sources other than the Depositor,
the
related Servicer or the Master Servicer, (iv) disclosure as required pursuant
to
this Agreement or (v) disclosure of any and all information (A) in any
preliminary or final offering circular, registration statement or contract
or
other document pertaining to the transactions contemplated by the Agreement
approved in advance by the Depositor, the related Servicer or the Master
Servicer or (B) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Trustee having a need to know the same, provided
that the Trustee advises such recipient of the confidential nature of the
information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing
in this
Section 7.07 shall limit the obligation of Ocwen or Xxxxx Fargo to comply
with any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of Ocwen or Xxxxx Fargo to provide access as provided
in this Section 7.07 as a result of such obligation shall not constitute a
breach of this Section. Nothing in this Section 7.07 shall require Ocwen or
Xxxxx Fargo to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. Ocwen and Xxxxx
Fargo
shall not be required to make copies of or ship documents to any party unless
provisions have been made for the reimbursement of the costs thereof. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer, Ocwen and Xxxxx Fargo under this Agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer, Ocwen or Xxxxx Fargo under this Agreement or exercise
the rights of the Master Servicer, Ocwen or Xxxxx Fargo under this Agreement;
provided that none of the Master Servicer, Ocwen or Xxxxx Fargo shall be
relieved of any of its obligations under this Agreement by virtue of such
performance by the Depositor or its designee. The Depositor shall not have
any
responsibility or liability for any action or failure to act by the Master
Servicer, Ocwen or Xxxxx Fargo and is not obligated to supervise the performance
of the Master Servicer, Ocwen or Xxxxx Fargo under this Agreement or
otherwise.
SECTION
7.08 Duties
of the Loan Performance Advisor.
For
and
on behalf of the Depositor pursuant to the Loan Performance Advisor Agreement,
the Loan Performance Advisor will among other duties set forth in the Loan
Performance Advisor Agreement, provide reports and recommendations concerning
certain delinquent and defaulted Mortgage Loans, and as to the collection
of any
Prepayment Charges with respect to the Mortgage Loans. Such reports and
recommendations will be based upon information provided to the Loan Performance
Advisor pursuant to the Loan Performance Monitoring Agreements, and the Loan
Performance Advisor shall look solely to the related Servicer for all
information and data (including loss and delinquency information and data)
relating to the servicing of the related Mortgage Loans.
Neither
the Loan Performance Advisor, nor any of its directors, officers, employees,
or
agents shall be under any liability to the Trustee, the Certificateholders,
or
the Depositor for any action taken or for refraining from the taking of any
action made in good faith pursuant to this Agreement, in reliance upon
information provided by a Servicer under the related Loan Performance Monitoring
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Loan Performance Advisor or any such person against
liability that would otherwise be imposed by reason of willful malfeasance
or
bad faith in its performance of its duties. The Loan Performance Advisor
and any
director, officer, employee, or agent of the Loan Performance Advisor 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 or under
the
related Loan Performance Monitoring Agreement, and may rely in good faith
upon
the accuracy of information furnished by a Servicer pursuant to the related
Loan
Performance Monitoring Agreement in the performance of its duties thereunder
and
hereunder. The Loan Performance Advisor shall be held harmless and indemnified
by the Trust Fund for any claims, costs or liability (each a “Claim”) arising
out of or related in any way to the performance of its duties hereunder absent
bad faith, willful misfeasance or gross negligence on the part of the Loan
Performance Advisor with respect to the applicable Claim and the legal expenses
for any applicable Claim shall be expenses, costs and liabilities of the
Trust
Fund.
SECTION
7.10 Removal
of the Loan Performance Advisor.
So
long
as Deutsche Bank Securities Inc. is the Holder of the Class CE-1 Certificate
it
may, at its option, terminate the Loan Performance Advisor if the Loan
Performance Advisor breaches its obligations under the Loan Performance
Monitoring Agreements in any material respect and has not cured such breach
as
promptly as practicable but in no event later than 30 days after receiving
written notice of such breach. In the event that a party other than Deutsche
Bank Securities Inc. is the Holder of the Class CE-1 Certificate, the Holder
of
the Class CE-1 Certificate shall not have such termination right. In addition,
the Loan Performance Advisor may be removed as Loan Performance Advisor under
both Loan Performance Monitoring Agreements by Certificateholders holding
not
less than 66 2/3% of the Voting Rights in the Trust Fund, in the exercise
of its
or their sole discretion. Upon the termination of the Loan Performance Advisor
by the Certificateholders or Deutsche Bank Securities Inc. as provided above,
the Certificateholders or Deutsche Bank Securities Inc., as applicable, shall
provide written notice of the Loan Performance Advisor’s removal to the Trustee
and the Servicers. Upon receipt of such notice, the Trustee shall provide
written notice to the Loan Performance Advisor of its removal, which shall
be
effective upon receipt of such notice by the Loan Performance Advisor with
a
copy to the Securities Administrator and the Master Servicer.
Upon
the
termination of the Loan Performance Advisor by the Holder of the Class CE-1
Certificate as provided above, the Holder of the Class CE-1 Certificate may,
at
its option, appoint a successor Loan Performance Advisor. If the Holder of
the
Class CE-1 Certificate fails to appoint a successor Loan Performance Advisor,
the Depositor may appoint a successor Loan Performance Advisor. Upon the
termination of the Loan Performance Advisor by the Certificateholders as
provided above, the Depositor shall appoint a successor Loan Performance
Advisor. Notwithstanding the foregoing, the termination of the Loan Performance
Advisor pursuant to this Section shall not become effective until the
appointment of a successor Loan Performance Advisor.
SECTION
7.11 Transfer
of Servicing by Sponsor.
The
Sponsor may, at its option, transfer the servicing responsibilities of each
Servicer with respect to the related Mortgage Loans at any time without cause.
No such transfer shall become effective unless and until a successor to the
related Servicer shall have been appointed to service and administer the
related
Mortgage Loans pursuant to the terms and conditions of this Agreement. No
appointment shall be effective unless (i) such successor meets the eligibility
criteria set forth in Section 7.04 and (ii) all amounts reimbursable to such
Servicer under this Agreement shall have been paid by the successor appointed
pursuant to the terms of this Section 7.11 or by the Sponsor including without
limitation, all xxxxxxxxxxxx X&X Advances and Servicing Advances made by
such Servicer accrued and unpaid Servicing Fees and all out-of-pocket expenses
of such Servicer incurred in connection with the transfer of servicing to
such
successor. The Sponsor shall provide a copy of the written confirmation of
the
Rating Agencies to the Trustee, the Securities Administrator and the Master
Servicer. In connection with such appointment and assumption described herein,
the Sponsor may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted for the related Servicer hereunder. In addition, with respect to
any
successor servicer to Xxxxx Fargo hereunder, such compensation shall not
be in
excess of the Servicing Fee Rate. The Sponsor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such
succession.
ARTICLE VIII
SECTION
8.01 Servicer
Events of Default.
(a) “Servicer
Event of Default,” wherever used herein, means with respect to Ocwen and Xxxxx
Fargo any one of the following events:
(i) any
failure by the related Servicer to remit to the Securities Administrator
for
distribution to the Certificateholders any payment (other than a P&I Advance
required to be made from its own funds on any Servicer Remittance Date pursuant
to Section 5.03 of this Agreement) required to be made by the related
Servicer under the terms of the Certificates and this Agreement which continues
unremedied for a period of one (1) Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have
been given to such Servicer by the Depositor or the Trustee (in which case
notice shall be provided by telecopy), or to such Servicer, the Depositor
and
the Trustee by the Holders of Certificates entitled to at least 25% of the
Voting Rights; or
(ii) any
failure on the part of the related Servicer duly to observe or perform in
any
material respect any other of the covenants or agreements on the part of
such
Servicer contained in this Agreement, or the material breach by such Servicer
of
any representation and warranty contained in Section 2.05 of this
Agreement, which continues unremedied for a period of thirty (30) days after
the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to such Servicer by the Depositor or the Trustee or
to
such Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least 25% of the Voting Rights; provided, however, that in
the
case of a failure that cannot be cured within thirty (30) days, the cure
period
may be extended for an additional thirty (30) days if the related Servicer
can
demonstrate to the reasonable satisfaction of the Trustee that such Servicer
is
diligently pursuing remedial action; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator
or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the related Servicer
and such decree or order shall have remained in force undischarged or unstayed
for a period of ninety (90) days; or
(iv) the
related Servicer shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings of or relating to it or of or relating
to all
or substantially all of its property; or
(v) the
related Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) failure
by the related Servicer to duly perform, within the required time period,
its
obligations under Sections 3.17, 3.18 or 3.19; or
(vii) any
failure of the related Servicer to make any P&I Advance on any Servicer
Remittance Date required to be made from its own funds pursuant to
Section 5.03 which continues unremedied until 3:00 p.m. New York time on
the Business Day immediately following the Servicer Remittance Date;
or
(viii) failure
of the related Servicer to maintain at least an “average” rating from the Rating
Agencies.
A
“Servicer Event of Default” whenever used herein means, with respect to SPS, an
event of default by SPS under the Servicing Agreement.
If
a
Servicer Event of Default described in clauses (a)(i) through (vi) or (viii)
of
this Section or a corresponding Servicer Event of Default under the
Servicing Agreement shall occur, then, and in each and every such case, so
long
as such Servicer Event of Default shall not have been remedied, the Depositor
or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the defaulting Servicer (and to the Depositor if given by the
Trustee
or to the Trustee if given by the Depositor) with a copy to the Master Servicer
and each Rating Agency, terminate all of the rights and obligations of the
defaulting Servicer in its capacity as a Servicer under this Agreement, to
the
extent permitted by law, and in and to the related Mortgage Loans and the
proceeds thereof. If a Servicer Event of Default described in clause (vii)
hereof or the corresponding Servicer Event of Default under the Servicing
Agreement shall occur, the Trustee shall, by notice in writing to the defaulting
Servicer, the Depositor and the Master Servicer, terminate all of the rights
and
obligations of the defaulting Servicer in its capacity as a Servicer under
this
Agreement and in and to the related Mortgage Loans and the proceeds thereof.
Subject to Section 8.02 of this Agreement, on or after the receipt by the
defaulting Servicer of such written notice, all authority and power of the
defaulting Servicer under this Agreement or the Servicing Agreement, as
applicable, whether with respect to the Certificates (other than as a Holder
of
any Certificate) or the related Mortgage Loans or otherwise, shall pass to
and
be vested in the Master Servicer or, with respect to a default by Xxxxx Fargo,
to a successor Servicer appointed by the Trustee pursuant to and under this
Section, and, without limitation, the Master Servicer is hereby authorized
and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the defaulting Servicer, any and all documents and
other instruments and to do or accomplish all other acts or things necessary
or
appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement or assignment of the related Mortgage
Loans and related documents, or otherwise. The defaulting Servicer agrees
promptly (and in any event no later than ten Business Days subsequent to
such
notice) to provide the Master Servicer or other successor Servicer with all
documents and records requested by it to enable it to assume such Servicer’s
functions under this Agreement, and to cooperate with the Master Servicer
or,
with respect to Xxxxx Fargo, the Trustee in effecting the termination of
the
defaulting Servicer’s responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Master Servicer or other successor Servicer for administration by it of all
cash
amounts which at the time shall be or should have been credited by the
defaulting Servicer to the related Collection Account held by or on behalf
of
such Servicer or thereafter be received with respect to the related Mortgage
Loans or any related REO Property (provided, however, that the defaulting
Servicer shall continue to be entitled to receive all amounts accrued or
owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of P&I Advances, Servicing Advances, accrued and unpaid Servicing
Fees or otherwise, and shall continue to be entitled to the benefits of
Section 7.03 of this Agreement, notwithstanding any such termination, with
respect to events occurring prior to such termination). Reimbursement of
xxxxxxxxxxxx X&X Advances, Servicing Advances and accrued and unpaid
Servicing Fees shall be made on a first in, first out (“FIFO”) basis no later
than the Servicer Remittance Date. For purposes of this Section 8.01(a),
the Trustee shall not be deemed to have knowledge of a Servicer Event of
Default
unless a Responsible Officer of the Trustee assigned to and working in the
Trustee’s Corporate Trust Office has actual knowledge thereof or unless written
notice of any event which is in fact such a Servicer Event of Default is
received by the Trustee at its Corporate Trust Office and such notice references
the Certificates, the Trust or this Agreement. The Trustee shall promptly
notify
the Master Servicer and the Rating Agencies of the occurrence of a Servicer
Event of Default of which it has knowledge as provided above.
The
Master Servicer, any other successor servicer and the Trustee shall be entitled
to be reimbursed by the defaulting Servicer (or from amounts on deposit in
the
Distribution Account if the defaulting Servicer is unable to fulfill its
obligations hereunder) for all reasonable out-of-pocket or third party costs
associated with the transfer of servicing from the predecessor Servicer (or
if
the predecessor Servicer is the Master Servicer, from the Servicer immediately
preceding the Master Servicer), including without limitation, any reasonable
out-of-pocket or third party costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation
of
such servicing data as may be required by the Master Servicer to correct
any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the Mortgage Loans properly and effectively, upon
presentation of reasonable documentation of such costs and
expenses.
(b) “Master
Servicer Event of Default,” wherever used herein, means any one of the following
events:
(i) any
failure on the part of the Master Servicer duly to observe or perform in
any
material respect any other of the covenants or agreements on the part of
the
Master Servicer contained in this Agreement, or the breach by the Master
Servicer of any representation and warranty contained in Section 2.04,
which continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have
been given to the Master Servicer by the Depositor or the Trustee or to the
Master Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least 25% of the Voting Rights; or
(ii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator
or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force undischarged or unstayed
for a period of ninety (90) days; or
(iii) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings of or relating to it or of or relating
to all
or substantially all of its property; or
(iv) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its
creditors, or voluntarily suspend payment of its obligations; or
(v) failure
by the Master Servicer to duly perform, within the required time period,
its
obligations under Sections 4.15, 4.16, 4.17 and 4.18.
If
a
Master Servicer Event of Default shall occur, then, and in each and every
such
case, so long as such Master Servicer Event of Default shall not have been
remedied, the Depositor or the Trustee may, and at the written direction
of the
Holders of Certificates entitled to at least 51% of Voting Rights, the Trustee
shall, by notice in writing to the Master Servicer (and to the Depositor
if
given by the Trustee or to the Trustee if given by the Depositor) with a
copy to
each Rating Agency, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement, to the
extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof.
On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, whether
with
respect to the Certificates (other than as a Holder of any Certificate) or
the
Mortgage Loans or otherwise including, without limitation, the compensation
payable to the Master Servicer under this Agreement, shall pass to and be
vested
in the Trustee pursuant to and under this Section, and, without limitation,
the
Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise,
to
execute and deliver, on behalf of and at the expense of the Master Servicer,
any
and all documents and other instruments and to do or accomplish all other
acts
or things necessary or appropriate to effect the purposes of such notice
of
termination, whether to complete the transfer and endorsement or assignment
of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees promptly (and in any event no later than ten Business Days subsequent
to
such notice) to provide the Trustee with all documents and records requested
by
it to enable it to assume the Master Servicer’s functions under this Agreement,
and to cooperate with the Trustee in effecting the termination of the Master
Servicer’s responsibilities and rights under this Agreement (provided, however,
that the Master Servicer shall continue to be entitled to receive all amounts
accrued or owing to it under this Agreement on or prior to the date of such
termination and shall continue to be entitled to the benefits of
Section 7.03 of this Agreement, notwithstanding any such termination, with
respect to events occurring prior to such termination). For purposes of this
Section 8.01(b), the Trustee shall not be deemed to have knowledge of a
Master Servicer Event of Default unless a Responsible Officer of the Trustee
assigned to and working in the Trustee’s Corporate Trust Office has actual
knowledge thereof or unless written notice of any event which is in fact
such a
Master Servicer Event of Default is received by the Trustee and such notice
references the Certificates, the Trust or this Agreement. The Trustee shall
promptly notify the Rating Agencies of the occurrence of a Master Servicer
Event
of Default of which it has knowledge as provided above.
To
the
extent that the costs and expenses of the Trustee related to the termination
of
the Master Servicer, appointment of a successor Master Servicer or the transfer
and assumption of the master servicing by the Trustee (including, without
limitation, (i) all legal costs and expenses and all due diligence costs
and
expenses associated with an evaluation of the potential termination of the
Master Servicer as a result of a Master Servicer Event of Default and (ii)
all
costs and expenses associated with the complete transfer of the master
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor Master Servicer to correct any errors or insufficiencies
in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully
and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Neither
the Trustee nor any other successor master servicer shall be deemed to be
in
default hereunder by reason of any failure to make, or any delay in making,
any
distribution hereunder or any portion thereof or any failure to perform,
or any
delay in performing, any duties or responsibilities hereunder, in either
case
caused by the failure of the Master Servicer to deliver or provide, or any
delay
in delivering or providing, any cash, information, documents or records to
it.
Notwithstanding
the foregoing, the Trustee may, if it shall be unwilling to continue to act,
or
shall, if it is unable to so act, petition a court of competent jurisdiction
to
appoint, or appoint on its own behalf, any established housing and home finance
institution servicer, master servicer, servicing or mortgage servicing
institution having a net worth of not less than $25,000,000 and meeting such
other standards for a successor master servicer as are set forth in this
Agreement, as the successor to such Master Servicer in the assumption of
all of
the responsibilities, duties or liabilities of a master servicer.
SECTION
8.02 Master
Servicer to Act; Appointment of Successor.
(a) On
and
after the time a Servicer receives a notice of termination, the Master Servicer
or other successor Servicer as appointed by the Trustee shall be the successor
in all respects to such Servicer in its capacity as a Servicer under this
Agreement or the Servicing Agreement, as applicable, and the transactions
set
forth or provided for herein or therein, and all the responsibilities, duties
and liabilities relating thereto and arising thereafter shall be assumed
by the
Master Servicer or such successor Servicer (except for any representations
or
warranties of the related Servicer under this Agreement or the Servicing
Agreement, as applicable, the responsibilities, duties and liabilities contained
in Section 2.03 of this Agreement and the obligation to deposit amounts in
respect of losses pursuant to Section 3.10(b) of this Agreement) by the
terms and provisions hereof including, without limitation, the related
Servicer’s obligations to make P&I Advances pursuant to Section 5.03 of
this Agreement or pursuant to the Servicing Agreement; provided that the
Trustee
shall be obligated to make P&I Advances in connection with the Xxxxx Fargo
Mortgage Loans in the event Xxxxx Fargo is terminated as Servicer hereunder;
provided, further, that if the Master Servicer or other successor servicer,
is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Master Servicer or other successor
servicer shall not be obligated to make P&I Advances pursuant to
Section 5.03 of this Agreement or pursuant to the Servicing Agreement; and
provided further, that any failure to perform such duties or responsibilities
caused by the related Servicer’s failure to provide information required by
Section 8.01 of this Agreement or under the Servicing Agreement shall not
be considered a default by the Master Servicer as successor to such Servicer
hereunder; provided, however, that (1) it is understood and acknowledged
by the
parties hereto that there will be a period of transition (not to exceed 120
days) before the actual servicing functions can be fully transferred to the
Master Servicer or any successor Servicer appointed in accordance with the
following provisions and (2) any failure to perform such duties or
responsibilities caused by the related Servicer’s failure to provide information
required by Section 8.01 of this Agreement or under the Servicing Agreement
shall not be considered a default by the Master Servicer as successor to
such
Servicer. As compensation therefor, the Master Servicer or other successor
servicer, as applicable, shall be entitled to the Servicing Fee and all funds
relating to the Mortgage Loans to which the terminated Servicer would have
been
entitled if it had continued to act hereunder or under the Servicing Agreement.
Notwithstanding the above and subject to the immediately following paragraph,
the Master Servicer may, if it shall be unwilling to so act, or shall, if
it is
unable to so act promptly appoint or petition a court of competent jurisdiction
to appoint, a Person that satisfies the eligibility criteria set forth below
as
the successor to the terminated Servicer under this Agreement or under the
Servicing Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the related Servicer under this
Agreement or under the Servicing Agreement.
Notwithstanding
anything herein to the contrary, in no event shall the Trustee or the Master
Servicer be liable for any Servicing Fee or for any differential in the amount
of the Servicing Fee paid hereunder or under the Servicing Agreement and
the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement or the Servicing Agreement and the transactions set
forth
or provided for herein.
Any
successor Servicer appointed under this Agreement must (i) be an established
mortgage loan servicing institution that is a Xxxxxx Xxx and Xxxxxxx Mac
approved seller/servicer, (ii) be approved by each Rating Agency by a written
confirmation from each Rating Agency that the appointment of such successor
Servicer would not result in the reduction or withdrawal of the then current
ratings of any outstanding Class of Certificates, (iii) have a net worth
of not
less than $25,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
Servicer hereunder incurred prior to termination of the related Servicer
under
Section 8.01 herein) under this Agreement as if originally named as a party
to this Agreement.
(b) (1)
All
servicing transfer costs (including, without limitation, servicing transfer
costs of the type described in Section 8.02(a) of this Agreement and
incurred by the Trustee, the Master Servicer and any successor Servicer under
paragraph (b)(2) below) in connection with the termination of a Servicer
shall
be paid by the terminated Servicer upon presentation of reasonable documentation
of such costs, and if such predecessor or initial Servicer, as applicable,
defaults in its obligation to pay such costs, the successor Servicer, the
Master
Servicer and the Trustee shall be entitled to reimbursement therefor from
the
assets of the Trust Fund.
(2)
No
appointment of a successor to a Servicer under this Agreement shall be effective
until the assumption by the successor of all of such Servicer’s
responsibilities, duties and liabilities hereunder. In connection with such
appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on the
related Mortgage Loans as it and such successor shall agree; provided,
however,
that no
such compensation shall be in excess of that permitted the related Servicer
as
such hereunder or under the Servicing Agreement. The Depositor, the Trustee
and
such successor shall take such action, consistent with this Agreement, as
shall
be necessary to effectuate any such succession. Pending appointment of a
successor to a Servicer under this Agreement, the Master Servicer shall act
in
such capacity as hereinabove provided.
SECTION
8.03 Notification
to Certificateholders.
(a) Upon
any
termination of a Servicer or the Master Servicer pursuant to the Servicing
Agreement or Section 8.01(a) or Section 8.01(b) of this Agreement, as
applicable, or any appointment of a successor to a Servicer or the Master
Servicer pursuant to the Servicing Agreement or Section 8.02 of this
Agreement, as applicable, the Trustee shall give prompt written notice thereof
to the Certificateholders at the expense of the Trust Fund at their respective
addresses appearing in the Certificate Register.
(b) Not
later
than the later of sixty (60) days after the occurrence of any event, which
constitutes or which, with notice or lapse of time or both, would constitute
a
Servicer Event of Default or a Master Servicer Event of Default or five (5)
days
after a Responsible Officer of the Trustee becomes aware of the occurrence
of
such an event, the Trustee shall transmit by mail to all Holders of Certificates
notice of each such occurrence, unless such default or Servicer Event of
Default
or Master Servicer Event of Default shall have been cured or
waived.
SECTION
8.04 Waiver
of Servicer Events of Default.
The
Holders representing at least 66% of the Voting Rights evidenced by all Classes
of Certificates affected by any default, Servicer Event of Default or Master
Servicer Event of Default hereunder may waive such default, Servicer Event
of
Default or Master Servicer Event of Default; provided,
however,
that a
Servicer Event of Default under clause (i) or (vii) of Section 8.01(a) of
this Agreement may be waived only by all of the Holders of the Regular
Certificates. Upon any such waiver of a default, Servicer Event of Default
or
Master Servicer Event of Default, such default, Servicer Event of Default
or
Master Servicer Event of Default shall cease to exist and shall be deemed
to
have been remedied for every purpose hereunder. No such waiver shall extend
to
any subsequent or other default, Servicer Event of Default or Master Servicer
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE
IX
SECTION
9.01 Duties
of Trustee and Securities Administrator.
The
Trustee, prior to the occurrence of a Master Servicer Event of Default and
after
the curing or waiver of all Master Servicer Events of Default which may have
occurred, and the Securities Administrator each undertake to perform such
duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. During the
continuance of a Master Servicer Event of Default, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the
same
degree of care and skill in its exercise as a prudent person would exercise
or
use under the circumstances in the conduct of such person’s own affairs. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
Each
of
the Trustee and the Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to it, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement
in a
material manner, the Trustee or the Securities Administrator, as the case
may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
The
Trustee shall promptly remit to the related Servicer any complaint, claim,
demand, notice or other document (collectively, the “Notices”) delivered to the
Trustee as a consequence of the assignment of any Mortgage Loan hereunder
and
relating to the servicing of the Mortgage Loans; provided than any such notice
(i) is delivered to the Trustee at its Corporate Trust Office, (ii) is in
writing and contains information sufficient to permit the Trustee to make
a
determination that the real property to which such document relates is a
Mortgaged Property. The Trustee shall have no duty hereunder with respect
to any
Notice it may receive or which may be alleged to have been delivered to or
served upon it unless such Notice is delivered to it or served upon it at
its
Corporate Trust Office and such Notice contains the information required
pursuant to clause (ii) of the preceding sentence.
No
provision of this Agreement shall be construed to relieve the Trustee or
the
Securities Administrator from liability for its own negligent action, its
own
negligent failure to act or its own misconduct; provided,
however,
that:
(i) Prior
to
the occurrence of a Master Servicer Event of Default, and after the curing
or
waiver of all such Master Servicer Events of Default which may have occurred
with respect to the Trustee and at all times with respect to the Securities
Administrator, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, neither the Trustee nor
the
Securities Administrator shall be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against
the
Trustee or the Securities Administrator and, in the absence of bad faith
on the
part of the Trustee or the Securities Administrator, respectively, the Trustee
or the Securities Administrator, respectively, may conclusively rely, as
to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
(ii) Neither
the Trustee nor the Securities Administrator shall be liable for an error
of
judgment made in good faith by a Responsible Officer or Responsible Officers
of
the Trustee or an officer or officers of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the pertinent
facts;
and
(iii) Neither
the Trustee nor the Securities Administrator shall be liable with respect
to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates entitled to at least 25%
of
the Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator or exercising any trust or power conferred upon the Trustee
or the
Securities Administrator under this Agreement.
(a) Except
as
otherwise provided in Section 9.01 of this Agreement:
(i) Before
taking any action hereunder, the Trustee and the Securities Administrator
may
request and rely upon and shall be protected in acting or refraining from
acting
upon any resolution, Officers’ Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed by
it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) The
Trustee and the Securities Administrator may consult with counsel of its
selection and any advice of such counsel or any Opinion of Counsel shall
be full
and complete authorization and protection in respect of any action taken
or
suffered or omitted by it hereunder in good faith and in accordance with
such
advice or Opinion of Counsel;
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto
at
the request, order or direction of any of the Certificateholders, pursuant
to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee or the Securities Administrator, as the case may be,
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Master Servicer Event of Default (which has not been cured
or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise
as a
prudent person would exercise or use under the circumstances in the conduct
of
such person’s own affairs;
(iv) Neither
the Trustee nor the Securities Administrator shall be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by
this Agreement;
(v) Prior
to
the occurrence of a Master Servicer Event of Default hereunder and after
the
curing or waiver of all Master Servicer Events of Default which may have
occurred with respect to the Trustee and at all times with respect to the
Securities Administrator, neither the Trustee nor the Securities Administrator
shall be bound to make any investigation into the facts or matters stated
in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Holders of Certificates entitled to
at
least 25% of the Voting Rights; provided,
however,
that if
the payment within a reasonable time to the Trustee or the Securities
Administrator of the costs, expenses or liabilities likely to be incurred
by it
in the making of such investigation is, in the opinion of the Trustee or
the
Securities Administrator, as applicable, not reasonably assured to the Trustee
or the Securities Administrator by such Certificateholders, the Trustee or
the
Securities Administrator, as applicable, may require reasonable indemnity
satisfactory to it against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(vi) The
Trustee may execute any of the trusts or powers hereunder or perform any
duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of
any
agent or attorney appointed with due care by it hereunder;
(vii) The
Trustee shall not be liable for any loss resulting from (a) the investment
of
funds held in any Collection Account or the Custodial Account, (b) the
investment of funds held in the Reserve Fund, (c) the investment of funds
in the
Distribution Account or (d) the redemption or sale of any such investment
as
therein authorized;
(viii) The
Trustee shall not be deemed to have notice of any default, Master Servicer
Event
of Default or Servicer Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event
which
is in fact such a default is received by a Responsible Officer of the Trustee
at
the Corporate Trust Office of the Trustee, and such notice references the
Certificates and this Agreement; and
(ix) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended
to, and
shall be enforceable by, each agent, custodian and other Person employed
to act
hereunder.
(b) All
rights of action under this Agreement or under any of the Certificates,
enforceable by the Trustee, may be enforced by it without the possession
of any
of the Certificates, or the production thereof at the trial or other proceeding
relating thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the Holders of
such
Certificates, subject to the provisions of this Agreement.
(c) [Reserved].
(d) None
of
the Securities Administrator, the Master Servicer, the Servicers, the Sponsor,
the Depositor, the Custodians or the Trustee shall be responsible for the
acts
or omissions of the others, it being understood that this Agreement shall
not be
construed to render those partners joint venturers or agents of one
another.
The
recitals contained herein and in the Certificates (other than the signature
of
the Securities Administrator, the authentication of the Securities Administrator
on the Certificates, the acknowledgments of the Trustee contained in Article
II
and the representations and warranties of the Trustee in Section 9.12 of
this Agreement) shall be taken as the statements of the Depositor and neither
the Trustee nor the Securities Administrator assumes any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12 of this
Agreement) or of the Certificates (other than the signature of the Securities
Administrator and authentication of the Securities Administrator on the
Certificates) or of any Mortgage Loan or related document. The Trustee and
the
Securities Administrator shall not be accountable for the use or application
by
the Depositor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor
or the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from any Collection Account or the Custodial Account by the related
Servicer, other than with respect to the Securities Administrator any funds
held
by it or on behalf of the Trustee in accordance with Section 3.23 and
Section 3.24 of this Agreement.
Each
of
the Trustee and the Securities Administrator in its individual capacity or
any
other capacity may become the owner or pledgee of Certificates and may transact
business with other interested parties and their Affiliates with the same
rights
it would have if it were not Trustee or the Securities
Administrator.
The
fees
of the Trustee and the Securities Administrator hereunder and of Xxxxx Fargo
as
the Custodian under the Xxxxx Fargo Custodial Agreement and of DBNTC as the
Custodian under the DBNTC Custodial Agreement and of U.S. Bank as Custodian
under the U.S. Bank Custodial Agreement shall be paid in accordance with
a side
letter agreement with the Master Servicer and at the sole expense of the
Master
Servicer. In addition, the Trustee, the Securities Administrator, the Custodians
and any director, officer, employee or agent of the Trustee, the Securities
Administrator and the Custodians shall be indemnified by the Trust and held
harmless against any loss, liability or expense (including reasonable attorney’s
fees and expenses) incurred by the Trustee, the Custodians or the Securities
Administrator in connection with any claim or legal action or any pending
or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its respective obligations and duties under
this
Agreement, including any and all other agreements related hereto, other than
any
loss, liability or expense (i) for which the Trustee is indemnified by the
Master Servicer or any Servicer, (ii) that constitutes a specific liability
of
the Trustee or the Securities Administrator pursuant to Section 11.01(g) of
this Agreement or (iii) any loss, liability or expense incurred by reason
of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder by the Trustee or the Securities Administrator or by reason of
reckless disregard of obligations and duties hereunder. In no event shall
the
Trustee, the Custodians, the Master Servicer or the Securities Administrator
be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form
of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold
the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney’s fees and expenses) incurred by the Trustee by reason of the Master
Servicer’s willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer’s
reckless disregard of its obligations and duties under this Agreement. In
addition, the Sponsor agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of,
or in
connection with, the provisions set forth in the last paragraph of
Section 2.01 of this Agreement, including, without limitation, all costs,
liabilities and expenses (including reasonable legal fees and expenses) of
investigating and defending itself against any claim, action or proceeding,
pending or threatened, relating to the provisions of such paragraph. The
indemnities in this Section 9.05 shall survive the termination or discharge
of this Agreement and the resignation or removal of the Master Servicer,
the
Trustee, the Securities Administrator or the Custodians. Any payment under
this
Section 9.05 made by the Master Servicer to the Trustee in respect of the
Trustee’s fees or the Master Servicer’s indemnification obligation to the
Trustee shall be from the Master Servicer’s own funds, without reimbursement
from REMIC I therefor.
The
Trustee and the Securities Administrator shall at all times be a corporation
or
an association (other than the Depositor, the Sponsor, the Master Servicer
or
any Affiliate of the foregoing) organized and doing business under the laws
of
any state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of
at
least $50,000,000 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and subject to supervision or examination
by
federal or state authority. If such corporation or association publishes
reports
of conditions at least annually, pursuant to law or to the requirements of
the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its
most
recent report of conditions so published. In case at any time the Trustee
or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and
with
the effect specified in Section 9.07 of this Agreement.
Additionally,
the Securities Administrator (i) may not be an originator, Master Servicer,
Servicer, the Depositor or an affiliate of the Depositor unless the Securities
Administrator is in an institutional trust department, (ii) must be authorized
to exercise corporate trust powers under the laws of its jurisdiction of
organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch
is a
Rating Agency, or the equivalent rating by S&P (or such rating acceptable to
Fitch pursuant to a rating confirmation). If no successor securities
administrator shall have been appointed and shall have accepted appointment
within 60 days after Xxxxx Fargo Bank, National Association, as Securities
Administrator, ceases to be the securities administrator pursuant to this
Section 9.06, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, promptly appoint or petition a court of competent jurisdiction
to
appoint, a Person that satisfies the eligibility criteria set forth herein
as
the Trustee under this Agreement in the assumption of all or any part of
the
responsibilities, duties or liabilities of the Trustee under this
Agreement.
The
Trustee and the Securities Administrator may at any time resign and be
discharged from the trust hereby created by giving written notice thereof
to the
Depositor, to the Master Servicer, to the Securities Administrator (or the
Trustee, if the Securities Administrator resigns) and to the Certificateholders.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor trustee or successor securities administrator by written instrument,
in duplicate, which instrument shall be delivered to the resigning Trustee
or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within thirty (30) days after the giving of such notice
of
resignation, the resigning Trustee or Securities Administrator, as the case
may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee, successor securities
administrator, Trustee or Securities Administrator, as applicable.
If
at any
time the Trustee or the Securities Administrator shall cease to be eligible
in
accordance with the provisions of Section 9.06 of this Agreement and shall
fail to resign after written request therefor by the Depositor, or if at
any
time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee
or the Securities Administrator or of its property shall be appointed, or
any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or
the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument,
in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The
Holders of Certificates entitled to at least 51% of the Voting Rights may
at any
time remove the Trustee or the Securities Administrator and appoint a successor
trustee or successor securities administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered
to the
Depositor, one complete set to the Trustee or the Securities Administrator
so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee (in
the
case of the removal of the Securities Administrator), the Securities
Administrator (in the case of the removal of the Trustee) and the Master
Servicer by the Depositor.
Any
resignation or removal of the Trustee or the Securities Administrator and
appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor trustee or successor securities
administrator, as applicable, as provided in Section 9.08.
Notwithstanding
anything to the contrary contained herein, the Master Servicer and the
Securities Administrator shall at all times be the same Person.
SECTION
9.08 Successor
Trustee or Securities Administrator.
Any
successor trustee or successor securities administrator appointed as provided
in
Section 9.07 of this Agreement shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its
predecessor hereunder, with the like effect as if originally named as trustee
or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents
and
statements to the extent held by it hereunder, as well as all monies, held
by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do
such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.
No
successor trustee or successor securities administrator shall accept appointment
as provided in this Section unless at the time of such acceptance such successor
trustee or successor securities administrator shall be eligible under the
provisions of Section 9.06 and the appointment of such successor trustee or
successor securities administrator shall not result in a downgrading of any
Class of Certificates by any Rating Agency, as evidenced by a letter from
each
Rating Agency.
Upon
acceptance of appointment by a successor trustee or successor securities
administrator as provided in this Section, the Depositor shall mail notice
of
the succession of such trustee hereunder to all Holders of Certificates at
their
addresses as shown in the Certificate Register. If the Depositor fails to
mail
such notice within ten (10) days after acceptance of appointment by the
successor trustee or successor securities administrator, the successor trustee
or successor securities administrator shall cause such notice to be mailed
at
the expense of the Depositor.
Any
corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated
or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall
be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee
or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 9.06 of this Agreement,
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.
SECTION
9.10 Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any
legal
requirements of any jurisdiction in which any part of the REMIC I or property
securing the same may at the time be located, the Trustee shall have the
power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with
the
Trustee, or separate trustee or separate trustees, of all or any part of
REMIC
I, and to vest in such Person or Persons, in such capacity, and for the benefit
of the Holders of the Certificates, such title to REMIC I, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary
or
desirable. No co-trustee or separate trustee hereunder shall be required
to meet
the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
In
the
case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or
performed by the Trustee and such separate trustee or co-trustee jointly,
except
to the extent that under any law of any jurisdiction in which any particular
act
or acts are to be performed by the Trustee (whether as Trustee hereunder
or as
successor to a defaulting Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
REMIC
I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to
have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this Article
IX.
Each separate trustee and co-trustee, upon its acceptance of the trust
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee, or separately,
as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct
of, affecting the liability of, or affording protection to, the Trustee.
Every
such instrument shall be filed with the Trustee.
Any
separate trustee or co-trustee may, at any time, constitute the Trustee,
its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by
the
Trustee, to the extent permitted by law, without the appointment of a new
or
successor trustee or co-trustee.
SECTION
9.11 Appointment
of Office or Agency.
The
Certificates may be surrendered for registration of transfer or exchange
at the
Securities Administrator’s office located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, and presented for final distribution at the
Corporate Trust Office of the Securities Administrator where notices and
demands
to or upon the Securities Administrator in respect of the Certificates and
this
Agreement may be served.
SECTION
9.12 Representations
and Warranties.
The
Trustee hereby represents and warrants to the Master Servicer, the Securities
Administrator, the Servicers and the Depositor as applicable, as of the Closing
Date, that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(ii) The
execution and delivery of this Agreement by it, and the performance and
compliance with the terms of this Agreement by it, will not violate its articles
of association or bylaws or constitute a default (or an event which, with
notice
or lapse of time, or both, would constitute a default) under, or result in
the
breach of, any material agreement or other instrument to which it is a party
or
which is applicable to it or any of its assets.
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery
and
performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This
Agreement, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid, legal and binding obligation of it,
enforceable against it in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, receivership, reorganization, moratorium
and
other laws affecting the enforcement of creditors’ rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) It
is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or
any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in its good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of it
to perform its obligations under this Agreement or its financial
condition.
(vi) No
litigation is pending or, to the best of its knowledge, threatened against
it,
which would prohibit it from entering into this Agreement or, in its good
faith
reasonable judgment, is likely to materially and adversely affect either
the
ability of it to perform its obligations under this Agreement or its financial
condition.
ARTICLE X
XXXXXXX
00.00 Xxxxxxxxxxx
Xxxx Xxxxxxxxxx or Liquidation of All Mortgage Loans.
(a) Subject
to Section 10.02 of this Agreement, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer,
the
Securities Administrator, the Servicers and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05
of this Agreement and of the Servicers to make remittances to the Securities
Administrator and the Securities Administrator to make payments in respect
of
the REMIC I Regular Interests, REMIC I Regular Interests or the Classes of
Certificates as hereinafter set forth) shall terminate upon payment to the
Certificateholders and the deposit of all amounts held by or on behalf of
the
Trustee and required hereunder to be so paid or deposited on the Distribution
Date coinciding with or following the earlier to occur of (i) the purchase
by
the Terminator (as defined below) of all Mortgage Loans and each REO Property
remaining in REMIC I and (ii) the final payment or other liquidation (or
any
advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; provided,
however,
that in
no event shall the trust created hereby continue beyond the earlier of (a)
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 and (b) the Last Scheduled Distribution
Date.
The purchase by the Terminator (defined below) of all Mortgage Loans and
each
REO Property remaining in REMIC I shall be at a price (the “Termination Price”)
equal to the sum of (i) the greater of (A) the aggregate Purchase Price of
all
the Mortgage Loans included in REMIC I, plus the appraised value of each
REO
Property, if any, included in REMIC I, such appraisal to be conducted by
an
appraiser mutually agreed upon by the Master Servicer and the Trustee in
their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Master Servicer, as of the close
of
business on the third Business Day next preceding the date upon which notice
of
any such termination is furnished to Certificateholders pursuant to the third
paragraph of this Section 10.01) plus (ii) any amounts due the Servicers
and the Master Servicer in respect of unpaid Servicing Fees and outstanding
P&I Advances and Servicing Advances.
(b) The
Master Servicer or, if the Master Servicer fails to exercise such optional
termination right, Ocwen (either the Master Servicer or Ocwen, the “Terminator”)
shall have the right to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I pursuant to clause (i) of the preceding paragraph no
later
than the Determination Date in the month immediately preceding the Distribution
Date on which the Certificates will be retired; provided, however, that the
Terminator may elect to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I pursuant to clause (i) above only if the aggregate
Scheduled Principal Balance of the Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is reduced to less
than
or equal to 10% of the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the Cut-off Date. By acceptance of the Residual Certificates,
the
Holder of the Residual Certificates agrees, in connection with any termination
hereunder, to assign and transfer any portion of the Termination Price in
excess
of par, and to the extent received in respect of such termination, to pay
any
such amounts to the Holders of the Class CE-1 Certificates. Notwithstanding
the
foregoing, the optional termination right may only be exercised by Ocwen
if (1)
Ocwen receives written notification from the Master Servicer that the Master
Servicer will not exercise such optional termination right or (2) Ocwen does
not
receive such written notification from the Master Servicer, and the Master
Servicer fails to exercise its optional termination right by the third
Distribution Date following the date such right became exercisable; provided,
however, in no event shall Ocwen exercise its optional termination right
under
(1) or (2) above unless it first provides written notice to the Authorized
Officers of the Sponsor that it intends to exercise such optional termination
right.
(c) Notice
of
the liquidation of the Certificates shall be given promptly by the Securities
Administrator by letter to the Certificateholders mailed (a) in the event
such
notice is given in connection with the purchase of the Mortgage Loans and
each
REO Property by the Terminator, not earlier than the 15th day and not later
than
the 25th day of the month next preceding the month of the final distribution
on
the Certificates or (b) otherwise during the month of such final distribution
on
or before the Determination Date in such month, in each case specifying (i)
the
Distribution Date upon which the Trust Fund will terminate and the final
payment
in respect of the REMIC I Regular Interests or the Certificates will be made
upon presentation and surrender of the related Certificates at the office
of the
Securities Administrator therein designated, (ii) the amount of any such
final
payment, (iii) that no interest shall accrue in respect of the REMIC I Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record
Date
otherwise applicable to such Distribution Date is not applicable, payments
being
made only upon presentation and surrender of the Certificates at the office
of
the Securities Administrator. In the event such notice is given in connection
with the purchase of all of the Mortgage Loans and each REO Property remaining
in REMIC I by the Terminator, the Terminator shall deliver to the Securities
Administrator for deposit in the Distribution Account not later than the
Business Day prior to the Distribution Date on which the final distribution
on
the Certificates an amount in immediately available funds equal to the
above-described Termination Price. The Securities Administrator shall remit
to
the Servicers, the Master Servicer, the Trustee and the applicable Custodian
from such funds deposited in the Distribution Account (i) any amounts which
the
related Servicer would be permitted to withdraw and retain from the Custodial
Account pursuant to the Servicing Agreement or from the related Collection
Account pursuant to Section 3.09 of this Agreement, as applicable, as if
such funds had been deposited therein (including all unpaid Servicing Fees,
Master Servicer Fees and all outstanding P&I Advances and Servicing
Advances) and (ii) any other amounts otherwise payable by the Securities
Administrator to the Master Servicer, the Trustee, the applicable Custodian
and
the Servicers from amounts on deposit in the Distribution Account pursuant
to
the terms of this Agreement or the Servicing Agreement prior to making any
final
distributions pursuant to Section 10.01(d) below. Upon certification to the
Trustee by the Securities Administrator of the making of such final deposit,
the
Trustee shall promptly release or cause to be released to the Terminator
the
Mortgage Files for the remaining Mortgage Loans, and Trustee shall execute
all
assignments, endorsements and other instruments delivered to it and necessary
to
effectuate such transfer.
(d) Upon
presentation of the Certificates by the Certificateholders on the final
Distribution Date, the Securities Administrator shall distribute to each
Certificateholder so presenting and surrendering its Certificates the amount
otherwise distributable on such Distribution Date in accordance with
Section 5.01 in respect of the Certificates so presented and surrendered.
Any funds not distributed to any Holder or Holders of Certificates being
retired
on such Distribution Date because of the failure of such Holder or Holders
to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this
Section 10.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Securities Administrator
shall mail a second notice to the remaining non-tendering Certificateholders
to
surrender their Certificates for cancellation in order to receive the final
distribution with respect thereto. If within one year after the second notice
all such Certificates shall not have been surrendered for cancellation, the
Securities Administrator shall, directly or through an agent, mail a final
notice to the remaining non-tendering Certificateholders concerning surrender
of
their Certificates. The costs and expenses of maintaining the funds in trust
and
of contacting such Certificateholders shall be paid out of the assets remaining
in the trust funds. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall pay to the Depositor all such amounts, and all rights
of
non-tendering Certificateholders in or to such amounts shall thereupon cease.
No
interest shall accrue or be payable to any Certificateholder on any amount
held
in trust by the Securities Administrator as a result of such Certificateholder’s
failure to surrender its Certificate(s) on the final Distribution Date for
final
payment thereof in accordance with this Section 10.01. Any such amounts
held in trust by the Securities Administrator shall be held uninvested in
an
Eligible Account.
SECTION
10.02 Additional
Termination Requirements.
(a) In
the
event that the Terminator purchases all the Mortgage Loans and each REO Property
or the final payment on or other liquidation of the last Mortgage Loan or
REO
Property remaining in REMIC I pursuant to Section 10.01, the Trust Fund
shall be terminated in accordance with the following additional
requirements:
(i) The
Trustee shall specify the first day in the 90-day liquidation period in a
statement attached to each Trust REMIC’s final Tax Return pursuant to Treasury
regulation Section 1.860F-1 and shall satisfy all requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained by and at the
expense
of the Terminator;
(ii) During
such 90-day liquidation period and, at or prior to the time of making of
the
final payment on the Certificates, the Trustee shall sell all of the assets
of
REMIC I to the Terminator for cash; and
(iii) At
the
time of the making of the final payment on the Certificates, the Securities
Administrator shall distribute or credit, or cause to be distributed or
credited, to the Holders of the Residual Certificates all cash on hand in
the
Trust Fund (other than cash retained to meet claims), and the Trust Fund
shall
terminate at that time.
(b) At
the
expense of the Terminator (or, if the Trust Fund is being terminated as a
result
of the occurrence of the event described in clause (ii) of the first paragraph
of Section 10.01, at the expense of the Trust Fund), the Terminator shall
prepare or cause to be prepared the documentation required in connection
with
the adoption of a plan of liquidation of each Trust REMIC pursuant to this
Section 10.02.
(c) By
their
acceptance of Certificates, the Holders thereof hereby agree to authorize
the
Trustee to specify the 90-day liquidation period for each Trust REMIC, which
authorization shall be binding upon all successor
Certificateholders.
ARTICLE
XI
SECTION
11.01 REMIC
Administration.
(a) The
Trustee shall elect to treat each Trust REMIC as a REMIC under the Code and,
if
necessary, under applicable state law. Each such election will be made by
the
Securities Administrator on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued.
For
the purposes of the REMIC election in respect of REMIC I, the REMIC I Regular
Interests shall be designated as the Regular Interests in REMIC I and the
Class
R-I Interest shall be designated as the Residual Interests in REMIC I. The
Class
A Certificates and the Mezzanine Certificates (exclusive of any right to
receive
payments from the Reserve Fund), the Class P Certificates, the Class CE-1
Certificates and the Class CE-2 Certificates shall be designated as the Regular
Interests in REMIC II and the Class R-II Interest shall be designated as
the
Residual Interests in REMIC II. The Trustee shall not permit the creation
of any
“interests” in each Trust REMIC (within the meaning of Section 860G of the Code)
other than the REMIC I Regular Interests and the interests represented by
the
Certificates.
(b) The
Closing Date is hereby designated as the “Startup Day” of each Trust REMIC
within the meaning of Section 860G(a)(9) of the Code.
(c) The
Securities Administrator shall be reimbursed for any and all expenses relating
to any tax audit of the Trust Fund (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect
to
each Trust REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion
of
Counsel except as specified herein. The Securities Administrator, as agent
for
each Trust REMIC’s tax matters person shall (i) act on behalf of the Trust Fund
in relation to any tax matter or controversy involving any Trust REMIC and
(ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint
the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d) The
Securities Administrator shall prepare and file and the Trustee shall sign
all
of the Tax Returns in respect of each REMIC created hereunder. The expenses
of
preparing and filing such returns shall be borne by the Securities Administrator
without any right of reimbursement therefor.
(e) The
Securities Administrator shall perform on behalf of each Trust 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, as required by the Code, the REMIC Provisions or other
such
compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for
the
application of any tax relating to the transfer of a Residual Certificate
to any
Person who is not a Permitted Transferee upon receipt of additional reasonable
compensation, (ii) to the Certificateholders such information or reports
as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service
the
name, title, address and telephone number of the person who will serve as
the
representative of each Trust REMIC. The Depositor shall provide or cause
to be
provided to the Securities Administrator, within ten (10) days after the
Closing
Date, all information or data that the Securities Administrator reasonably
determines to be relevant for tax purposes as to the valuations and issue
prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) To
the
extent in the control of the Trustee or the Securities Administrator, each
such
Person (i) shall take such action and shall cause each REMIC created hereunder
to take such action as shall be necessary to create or maintain the status
thereof as a REMIC under the REMIC Provisions, (ii) shall not take any action,
cause the Trust Fund 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 (A) endanger the status of each Trust REMIC as a REMIC
or
(B) result in the imposition of a tax upon the Trust Fund (including but
not
limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an “Adverse REMIC
Event”) unless such action or inaction is permitted under this Agreement or the
Trustee and the Securities Administrator have received an Opinion of Counsel,
addressed to the them (at the expense of the party seeking to take such action
but in no event at the expense of the Trustee or the Securities Administrator)
to the effect that the contemplated action will not, with respect to any
Trust
REMIC, endanger such status or result in the imposition of such a tax, nor
(iii)
shall the Securities Administrator take or fail to take any action (whether
or
not authorized hereunder) as to which the Trustee has advised it in writing
that
it has received an Opinion of Counsel to the effect that an Adverse REMIC
Event
could occur with respect to such action; provided that the Securities
Administrator may conclusively rely on such Opinion of Counsel and shall
incur
no liability for its action or failure to act in accordance with such Opinion
of
Counsel. In addition, prior to taking any action with respect to any Trust
REMIC
or the respective assets of each, or causing any Trust REMIC to take any
action,
which is not contemplated under the terms of this Agreement, the Securities
Administrator will consult with the Trustee or its designee, in writing,
with
respect to whether such action could cause an Adverse REMIC Event to occur
with
respect to any Trust REMIC, and the Securities Administrator shall not take
any
such action or cause any Trust REMIC to take any such action as to which
the
Trustee has advised it in writing that an Adverse REMIC Event could occur.
The
Trustee may consult with counsel to make such written advice, and the cost
of
same shall be home by the party seeking to take the action not permitted
by this
Agreement, but in no event shall such cost be an expense of the
Trustee.
(g) In
the
event that any tax is imposed on “prohibited transactions” of any REMIC created
hereunder as defined in Section 860F(a)(2) of the Code, on the “net income
from foreclosure property” of such REMIC as defined in Section 860G(c) of
the Code, on any contributions to any such REMIC after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall
be
charged (i) to the Trustee pursuant to Section 11.03 of this Agreement, if
such tax arises out of or results from a breach by the Trustee of any of
its
obligations under this Article XI, (ii) to the Securities Administrator pursuant
to Section 11.03 of this Agreement, if such tax arises out of or results
from a breach by the Securities Administrator of any of its obligations under
this Article XI, (iii) to the Master Servicer pursuant to Section 11.03 of
this Agreement, if such tax arises out of or results from a breach by the
Master
Servicer of any of its obligations under Article IV or under this Article
XI,
(iv) to the related Servicer pursuant to Section 11.03 of this Agreement,
if such tax arises out of or results from a breach by a Servicer of any of
its
obligations under Article III or under this Article XI, or (v) in all other
cases, against amounts on deposit in the Distribution Account and shall be
paid
by withdrawal therefrom.
(h) The
Securities Administrator shall, for federal income tax purposes, maintain
books
and records with respect to each Trust REMIC on a calendar year and on an
accrual basis.
(i) Following
the Startup Day, neither the Securities Administrator nor the Trustee shall
accept any contributions of assets to any Trust REMIC other than in connection
with any Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause
the
related REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject such REMIC to any tax under the REMIC Provisions
or
other applicable provisions of federal, state and local law or
ordinances.
(j) Neither
the Trustee nor the Securities Administrator shall knowingly enter into any
arrangement by which any Trust REMIC will receive a fee or other compensation
for services nor permit either REMIC to receive any income from assets other
than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or
“permitted investments” as defined in Section 860G(a)(5) of the
Code.
(k) The
Securities Administrator shall apply for an employer identification number
with
the Internal Revenue Service via a Form SS-4 or other comparable method for
each
REMIC. In connection with the foregoing, the Securities Administrator shall
provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of Regular Interests in
each
REMIC as required by IRS Form 8811.
SECTION
11.02 Prohibited
Transactions and Activities.
None
of
the Depositor, any Servicer, the Securities Administrator, the Master Servicer
or the Trustee shall sell, dispose of or substitute for any of the Mortgage
Loans (except in connection with (i) the foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property
acquired by deed in lieu of foreclosure, (ii) the bankruptcy of REMIC I,
(iii)
the termination of REMIC I pursuant to Article X of this Agreement, (iv)
a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II of this Agreement), nor acquire any
assets
for any Trust REMIC (other than REO Property acquired in respect of a defaulted
Mortgage Loan), nor sell or dispose of any investments in the Collection
Accounts, the Custodial Account or the Distribution Account for gain, nor
accept
any contributions to any Trust REMIC after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to
the Trustee and the Securities Administrator (at the expense of the party
seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust
REMIC
to be subject to a tax on “prohibited transactions” or “contributions” pursuant
to the REMIC Provisions.
SECTION
11.03 Indemnification.
(a) The
Trustee agrees to be liable for any taxes and costs incurred by the Trust
Fund,
the Depositor, the Master Servicer, the Securities Administrator or the
Servicers including,
without
limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator or a Servicer
as a
result of the Trustee’s failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Trustee set forth
in
this Agreement.
(b) Each
Servicer party hereto agrees to indemnify the Trust Fund, the Depositor,
the
Master Servicer, the Securities Administrator, the other Servicer and the
Trustee for any taxes and costs including, without limitation, any reasonable
attorneys’ fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator, the other Servicer or the
Trustee, as a result of the related Servicer’s failure to perform its covenants
set forth in Article III in accordance with the standard of care of such
Servicer set forth in this Agreement.
(c) The
Master Servicer agrees to indemnify the Trust Fund, the Depositor, each Servicer
party hereto and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust
Fund, the Depositor, the Servicers or the Trustee, as a result of the Master
Servicer’s failure to perform its covenants set forth in Article IV in
accordance with the standard of care of the Master Servicer set forth in
this
Agreement.
(d) The
Securities Administrator agrees to be liable for any taxes and costs incurred
by
the Trust Fund, the Depositor, the Servicers which are a party hereto or
the
Trustee including, without limitation, any reasonable attorneys’ fees imposed on
or incurred by the Trust Fund, the Depositor, a Servicer or the Trustee as
a
result of the Securities Administrator’s failure to perform its covenants set
forth in this Article XI in accordance with the standard of care of the
Securities Administrator set forth in this Agreement.
(e) Each
of
the Depositor, Master Servicer, Securities Administrator and any Servicing
Function Participant engaged by such party, respectively, shall indemnify
and
hold harmless the Master Servicer, the Securities Administrator and the
Depositor, respectively, and each of its directors, officers, employees,
agents,
and affiliates from and against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments and
other
costs and expenses arising out of or based upon (a) any breach by such party
of
any if its obligations under hereunder, including particularly its obligations
to provide any Assessment of Compliance, Attestation Report, Compliance
Statement or any information, data or materials required to be included in
any
Exchange Act report, (b) any material misstatement or omission in any
information, data or materials provided by such party (or, in the case of
the
Securities Administrator or Master Servicer, any material misstatement or
material omission in (i) any Compliance Statement, Assessment of Compliance
or
Attestation Report delivered by it, or by any Servicing Function Participant
engaged by it, pursuant to this Agreement, or (ii) any Additional Form 10-D
Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure concerning
the Master Servicer or the Securities Administrator), or (c) the negligence,
bad
faith or willful misconduct of such indemnifying party in connection with
its
performance hereunder. If the indemnification provided for in this Section
11.03(e) is unavailable or insufficient to hold harmless the Master Servicer,
the Securities Administrator or the Depositor, as the case may be, then each
such party agrees that it shall contribute to the amount paid or payable
by the
Master Servicer, the Securities Administrator or the Depositor, as applicable,
as a result of any claims, losses, damages or liabilities incurred by such
party
in such proportion as is appropriate to reflect the relative fault of the
indemnified party on the one hand and the indemnifying party on the other.
This
indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
ARTICLE
XII
SECTION
12.01 Amendment.
This
Agreement may be amended from time to time by the Depositor, Ocwen, Xxxxx
Fargo,
the Master Servicer, the Securities Administrator and the Trustee, but without
the consent of any of the Certificateholders, (i) to cure any ambiguity or
defect, (ii) to correct, modify or supplement any provisions herein (including
to give effect to the expectations of Certificateholders), (iii) to ensure
compliance with Regulation AB, or (iv) 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, and that such action
shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter
from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates. No amendment shall be deemed to adversely affect in any material
respect the interests of any Certificateholder who shall have consented thereto,
and no Opinion of Counsel shall be required to address the effect of any
such
amendment on any such consenting Certificateholder.
This
Agreement may also be amended from time to time by the Depositor, Ocwen,
Xxxxx
Fargo, the Master Servicer, the Securities Administrator and the Trustee
with
the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights for the purpose of adding any provisions to or changing in
any
manner or eliminating any of the provisions of this Agreement or of modifying
in
any manner the rights of the Holders of Certificates; provided, however,
that no
such amendment shall (i) reduce in any manner the amount of, or delay the
timing
of, payments received on Mortgage Loans which are required to be distributed
on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of
any
Class of Certificates in a manner, other than as described in (i), without
the
consent of the Holders of Certificates of such Class evidencing at least
66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of
the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 12.01, Certificates registered in the
name of the Depositor or a Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates. Without
limiting the generality of the foregoing, any amendment to this Agreement
required in connection with the compliance with or the clarification of any
reporting obligations described in Section 5.06 hereof shall not require
the consent of any Certificateholder and without the need for any Opinion
of
Counsel or Rating Agency confirmation.
Notwithstanding
any contrary provision of this Agreement, the Trustee shall not consent to
any
amendment to this Agreement unless it shall have first received an Opinion
of
Counsel to the effect that such amendment is permitted hereunder and will
not
result in the imposition of any tax on any Trust REMIC pursuant to the REMIC
Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any
time
that any Certificates are outstanding and that such amendment is authorized
or
permitted by this Agreement.
Promptly
after the execution of any such amendment the Trustee shall furnish a copy
of
such amendment to each Certificateholder.
It
shall
not be necessary for the consent of Certificateholders under this
Section 12.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
The
manner of obtaining such consents and of evidencing the authorization of
the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The
cost
of any Opinion of Counsel to be delivered pursuant to this Section 12.01
shall be borne by the Person seeking the related amendment, but in no event
shall such Opinion of Counsel be an expense of the Trustee.
The
Trustee may, but shall not be obligated to enter into any amendment pursuant
to
this Section 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 (or an abstract hereof,
if
acceptable by the applicable recording office) 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 Depositor at the expense
of
the Certificateholders, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially
and
beneficially affects the interests of the Certificateholders.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any
number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
SECTION
12.03 Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder’s legal
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 Trust Fund,
nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No
Certificateholder shall have any right to vote (except as expressly provided
for
herein) or in any manner otherwise control the operation and management of
the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein
set forth, or contained in the terms of any 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 reasonable
indemnity as it may 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 whatsoever 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, 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, 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 Governing
Law.
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 without regard to conflicts of laws
principles thereof other than Section 5-1401 of the New York General Obligations
Law which shall govern.
SECTION
12.05 Notices.
All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when received if sent by facsimile, receipt
confirmed, if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service or delivered in any other manner
specified herein, to (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Xxxxxxx Xxxxxxx (telecopy number: (000) 000-0000) with
a copy
to Deutsche Bank Securities, Inc. Attention: Legal Department (telecopy number:
(000) 000-0000), or such other address or telecopy number as may hereafter
be
furnished to the Servicers, the Master Servicer, the Securities Administrator
and the Trustee in writing by the Depositor, (b) in the case of Ocwen, Ocwen
Loan Servicing, LLC, 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxx
Xxxx Xxxxx, Xxxxxxx 00000, Attention: Secretary (telecopy number: (000)
000-0000), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Master Servicer, the Securities Administrator
and
the Depositor in writing by Ocwen, (c) in the case of Xxxxx Fargo, Xxxxx
Fargo
Bank, National Association, 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000, Attention:
Xxxxx Xxxxxxxxx (telecopy number: (000) 000-0000), or such other address
or
telecopy number as may hereafter be furnished to the Trustee, the Master
Servicer, the Securities Administrator and the Depositor in writing by Xxxxx
Fargo, (d) in the case of the Master Servicer and the Securities Administrator,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 and for overnight delivery to 0000
Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Ace Securities Corp.,
2006-SD1 (telecopy number: (000) 000-0000), or such other address or telecopy
number as may hereafter be furnished to the Trustee, the Depositor and the
Servicers in writing by the Master Servicer or the Securities Administrator
and
(e) in the case of the Trustee, at the Corporate Trust Office or such other
address or telecopy number as the Trustee may hereafter be furnish to the
Servicers, the Master Servicer, the Securities Administrator and the Depositor
in writing by the Trustee. Any notice required or permitted to be given to
a
Certificateholder shall be given by first class mail, postage prepaid, at
the
address of such Holder 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 when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to
be
telecopied hereunder also shall be mailed to the appropriate party in the
manner
set forth above.
SECTION
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
SECTION
12.07 Notice
to Rating Agencies.
The
Trustee shall use its best efforts promptly to provide notice to the Rating
Agencies with respect to each of the following of which a Responsible Officer
has actual knowledge:
1. |
Any
material change or amendment to this
Agreement;
|
2. |
The
occurrence of any Servicer Event of Default or Master Servicer Event
of
Default that has not been cured or
waived;
|
3. |
The
resignation or termination of a Servicer, the Master Servicer or
the
Trustee;
|
4. |
The
repurchase or substitution of Mortgage Loans pursuant to or as
contemplated by Section 2.03;
|
5. |
The
final payment to the Holders of any Class of
Certificates;
|
6. |
Any
change in the location of the Distribution Account;
and
|
7. |
Any
event that would result in the inability of the Trustee as successor
to
Xxxxx Fargo in its capacity as a Servicer hereunder to make advances
regarding delinquent Xxxxx Fargo Mortgage
Loans.
|
In
addition, the Securities Administrator shall promptly make available to each
Rating Agency copies of each report to Certificateholders described in
Section 5.02 of this Agreement.
Each
Servicer shall make available to each Rating Agency copies of the
following:
1. |
Each
Annual Statement of Compliance described in Section 3.17 of this
Agreement;
|
2. |
Each
Assessment of Compliance and Attestation Report described in
Section 3.18 of this Agreement; and
|
3. |
Any
change in the location of the related Collection
Account.
|
Any
such
notice pursuant to this Section 12.07 shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service to Standard &
Poor’s, a division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; to Xxxxx’x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and to Fitch Ratings, 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx
Xxxx 00000 or such other addresses as the Rating Agencies may designate in
writing to the parties hereto.
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 Grant
of Security Interest.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage
Loans
by the Depositor to the Trustee, on behalf of the Trust and for the benefit
of
the Certificateholders, be, and be construed as, a sale of the Mortgage Loans
by
the Depositor and not a pledge of the Mortgage Loans to secure a debt or
other
obligation of the Depositor. However, in the event that, notwithstanding
the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor, then, (a) it is the express intent of the parties that
such
conveyance be deemed a pledge of the Mortgage Loans by the Depositor to the
Trustee, on behalf of the Trust and for the benefit of the Certificateholders,
to secure a debt or other obligation of the Depositor and (b)(1) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles
8
and 9 of the Uniform Commercial Code as in effect from time to time in the
State
of New York; (2) the conveyance provided for in Section 2.01 shall be
deemed to be a grant by the Depositor to the Trustee, on behalf of the Trust
and
for the benefit of the Certificateholders, of a security interest in all
of the
Depositor’s right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary,
of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time
to
time held or invested in the Collection Accounts and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3)
the
obligations secured by such security agreement shall be deemed to be all
of the
Depositor’s obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating
to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding
such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts
or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee,
on
behalf of the Trust and for the benefit of the Certificateholders, a security
interest in the Mortgage Loans and all other property described in clause
(2) of
the preceding sentence, for the purpose of securing to the Trustee the
performance by the Depositor of the obligations described in clause (3) of
the
preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the
conveyance pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Mortgage Loans and assets constituting the Trust
Fund
by the Depositor to the Trustee, on behalf of the Trust and for the benefit
of
the Certificateholders.
SECTION
12.10 Survival
of Indemnification.
Any
and
all indemnities to be provided by any party to this Agreement shall survive
the
termination and resignation of any party hereto and the termination of this
Agreement.
SECTION
12.11 Servicing
Agreement.
With
respect to the Servicing Agreement, in the event of any conflict between
the
provisions of this Agreement and the provisions of the Servicing Agreement,
the
provisions of the Servicing Agreement shall control.
SECTION
12.12 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.17, 3.18,
3.19, 4.15, 4.16, 4.17, 4.18 and 5.06 of this Agreement is to facilitate
compliance by the Sponsor, the Master Servicer, the Securities Administrator
and
the Depositor with the provisions of Regulation AB promulgated by the SEC
under
the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from
time to time and subject to clarification and interpretive advice as may
be
issued by the staff of the SEC from time to time. Therefore, each of the
parties
agrees that (a) the obligations of the parties hereunder shall be interpreted
in
such a manner as to accomplish that purpose, (b) the parties’ obligations
hereunder will be supplemented and modified as necessary to be consistent
with
any such amendments, interpretive advice or guidance, convention or consensus
among active participants in the asset-backed securities markets, advice
of
counsel, or otherwise in respect of the requirements of Regulation AB and
(c)
the parties shall comply with reasonable requests made by the Master Servicer,
the Securities Administrator, the Sponsor or the Depositor for delivery of
additional or different information as the Master Servicer, the Securities
Administrator, the Sponsor or the Depositor may determine in good faith is
necessary to comply with the provisions of Regulation AB.
ACE
SECURITIES CORP.,
as
Depositor
|
|
By:
/s/
Xxxxxx
Xxxxxxxxxx
|
|
Name: Xxxxxx
Xxxxxxxxxx
|
|
Title: Vice
President
|
By:
/s/
Xxxxx X.
Xxxxx
|
|
Name: Xxxxx
X. Xxxxx
|
|
Title: Vice
President
|
OCWEN
LOAN SERVICING, LLC,
as
a Servicer
|
|
By:
/s/
Xxxxxxx
Xxxxxxx
|
|
Name: Xxxxxxx
Xxxxxxx
|
|
Title: Authorized
Representative
|
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
as
a Servicer
|
|
By:
/s/ Xxxxxx XxXxxxxx
|
|
Name:
Xxxxxx XxXxxxxx
|
|
Title:
Vice President
|
HSBC
BANK USA, NATIONAL ASSOCIATION
not
in its individual capacity but solely as Trustee
|
|
By:
/s/
Xxxxx
Xxx
|
|
Name: Xxxxx
Xxx
|
|
Title: Vice
President
|
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
as
Master Servicer and Securities Administrator
|
|
By:
/s/
Xxxxxxxx X.
Xxxxxxxxxx
|
|
Name: Xxxxxxxx
X. Xxxxxxxxxx
|
|
Title: Assistant
Vice President
|
|
Acknowledged
and Agreed for purposes of Sections 7.08, 7.09 and
7.10:
|
MORTGAGERAMP,
INC.
|
|
By:
/s/
Xxxxxxx
Xxxxxxx
|
|
Name: Xxxxxxx
Xxxxxxx
|
|
Title: Secretary
|
|
Acknowledged
and Agreed for purposes of
Section 9.05:
|
DB
STRUCTURED PRODUCTS, INC.
|
|
By:
/s/ Xxxxx Xxxxxxx
|
|
Name:
Xxxxx Xxxxxxx
|
|
Title:
Director
|
By:
/s/ Xxxx Xxxx
|
|
Name:
Xxxx Xxxx
|
|
Title:
Vice President
|
Acknowledged
and Agreed for purposes of Section
5.01(b):
|
DEUTSCHE
BANK SECURITIES INC. as Class CE-2 Certificateholder
|
|
By:
/s/ Xxxxx Xxxxxxx
|
|
Name:
Xxxxx Xxxxxxx
|
|
Title:
Director
|
By:
/s/ Xxxx Xxxx
|
|
Name:
Xxxx Xxxx
|
|
Title:
Vice President
|
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the
___ day of March 2006, before me, a notary public in and for said State,
personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the
___ day of March 2006, before me, a notary public in and for said State,
personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the
___ day of March 2006, before me, a notary public in and for said State,
personally appeared _____________________ known to me to be a
_____________________ of Xxxxx Fargo Bank, National Association, a national
banking association that executed the within instrument, and also known to
me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the __
day of March 2006, before me, a notary public in and for said State, personally
appeared ___________________________ known to me to be a ____________________
of
Ocwen Loan Servicing, LLC, a Delaware limited liability company that executed
the within instrument, and also known to me to be the person who executed
it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the
___ day of March 2006, before me, a notary public in and for said State,
personally appeared _____________________ known to me to be a
_____________________ of Xxxxx Fargo Bank, National Association, a national
banking association that executed the within instrument, and also known to
me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
STATE
OF_____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF___________
|
)
|
On
the
___ day of March 2006, before me, a notary public in and for said State,
personally appeared _____________________ known to me to be a
_____________________ of HSBC Bank USA, National Association, a national
banking
association that executed the within instrument, and also known to me to
be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.
Notary
Public
|
[Notarial
Seal] My
commission
expires
EXHIBIT
A-1
FORM
OF
CLASS A-1[A][B] CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Series
2006-SD1, Class A-1[A][B]
|
Aggregate
Certificate Principal Balance of the Class A-1[A][ B] Certificates
as of
the Issue Date: $________
|
|
Pass-Through
Rate: Variable
|
Denomination:
$_____________________
|
|
Date
of Pooling and Servicing Agreement:
February
28, 2006
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
|
First
Distribution Date: April 25, 2006
|
Trustee:
HSBC Bank USA, National Association
|
|
Cut-off
Date: February 28, 2006
|
Issue
Date: March 27, 2006
|
|
No.__
|
CUSIP:________________
|
|
DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY
BE
MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE
AS
THE DENOMINATION OF THIS CERTIFICATE.
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family family, fixed and
adjustable-rate first and second lien mortgage loans (the “Mortgage Loans”)
formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that [Cede & Co.] is the registered owner of a Percentage Interest
(obtained by dividing the denomination of this Certificate by the aggregate
Certificate Principal Balance of the Class A-1[A][B] Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all
the
Class A-1[A][B] Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp. as depositor (hereinafter called the “Depositor”, which term
includes any successor entity under the Agreement), Xxxxx Fargo Bank, N.A.
as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”), Ocwen Loan Servicing, LLC as a servicer (“Ocwen”),
Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”) and HSBC Bank USA, National
Association as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. Certain of the Mortgage Loans
are
being serviced by Select Portfolio Servicing, Inc. (“SPS,” together with Ocwen
and Xxxxx Fargo, each a “Servicer” and together the “Servicers”) pursuant to a
separate servicing agreement. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the
acceptance hereof assents and by which such Holder is bound.
Pursuant
to the terms of the Agreement, distributions will be made on the 25th
day of
each month or, if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the Business
Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to the Holders of Class A-1[A][B]
Certificates on such Distribution Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-1[A][B] Certificates
the aggregate initial Certificate Principal Balance of which is in excess
of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-1[A][B] Certificates, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto,
as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after
due
notice by the Securities Administrator of the pendency of such distribution
and
only upon presentation and surrender of this Certificate at the office or
agency
appointed by the Securities Administrator for that purpose as provided in
the
Agreement.
The
Pass-Through Rate applicable to the calculation of interest payable with
respect
to this Certificate on any Distribution Date shall be a rate per annum equal
to
the lesser of (i) One-Month LIBOR plus [___]%, in the case of each Distribution
Date through and including the Distribution Date on which the aggregate
principal balance of the Mortgage Loans (and properties acquired in respect
thereof) remaining in the Trust Fund is reduced to less than or equal to
10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date,
or
One-Month LIBOR plus [___]%, in the case of any Distribution Date thereafter
and
(ii) the Net WAC Pass-Through Rate for such Distribution Date.
This
Certificate is one of a duly authorized issue of Certificates designated
as an
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries in respect of the Mortgage Loans , as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates
of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Scheduled Principal
Balance of the Mortgage Loans (and properties acquired in respect thereof)
at
the time of purchase being less than or equal to 10% of the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class A-1[A][B] Certificates referred to in the within-mentioned
Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on
the
Certificate Register of the Trust Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
A-2
FORM
OF
CLASS M-[1][2][3][4][5] CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS
CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND] CLASS M-1
CERTIFICATES] [[,/AND] CLASS M-2 CERTIFICATES] [[,/AND] CLASS M-3 CERTIFICATES]
[[AND] CLASS M-4 CERTIFICATES] TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH SECTION
6.02(c) OF THE AGREEMENT REFERRED TO HEREIN.
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO AS DESCRIBED
IN
THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE
OF
THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL
BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
ADMINISTRATOR NAMED HEREIN.
Series
2006-SD1, Class M-[1][2][3][4][5]
|
Aggregate
Certificate Principal Balance of the Class M-[1][2][3][4][5] Certificates
as of the Issue Date: $______________
|
|
Pass-Through
Rate: Variable
|
Denomination:
$______________
|
|
Date
of Pooling and Servicing Agreement: February 28, 2006
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
|
First
Distribution Date: April 25, 2006
|
Trustee:
HSBC Bank USA, National Association
|
|
Cut-off
Date: February 28, 2006
|
Issue
Date: March 27, 2006
|
|
No.___
|
CUSIP:_________________
|
|
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the “Mortgage Loans”)
formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that [Cede & Co.] is the registered owner of a Percentage Interest
(obtained by dividing the denomination of this Certificate by the aggregate
Certificate Principal Balance of the Class M-[1][2][3][4][5] Certificates
as of
the Issue Date) in that certain beneficial ownership interest evidenced by
all
the Class M-[1][2][3][4][5] Certificates in REMIC II created pursuant to
a
Pooling and Servicing Agreement, dated as specified above (the “Agreement”),
among ACE Securities Corp. as depositor (hereinafter called the “Depositor”,
which term includes any successor entity under the Agreement), Xxxxx Fargo
Bank,
N.A. as master servicer (the “Master Servicer”) and securities administrator
(the “Securities Administrator”), Ocwen Loan Servicing, LLC as a servicer
(“Ocwen”), Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”) and HSBC Bank
USA, National Association as trustee (the “Trustee”), a summary of certain of
the pertinent provisions of which is set forth hereafter. Certain of the
Mortgage Loans are being serviced by Select Portfolio Servicing, Inc. (“SPS,”
together with Ocwen and Xxxxx Fargo, each a “Servicer” and together the
“Servicers”) pursuant to a separate servicing agreement. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder
of
this Certificate by virtue of the acceptance hereof assents and by which
such
Holder is bound.
Pursuant
to the terms of the Agreement, distributions will be made on the 25th
day of
each month or, if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the Business
Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to the Holders of Class
M-[1][2][3][4][5] Certificates on such Distribution Date pursuant to the
Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-[1][2][3][4][5]
Certificates the aggregate initial Certificate Principal Balance of which
is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class M-[1][2][3][4][5]
Certificates, or otherwise by check mailed by first class mail to the address
of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on
this
Certificate will be made after due notice by the Securities Administrator
of the
pendency of such distribution and only upon presentation and surrender of
this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.
The
Pass-Through Rate applicable to the calculation of interest payable with
respect
to this Certificate on any Distribution Date shall be a rate per annum equal
to
the lesser of (i) One-Month LIBOR plus ____%, in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired
in
respect thereof) remaining in the Trust Fund is reduced to less than or equal
to
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus ____%, in the case of any Distribution Date
thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This
Certificate is one of a duly authorized issue of Certificates designated
as an
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries in respect of the Mortgage Loans, as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates
of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No
transfer of this Certificate may be made except in accordance with Section
6.02(c) of the Agreement.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however,
such
right to purchase is subject to the aggregate Scheduled Principal Balance
of the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator by manual signature, this Certificate shall not be entitled
to any
benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class M-[1][2][3][4][5] Certificates referred to in the
within-mentioned Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately
available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
A-3
FORM
OF
CLASS CE-1 CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
THIS
CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE MEZZANINE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND (1) OUTSIDE OF
THE
UNITED STATES WITHIN THE MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER
THE 1933 ACT (“REGULATION S”), OR (2) WITHIN THE UNITED STATES TO
(A)
“QUALIFIED INSTITUTIONAL BUYERS” WITHIN THE MEANING OF AND IN COMPLIANCE WITH
RULE 144A UNDER THE 1933 ACT (“RULE 144A”) OR (B) TO INSTITUTIONAL INVESTORS
THAT ARE “ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3)
OR (7) OF “REGULATION D” UNDER THE 1933 ACT.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE AGREEMENT REFERRED
TO HEREIN.
Series
2006-SD1, Class CE-1
|
Aggregate
Notional Amount of the Class CE-1 Certificates as of the Issue
Date:
$_____________
|
||
Pass-Through
Rate: Variable
|
Denomination:
$_________________
|
||
Date
of Pooling and Servicing Agreement: February 28, 2006
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
||
First
Distribution Date: April 25, 2006
|
Trustee:
HSBC Bank USA, National Association
|
||
Cut-off
Date: February 28, 2006
|
Issue
Date: March 27, 2006
|
||
No.
__
|
|||
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the “Mortgage Loans”)
formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that [Deutsche Bank Securities Inc.] is the registered owner of
a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE-1 Certificates
as
of the Issue Date) in that certain beneficial ownership interest evidenced
by
all the Class CE-1 Certificates in REMIC II created pursuant to a Pooling
and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp. as depositor (hereinafter called the “Depositor,” which term
includes any successor entity under the Agreement), Xxxxx Fargo Bank, N.A.
as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”), Ocwen Loan Servicing, LLC as a servicer (“Ocwen”),
Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”) and HSBC Bank USA, National
Association as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. Certain of the Mortgage Loans
are
being serviced by Select Portfolio Servicing, Inc. (“SPS,” together with Ocwen
and Xxxxx Fargo, each a “Servicer” and together the “Servicers”) pursuant to a
separate servicing agreement. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the
acceptance hereof assents and by which such Holder is bound.
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the Notional Amount
(as
defined in the Agreement) hereof at a per annum rate equal to the applicable
Pass-Through Rate as set forth in the Agreement. Pursuant to the terms of
the
Agreement, distributions will be made on the 25th
day of
each month or, if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “Record Date”), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE-1 Certificates on such Distribution
Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE-1 Certificates
the
aggregate initial Certificate Principal Balance of which is in excess of
the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class CE-1 Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such
name
and address shall appear on the Certificate Register. Notwithstanding the
above,
the final distribution on this Certificate will be made after due notice
by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated
as an
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Notional Amount of
the
Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the 1933 Act, and an effective
registration or qualification under applicable state securities laws, or
is made
in a transaction that does not require such registration or qualification.
In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon
Rule
144A or Regulation S under the 1933 Act, written certifications from the
Holder
of the Certificate desiring to effect the transfer, and from such Holder’s
prospective transferee, substantially in the forms attached to the Agreement
as
Exhibit B-1, (ii) if such transfer is purportedly being made in reliance
upon
Rule 501(a) under the 1933 Act, written certifications from the Holder of
the
Certificate desiring to effect the transfer and from such Holder’s prospective
transferee, substantially in the form attached to the Agreement as Exhibit
B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor,
the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s)
of the
Holder of the Certificate desiring to effect the transfer and/or such Holder’s
prospective transferee upon which such Opinion of Counsel is based. None
of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the
1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of
this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02(c) of the Agreement.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates
of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Securities Administrator may require payment of a sum sufficient
to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however,
such
right to purchase is subject to the aggregate Scheduled Principal Balance
of the
Mortgage Loans (and properties acquired in respect hereof) at the time of
purchase being less than or equal to 10% of the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class CE-1 Certificates referred to in the within-mentioned
Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately
available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
A-4
FORM
OF
CLASS CE-2 CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE
WITH
THE 1933 ACT AND OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES
WITHIN THE MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE 1933
ACT
(“REGULATION S”), OR (2) WITHIN THE UNITED STATES TO (A) “QUALIFIED
INSTITUTIONAL BUYERS” WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
UNDER THE 1933 ACT (“RULE 144A”) OR (B) TO INSTITUTIONAL INVESTORS THAT ARE
“ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
“REGULATION D” UNDER THE 1933 ACT.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE AGREEMENT REFERRED
TO HEREIN.
Series
2006-SD1, Class CE-2
|
Aggregate
Percentage Interest of the Class CE-2 Certificates as of the Issue
Date:
100.00%
|
|||
Pass-Through
Rate: Variable
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
|||
Date
of Pooling and Servicing Agreement: February 28, 2006
|
Trustee:
HSBC Bank USA, National Association
|
|||
First
Distribution Date: April 25, 2006
|
Issue
Date: March 27, 2006
|
|||
Cut-off
Date: February 28, 2006
|
||||
No.
__
|
||||
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the “Mortgage Loans”)
formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that ________________ is the registered owner of a Percentage Interest
set forth above in that certain beneficial ownership interest evidenced by
all
the Class CE-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp. as depositor (hereinafter called the “Depositor,” which term
includes any successor entity under the Agreement), Xxxxx Fargo Bank, N.A.
as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”), Ocwen Loan Servicing, LLC as a servicer (“Ocwen”),
Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”) and HSBC Bank USA, National
Association as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. Certain of the Mortgage Loans
are
being serviced by Select Portfolio Servicing, Inc. (“SPS,” together with Ocwen
and Xxxxx Fargo, each a “Servicer” and together the “Servicers”) pursuant to a
separate servicing agreement. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the
acceptance hereof assents and by which such Holder is bound.
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the Notional Balance
hereof
at a per annum rate equal to the applicable Pass-Through Rate as set forth
in
the Agreement. Pursuant to the terms of the Agreement, distributions will
be
made on the 25th
day of
each month or, if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “Record Date”), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE-2 Certificates on such Distribution
Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE-2 Certificates,
or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency
of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated
as an
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the 1933 Act, and an effective
registration or qualification under applicable state securities laws, or
is made
in a transaction that does not require such registration or qualification.
In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon
Rule
144A or Regulation S under the 1933 Act, written certifications from the
Holder
of the Certificate desiring to effect the transfer, and from such Holder’s
prospective transferee, substantially in the forms attached to the Agreement
as
Exhibit B-1, (ii) if such transfer is purportedly being made in reliance
upon
Rule 501(a) under the 1933 Act, written certifications from the Holder of
the
Certificate desiring to effect the transfer and from such Holder’s prospective
transferee, substantially in the form attached to the Agreement as Exhibit
B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor,
the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s)
of the
Holder of the Certificate desiring to effect the transfer and/or such Holder’s
prospective transferee upon which such Opinion of Counsel is based. None
of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the
1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of
this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02(c) of the Agreement.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates
of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Securities Administrator may require payment of a sum sufficient
to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however,
such
right to purchase is subject to the aggregate Scheduled Principal Balance
of the
Mortgage Loans (and properties acquired in respect hereof) at the time of
purchase being less than or equal to 10% of the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class CE-2 Certificates referred to in the within-mentioned
Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately
available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
A-5
FORM
OF
CLASS P CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT
CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS MENDED (THE “CODE”).
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE
ACT AND OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN
THE
MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT (“REGULATION S”),
OR (2) WITHIN THE UNITED STATES TO (A) “QUALIFIED INSTITUTIONAL BUYERS” WITHIN
THE MEANING OF AND IN COMPLIANCE WITH RULE 144A UNDER THE ACT (“RULE 144A”) OR
(B) TO INSTITUTIONAL INVESTORS THAT ARE “ACCREDITED INVESTORS” WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF “REGULATION D” UNDER THE
ACT.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE AGREEMENT REFERRED
TO HEREIN.
Series
2006-SD1, Class P
|
Aggregate
Certificate Principal Balance of the Class P Certificates as of
the Issue
Date: $100.00
|
|
Cut-off
Date and date of Pooling and Servicing Agreement: February 28,
2006
|
Denomination:
$100.00
|
|
First
Distribution Date: April 25, 2006
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
|
No.
__
|
Trustee:
HSBC Bank USA, National Association
|
|
Issue
Date: March 28, 2006
|
||
ACE
SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2006-SD1
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, first and second
lien,
fixed and adjustable-rate mortgage loans (the “Mortgage Loans”) formed and sold
by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that____________________ is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class P Certificates as of
the
Issue Date) in that certain beneficial ownership interest evidenced by all
of
the Class P Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the “Agreement”), among ACE Securities
Corp., as depositor (hereinafter called the “Depositor”, which term includes any
successor entity under the Agreement), Xxxxx Fargo Bank, N.A. as master servicer
(the “Master Servicer”) and securities administrator (the “Securities
Administrator”), Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”), Ocwen
Loan Servicing, LLC as a servicer (“Ocwen”) and HSBC Bank USA, National
Association as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. Certain of the Mortgage Loans
are
being serviced by Select Portfolio Servicing, Inc. (“SPS”, together with Ocwen
and Xxxxx Fargo, each a “Servivcer” and together the “Servicers”) pursuant to a
separate servicing agreement. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the
acceptance hereof assents and by which such Holder is bound.
Pursuant
to the terms of the Agreement, distributions will be made on the 25th
day of
each month or, if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “Record Date”), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five (5) Business Days prior to the Record Date immediately prior to
such
Distribution Date and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed
by
first class mail to the address of the Person entitled thereto, as such name
and
address shall appear on the Certificate Register. Notwithstanding the above,
the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated
as an
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Accounts and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933,
as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A or Regulation S under the
1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder’s prospective transferee,
substantially in the forms attached to the Agreement as Exhibit B-1, (ii)
if
such transfer is purportedly being made in reliance upon Rule 501(a) under
the
1933 Act, written certifications from the Holder of the Certificate desiring
to
effect the transfer and from such Holder’s prospective transferee, substantially
in the form attached to the Agreement as Exhibit B-2 and (iii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be
made
without such registration or qualification (which Opinion of Counsel shall
not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Master
Servicer or the Securities Administrator in their respective capacities as
such), together with copies of the written certification(s) of the Holder
of the
Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act
or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02(c) of the Agreement.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates
of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Securities Administrator may require payment of a sum sufficient
to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however,
such
right to purchase is subject to the aggregate Scheduled Principal Balance
of the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class P Certificates referred to in the within-mentioned
Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately
available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
A-6
FORM
OF
CLASS R CERTIFICATE
THIS
CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS THE SOLE “RESIDUAL INTEREST” IN EACH “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”).
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED
TO
HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO THE 1933
ACT
AND SUCH LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER THE 1933 ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE
AGREEMENT.
NO
TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS
AMENDED (“ERISA”), OR SECTION 4975 OF THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF
THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE SECURITIES
ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF
ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER
1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511
OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE
CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A “DISQUALIFIED ORGANIZATION”) OR (4) AN AGENT OF
A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE
THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER
OF ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER
OF
THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO
THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 6.02(d) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
Series
2006-SD1, Class R
|
Aggregate
Percentage Interest of the Class R Certificates as of the Issue
Date:
100.00%
|
|
Date
of Pooling and Servicing Agreement: February 28, 2006
|
Master
Servicer: Xxxxx Fargo Bank, N.A.
|
|
First
Distribution Date: April 25, 2006
|
Trustee:
HSBC Bank USA, National Association
|
|
Cut-off
Date: February 28, 2006
|
Issue
Date: March 27, 2006
|
|
No
__
|
||
ACE
SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2006-SD1
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the “Mortgage Loans”)
formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICERS,
THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE
UNITED STATES.
This
certifies that _______________ is the registered owner of a Percentage Interest
set forth above in that certain beneficial ownership interest evidenced by
all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the “Agreement”), among ACE Securities
Corp. as depositor (hereinafter called the “Depositor”, which term includes any
successor entity under the Agreement), Xxxxx Fargo Bank, N.A. as master servicer
(the “Master Servicer”) and securities administrator (the “Securities
Administrator”), Ocwen Loan Servicing, LLC as a servicer (“Ocwen”), Xxxxx Fargo
Bank, N.A. as a servicer (“Xxxxx Fargo”; each of Xxxxx Fargo and Ocwen, a
“Servicer” and together, the “Servicers”) and HSBC Bank USA, National
Association as trustee (the “Trustee”), a summary of certain of the pertinent
provisions of which is set forth hereafter. Certain of the Mortgage Loans
are
being serviced by Select Portfolio Servicing, Inc. (“SPS,” together with Ocwen
and Xxxxx Fargo, each a “Servicer” and together the “Servicers”) pursuant to a
separate servicing agreement. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the
Agreement, to which Agreement the Holder of this Certificate by virtue of
the
acceptance hereof assents and by which such Holder is bound.
Pursuant
to the terms of the Agreement, distributions will be made on the 25th day
of
each month or, if such 25th day is not a Business Day, the Business Day
immediately following such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “Record Date”), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will
be made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto
if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency
of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated
as
Asset Backed Pass-Through Certificate of the Series specified on the face
hereof
(herein called the “Certificates”) and representing the Percentage Interest in
the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to
time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicers
party
thereto and the rights of the Certificateholders under the Agreement at any
time
by the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Servicers party thereto with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder
of
this Certificate shall be conclusive and binding on such Holder and upon
all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits
the
amendment thereof, in certain limited circumstances, without the consent
of the
Holders of any of the Certificates.
As
provided in the Agreement and subject to certain limitations therein set
forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the
same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in
the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the 1933 Act, and an effective
registration or qualification under applicable state securities laws, or
is made
in a transaction that does not require such registration or qualification.
In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon
Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder’s prospective
transferee, substantially in the forms attached to the Agreement as Exhibit
B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that
such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor,
the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s)
of the
Holder of the Certificate desiring to effect the transfer and/or such Holder’s
prospective transferee upon which such Opinion of Counsel is based. None
of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the
1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of
this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02 of the Agreement.
Prior
to
registration of any transfer, sale or other disposition of this Certificate,
the
proposed transferee shall provide to the Securities Administrator (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as
representing the beneficial ownership of the residual interests in each of
REMIC
I and REMIC II, (B) it will include in its income a pro
rata
share of
the net income of the Trust Fund and that such income may be an “excess
inclusion,” as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects
to
have the financial means to satisfy all of its tax obligations including
those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of
this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall
be
deemed to be of no legal force or effect whatsoever and such Person shall
not be
deemed to be a Certificateholder for any purpose, including, but not limited
to,
the receipt of distributions in respect of this Certificate.
The
Holder of this Certificate, by its acceptance hereof, shall be deemed to
have
consented to the provisions of Section 6.02 of the Agreement and to any
amendment of the Agreement deemed necessary by counsel of the Depositor to
ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause any portion of the
Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon
any
REMIC.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or a Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none
of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicers nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining
in
REMIC I and (ii) the purchase by the party designated in the Agreement at
a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect
of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however,
such
right to purchase is subject to the aggregate Scheduled Principal Balance
of the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
Dated:
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class R Certificates referred to in the within-mentioned
Agreement.
XXXXX
FARGO BANK, N.A.
as
Securities Administrator
|
||||||||||||||
By:
_________________________________
|
||||||||||||||
Authorized
Officer
|
||||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of
a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
.
|
Dated:
|
|
Signature
by or on behalf of assignor
|
|
Signature
Guaranteed
|
DISTRIBUTION
INSTRUCTIONS
The
assignee should include the following for purposes of distribution:
Distributions
shall be made, by wire transfer or otherwise, in immediately
available
|
|||||||
funds
to
____________________________________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
for
the account of
_____________________________________________________________________________________________
|
|||||||
account
number ___________________________________________ or,
if mailed by check, to ________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
Applicable
statements should be mailed to
__________________________________________________________________________
|
|||||||
_____________________________________________________________________________________________ | |||||||
This
information is provided by
____________________________________________________________________________
|
|||||||
assignee
named above, or
_______________________________________________________________________________________
|
|||||||
its
agent.
|
EXHIBIT
B-1
FORM
OF
TRANSFEROR REPRESENTATION LETTER
[Date]
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Corporate Trust ACE 2006-SD1
Re:
|
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1
Asset
Backed Pass-Through Certificates
Class
CE-1, Class CE-2, Class P and Class R
Certificates
|
Ladies
and Gentlemen:
In
connection with the transfer by ______________________ (the “Transferor”) to
___________________ (the “Transferee”) of the captioned asset-backed
pass-through certificates (the “Certificates”), the Transferor hereby certifies
as follows:
Neither
the Transferor nor anyone acting on its behalf has (a) offered, pledged,
sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b)
has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate
or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner,
(e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the “1933 Act”), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or
any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of February 28, 2006, among
ACE Securities Corp. as Depositor, Ocwen Loan Servicing, LLC as a servicer,
Xxxxx Fargo Bank, N.A. as a servicer, Xxxxx Fargo Bank, N.A. as Master Servicer
and Securities Administrator and HSBC Bank USA, National Association as trustee
(the “Pooling and Servicing Agreement”), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.
Capitalized
terms used but not defined herein shall have the meanings assigned thereto
in
the Pooling and Servicing Agreement.
Very
truly yours,
______________________________________
|
|||||||||||||
[Transferor]
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
FORM
OF
TRANSFEREE REPRESENTATION LETTER
[Date]
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Corporate Trust ACE 2006-SD1
Re:
|
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1
Asset
Backed Pass-Through Certificates
Class
CE-1, Class CE-2, Class P and Class R
Certificates
|
Ladies
and Gentlemen:
In
connection with the purchase from ______________________________ (the
“Transferor”) on the date hereof of the captioned trust certificates (the
“Certificates”), (the “Transferee”) hereby certifies as follows:
1. The
Transferee is a “qualified institutional buyer” as that term is defined in Rule
144A (“Rule 144A”) under the Securities Act of 1933 (the “1933 Act”) and has
completed either of the forms of certification to that effect attached hereto
as
Annex 1 or Annex 2. The Transferee is aware that the sale to it is being
made in
reliance on Rule 144A. The Transferee is acquiring the Certificates for its
own
account or for the account of a qualified institutional buyer, and understands
that such Certificate may be resold, pledged or transferred only (i) to a
person
reasonably believed to be a qualified institutional buyer that purchases
for its
own account or for the account of a qualified institutional buyer to whom
notice
is given that the resale, pledge or transfer is being made in reliance on
Rule
144A, or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The
Transferee has been furnished with all information regarding (a) the
Certificates and distributions thereon, (b) the nature, performance and
servicing of the Mortgage Loans, (c) the Pooling and Servicing Agreement
referred to below, and (d) any credit enhancement mechanism associated with
the
Certificates, that it has requested.
3. The
Transferee: (a) is not an employee benefit plan or other plan subject to
the
prohibited transaction provisions of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of
1986, as amended (the “Code”) (each, a “Plan”), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with “plan
assets” of any Plan within the meaning of the Department of Labor (“DOL”)
regulation at 29 C.F.R. §2510.3-101 or (b) has provided the Securities
Administrator with an Opinion of Counsel on which the Trustee, the Depositor,
the Master Servicer, the Securities Administrator and the Servicers may rely,
acceptable to and in form and substance satisfactory to the Trustee to the
effect that the purchase of Certificates is permissible under applicable
law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Trust Fund, the
Trustee, the Depositor, the Master Servicer, the Securities Administrator
or the
Servicers to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken
in the
Pooling and Servicing Agreement.
In
addition, the Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee, the Securities Administrator,
the
Master Servicer and the Servicers that the Transferee will not transfer such
Certificates to any Plan or person unless such Plan or person meets the
requirements set forth in paragraph 3 above.
All
capitalized terms used but not otherwise defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement, dated as
of
February 28, 2006, among ACE Securities Corp. as Depositor, Xxxxx Fargo Bank,
N.A. as Master Servicer and Securities Administrator, Ocwen Loan Servicing,
LLC
as a Servicer, Xxxxx Fargo Bank, N.A. as a Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were
issued.
[TRANSFEREE]
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
ANNEX
A TO EXHIBIT B-1
FORM
OF
REGULATION S TRANSFER CERTIFICATE
[Date]
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Corporate Trust ACE 2006-SD1
Re:
|
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1 Asset
Backed
Pass-Through Certificates, Class CE -1, Class CE-2 and Class P
Certificates
|
Ladies
and Gentlemen:
Reference
is hereby made to the Pooling and Servicing Agreement (the “Agreement”), dated
as of February 28, 2006, among ACE Securities Corp. as Depositor, Ocwen Loan
Servicing, LLC as a servicer, Xxxxx Fargo Bank, N.A. as a servicer, Xxxxx
Fargo
Bank, N.A. as Master Servicer and Securities Administrator and HSBC Bank
USA,
National Association as trustee (the “Trustee”). Capitalized terms used herein
but not defined herein shall have the meanings assigned thereto in the
Agreement.
This
letter relates to U.S. $[__________] Certificate Principal Balance of Class
[CE][1][2][P] Certificates (the “Certificates”) which are held in the name of
[name of transferor] (the “Transferor”) to effect the transfer of the
Certificates to a person who wishes to take delivery thereof in the form
of an
equivalent beneficial interest [name of transferee] (the
“Transferee”).
In
connection with such request, the Transferor hereby certifies that such transfer
has been effected in accordance with the transfer restrictions set forth
in the
Agreement relating to the Certificates and that the following additional
requirements (if applicable) were satisfied:
(a) the
offer
of the Certificates was not made to a person in the United States;
(b) at
the
time the buy order was originated, the Transferee was outside the United
States
or the Transferor and any person acting on its behalf reasonably believed
that
the Transferee was outside the United States;
(c) no
directed selling efforts were made in contravention of the requirements of
Rule
903(b) or 904(b) of Regulation S, as applicable;
(d) the
transfer or exchange is not part of a plan or scheme to evade the registration
requirements of the Securities Act;
(e) the
Transferee is not a U.S. Person, as defined in Regulation S under the Securities
Act;
(f) the
transfer was made in accordance with the applicable provisions of Rule 903(b)(2)
or (3) or Rule 904(b)(1), as the case may be; and
(g) the
Transferee understands that the Certificates have not been and will not be
registered under the Securities Act, that any offers, sales or deliveries
of the
Certificates purchased by the Transferee in the United States or to U.S.
persons
prior to the date that is 40 days after the later of (i) the commencement
of the
offering of the Certificates and (ii) the Closing Date, may constitute a
violation of United States law, and that (x) distributions of principal and
interest and (y) the exchange of beneficial interests in a Temporary Regulation
S Global Certificate for beneficial interests in the related Permanent
Regulation S Global Certificate, in each case, will be made in respect of
such
Certificates only following the delivery by the Holder of a certification
of
non-U.S. beneficial ownership, at the times and in the manner set forth in
the
Agreement.
ANNEX
1 TO EXHIBIT B-1
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees Other Than Registered Investment Companies]
The
undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) and Xxxxx Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed pass-through certificates (the “Certificates”)
described in the Transferee Certificate to which this certification relates
and
to which this certification is an Annex:
1. As
indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the entity purchasing
the
Certificates (the “Transferee”).
2. In
connection with purchases by the Transferee, the Transferee is a “qualified
institutional buyer” as that term is defined in Rule 144A under the Securities
Act of 1933 (“Rule 144A”) because (i) the Transferee owned and/or invested on a
discretionary basis $________________1
in
securities (except for the excluded securities referred to below) as of the
end
of the Transferee’s most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria
in the
category marked below.
___
|
Corporation,
etc.
The Transferee is a corporation (other than a bank, savings and
loan
association or similar institution), Massachusetts or similar business
trust, partnership, or any organization described in Section 501(c)(3)
of
the Internal Revenue Code of 1986.
|
|
___
|
Bank.
The Transferee (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia,
the
business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official
or is a
foreign bank or equivalent institution, and (b) has an audited
net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a
copy of which is attached hereto.
|
|
___
|
Savings
and Loan.
The Transferee (a) is a savings and loan association, building
and loan
association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a
foreign
savings and loan association or equivalent institution and (b)
has an
audited net worth of at least $25,000,000 as demonstrated in its
latest
annual financial statements, a
copy of which is attached hereto.
|
1 |
Transferee
must own and/or invest on a discretionary basis at least $100,000,000
in
securities unless Transferee is a dealer, and, in that case,
Transferee
must own and/or invest on a discretionary basis at least $10,000,000
in
securities.
|
___
|
Broker-dealer.
The Transferee is a dealer registered pursuant to Section 15 of
the
Securities Exchange Act of 1934.
|
|
___
|
Insurance
Company.
The Transferee is an insurance company whose primary and predominant
business activity is the writing of insurance or the reinsuring
of risks
underwritten by insurance companies and which is subject to supervision
by
the insurance commissioner or a similar official or agency of a
State,
territory or the District of Columbia.
|
|
___
|
State
or Local Plan.
The Transferee is a plan established and maintained by a State,
its
political subdivisions, or any agency or instrumentality of the
State or
its political subdivisions, for the benefit of its
employees.
|
|
___
|
ERISA
Plan.
The Transferee is an employee benefit plan within the meaning of
Title I
of the Employee Retirement Income Security Act of 1974, as
amended.
|
|
___
|
Investment
Advisor
The Transferee is an investment advisor registered under the Investment
Advisers Act of 1940.
|
|
3. The
term
“securities”
as
used
herein does
not include
(i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee,
if
the Transferee is a dealer, (iii) securities issued or guaranteed by the
U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii)
securities owned but subject to a repurchase agreement and (viii) currency,
interest rate and commodity swaps.
4. For
purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Transferee, the Transferee used the cost
of such
securities to the Transferee and did not include any of the securities referred
to in the preceding paragraph. Further, in determining such aggregate amount,
the Transferee may have included securities owned by subsidiaries of the
Transferee, but only if such subsidiaries are consolidated with the Transferee
in its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Transferee’s direction. However, such securities were not included if
the Transferee is a majority-owned, consolidated subsidiary of another
enterprise and the Transferee is not itself a reporting company under the
Securities Exchange Act of 1934.
5. The
Transferee acknowledges that it is familiar with Rule 144A and understands
that
the Transferor and other parties related to the Certificates are relying
and
will continue to rely on the statements made herein because one or more sales
to
the Transferee may be in reliance on Rule 144A.
___
|
___
|
Will
the Transferee be purchasing the Certificates
|
||
Yes
|
No
|
only
for the Transferee’s own account?
|
||
6. If
the
answer to the foregoing question is “no”, the Transferee agrees that, in
connection with any purchase of securities sold to the Transferee for the
account of a third party (including any separate account) in reliance on
Rule
144A, the Transferee will only purchase for the account of a third party
that at
the time is a “qualified institutional buyer” within the meaning of Rule 144A.
In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently
meets
the definition of “qualified institutional buyer” set forth in Rule
144A.
7. The
Transferee will notify each of the parties to which this certification is
made
of any changes in the information and conclusions herein. Until such notice
is
given, the Transferee’s purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Transferee is a bank or savings and loan as provided above,
the
Transferee agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
Dated:
Print
Name of Transferee
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
ANNEX
2 TO EXHIBIT B-1
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees That Are Registered Investment Companies]
The
undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) and Xxxxx Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed pass-through certificates (the “Certificates”)
described in the Transferee Certificate to which this certification relates
and
to which this certification is an Annex:
1. As
indicated below, the undersigned is the President, Chief Financial Officer
or
Senior Vice President of the entity purchasing the Certificates (the
“Transferee”) or, if the Transferee is a “qualified institutional buyer” as that
term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”)
because the Transferee is part of a Family of Investment Companies (as defined
below), is such an officer of the investment adviser (the
“Adviser”).
2. In
connection with purchases by the Transferee, the Transferee is a “qualified
institutional buyer” as defined in Rule 144A because (i) the Transferee is an
investment company registered under the Investment Company Act of 1940, and
(ii)
as marked below, the Transferee alone, or the Transferee’s Family of Investment
Companies, owned at least $100,000,000 in securities (other than the excluded
securities referred to below) as of the end of the Transferee’s most recent
fiscal year. For purposes of determining the amount of securities owned by
the
Transferee or the Transferee’s Family of Investment Companies, the cost of such
securities was used.
___
|
The
Transferee owned $________________________ in securities (other
than the
excluded securities referred to below) as of the end of the Transferee’s
most recent fiscal year (such amount being calculated in accordance
with
Rule 144A).
|
|
___
|
The
Transferee is part of a Family of Investment Companies which owned
in the
aggregate $_______________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee’s most
recent fiscal year (such amount being calculated in accordance
with Rule
144A).
|
|
3. The
term
“Family
of Investment Companies”
as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the
other).
4. The
term
“securities”
as used
herein does not include (i) securities of issuers that are affiliated with
the
Transferee or are part of the Transferee’s Family of Investment Companies, (ii)
securities issued or guaranteed by the U.S. or any instrumentality thereof,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a
repurchase agreement and (vii) currency, interest rate and commodity
swaps.
5. The
Transferee is familiar with Rule 144A and understands that the parties to
which
this certification is being made are relying and will continue to rely on
the
statements made herein because one or more sales to the Transferee will be
in
reliance on Rule 144A. In addition, the Transferee will only purchase for
the
Transferee’s own account.
6. The
undersigned will notify the parties to which this certification is made of
any
changes in the information and conclusions herein. Until such notice, the
Transferee’s purchase of the Certificates will constitute a reaffirmation of
this certification by the undersigned as of the date of such
purchase.
Dated:
Print
Name of Transferee or Advisor
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
|||||||||||||
IF
AN ADVISER:
|
|||||||||||||
______________________________________
|
|||||||||||||
Print
Name of Transferee
|
FORM
OF
TRANSFEREE REPRESENTATION LETTER
The
undersigned hereby certifies on behalf of the purchaser named below (the
“Purchaser”) as follows:
1. I
am an
executive officer of the Purchaser.
2. The
Purchaser is a “qualified institutional buyer”, as defined in Rule 144A, (“Rule
144A”) under the Securities Act of 1933, as amended.
3. As
of the
date specified below (which is not earlier than the last day of the Purchaser’s
most recent fiscal year), the amount of “securities”, computed for purposes of
Rule 144A, owned and invested on a discretionary basis by the Purchaser was
in
excess of $100,000,000.
Name
of
Purchaser _______________________________________
By:
(Signature) __________________________________________
Name
of
Signatory _______________________________________
Title
__________________________________________________
Date
of
this certificate ____________________________________
Date
of
information provided in paragraph 3 ___________________
EXHIBIT
B-2
FORM
OF
TRANSFEROR REPRESENTATION LETTER
____________,
20__
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Corporate Trust ACE 2006-SD1
Re:
|
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1
Asset
Backed Pass-Through Certificates,
Class
CE-1, Class CE-2, Class P and Class R
Certificates
|
Ladies
and Gentlemen:
In
connection with the transfer by ________________ (the “Transferor”) to
__________________________ (the “Transferee”) of the captioned asset-backed
pass-through certificates (the “Certificates”), the Transferor hereby certifies
as follows:
Neither
the Seller nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b)
has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate
or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner,
or
(e) has taken any other action, that (as to any of (a) through (e) above)
would
constitute a distribution of the Certificates under the Securities Act of
1933
(the “Act’), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act,
in any
manner set forth in the foregoing sentence with respect to any Certificate.
The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of that certain Pooling and Servicing
Agreement, dated as of February 28, 2006, among ACE Securities Corp. as
Depositor, Ocwen Loan Servicing, LLC as a servicer, Xxxxx Fargo Bank, N.A.
as a
servicer, Xxxxx Fargo Bank, N.A. as Master Servicer and Securities Administrator
and HSBC Bank USA, National Association as trustee (the “Pooling
and Servicing Agreement”), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.
Very
truly yours,
______________________________________
|
|||||||||||||
(Transferor)
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
FORM
OF
TRANSFEREE REPRESENTATION LETTER
_______________,
20__
Xxxxx
Fargo Bank, N.A.
Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Corporate Trust ACE 2006-SD1
Re:
|
ACE
Securities Corp. Home Equity Loan Trust, Series 2006-SD1
Asset
Backed Pass-Through Certificates,
Class
CE-1, Class CE-2, Class P and Class R
Certificates
|
Ladies
and Gentlemen:
In
connection with the transfer by ______________________ (the “Transferor”) to
__________________________ (the “Transferee”) of the captioned mortgage
pass-through certificates (the “Certificates”), the Transferee hereby certifies
as follows:
1. The
Transferee understands that (a) the Certificates have not been and will not
be
registered or qualified under the Securities Act of 1933, as amended (the
“Act”)
or any state securities law, (b) the Depositor is not required to so register
or
qualify the Certificates, (c) the Certificates may be resold only if registered
and qualified pursuant to the provisions of the Act or any state securities
law,
or if an exemption from such registration and qualification is available,
(d)
the Pooling and Servicing Agreement contains restrictions regarding the transfer
of the Certificates and (e) the Certificates will bear a legend to the foregoing
effect.
2. The
Transferee is acquiring the Certificates for its own account for investment
only
and not with a view to or for sale in connection with any distribution thereof
in any manner that would violate the Act or any applicable state securities
laws.
3. The
Transferee is (a) a substantial, sophisticated institutional investor having
such knowledge and experience in financial and business matters, and, in
particular, in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment
in the
Certificates, (b) able to bear the economic risks of such an investment and
(c)
an “accredited investor” within the meaning of Rule 501(a) promulgated pursuant
to the Act.
4. The
Transferee has been furnished with, and has had an opportunity to review
(a) a
copy of the Pooling and Servicing Agreement and (b) such other information
concerning the Certificates, the Mortgage Loans and the Depositor as has
been
requested by the Transferee from the Depositor or the Transferor and is relevant
to the Transferee’s decision to purchase the Certificates. The Transferee has
had any questions arising from such review answered by the Depositor or the
Transferor to the satisfaction of the Transferee.
5. The
Transferee has not and will not nor has it authorized or will it authorize
any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security
to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner,
(c)
otherwise approach or negotiate with respect to any Certificate, any interest
in
any Certificate or any other similar security with any person in any manner,
(d)
make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above)
would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the
Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Transferee will not sell or otherwise transfer any
of the
Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The
Transferee: (a) is not an employee benefit plan or other plan subject to
the
prohibited transaction provisions of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of
1986, as amended (the “Code”) (each, a “Plan”), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with “plan
assets” of any Plan within the meaning of the Department of Labor (“DOL”)
regulation at 29 C.F.R. §2510.3-101 or (b) has provided the Trustee with an
Opinion of Counsel on which the Depositor, the Master Servicer, the Securities
Administrator, the Trustee and the Servicers may rely, acceptable to and
in form
and substance satisfactory to the Trustee to the effect that the purchase
of
Certificates is permissible under applicable law, will not constitute or
result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code
and will not subject the Trust Fund, the Trustee, the Master Servicer, the
Securities Administrator, the Depositor or the Servicers to any obligation
or
liability (including obligations or liabilities under ERISA or Section 4975
of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.
In
addition, the Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee, the Securities Administrator,
the
Master Servicer and the Servicers that the Transferee will not transfer such
Certificates to any Plan or person unless such Plan or person meets the
requirements set forth in paragraph 6 above.
All
capitalized terms used but not otherwise defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement, dated as
of
February 28, 2006, among ACE Securities Corp. as Depositor, Xxxxx Fargo Bank,
N.A. as Master Servicer and Securities Administrator, Ocwen Loan Servicing,
LLC
as a Servicer, Xxxxx Fargo Bank, N.A.
as a
Servicer and HSBC Bank USA, National Association as Trustee, pursuant to
which
the Certificates were issued.
Very
truly yours,
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
|
|||||||||||||
EXHIBIT
B-3
FORM
OF
TRANSFER AFFIDAVIT AND AGREEMENT
STATE
OF NEW YORK
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF NEW YORK
|
)
|
___________________________
being duly sworn, deposes, represents and warrants as follows:
1.
|
I
am a _____________________ of _______________________________ (the
“Owner”) a corporation duly organized and existing under the laws of
_________________________, the record owner of ACE Securities Corp.
Home
Equity Loan Trust, Series 2006-SD1 Asset Backed Pass-Through Certificates,
Class R Certificates (the “Class R Certificates”), on behalf of whom I
make this affidavit and agreement. Capitalized terms used but not
defined
herein have the respective meanings assigned thereto in the Pooling
and
Servicing Agreement pursuant to which the Class R Certificates
were
issued.
|
|
2.
|
The
Owner (i) is and will be a “Permitted Transferee” as of
____________________. ____ and (ii) is acquiring the Class R Certificates
for its own account or for the account of another Owner from which
it has
received an affidavit in substantially the same form as this affidavit.
A
“Permitted Transferee” is any person other than a “disqualified
organization” or a possession of the United States. 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 real electric or telephone cooperative, or
any
organization (other than certain farmers’ cooperatives) that is generally
exempt from federal income tax unless such organization is subject
to the
tax on unrelated business taxable income.
|
|
3.
|
The
Owner is aware (i) of the tax that would be imposed on transfers
of the
Class R Certificates to disqualified organizations under the Internal
Revenue Code of 1986 that applies to all transfers of the Class
R
Certificates after April 31, 1988; (ii) that such tax would be
on the
transferor or, if such transfer is through an agent (which person
includes
a broker, nominee or middleman) for a non-Permitted Transferee,
on the
agent; (iii) that the person otherwise liable for the tax shall
be
relieved of liability for the tax if the transferee furnishes to
such
person an affidavit that the transferee is a Permitted Transferee
and, at
the time of transfer, such person does not have actual knowledge
that the
affidavit is false; and (iv) that each of the Class R Certificates
may be
a “noneconomic residual interest” within the meaning of proposed Treasury
regulations promulgated under the Code and that the transferor
of a
“noneconomic residual interest” will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection
of
tax.
|
|
4.
|
The
Owner is aware of the tax imposed on a “pass-through entity” holding the
Class R Certificates if, at any time during the taxable year of
the
pass-through entity, a non-Permitted Transferee is the record holder
of an
interest in such entity. (For this purpose, a “pass-through entity”
includes a regulated investment company, a real estate investment
trust or
common trust fund, a partnership, trust or estate, and certain
cooperatives.)
|
|
5.
|
The
Owner is aware that the Securities Administrator will not register
the
transfer of any Class R Certificate unless the transferee, or the
transferee’s agent, delivers to the Securities Administrator, among other
things, an affidavit in substantially the same form as this affidavit.
The
Owner expressly agrees that it will not consummate any such transfer
if it
knows or believes that any of the representations contained in
such
affidavit and agreement are false.
|
|
6.
|
The
Owner 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 Owner that is a Permitted
Transferee.
|
|
7.
|
The
Owner’s taxpayer identification number is
________________.
|
|
8.
|
The
Owner has reviewed the restrictions set forth on the face of the
Class R
Certificates and the provisions of Section 6.02(d) of the Pooling
and
Servicing Agreement under which the Class R Certificates were issued
(in
particular, clauses (iii)(A) and (iii)(B) of Section 6.02(d) which
authorize the Securities Administrator to deliver payments to a
person
other than the Owner and negotiate a mandatory sale by the Securities
Administrator in the event that the Owner holds such Certificate
in
violation of Section 6.02(d)); and that the Owner expressly agrees
to be
bound by and to comply with such restrictions and
provisions.
|
|
9.
|
The
Owner is not acquiring and will not transfer the Class R Certificates
in
order to impede the assessment or collection of any
tax.
|
|
10.
|
The
Owner anticipates that it will, so long as it holds the Class R
Certificates, have sufficient assets to pay any taxes owed by the
holder
of such Class R Certificates, and hereby represents to and for
the benefit
of the person from whom it acquired the Class R Certificates that
the
Owner intends to pay taxes associated with holding such Class R
Certificates as they become due, fully understanding that it may
incur tax
liabilities in excess of any cash flows generated by the Class
R
Certificates.
|
|
11.
|
The
Owner has no present knowledge that it may become insolvent or
subject to
a bankruptcy proceeding for so long as it holds the Class R
Certificates.
|
|
12.
|
The
Owner has no present knowledge or expectation that it will be unable
to
pay any United States taxes owed by it so long as any of the Certificates
remain outstanding.
|
|
13.
|
The
Owner is not acquiring the Class R Certificates with the intent
to
transfer the Class R Certificates to any person or entity that
will not
have sufficient assets to pay any taxes owed by the holder of such
Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain
outstanding.
|
|
14.
|
The
Owner will, in connection with any transfer that it makes of the
Class R
Certificates, obtain from its transferee the representations required
by
Section 6.02(d) of the Pooling and Servicing Agreement under which
the
Class R Certificate were issued and will not consummate any such
transfer
if it knows, or knows facts that should lead it to believe, that
any such
representations are false.
|
|
15.
|
The
Owner will, in connection with any transfer that it makes of the
Class R
Certificates, deliver to the Securities Administrator an affidavit,
which
represents and warrants that it is not transferring the Class R
Certificates to impede the assessment or collection of any tax
and that it
has no actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of the
Class R
Certificates; (ii) may become insolvent or subject to a bankruptcy
proceeding for so long as the Class R Certificates remains outstanding;
and (iii) is not a “Permitted Transferee”.
|
|
16.
|
The
Owner 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 may be
included
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.
|
|
17.
|
[OWNER]
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
[Vice] President
|
ATTEST:
By:
|
________________________________
|
Name:
|
|
Title:
|
[Assistant]
Secretary
|
Personally
appeared before me the above-named __________________, known or proved to
me to
be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the
same
as [his/her] free act and deed and the free act and deed of the
Owner.
Subscribed
and sworn before me this ______________ day of __________, ____.
Notary
Public
|
|
County
of _____________________________
State
of _______________________________
|
|
My
Commission expires:
|
FORM
OF
TRANSFEROR AFFIDAVIT
STATE
OF NEW YORK
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF NEW YORK
|
)
|
_________________________,
being duly sworn, deposes, represents and warrants as follows:
1. I
am
a ____________________
of _________________________ (the “Owner”), a corporation duly organized and
existing under the laws of _____________, on behalf of whom I make this
affidavit.
2. The
Owner
is not transferring the Class R Certificates (the “Residual Certificates”) to
impede the assessment or collection of any tax.
3. The
Owner
has no actual knowledge that the Person that is the proposed transferee (the
“Purchaser”) of the Residual Certificates: (i) has insufficient assets to pay
any taxes owed by such proposed transferee as holder of the Residual
Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding
for so long as the Residual Certificates remain outstanding and (iii) is
not a
Permitted Transferee.
4. The
Owner
understands that the Purchaser has delivered to the Trustee or a transfer
affidavit and agreement in the form attached to the Pooling and Servicing
Agreement as Exhibit B-2. The Owner does not know or believe that any
representation contained therein is false.
5. At
the
time of transfer, the Owner has conducted a reasonable investigation of the
financial condition of the Purchaser as contemplated by Treasury Regulations
Section 1.860E-1(c)(4)(i) and, as a result of that investigation, the Owner
has
determined that the Purchaser has historically paid its debts as they became
due
and has found no significant evidence to indicate that the Purchaser will
not
continue to pay its debts as they become due in the future. The Owner
understands that the transfer of a Residual Certificate may not be respected
for
United States income tax purposes (and the Owner may continue to be liable
for
United States income taxes associated therewith) unless the Owner has conducted
such an investigation.
6. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them
in
the Pooling and Servicing Agreement.
[OWNER]
|
|||||||||||||
By:
___________________________________
|
|||||||||||||
Name:
|
|||||||||||||
Title:
[Vice] President
|
ATTEST:
By:
|
_________________________________ |
Name:
|
|
Title:
|
[Assistant]
Secretary
|
Personally
appeared before me the above-named _________________, known or proved to
me to
be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the
same
as [his/her] free act and deed and the free act and deed of the
Owner.
Subscribed
and sworn before me this ______ day of _____________, ____.
Notary
Public
|
|
County
of _____________________________
State
of _______________________________
|
|
My
Commission expires:
|
EXHIBIT
C
BACK-UP
CERTIFICATION
Re: __________
(the “Trust”)
Mortgage
Pass-Through Certificates, Series 2006-SD1
I,
[identify the certifying individual], certify to ACE Securities Corp. (the
“Depositor”), HSBC Bank USA, National Association (the “Trustee”) and Xxxxx
Fargo Bank, National Association (the “Master Servicer”), and their respective
officers, directors and affiliates, and with the knowledge and intent that
they
will rely upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’s compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance
with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and
Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the Master Servicer pursuant
to the Agreement (collectively, the “Company Servicing
Information”);
(2) Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the Master
Servicer;
(4) I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Company pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the Master Servicer. Any material instances
of
noncompliance described in such reports have been disclosed to the Master
Servicer. Any material instance of noncompliance with the Servicing Criteria
has
been disclosed in such reports.
Capitalized
terms used and not otherwise defined herein have the meanings assigned thereto
in the Pooling and Servicing Agreement, dated as of February 28, 2006, among
ACE
Securities Corp. as Depositor, Xxxxx Fargo Bank, N.A. as Master Servicer,
Securities Administrator and as Servicer, Ocwen Loan Servicing, LLC as a
Servicer and HSBC Bank USA, National Association as Trustee.
Date:
________________________________
|
_____________________________________
|
[Signature]
|
_____________________________________
|
[Title]
|
EXHIBIT
D
FORM
OF
POWER OF ATTORNEY
RECORDING
REQUESTED BY
AND
WHEN
RECORDED MAIL TO
[Servicer]
[Servicer’s
Address]
Attn:
_________________________________
LIMITED
POWER OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that __________________,
having
its principal place of business at _______________________,
as
Trustee (the “Trustee”) pursuant to that Pooling and Servicing Agreement among
ACE Securities Corp. (the “Depositor”), Ocwen Loan Servicing, LLC as a servicer
(“Ocwen”), Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx Fargo”), Xxxxx Fargo
Bank, N.A. as master servicer (the “Master Servicer”) and as securities
administrator (the “Securities Administrator”) and the Trustee, dated as of
February 28, 2006 (the “Pooling and Servicing Agreement”), hereby constitutes
and appoints [Ocwen][Xxxxx Fargo], by and through [Ocwen][Xxxxx Fargo]’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 [Ocwen][Xxxxx Fargo] pursuant to the Pooling and Servicing
Agreement for the purpose of performing all acts and executing all documents
in
the name of the Trustee as may be customarily and reasonably 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 [Ocwen][Xxxxx
Fargo] is acting as servicer, all subject to the terms of the Pooling and
Servicing Agreement.
This
appointment shall apply to the following enumerated transactions
only:
1.
|
The
modification or re-recording of a Mortgage or Deed of Trust, where
said
modification or re-recordings is 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 and said modification or re-recording, in
either
instance, does not adversely affect the lien of the Mortgage or
Deed of
Trust as insured.
|
|
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 a 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.
|
|
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 lawfully do or
cause
to be done by authority hereof.
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, _________________
as
Trustee pursuant to that Pooling and Servicing Agreement among the Depositor,
Ocwen, Xxxxx Fargo, the Master Servicer, the Securities Administrator and
the
Trustee, dated as of February 28, 2006 (ACE Securities Corp. Home Equity
Loan
Trust, Series 2006-SD1 Asset Backed Pass-Through Certificates), has caused
its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by ____________
its duly
elected and authorized Vice President this ___
day of
___________,
200__.
as
Trustee for ACE Securities Corp. Home Equity Loan Trust, Series
2006-SD1
Asset Backed Pass-Through Certificates
|
|||||||||||||
By:
________________________________
|
|||||||||||||
STATE
OF ___________________________
|
|||
COUNTY
OF _____________________________
|
On
_______________,
200__,
before me, the undersigned, a Notary Public in and for said state, personally
appeared _____________,
Vice
President of __________________
as
Trustee for _____ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD1
Asset Backed Pass-Through Certificates, 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
|
|
My
Commission Expires
_________________
|
EXHIBIT
E
SERVICING
CRITERIA
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Schedule
1122 (Pooling and Servicing Agreement)
Assessments
of Compliance and Attestation Reports Servicing Criteria2
Reg.
AB Item 1122(d) Servicing Criteria
|
Depositor
|
Seller
|
Servicer
|
Trustee
|
Custodian
|
Paying
Agent
|
Master
Servicer
|
Securities
Administrator
|
(1) General
Servicing Considerations
|
||||||||
(i) monitoring
performance or other triggers and events of default
|
X
|
X
|
X
|
|||||
(ii) monitoring
performance of vendors of activities outsourced
|
X
|
X
|
||||||
(iii) maintenance
of back-up servicer for pool assets
|
||||||||
(iv) fidelity
bond and E&O policies in effect
|
X
|
X
|
||||||
(2) Cash
Collection and Administration
|
||||||||
(i) timing
of deposits to custodial account
|
X
|
X
|
X
|
X
|
||||
(ii) wire
transfers to investors by authorized personnel
|
X
|
X
|
X
|
|||||
(iii) advances
or guarantees made, reviewed and approved as required
|
X
|
X
|
||||||
(iv) accounts
maintained as required
|
X
|
X
|
X
|
X
|
||||
(v) accounts
at federally insured depository institutions
|
X
|
X
|
X
|
X
|
||||
(vi) unissued
checks safeguarded
|
X
|
X
|
X
|
|||||
(vii) monthly
reconciliations of accounts
|
X
|
X
|
X
|
X
|
||||
(3) Investor
Remittances and Reporting
|
||||||||
(i) investor
reports
|
X
|
X
|
X
|
|||||
(ii) remittances
|
X
|
X
|
X
|
|||||
(iii) proper
posting of distributions
|
X
|
X
|
X
|
|||||
(iv) reconciliation
of remittances and payment statements
|
X
|
X
|
X
|
X
|
||||
(4) Pool
Asset Administration
|
||||||||
(i) maintenance
of pool collateral
|
X
|
X
|
||||||
(ii) safeguarding
of pool assets/documents
|
X
|
X
|
||||||
(iii) additions,
removals and substitutions of pool assets
|
X
|
|||||||
(iv) posting
and allocation of pool asset payments to pool assets
|
X
|
|||||||
(v) reconciliation
of servicer records
|
X
|
|||||||
(vi) modifications
or other changes to terms of pool assets
|
X
|
|||||||
(vii) loss
mitigation and recovery actions
|
X
|
|||||||
(viii)records
regarding collection efforts
|
X
|
|||||||
(ix) adjustments
to variable interest rates on pool assets
|
X
|
|||||||
(x) matters
relating to funds held in trust for obligors
|
X
|
|||||||
(xi) payments
made on behalf of obligors (such as for taxes or
insurance)
|
X
|
|||||||
(xii) late
payment penalties with respect to payments made on behalf of obligors
|
X
|
|||||||
(xiii)records
with respect to payments made on behalf of obligors
|
X
|
|||||||
(xiv) recognition
and recording of delinquencies, charge-offs and uncollectible
accounts
|
X
|
X
|
||||||
(xv) maintenance
of external credit enhancement or other support
|
*
The
descriptions of the Item 1122(d) servicing criteria use key words and
phrases
and are not verbatim recitations of the servicing criteria. Refer to
Regulation
AB, Item 1122 for a full description of servicing
criteria.
EXHIBIT
F
MORTGAGE
LOAN PURCHASE AGREEMENT
This
is a
Mortgage Loan Purchase Agreement (this “Agreement”), dated March 27, 2006,
between DB Structured Products, Inc. (the “Seller”) and ACE Securities Corp., a
Delaware corporation (the “Purchaser”).
The
Seller intends to sell the Mortgage Loans (as hereinafter identified) to
the
Purchaser on the terms and subject to the conditions set forth in this
Agreement. The Purchaser intends to deposit the Mortgage Loans into a mortgage
pool comprising the Trust Fund. The Trust Fund will be evidenced by a single
series of mortgage pass-through certificates designated as ACE Securities
Corp.
Home Equity Loan Trust, Series 2006-SD1, Asset Backed Pass-Through Certificates
(the “Certificates”). The Certificates will consist of eleven classes of
certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement for ACE Securities Corp. Home Equity Loan Trust, Series
2006-SD1, Asset Backed Pass-Through Certificates, dated as of February
28, 2006
(the “Pooling and Servicing Agreement”), among the Purchaser as depositor, Xxxxx
Fargo Bank, National Association as master servicer (the “Master Servicer”) and
securities administrator (the “Securities Administrator”), Ocwen Loan Servicing,
LLC as a servicer (“Ocwen”), Xxxxx Fargo Bank, N.A. as a servicer (“Xxxxx
Fargo”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).
Certain of the Mortgage Loans will be serviced by Select Portfolio Servicing,
Inc. (“SPS”, and together with Ocwen and Xxxxx Fargo, each a “Servicer” and
collectively the “Servicers”) pursuant to a separate servicing agreement between
the Seller and SPS (the “SPS Servicing Agreement”) which will be assigned to the
Purchaser as of the date hereof. The Purchaser will sell the Class A1-A,
Class
A1-B, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates
(collectively, the “Offered Certificates”) to Deutsche Bank Securities Inc.
(“DBSI”), pursuant to the Second Amended and Restated Underwriting Agreement,
dated June 24, 1999, as amended and restated to and including January 25,
2006
between the Purchaser and DBSI, and the Terms Agreement, dated March 27,
2006
(collectively, the “Underwriting Agreement”), between the Purchaser and DBSI.
Capitalized terms used but not defined herein shall have the meanings set
forth
in the Pooling and Servicing Agreement.
The
parties hereto agree as follows:
SECTION
1. Agreement
to Purchase.
The
Seller hereby sells, and the Purchaser hereby purchases, on or before March
27,
2006 (the “Closing Date”), certain fixed-rate and adjustable rate residential
first and second lien mortgage loans on mortgaged properties consisting
of
attached, detached or semi-detached, one to four-family dwelling units,
individual condominium units, manufactured homes, individual units in planned
unit developments and vacant land (the “Mortgage Loans”), having an aggregate
principal balance as of the close of business on February 28, 2006 (the
“Cut-off
Date”) of approximately $170,112,021 (the “Closing Balance”), including the
right to any Prepayment Charges payable by the related Mortgagors in connection
with any Principal Prepayments on the Mortgage Loans.
SECTION
2. Mortgage
Loan Schedule.
The
Purchaser and the Seller have agreed upon which of the mortgage loans owned
by
the Seller are to be purchased by the Purchaser pursuant to this Agreement
and
the Seller will prepare or cause to be prepared on or prior to the Closing
Date
a final schedule (the “Closing Schedule”) that shall describe such Mortgage
Loans and set forth all of the Mortgage Loans to be purchased under this
Agreement, including the Prepayment Charges. The Closing Schedule will
conform
to the requirements set forth in this Agreement and to the definition of
“Mortgage Loan Schedule” under the Pooling and Servicing Agreement.
SECTION
3. Consideration.
(a) In
consideration for the Mortgage Loans to be purchased hereunder, the Purchaser
shall, as described in Section 8, pay to or upon the order of the Seller
in
immediately available funds an amount (the “Purchase Price”) equal to (i)
$[__________]1
and (ii)
a 100% interest in the Class CE-1, Class CE-2, Class P and Class R Certificates
(collectively the “DB Certificates”). The DB Certificates shall be in the name
of “Deutsche Bank Securities Inc.”
(b) The
Purchaser or any assignee, transferee or designee of the Purchaser shall
be
entitled to (i) with respect to all of the Mortgage Loans other than the
Mortgage Loans set forth on Schedule
B
attached
hereto, all payments of principal collected after the Cut-off Date and
all
payments of interest on the Mortgage Loans collected after the Cut-off
Date and
(ii) with respect to the Mortgage Loans set forth on Schedule
B
attached
hereto, all scheduled principal due after the related Cut-off Date, all
other
recoveries of principal collected after the Cut-off Date (provided, however,
that all scheduled payments of principal due on or before the Cut-off Date
and
collected by the Seller after the Cut-off Date shall belong to the Seller),
and
all payments of interest on the Mortgage Loans (minus that portion of any
such
interest payment that is allocable to the period prior to the Cut-off
Date).
(c) Pursuant
to the Pooling and Servicing Agreement, the Purchaser will assign all of
its
right, title and interest in and to the Mortgage Loans, together with its
rights
under this Agreement, to the Trustee for the benefit of the
Certificateholders.
SECTION
4. Transfer
of the Mortgage Loans.
(a) Possession
of Mortgage Files. The
Seller does hereby sell to the Purchaser, without recourse but subject
to the
terms of this Agreement, all of its right, title and interest in, to and
under
the Mortgage Loans, including the Prepayment Charges on the Mortgage
Loans. The contents of each Mortgage File not delivered to the
Purchaser or to any assignee, transferee or designee of the Purchaser on
or
prior to the Closing Date and not listed as a defect on Schedule
A
attached
hereto are and shall be held in trust by the Seller for the benefit of
the
Purchaser or any assignee, transferee or designee of the
Purchaser. Upon the sale of the Mortgage Loans, the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records
and
documents with respect to the related Mortgage Loan prepared by or that
come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser
or as
otherwise directed by the Purchaser.
1 Please
contact the Mortgage Loan Seller for this information.
(b) Delivery
of Mortgage Loan Documents. Except
as set forth on Schedule
A
attached
hereto, the Seller will, on or prior to the Closing Date, deliver or cause
to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:
(A) the
original Mortgage Note (including all riders thereto) bearing all intervening
endorsements necessary to show a complete chain of endorsements from the
original payee, endorsed in blank, via
original signature,
and, if
previously endorsed, signed in the name of the last endorsee by a duly
qualified
officer of the last endorsee. If
the
Mortgage Loan was acquired by the last endorsee in a merger, the endorsement
must be by “[name of last endorsee], successor by merger to [name of
predecessor]”. If the Mortgage Loan was acquired or originated by the last
endorsee while doing business under another name, the endorsement must
be by
“[name of last endorsee], formerly known as [previous name]”;
(B) Reserved;
(C) the
original Assignment of Mortgage executed in blank;
(D) the
original of any guarantee executed in connection with the Mortgage Note,
if
any;
(E) the
original Mortgage (including all riders thereto) with evidence of recording
thereon and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording thereon,
and in the case of each MOM Loan, the original Mortgage, noting the presence
of
the MIN of the Mortgage Loan and either language indicating that the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination,
the original Mortgage and the assignment thereof to MERS®, with evidence of
recording indicated thereon; or, if the original Mortgage with evidence
of
recording thereon has not been returned by the public recording office
where
such Mortgage has been delivered for recordation or such Mortgage has been
lost
or such public recording office retains the original recorded Mortgage,
a
photocopy of such Mortgage, together with (i) in the case of a delay caused
by
the public recording office, an officer’s certificate of the title insurer
insuring the Mortgage, the escrow agent, the seller or the related Servicer
stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and that the original recorded Mortgage
or a
copy of such Mortgage certified by such public recording office to be a
true and
complete copy of the original recorded Mortgage will be promptly delivered
to
the Purchaser’s designee upon receipt thereof by the party delivering the
officer’s certificate or by the related Servicer; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage with the recording information thereon
certified
by such public recording office to be a true and complete copy of the original
recorded Mortgage;
(F) the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any;
(G) the
originals of any intervening assignments of mortgage with evidence of recording
thereon evidencing a complete chain of ownership from the originator of
the
Mortgage Loan to the last assignee, or if any such intervening assignment
of
mortgage has not been returned from the applicable public recording office
or
has been lost or if such public recording office retains the original recorded
intervening assignments of mortgage, a photocopy of such intervening assignment
of mortgage, together with (i) in the case of a delay caused by the public
recording office, an officer’s certificate of the title insurer insuring the
Mortgage, the escrow agent, the seller or the related Servicer stating
that such
intervening assignment of mortgage has been delivered to the appropriate
public
recording office for recordation and that such original recorded intervening
assignment of mortgage or a copy of such intervening assignment of mortgage
certified by the appropriate public recording office to be a true and complete
copy of the original recorded intervening assignment of mortgage will be
promptly delivered to the Purchaser’s designee upon receipt thereof by the party
delivering the officer’s certificate or by the related Servicer; or (ii) in the
case of an intervening assignment of mortgage where a public recording
office
retains the original recorded intervening assignment of mortgage or in
the case
where an intervening assignment of mortgage is lost after recordation in
a
public recording office, a copy of such intervening assignment of mortgage
with
recording information thereon certified by such public recording office
to be a
true and complete copy of the original recorded intervening assignment
of
mortgage;
(H) if
the
Mortgage Note, the Mortgage, any Assignment of Mortgage, or any other related
document has been signed by a Person on behalf of the Mortgagor, the original
power of attorney or other instrument that authorized and empowered such
Person
to sign;
(I) the
original lender’s title insurance policy in the form of an ALTA mortgage title
insurance policy
or,
if the
original lender’s title insurance policy has not been issued, the irrevocable
commitment to issue the same; provided, that the Seller shall deliver such
original title insurance policy to the Purchaser or any assignee, transferee
or
designee of the Purchaser promptly upon receipt by the Seller, if any;
and
(J) the
original of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any.
Notwithstanding
anything to the contrary contained in this Section 4, with respect to certain
of
the Mortgage Loans, if any original Mortgage Note referred to in Sections
4(b)
above cannot be located, the obligations of the Seller to deliver such
documents
shall be deemed to be satisfied upon delivery to the Purchaser or any assignee,
transferee or designee of the Purchaser of a photocopy of such Mortgage
Note, if
available, with a lost note affidavit substantially in the form of Exhibit
1
attached
hereto. If any of the original Mortgage Notes for which a lost note affidavit
was delivered to the Purchaser or any assignee, transferee or designee
of the
Purchaser is subsequently located, such original Mortgage Note shall be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser within three Business Days.
Each
original document relating to a Mortgage Loan which is not delivered to
the
Purchaser or its assignee, transferee or designee, if held by the Seller,
shall
be so held for the benefit of the Purchaser, its assignee, transferee or
designee.
In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Seller further agrees that it will cause, at the Seller’s own
expense, within 30 days after the Closing Date, the MERS® System to indicate
that such Mortgage Loans have been assigned by the Seller to the Depositor
and
by the Depositor to the Trustee in accordance with this Agreement for the
benefit of the Certificateholders by including (or deleting, in the case
of
Mortgage Loans which are repurchased in accordance with this Agreement)
in such
computer files (a) the code in the field which identifies the specific
Trustee
and (b) the code in the field “Pool Field” which identifies the series of the
Certificates issued in connection with such Mortgage Loans. The Seller
further
agrees that it will not, and will not permit any Servicer or the Master
Servicer
to, and the Master Servicer agrees that it will not, alter the codes referenced
in this paragraph with respect to any Mortgage Loan during the term of
this
Agreement unless and until such Mortgage Loan is repurchased in accordance
with
the terms of this Agreement or the Pooling and Servicing Agreement.
(c) Acceptance
of Mortgage Loans.
The
documents delivered pursuant to Section 4(b) hereof shall be reviewed by
the
Purchaser or any assignee, transferee or designee of the Purchaser at any
time
before or after the Closing Date (and with respect to each document permitted
to
be delivered after the Closing Date, within seven days of its delivery)
to
ascertain that all required documents have been executed and received and
that
such documents relate to the Mortgage Loans identified on the Mortgage
Loan
Schedule.
(d) Transfer
of Interest in Agreements.
The
Purchaser has the right to assign its interest under this Agreement, in
whole or
in part, to the Trustee, as may be required to effect the purposes of the
Pooling and Servicing Agreement, without the consent of the Seller, and
the
assignee shall succeed to the rights and obligations hereunder of the
Purchaser. Any expense reasonably incurred by or on behalf of the
Purchaser or the Trustee in connection with enforcing any obligations of
the
Seller under this Agreement will be promptly reimbursed by the
Seller.
(e) Examination
of Mortgage Files.
Prior
to the Closing Date, the Seller shall either (i) deliver in escrow to the
Purchaser or to any assignee, transferee or designee of the Purchaser for
examination the Mortgage File pertaining to each Mortgage Loan, or (ii)
make
such Mortgage Files available to the Purchaser or to any assignee, transferee
or
designee of the Purchaser for examination. Such examination may be
made by the Purchaser or the Trustee, and their respective designees, upon
reasonable notice to the Seller during normal business hours before the
Closing
Date and within 60 days after the Closing Date. If any such person
makes such examination prior to the Closing Date and identifies any Mortgage
Loans that do not conform to the requirements of the Purchaser as described
in
this Agreement, including the exceptions set forth in Schedule
A
attached
hereto, such Mortgage Loans shall be deleted from the Closing
Schedule. The Purchaser may, at its option and without notice to the
Seller, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any
person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase
or
other relief as provided herein.
SECTION
5. Representations,
Warranties and Covenants of the Seller.
The
Seller hereby represents and warrants to the Purchaser, as of the date
hereof
and as of the Closing Date, and covenants, that:
(i) The
Seller is duly organized, validly existing and in good standing under the
laws
of the state of New York and is and will remain in compliance with the
laws of
each state in which any Mortgaged Property is located to the extent necessary
to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loan in accordance with the terms of this Agreement. Seller has
the
requisite licenses to perform pursuant to this Agreement, no such licenses
or
approvals obtained by the Seller have been suspended or revoked by any
court,
administrative agency, arbitrator or governmental body and no proceedings
are
pending which might result in such suspension or revocation, except where
the
failure to be so licensed would not result in a material adverse effect
on the
Seller, the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
(ii) The
Seller has the full power and authority to hold each Mortgage Loan, to
sell each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. The Seller
has duly
authorized the execution, delivery and performance of this Agreement, has
duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Purchaser, constitutes a legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization
or
other similar laws affecting the enforcement of creditors’ rights, or (ii)
general principles of equity;
(iii) The
execution and delivery of this Agreement by the Seller and the performance
of
and compliance with the terms of this Agreement will not violate the Seller’s
articles of incorporation or by-laws or constitute a default under or result
in
a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to
the
Seller or its assets;
(iv) The
Seller is not in violation of, and the execution and delivery of this Agreement
by the Seller and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any order or
decree
of any court or any order or regulation of any federal, state, municipal
or
governmental agency having jurisdiction over the Seller or its assets,
which
violation might have consequences that would materially and adversely affect
the
condition (financial or otherwise) or the operation of the Seller or its
assets
or might have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder;
(v) The
Seller is an approved seller/servicer for FNMA and FHLMC in good standing
and is
a HUD approved mortgagee pursuant to Section 203 of the National Housing
Act. No
event has occurred, including but not limited to a change in insurance
coverage,
which would make the Seller unable to comply with FNMA, FHLMC or HUD eligibility
requirements or which would require notification to FNMA, FHLMC or
HUD;
(vi) The
Seller does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this
Agreement;
(vii) The
Mortgage Loan Documents and any other documents required to be delivered
with
respect to each Mortgage Loan pursuant to this Agreement have been delivered
to
the Custodians, all in compliance with the specific requirements of this
Agreement;
(viii) Immediately
prior to the payment of the Purchase Price for each Mortgage Loan, the
Seller
was the owner of record of the related Mortgage and the indebtedness evidenced
by the related Mortgage Note and upon the payment of the Purchase Price
by the
Purchaser, in the event that the Seller retains record title, the Seller
shall
retain such record title to each Mortgage, each related Mortgage Note and
the
related Mortgage Files with respect thereto in trust for the Purchaser
as the
owner thereof and only for the purpose of servicing and supervising the
servicing of each Mortgage Loan;
(ix) There
are
no actions or proceedings against, or, to the best knowledge of Seller,
investigations of, the Seller before any court, administrative agency or
other
tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking
to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or
materially and adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement;
(x) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Seller
of,
or compliance by the Seller with, this Agreement or the consummation of
the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the related Closing Date;
(xi) The
consummation of the transactions contemplated by this Agreement are in
the
ordinary course of business of the Seller, and the transfer, assignment
and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant
to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions;
(xii) The
information delivered by the Seller to the Purchaser with respect to the
Seller’s loan loss, foreclosure and delinquency experience for the twelve (12)
months immediately preceding the Initial Closing Date on mortgage loans
underwritten to the same standards as the Mortgage Loans and covering mortgaged
properties similar to the Mortgaged Properties, is true and correct in
all
material respects;
(xiii) Neither
this Agreement nor any written statement, report or other document prepared
and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading;
(xiv) The
consideration received by the Seller upon the sale of the Mortgage Loans
constitutes fair consideration and reasonably equivalent value for such
Mortgage
Loans;
(xv) The
Seller is solvent and will not be rendered insolvent by the consummation
of the
transactions contemplated hereby. The Seller is not transferring any Mortgage
Loan with any intent to hinder, delay or defraud any of its
creditors;
(xvi) The
Seller 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 MERS Mortgage Loans until the Servicing Transfer Date with respect
to any
Mortgage Loan Package; and
(xvii) The
information set forth in the applicable part of the Mortgage Loan Schedule
relating to the existence of a Prepayment Charge on the Mortgage Loans
is
complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Charge
on the
Mortgage Loans is permissible and enforceable in accordance with its terms
upon
the Mortgagor’s full and voluntary principal prepayment under applicable law,
except to the extent that (1) the enforceability thereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating
to creditors’ rights generally, (2) the collectability thereof may be limited
due to acceleration in connection with a foreclosure or other involuntary
prepayment or (3) subsequent changes in applicable law may limit or prohibit
enforceability thereof under applicable law, and was originated in compliance
with all applicable federal, state and local laws.
SECTION
6. Representations
and Warranties of the Seller Relating to the Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that as to each
Mortgage
Loan as of the Closing Date (unless otherwise specified):
(i) Information
provided to the Rating Agencies, including the loan level detail set forth
on
the Mortgage Loan Schedule, is true and correct in all material respects
as of
the Cut-off Date according to the Rating Agency Requirements;
(ii) With
respect to each Mortgage Loan other than the Mortgage Loans identified
on
Schedule
C
attached
hereto, no error, omission, misrepresentation, negligence, fraud or similar
occurrence has taken place on the part of any person, including without
limitation the Mortgagor, any appraiser, any builder or developer, or any
other
party involved in the origination of such Mortgage Loan or in the application
of
any insurance in relation to such Mortgage Loan. With respect to each Mortgage
Loan identified on Schedule C attached hereto, no material misrepresentation,
fraud or similar occurrence has taken place on the part of the originator
and
Seller;
(iii) Except
with respect to Mortgage Loans that are delinquent, that have borrowers
in
bankruptcy and/or that are subject to forbearance plans (collectively,
the
“Delinquent/Plan Mortgage Loans”), all payments required to be made prior to the
Cut-off Date with respect to each Mortgage Loan have been made;
(iv) Neither
the Seller nor the related originator of the Mortgage Loan has advanced
any
Monthly Payment required under the terms of the Mortgage Note;
(v) Except
with respect to certain of the Delinquent/Plan Mortgage Loans, there are
no
delinquent taxes, assessment liens or insurance premiums affecting the
related
Mortgaged Property;
(vi) The
terms
of the Mortgage Note and the Mortgage have not been materially impaired,
waived,
altered or modified in any respect, except by written instruments, recorded
in
the applicable public recording office if necessary to maintain the lien
priority of the Mortgage. The substance of any such waiver, alteration
or
modification has been approved by the title insurer, to the extent required
by
the related policy. No Mortgagor has been released, in whole or in part,
except
in connection with an assumption agreement (approved by the title insurer
to the
extent required by the policy) and which assumption agreement has been
delivered
to the Trustee;
(vii) The
Mortgaged Property is insured against loss by fire and hazards of extended
coverage (excluding earthquake insurance) in an amount which is at least
equal
to the lesser of (i) the amount necessary to compensate for any damage
or loss
to the improvements which are a part of such property on a replacement
cost
basis or (ii) the outstanding principal balance of the Mortgage Loan. If
the
Mortgaged Property is in an area identified on a flood hazard map or flood
insurance rate map issued by the Federal Emergency Management Agency as
having
special flood hazards (and such flood insurance has been made available),
a
flood insurance policy meeting the requirements of the current guidelines
of the
Federal Insurance Administration is in effect. All such insurance policies
contain a standard mortgagee clause naming the originator of the Mortgage
Loan,
its successors and assigns as mortgagee and the Seller has not engaged
in any
act or omission which would impair the coverage of any such insurance policies.
Except as may be limited by applicable law, the Mortgage obligates the
Mortgagor
thereunder to maintain all such insurance at the Mortgagor’s cost and expense,
and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, anti-predatory lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
fair housing or disclosure laws applicable to the origination and servicing
of
the Mortgage Loans have been complied with in all material
respects;
(ix) Except
as
otherwise set forth in the Mortgage File, the Mortgage has not been satisfied,
cancelled, subordinated (other than with respect to second lien Mortgage
Loans,
the subordination to the first lien) or rescinded, in whole or in part,
and the
Mortgaged Property has not been released from the lien of the Mortgage,
in whole
or in part, nor has any instrument been executed that would effect any
such
satisfaction, cancellation, subordination, rescission or release;
(x) The
Mortgage was recorded or was submitted for recording in accordance with
all
applicable laws and is a valid, existing and enforceable first or second
lien on
the Mortgaged Property including all improvements on the Mortgaged
Property;
(xi) The
Mortgage Note and the related Mortgage are genuine and each is the legal,
valid
and binding obligation of the maker thereof, insured under the related
title
policy, and enforceable in accordance with its terms, except to the extent
that
the enforceability thereof may be limited by a bankruptcy, insolvency or
reorganization;
(xii) The
Seller is the sole legal, beneficial and equitable owner of the Mortgage
Note
and the Mortgage and has the full right to convey, transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
lien
(other than with respect to second lien Mortgage Loans, the subordination
to the
first lien mortgage loan), pledge, charge, claim or security interest and
immediately upon the sale, assignment and endorsement of the Mortgage Loans
from
the Seller to the Purchaser, the Purchaser shall have good and indefeasible
title to and be the sole legal owner of the Mortgage Loans subject only
to any
encumbrance, equity, lien, pledge, charge, claim or security interest arising
out of the Purchaser’s actions;
(xiii) Each
Mortgage Loan is covered by a valid and binding American Land Title Association
lender’s title insurance policy or other generally acceptable form of policy of
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, in either case, issued
by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located. Except as set forth in the related Mortgage File,
no claims
have been filed under such lender’s title insurance policy, and the Seller has
not done, by act or omission, anything that would impair the coverage of
the
lender’s title insurance policy;
(xiv) Except
with respect to the Delinquent/Plan Mortgage Loans, there is no material
default, breach, violation or event of acceleration existing under the
Mortgage
or the Mortgage Note and no event which, with the passage of time or with
notice
and the expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration, and the Seller has
not, nor
has its predecessors, waived any material default, breach, violation or
event of
acceleration;
(xv) Except
as
set forth in the related Mortgage Files, there are no mechanics’ or similar
liens or claims which have been filed for work, labor or material provided
to
the related Mortgaged Property prior to the origination of the Mortgage
Loan
which are or may be liens prior to, or equal or coordinate with, the lien
of the
related Mortgage, except as may be disclosed in the related title
policy;
(xvi) Approximately
94.64% of the Mortgage Notes are payable on the first day of each month
in
monthly payments which (a) in the case of a fixed rate Mortgage Loans are
sufficient to amortize the Mortgage Loan fully by the stated maturity date
over
an original term from commencement of amortization to not more than 35
years,
(b) in the case of adjustable rate Mortgage Loans, are changed on each
adjustment date, and in any case are sufficient to amortize the Mortgage
Loan
fully by the stated maturity date over an original term from commencement
of
amortization to not more than 45 years and (c) in the case of balloon Mortgage
Loans, are based on a set amortization schedule of not more than 30 years,
as
set forth in the related Mortgage Note, and include a final monthly payment
substantially greater than the preceding monthly payment which is sufficient
to
amortize the remaining principal balance of such balloon Mortgage Loan.
Other
than with respect to Simple Interest Mortgage Loans, interest is calculated
on
each Mortgage Loan on a 30/360 basis. Interest is payable on each Mortgage
Loan
in arrears. Except for 6.91% of the Mortgage Loans (measured by the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date), no Mortgage
Loan is a balloon loan. No Mortgage Loan permits negative
amortization;
(xvii) The
servicing practices used in connection with the servicing of the Mortgage
Loans
have been in all respects reasonable and customary in the mortgage servicing
industry of like mortgage loan servicers, servicing similar sub prime mortgage
loans originated in the same jurisdiction as the Mortgaged
Property;
(xviii) At
the
time of origination of the Mortgage Loan there was no proceeding pending
for the
total or partial condemnation of the Mortgaged Property and, as of the
date such
Mortgage Loan was purchased by the Purchaser, to the best of the Purchaser’s
knowledge there is no proceeding pending for the total or partial condemnation
of the Mortgaged Property;
(xix) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage designated as
a deed
of trust, by trustee’s sale, and (b) otherwise by judicial
foreclosure;
(xx) The
Mortgage Note is not and has not been secured by any collateral except
the lien
of the related Mortgage referred to in subsection (x);
(xxi) In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will
become
payable by the Seller to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(xxii) At
the
time of origination and except as otherwise set forth in the related Mortgage
Files, the Mortgage Loan is not subject to any valid right of rescission,
set-off, counterclaim or defense, including without limitation the defense
of
usury, nor will the operation of any of the terms of the Mortgage Note
or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to
any such
right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(xxiii) To
the
best of the Seller’s knowledge, the Mortgaged Property is free of material
damage and in good repair, excepting therefrom any Mortgage Loan subject
to an
escrow withhold as shown on the Mortgage Loan Schedule;
(xxiv) All
of
the improvements which were included in determining the appraised value
of the
Mortgaged Property lie wholly within the Mortgaged Property’s boundary lines and
no improvements on adjoining properties encroach upon the Mortgaged Property,
excepting therefrom: (i) any encroachment insured against in the lender’s title
insurance policy identified in subsection (xiii), (ii) any encroachment
generally acceptable to sub prime mortgage loan originators doing business
in
the same jurisdiction as the Mortgaged Property, and (iii) any encroachment
which does not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(xxv) All
parties to the Mortgage Note had the legal capacity to execute the Mortgage
Note
and the Mortgage, and the Mortgage Note and the Mortgage have been duly
executed
by such parties;
(xxvi) To
the
best of the Seller’s knowledge, at the time of origination of the Mortgage Loan,
no appraised improvement located on or being part of the Mortgaged Property
was
in violation of any applicable zoning law or regulation and all inspections,
licenses and certificates required in connection with the origination of
any
Mortgage Loan with respect to the occupancy of the Mortgaged Property,
have been
made or obtained from the appropriate authorities;
(xxvii) No
Mortgagor has notified the Seller of any relief requested or allowed under
the
Servicemembers Civil Relief Act;
(xxviii) All
parties which have held an interest in the Mortgage Loan are (or during
the
period in which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the state wherein
the
Mortgaged Property is located, (2) organized under the laws of such state,
(3)
qualified to do business in such state, (4) a federal savings and loan
association or national bank, (5) not doing business in such state, or
(6)
exempt from the applicable licensing requirements of such state;
(xxix) Except
as
otherwise disclosed by the Seller, the Mortgage File contains an appraisal
of
the related Mortgaged Property which was made prior to the approval of
the
Mortgage Loan by a qualified appraiser, duly appointed by the related originator
and was made in accordance with the Financial Institutions Reform, Recovery,
and
Enforcement Act of 1989 and the Uniform Standards of Professional Appraisal
Practice;
(xxx) Except
as
may otherwise be limited by applicable law, the Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance
of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee
thereunder;
(xxxi) The
Mortgage Loan does not contain any provision which would constitute a “buydown”
provision and pursuant to which Monthly Payments are paid or partially
paid with
funds deposited in a separate account established by the related originator,
the
Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other
than
the Mortgagor. The Mortgage Loan is not a “graduated payment mortgage loan” and
the Mortgage loan does not have a shared appreciation or other contingent
interest feature;
(xxxii) To
the
best of the Seller’s knowledge there is no action or proceeding directly
involving the Mortgaged Property presently pending in which compliance
with any
environmental law, rule or regulation is at issue and the Seller has received
no
notice of any condition at the Mortgaged Property which is reasonably likely
to
give rise to an action or proceeding in which compliance with any environmental
law, rule or regulation is at issue;
(xxxiii) Each
Mortgage Loan is an obligation which is principally secured by an interest
in
real property within the meaning of Treasury Regulation section
1.860G-2(a);
(xxxiv) Each
Mortgage Loan is directly secured by a first or second lien on, and consists
of
vacant land or a single parcel of, real property with a detached one-to-four
family residence erected thereon, a townhouse or an individual condominium
unit
in a condominium project, an individual unit in a planned unit development
(“PUD”). No residence or dwelling is a mobile home or a manufactured dwelling
unless it is an Acceptable Manufactured Dwelling (as defined herein). An
“Acceptable Manufactured Dwelling” is a manufactured dwelling, which is
permanently affixed to a foundation and treated as “real estate” under
applicable law. No Mortgaged Property is used for commercial purposes.
Mortgaged
Properties which contain a home office shall not be considered as being
used for
commercial purposes as long as the Mortgaged Property has not been altered
for
commercial purposes and is not storing any chemicals or raw materials other
than
those commonly used for homeowner repair, maintenance and/or household
purposes;
(xxxv) The
Mortgage Interest Rate payable by the Mortgagor is subject to adjustment
at the
time and in the amounts as are set forth in the related Mortgage
Note;
(xxxvi) No
Mortgage Loan contains a provision whereby the Mortgagor can convert an
Adjustable Rate Mortgage Loan into a Fixed Rate Mortgage Loan;
(xxxvii) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act
of 1994
or any comparable law and no Mortgage Loan is classified and/or defined
as “high
cost”, “covered” (excluding home loans defined as “covered home loans” in the
New Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004) or “predatory” loan under any other federal,
state or local law (or a similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates, points
and/or fees) including, but not limited to, the States of Georgia or North
Carolina, or the City of New York;
(xxxviii) There
is
no Mortgage Loan that was originated or modified on or after October 1,
2002 and
before March 7, 2003, which is secured by property located in the State
of
Georgia. There is no such Mortgage Loan underlying the Certificate that
was
originated on or after March 7, 2003, which is a “high cost home loan” as
defined under the Georgia Fair Lending Act;
(xxxix) With
respect to any Mortgage Loan that is secured by a second lien on the related
Mortgaged Property, either (a) no consent for the Mortgage Loan is required
by
the holder of any related senior lien or (b) such consent has been obtained
and
is contained in the Mortgage File;
(xl) With
respect to a Mortgage Loan which is a second lien, as of the date hereof,
the
Seller has not received a notice of default of a senior lien on the related
Mortgaged Property which has not been cured;
(xli) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et
seq.);
(xlii) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Xxx.
Laws
Ch. 183C)
(xliv) No
Mortgage Loan is a “High-Risk Home Loan” as defined in the Illinois High-Risk
Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(xlv) No
Mortgage Loan is a “Section 10 mortgage loan” as defined in Oklahoma House Xxxx
1574; and
(xlvi) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such
terms
are defined in the then current Standard & Poor’s LEVELS® Glossary which is
now Version 5.6(d) Revised, Appendix E (attached hereto as Exhibit 2));
and
(xlvii) No
Loan
secured by property located in the State of Indiana is a high-cost home
loan as
defined in the Indiana High Cost Home Loan Act.
SECTION
7. Repurchase
Obligation for Defective Documentation and for Breach of Representation
and
Warranty.
(a) The
representations and warranties contained in Section 6 shall not be impaired
by
any review and examination of loan files or other documents evidencing
or
relating to the Mortgage Loans or any failure on the part of the Seller
or the
Purchaser to review or examine such documents and shall inure to the benefit
of
any assignee, transferee or designee of the Purchaser, including the Trustee
for
the benefit of the Certificateholders. With respect to the representations
and
warranties contained herein as to which the Seller has no knowledge, if
it is
discovered that the substance of any such representation and warranty was
inaccurate as of the date such representation and warranty was made or
deemed to
be made, and such inaccuracy materially and adversely affects the value
of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser’s assignee, transferee or designee, then notwithstanding the lack of
knowledge by the Seller with respect to the substance of such representation
and
warranty being inaccurate at the time the representation and warranty was
made,
the Seller shall take such action described in the following paragraph
in
respect of such Mortgage Loan.
Except
with respect to the defects set forth on Schedule
A
attached
hereto, upon discovery by the Seller, the Purchaser or any assignee, transferee
or designee of the Purchaser of any materially defective document in, or
that
any material document was not transferred by the Seller, as listed on a
Custodian’s preliminary exception report, as described in the related Custodial
Agreement, as part of any Mortgage File, or of a breach of any of the
representations and warranties contained in Section 6 that materially and
adversely affects the value of any Mortgage Loan or the interest therein
of the
Purchaser or the Purchaser’s assignee, transferee or designee, the party
discovering such breach shall give prompt written notice to the Seller.
Within
60 days of its discovery or its receipt of notice of any such missing
documentation that was not transferred by the Seller as described above,
or of
materially defective documentation, or any such breach of a representation
and
warranty, the Seller promptly shall deliver such missing document or cure
such
defect or breach in all material respects or, in the event the Seller cannot
deliver such missing document or cannot cure such defect or breach, the
Seller
shall, within 90 days of its discovery or receipt of notice of any such
missing
or materially defective documentation or of any such breach of a representation
and warranty, either (i) repurchase the affected Mortgage Loan at the Purchase
Price (as such term is defined in the Pooling and Servicing Agreement)
or (ii)
pursuant to the provisions of the Pooling and Servicing Agreement, cause
the
removal of such Mortgage Loan from the Trust Fund and substitute one or
more
Qualified Substitute Mortgage Loans. The Seller shall amend the Closing
Schedule
to reflect the withdrawal of such Mortgage Loan from the terms of this
Agreement
and the Pooling and Servicing Agreement. The Seller shall deliver to the
Purchaser such amended Closing Schedule and shall deliver such other documents
as are required by this Agreement or the Pooling and Servicing Agreement
within
five (5) days of any such amendment. Any repurchase pursuant to this Section
7(a) shall be accomplished by transfer to an account designated by the
Purchaser
of the amount of the Purchase Price in accordance with Section 2.03 of
the
Pooling and Servicing Agreement. Any repurchase required by this Section
shall
be made in a manner consistent with Section 2.03 of the Pooling and Servicing
Agreement.
(b) If
the
representation made by the Seller in Section 5(xvii) is breached, the Seller
shall not have the right or obligation to cure, substitute or repurchase
the
affected Mortgage Loan but shall remit to the related Servicer for deposit
in
the related Collection Account or the Custodial Account, as applicable,
prior to
the next succeeding Servicer Remittance Date, the amount of the Prepayment
Charge indicated on the applicable part of the Mortgage Loan Schedule to
be due
from the Mortgagor in the circumstances less any amount collected and remitted
to such Servicer for deposit into the related Collection Account or the
Custodial Account.
(c) It
is
understood and agreed that the obligations of the Seller set forth in this
Section 7 to cure or repurchase a defective Mortgage Loan (and to make
payments
pursuant to Section 7(b)) constitute the sole remedies of the Purchaser
against
the Seller respecting a missing document or a breach of the representations
and
warranties contained in Section 6.
SECTION
8. Closing;
Payment for the Mortgage Loans.The
closing of the purchase and sale of the Mortgage Loans, shall be held at
the New
York City office of Xxxxxxx Xxxxxxxx & Xxxx llp
at 10:00
a.m. New York City time on the Closing Date.
The
closing shall be subject to each of the following conditions:
(a) All
of
the representations and warranties of the Seller under this Agreement shall
be
true and correct in all material respects as of the date as of which they
are
made and no event shall have occurred which, with notice or the passage
of time,
would constitute a default under this Agreement;
(b) The
Purchaser shall have received, or the attorneys of the Purchaser shall
have
received in escrow (to be released from escrow at the time of closing),
all
Closing Documents as specified in Section 9 of this Agreement, in such
forms as
are agreed upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the respective
terms thereof;
(c) The
Seller shall have delivered or caused to be delivered and released to the
Purchaser or to its designee, all documents (including without limitation,
the
Mortgage Loans) required to be so delivered by the Purchaser pursuant to
Section
2.01 of the Pooling and Servicing Agreement; and
(d) All
other
terms and conditions of this Agreement and the Pooling and Servicing Agreement
shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall deliver or cause to be
delivered to the Seller on the Closing Date, against delivery and release
by the
Seller to the Trustee of all documents required pursuant to the Pooling
and
Servicing Agreement, the consideration for the Mortgage Loans as specified
in
Section 3 of this Agreement.
SECTION
9. Closing
Documents.
Without
limiting the generality of Section 8 hereof, the closing shall be subject
to
delivery of each of the following documents:
(a) An
Officers’ Certificate of the Seller, dated the Closing Date, upon which the
Purchaser and DBSI may rely with respect to certain facts regarding the
sale of
the Mortgage Loans by the Seller to the Purchaser;
(b) An
Opinion of Counsel of the Seller, dated the Closing Date and addressed
to the
Purchaser and DBSI;
(c) Such
opinions of counsel as the Rating Agencies or the Trustee may request in
connection with the sale of the Mortgage Loans by the Seller to the Purchaser
or
the Seller’s execution and delivery of, or performance under, this Agreement;
and
(d) Such
further information, certificates, opinions and documents as the Purchaser
or
DBSI may reasonably request.
SECTION
10. Costs.
The
Seller shall pay (or shall reimburse the Purchaser or any other Person
to the
extent that the Purchaser or such other Person shall pay) all costs and
expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, fees for title policy endorsements and
continuations, the fees and expenses of the Seller’s accountants and attorneys,
the costs and expenses incurred in connection with producing any Servicer’s loan
loss, foreclosure and delinquency experience, and the costs and expenses
incurred in connection with obtaining the documents referred to in Sections
9(a), 9(b) and 9(c), the costs and expenses of printing (or otherwise
reproducing) and delivering this Agreement, the Pooling and Servicing Agreement,
the Certificates, the prospectus and prospectus supplement, and any private
placement memorandum relating to the Certificates and other related documents,
the initial fees, costs and expenses of the Trustee, the fees and expenses
of
the Purchaser’s counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged
by
the Commission for registration of the Certificates and the fees charged
by any
rating agency to rate the Certificates. All other costs and expenses
in connection with the transactions contemplated hereunder shall be borne
by the
party incurring such expense.
SECTION
11. Servicing.
Each
Mortgage Loan will be master serviced by the Master Servicer under the
Pooling
and Servicing Agreement and serviced by the related Servicer on behalf
of the
Trust under the Pooling and Servicing Agreement or under the Servicing
Agreement, as applicable, and the Seller has represented to the Purchaser
that
the Mortgage Loans are not subject to any other servicing agreements with
third
parties. It is understood and agreed between the Seller and the Purchaser
that
the Mortgage Loans are to be delivered free and clear of any servicing
agreements. Neither the Purchaser nor any affiliate of the Purchaser is
servicing the Mortgage Loans under any such servicing agreement and,
accordingly, neither the Purchaser nor any affiliate of the Purchaser is
entitled to receive any fee for releasing the Mortgage Loans from any such
servicing agreement. The Seller shall arrange for the orderly transfer,
of such
servicing to the Servicer. For so long as the Master Servicer master services
a
Mortgage Loan and the related Servicers service such Mortgage Loan, the
Master
Servicer shall be entitled to the Master Servicing Fee and the Servicer
shall be
entitled to the servicing fee with respect to such Mortgage Loan and such
other
payments as provided for under the terms of the Pooling and Servicing Agreement
and the Servicing Agreement, as applicable.
SECTION
12. Mandatory
Delivery; Grant of Security Interest. The
sale and delivery on the Closing Date of the Mortgage Loans described on
the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that
each Mortgage Loan is unique and identifiable on the date hereof and that
an
award of money damages would be insufficient to compensate the Purchaser
for the
losses and damages incurred by the Purchaser in the event of the Seller’s
failure to deliver the Mortgage Loans on or before the Closing
Date. The Seller hereby grants to the Purchaser a lien on and a
continuing security interest in the Seller’s interest in each Mortgage Loan and
each document and instrument evidencing each such Mortgage Loan to secure
the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Mortgage Loans in custody for the Purchaser, subject
to the
Purchaser’s (i) right, prior to the Closing Date, to reject any Mortgage Loan to
the extent permitted by this Agreement and (ii) obligation to deliver or
cause
to be delivered the consideration for the Mortgage Loans pursuant to Section
8
hereof. Any Mortgage Loans rejected by the Purchaser shall
concurrently therewith be released from the security interest created
hereby. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under
this
Agreement or afforded by law or equity and all such rights and remedies
may be
exercised concurrently, independently or successively.
Notwithstanding
the foregoing, if on the Closing Date, each of the conditions set forth
in
Section 8 hereof shall have been satisfied and the Purchaser shall not
have paid
or caused to be paid the Purchase Price, or any such condition shall not
have
been waived or satisfied and the Purchaser determines not to pay or cause
to be
paid the Purchase Price, the Purchaser shall immediately effect the redelivery
of the Mortgage Loans, if delivery to the Purchaser has occurred, and the
security interest created by this Section 12 shall be deemed to have been
released.
SECTION
13. Notices. All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by fax and, receipt of
which is
confirmed by telephone, if to the Purchaser, addressed to the Purchaser
at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, fax: (000)
000-0000, Attention: Xxxxxxx Xxxxxxx, or such other address as may hereafter
be
furnished to the Seller in writing by the Purchaser; and if to the
Seller, addressed to the Seller at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
fax: (000) 000-0000, Attention: Xxxxxxx Xxxxxxxxx, or to such other
address as the Seller may designate in writing to the Purchaser.
SECTION
14. Severability
of Provisions. Any
part, provision, representation or warranty of this Agreement that is prohibited
or that is held to be void or unenforceable shall be ineffective to the
extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of
this Agreement that is prohibited or unenforceable or is held to be void
or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of
law which
prohibits or renders void or unenforceable any provision hereof.
SECTION
15. Agreement
of Parties. The
Seller and the Purchaser each agree to execute and deliver such instruments
and
take such actions as either of the others may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of
this
Agreement and the Pooling and Servicing Agreement.
SECTION
16. Survival. The
Seller agrees that the representations, warranties and agreements made
by it
herein and in any certificate or other instrument delivered pursuant hereto
shall be deemed to be relied upon by the Purchaser, notwithstanding any
investigation heretofore or hereafter made by the Purchaser or on its behalf,
and that the representations, warranties and agreements made by the Seller
herein or in any such certificate or other instrument shall survive the
delivery
of and payment for the Mortgage Loans and shall continue in full force
and
effect, notwithstanding any restrictive or qualified endorsement on the
Mortgage
Notes and notwithstanding subsequent termination of this Agreement, the
Pooling
and Servicing Agreement or the Trust Fund.
SECTION
17. GOVERNING
LAW. THIS
AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS
(EXCLUDING THE CHOICE OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF
NEW
YORK. THE
PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW
YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION
18. Miscellaneous.
This
Agreement may be executed in two or more counterparts, each of which when
so
executed and delivered shall be an original, but all of which together
shall
constitute one and the same instrument. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement supersedes all prior
agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge
or
termination is sought. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the
meaning
hereof.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage
Loans
by the Seller to the Purchaser as provided in Section 4 hereof be, and
be
construed as, a sale of the Mortgage Loans by the Seller to the Purchaser
and
not as a pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a
debt or other obligation of the Seller. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage
Loans are
held to be property of the Seller, then (a) it is the express intent of
the
parties that such conveyance be deemed a pledge of the Mortgage Loans by
the
Seller to the Purchaser to secure a debt or other obligation of the Seller
and
(b) (1) this Agreement shall also be deemed to be a security agreement
within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code;
(2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant
by the
Seller to the Purchaser of a security interest in all of the Seller’s right,
title and interest in and to the Mortgage Loans and all amounts payable
to the
holders of the Mortgage Loans in accordance with the terms thereof and
all
proceeds of the conversion, voluntary or involuntary, of the foregoing
into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or
invested
in a Collection Account or the Custodial Account whether in the form of
cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items
of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be “possession by the secured party” for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such
property
and acknowledgments, receipts or confirmations from persons holding such
property shall be deemed notifications to, or acknowledgments, receipts
or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant
to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to
ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement and the Pooling and Servicing
Agreement.
SECTION
19. Third
Party Beneficiary. The
parties hereto acknowledge and agree that DBSI and each of its respective
successors and assigns shall have all the rights of a third-party beneficiary
in
respect of Section 12 of this Agreement and shall be entitled to rely upon
and
directly enforce the provisions of Section 12 of this Agreement.
[signature
page to follow]
DB
STRUCTURED PRODUCTS, INC.
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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ACE
SECURITIES CORP.
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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EXHIBIT
1
Loan
#:
_____________
Borrower:
_____________
LOST
NOTE
AFFIDAVIT
I,
as
_____________________ of ____________________, a _______________ am authorized
to make this Affidavit on behalf of __________________ (the “Seller”). In
connection with the administration of the Mortgage Loans held by
______________________, a _______________ [corporation] as Seller on behalf
of
____________________ (the “Purchaser”), _______________________ (the
“Deponent”), being duly sworn, deposes and says that:
1. The
Seller’s address is:
2. The
Seller previously delivered to the Purchaser a signed Initial Certification
with
respect to such Mortgage and/or Assignment of Mortgage;
3. Such
Mortgage
Note and/or Assignment of Mortgage was assigned or sold to the Purchaser
by
__________________, a pursuant to the terms and provisions of a Mortgage
Loan
Purchase Agreement dated as of _____________;
4. Such
Mortgage
Note and/or Assignment of Mortgage is not outstanding pursuant to a request
for
release of Documents;
5. Aforesaid
Mortgage Note and/or Assignment of Mortgage (the “Original”) has been
lost;
6. Deponent
has
made or caused to be made a diligent search for the Original and has been
unable
to find or recover same;
7. The
Seller was the Seller of the Original at the time of the loss; and
8. Deponent
agrees that, if said Original should ever come into Seller’s possession, custody
or power, Seller will immediately and without consideration surrender the
Original to the Purchaser.
9. Attached
hereto is a true and correct copy of (i) the Note, endorsed in blank by
the
Mortgagee and (ii) the Mortgage or Deed of Trust (strike one) which secures
the
Note, which Mortgage or Deed of Trust is recorded in the county where the
property is located.
10. Deponent
hereby agrees that the Seller (a) shall indemnify and hold harmless the
Purchaser, its successors and assigns, against any loss, liability or damage,
including reasonable attorney’s fees, resulting from the unavailability of any
Notes, including but not limited to any loss, liability or damage arising
from
(i) any false statement contained in this Affidavit, (ii) any claim of
any party
that purchased a mortgage loan evidenced by the Lost Note or any interest
in
such mortgage loan, (iii) any claim of any borrower with respect to the
existence of terms of a mortgage loan evidenced by the Lost Note on the
related
property to the fact that the mortgage loan is not evidenced by an original
note
and (iv) the issuance of a new instrument in lieu thereof (items (i) through
(iv) above hereinafter referred to as the “Losses”) and (b) if required by any
Rating Agency in connection with placing such Lost Note into a Pass-Through
Transfer, shall obtain a surety from an insurer acceptable to the applicable
Rating Agency to cover any Losses with respect to such Lost Note.
11. This
Affidavit is intended to be relied upon by the Purchaser, its successors
and
assigns. Seller represents and warrants that is has the authority to perform
its
obligations under this Affidavit of Lost Note.
Executed
this _ day of _______, 200_.
By:
|
|
Name:
|
|
Title:
|
On
this
__ day of ______, 200_, before me appeared ______________________ to me
personally known, who being duly sworn did say that he is the
_______________________ of ____________________, a ______________________
and
that said Affidavit of Lost Note was signed and sealed on behalf of such
corporation and said acknowledged this instrument to be the free act and
deed of
said entity.
Signature:
[Seal]
EXHIBIT
2
SCHEDULE
A
DEFECTS
SCHEDULE
[PROVIDED
UPON REQUEST]
SCHEDULE
B
NONE.
SCHEDULE
C
[PROVIDED
UPON REQUEST]
EXHIBIT
G
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party
shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant
to
Section 5.06(a)(ii).
Under
Item 1 of Form 10-D: a) items marked “monthly statement” are required to be
included in the periodic Distribution Date statement under Section 5.02,
provided by the Securities Administrator based on information received from
the
Master Servicer; and b) items marked “Form 10-D report” are required to be in
the Form 10-D report but not the monthly 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.
Form
|
Item
|
Description
|
Servicers
|
Master
Servicer
|
Securities
Administrator
|
Custodian
|
Trustee
|
Depositor
|
Sponsor
|
|||||
10-D
|
Must
be filed within 15 days of the distribution date for the asset-backed
securities.
|
|||||||||||||
1
|
||||||||||||||
Item
1121(a) - Distribution and Pool Performance
Information
|
||||||||||||||
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating distributions and actual distribution dates for the
distribution period.
|
X
(monthly
Statement)
|
|||||||||||||
(2)
Cash flows received and the sources thereof for distributions,
fees and
expenses.
|
X
(monthly
Statement)
|
|||||||||||||
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
X
(monthly
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
(monthly
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
(monthly
Statement)
|
|||||||||||||
(iii)
Principal, interest and other distributions accrued and paid on
the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
X
(monthly
Statement)
|
|||||||||||||
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
X
(monthly
Statement)
|
|||||||||||||
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
X
(monthly
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
(monthly
Statement)
|
|||||||||||||
(6)
Beginning and ending balances of transaction accounts, such as
reserve
accounts, and material account activity during the period.
|
X
(monthly
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
(monthly
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
(monthly
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
|
X
(monthly
Statement)
|
|||||||||||
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
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
|
X
(monthly
Statement)
|
|||||||||||
(11)
Any material modifications, extensions or waivers to pool asset
terms,
fees, penalties or payments during the distribution period or that
have
cumulatively become material over time.
|
X
|
X
|
X
(monthly
Statement)
|
|||||||||||
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
X
|
X
|
X
|
|||||||||||
(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
(monthly
Statement)
|
|||||||||||||
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
|
X
|
|||||||||||||
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
|
X
|
X
|
||||||||||
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
|
||||||||||||||
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
(Seller)
|
X
|
|||||||||||||
Depositor
|
X
|
|||||||||||||
Trustee
|
X
|
|||||||||||||
Issuing
entity
|
X
|
|||||||||||||
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||
Securities
Administrator
|
X
|
|||||||||||||
Originator
of 20% or more of pool assets as of the Cut-off Date
|
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
|
|||||||||||||
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 Security Holders
|
|||||||||||||
Information
from Item 4 of Part II of Form 10-Q
|
X
|
X
|
||||||||||||
6
|
Significant
Obligors of Pool Assets
|
|||||||||||||
Item
1112(b) - Significant
Obligor Financial Information*
|
X
|
X
|
||||||||||||
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Item.
|
||||||||||||||
7
|
Significant
Enhancement Provider Information
|
|||||||||||||
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 distribution
period in which updated information is required pursuant to the
Items.
|
||||||||||||||
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
|
|||||||||||||
Distribution
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.
|
|||||||||||||
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
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
||||||||
1.02
|
Termination
of a Material Definitive Agreement
|
X
|
X
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer is not a party)
|
|||||||
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.
|
||||||||||||||
1.03
|
Bankruptcy
or Receivership
|
|||||||||||||
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Master Servicer, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|||||||
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/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are
disclosed
in the 5.02 statement
|
X
|
X
|
||||||||||||
3.03
|
||||||||||||||
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
|
X
|
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
|
X
|
||||||||||||
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 3.18]
|
X
|
|||||||||||||
6.02
|
Change
of Servicer or Trustee
|
|||||||||||||
Requires
disclosure of any removal, replacement, substitution or addition
of any
master servicer, affiliated servicer, other servicer servicing
10% or more
of pool assets at time of report, other material servicers, certificate
administrator or trustee.
|
X
|
X
|
X
|
X
|
X
|
|||||||||
Reg
AB disclosure about any new servicer (from entity appointing new
servicer)
or trustee (from Depositor) is also required.
|
X
|
X
|
X
|
|||||||||||
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
|
X
|
|||||||||||
Reg
AB disclosure about any new enhancement provider is also
required
|
X
|
|||||||||||||
6.04
|
Failure
to Make a Required Distribution
|
X
|
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
|
|
||||||||||||
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
|
Regulation
FD Disclosure
|
X
|
X
|
X
|
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 security
holders.
|
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 as indicated
above.
|
|||||||||||||
15
|
Exhibits
and Financial Statement Schedules
|
|||||||||||||
Item
1112(b) - Significant
Obligor Financial Information
|
X
|
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
|
|||||||||||||
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
(Seller)
|
X
|
|||||||||||||
Depositor
|
X
|
|||||||||||||
Trustee
|
X
|
|||||||||||||
Issuing
entity
|
X
|
|||||||||||||
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||
Securities
Administrator
|
X
|
|||||||||||||
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
X
|
||||||||||||
Custodian
|
X
|
|||||||||||||
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
||||||||||||||
Sponsor
(Seller)
|
X
|
|||||||||||||
Depositor
|
X
|
|||||||||||||
Trustee
|
X
(with respect to Item 1119(a) affiliations only)
|
|||||||||||||
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||
Securities
Administrator
|
X
|
|||||||||||||
Originator
|
X
|
X
|
||||||||||||
Custodian
|
X
(with respect to affiliations only)
|
|||||||||||||
Credit
Enhancer/Support Provider
|
X
|
X
|
||||||||||||
Significant
Obligor
|
X
|
X
|
||||||||||||
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
X
|
X
|
||||||||||
Item
1123 - Servicer Compliance Statement
|
X
|
X
|
EXHIBIT
H
ADDITIONAL
DISCLOSURE NOTIFICATION
**SENT
VIA FAX TO [_XXX)XXX-XXXX] AND VIA EMAIL TO [_________________] AND VIA
OVERNIGHT MAIL TO THE ADDRESS IMMEDIATELY BELOW:
Xxxxx
Fargo Bank, N.A. as Securities Administrator
Olx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Fax:
(000) 000-0000
E-mail:
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Attn:
Corporate Trust Services - ACE 2006-SD1 - SEC REPORT PROCESSING
ACE
Securities Corp.
6500
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Fax:
(000) 000-0000)
Attn:
Xxxxxxx Xxxxxxx
RE:
**
Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies
and Gentlemen:
In
accordance with Section [__] of the Pooling and Servicing Agreement, dated
as of [________] [__], 2006 among [_____________], as [______], [_____________],
as [______], [_____________], as [______] and [_____________], as [______],
the
undersigned, as [______], hereby notifies you that certain events have come
to
our attention that [will] [may] need to be disclosed on Form
[10-D][10-K][8-K].
Description
of Additional Form [10-D][10-K][8-K] Disclosure:
List
of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure:
Any
inquiries related to this notification should be directed to [_____________],
phone number: [______]; email address: [_________________].
[NAME
OF PARTY],
as
[role]
|
|
By:
_____________________________________
|
|
Name:
|
|
Title:
|
SCHEDULE
1
MORTGAGE
LOAN SCHEDULE
(AVAILABLE
UPON REQUEST)
SCHEDULE
2
PREPAYMENT
CHARGE SCHEDULE
(AVAILABLE
UPON REQUEST)
SCHEDULE
3
STANDARD
FILE LAYOUT- DELINQUENCY REPORTING
Exhibit
: Standard
File Layout - Delinquency Reporting
Column/Header
Name
|
Description
|
Decimal
|
Format
Comment
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR
|
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the originator.
|
|
|
CLIENT_NBR
|
Servicer
Client Number
|
||
SERV_INVESTOR_NBR
|
Contains
a unique number as assigned by an external servicer to identify
a group of
loans in their system.
|
|
|
BORROWER_FIRST_NAME
|
First
Name of the Borrower.
|
||
BORROWER_LAST_NAME
|
Last
name of the borrower.
|
||
PROP_ADDRESS
|
Street
Name and Number of Property
|
|
|
PROP_STATE
|
The
state where the property located.
|
|
|
PROP_ZIP
|
Zip
code where the property is located.
|
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date that the borrower's next payment is due to the servicer at
the end of
processing cycle, as reported by Servicer.
|
MM/DD/YYYY
|
|
LOAN_TYPE
|
Loan
Type (i.e. FHA, VA, Conv)
|
|
|
BANKRUPTCY_FILED_DATE
|
The
date a particular bankruptcy claim was filed.
|
MM/DD/YYYY
|
|
BANKRUPTCY_CHAPTER_CODE
|
The
chapter under which the bankruptcy was filed.
|
|
|
BANKRUPTCY_CASE_NBR
|
The
case number assigned by the court to the bankruptcy
filing.
|
|
|
POST_PETITION_DUE_DATE
|
The
payment due date once the bankruptcy has been approved by the
courts
|
MM/DD/YYYY
|
|
BANKRUPTCY_DCHRG_DISM_DATE
|
The
Date The Loan Is Removed From Bankruptcy. Either by Dismissal,
Discharged
and/or a Motion For Relief Was Granted.
|
MM/DD/YYYY
|
|
LOSS_MIT_APPR_DATE
|
The
Date The Loss Mitigation Was Approved By The Servicer
|
MM/DD/YYYY
|
|
LOSS_MIT_TYPE
|
The
Type Of Loss Mitigation Approved For A Loan Such As;
|
||
LOSS_MIT_EST_COMP_DATE
|
The
Date The Loss Mitigation /Plan Is Scheduled To End/Close
|
MM/DD/YYYY
|
|
LOSS_MIT_ACT_COMP_DATE
|
The
Date The Loss Mitigation Is Actually Completed
|
MM/DD/YYYY
|
|
FRCLSR_APPROVED_DATE
|
The
date DA Admin sends a letter to the servicer with instructions
to begin
foreclosure proceedings.
|
MM/DD/YYYY
|
|
ATTORNEY_REFERRAL_DATE
|
Date
File Was Referred To Attorney to Pursue Foreclosure
|
MM/DD/YYYY
|
|
FIRST_LEGAL_DATE
|
Notice
of 1st legal filed by an Attorney in a Foreclosure Action
|
MM/DD/YYYY
|
|
FRCLSR_SALE_EXPECTED_DATE
|
The
date by which a foreclosure sale is expected to occur.
|
MM/DD/YYYY
|
|
FRCLSR_SALE_DATE
|
The
actual date of the foreclosure sale.
|
MM/DD/YYYY
|
|
FRCLSR_SALE_AMT
|
The
amount a property sold for at the foreclosure sale.
|
2
|
No
commas(,) or dollar signs ($)
|
EVICTION_START_DATE
|
The
date the servicer initiates eviction of the borrower.
|
MM/DD/YYYY
|
|
EVICTION_COMPLETED_DATE
|
The
date the court revokes legal possession of the property from the
borrower.
|
MM/DD/YYYY
|
|
LIST_PRICE
|
The
price at which an REO property is marketed.
|
2
|
No
commas(,) or dollar signs ($)
|
LIST_DATE
|
The
date an REO property is listed at a particular price.
|
MM/DD/YYYY
|
|
OFFER_AMT
|
The
dollar value of an offer for an REO property.
|
2
|
No
commas(,) or dollar signs ($)
|
OFFER_DATE_TIME
|
The
date an offer is received by DA Admin or by the Servicer.
|
MM/DD/YYYY
|
|
REO_CLOSING_DATE
|
The
date the REO sale of the property is scheduled to close.
|
MM/DD/YYYY
|
|
REO_ACTUAL_CLOSING_DATE
|
Actual
Date Of REO Sale
|
MM/DD/YYYY
|
|
OCCUPANT_CODE
|
Classification
of how the property is occupied.
|
|
|
PROP_CONDITION_CODE
|
A
code that indicates the condition of the property.
|
|
|
PROP_INSPECTION_DATE
|
The
date a property inspection is performed.
|
MM/DD/YYYY
|
|
APPRAISAL_DATE
|
The
date the appraisal was done.
|
MM/DD/YYYY
|
|
CURR_PROP_VAL
|
The
current "as is" value of the property based on brokers price opinion
or
appraisal.
|
2
|
|
REPAIRED_PROP_VAL
|
The
amount the property would be worth if repairs are completed pursuant
to a
broker's price opinion or appraisal.
|
2
|
|
If
applicable:
|
|
|
|
DELINQ_STATUS_CODE
|
FNMA
Code Describing Status of Loan
|
||
DELINQ_REASON_CODE
|
The
circumstances which caused a borrower to stop paying on a loan.
Code
indicates the reason why the loan is in default for this
cycle.
|
||
MI_CLAIM_FILED_DATE
|
Date
Mortgage Insurance Claim Was Filed With Mortgage Insurance
Company.
|
MM/DD/YYYY
|
|
MI_CLAIM_AMT
|
Amount
of Mortgage Insurance Claim Filed
|
No
commas(,) or dollar signs ($)
|
|
MI_CLAIM_PAID_DATE
|
Date
Mortgage Insurance Company Disbursed Claim Payment
|
MM/DD/YYYY
|
|
MI_CLAIM_AMT_PAID
|
Amount
Mortgage Insurance Company Paid On Claim
|
2
|
No
commas(,) or dollar signs ($)
|
POOL_CLAIM_FILED_DATE
|
Date
Claim Was Filed With Pool Insurance Company
|
MM/DD/YYYY
|
|
POOL_CLAIM_AMT
|
Amount
of Claim Filed With Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
POOL_CLAIM_PAID_DATE
|
Date
Claim Was Settled and The Check Was Issued By The Pool
Insurer
|
MM/DD/YYYY
|
|
POOL_CLAIM_AMT_PAID
|
Amount
Paid On Claim By Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
FHA_PART_A_CLAIM_FILED_DATE
|
Date
FHA Part A Claim Was Filed With HUD
|
MM/DD/YYYY
|
|
FHA_PART_A_CLAIM_AMT
|
Amount
of FHA Part A Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
FHA_PART_A_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part A Claim Payment
|
MM/DD/YYYY
|
|
FHA_PART_A_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part A Claim
|
2
|
No
commas(,) or dollar signs ($)
|
FHA_PART_B_CLAIM_FILED_DATE
|
Date
FHA Part B Claim Was Filed With HUD
|
MM/DD/YYYY
|
|
FHA_PART_B_CLAIM_AMT
|
Amount
of FHA Part B Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
FHA_PART_B_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part B Claim Payment
|
MM/DD/YYYY
|
|
FHA_PART_B_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part B Claim
|
2
|
No
commas(,) or dollar signs ($)
|
VA_CLAIM_FILED_DATE
|
Date
VA Claim Was Filed With the Veterans Admin
|
MM/DD/YYYY
|
|
VA_CLAIM_PAID_DATE
|
Date
Veterans Admin. Disbursed VA Claim Payment
|
MM/DD/YYYY
|
|
VA_CLAIM_PAID_AMT
|
Amount
Veterans Admin. Paid on VA Claim
|
2
|
No
commas(,) or dollar signs ($)
|
Exhibit
2: Standard
File Codes - Delinquency Reporting
The
Loss
Mit Type
field
should show the approved Loss Mitigation Code as follows:
· |
ASUM-Approved
Assumption
|
· |
BAP-Borrower
Assistance Program
|
· |
CO-
Charge Off
|
· |
DIL-
Deed-in-Lieu
|
· |
FFA-
Formal Forbearance Agreement
|
· |
MOD-
Loan Modification
|
· |
PRE-
Pre-Sale
|
· |
SS-
Short Sale
|
· |
MISC-Anything
else approved by the PMI or Pool Insurer
|
NOTE:
Xxxxx
Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply Xxxxx Fargo
Bank
with a description of each of the Loss Mitigation Types prior to sending
the
file.
The
Occupant
Code
field
should show the current status of the property code as follows:
· |
Mortgagor
|
· |
Tenant
|
· |
Unknown
|
· |
Vacant
|
The
Property
Condition
field
should show the last reported condition of the property as follows:
· |
Damaged
|
· |
Excellent
|
· |
Fair
|
· |
Gone
|
· |
Good
|
· |
Poor
|
· |
Special
Hazard
|
· |
Unknown
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Reason Code
field
should show the Reason for Delinquency as follows:
Delinquency
Code
|
Delinquency
Description
|
001
|
FNMA-Death
of principal mortgagor
|
002
|
FNMA-Illness
of principal mortgagor
|
003
|
FNMA-Illness
of mortgagor’s family member
|
004
|
FNMA-Death
of mortgagor’s family member
|
005
|
FNMA-Marital
difficulties
|
006
|
FNMA-Curtailment
of income
|
007
|
FNMA-Excessive
Obligation
|
008
|
FNMA-Abandonment
of property
|
009
|
FNMA-Distant
employee transfer
|
011
|
FNMA-Property
problem
|
012
|
FNMA-Inability
to sell property
|
013
|
FNMA-Inability
to rent property
|
014
|
FNMA-Military
Service
|
015
|
FNMA-Other
|
016
|
FNMA-Unemployment
|
017
|
FNMA-Business
failure
|
019
|
FNMA-Casualty
loss
|
022
|
FNMA-Energy
environment costs
|
023
|
FNMA-Servicing
problems
|
026
|
FNMA-Payment
adjustment
|
027
|
FNMA-Payment
dispute
|
029
|
FNMA-Transfer
of ownership pending
|
030
|
FNMA-Fraud
|
031
|
FNMA-Unable
to contact borrower
|
INC
|
FNMA-Incarceration
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Status Code
field
should show the Status of Default as follows:
Status
Code
|
Status
Description
|
09
|
Forbearance
|
17
|
Pre-foreclosure
Sale Closing Plan Accepted
|
24
|
Government
Seizure
|
26
|
Refinance
|
27
|
Assumption
|
28
|
Modification
|
29
|
Charge-Off
|
30
|
Third
Party Sale
|
31
|
Probate
|
32
|
Military
Indulgence
|
43
|
Foreclosure
Started
|
44
|
Deed-in-Lieu
Started
|
49
|
Assignment
Completed
|
61
|
Second
Lien Considerations
|
62
|
Veteran’s
Affairs-No Bid
|
63
|
Veteran’s
Affairs-Refund
|
64
|
Veteran’s
Affairs-Buydown
|
65
|
Chapter
7 Bankruptcy
|
66
|
Chapter
11 Bankruptcy
|
67
|
Chapter
13 Bankruptcy
|
Exhibit
: Calculation
of Realized Loss/Gain Form 332- Instruction Sheet
NOTE:
Do not net or combine items. Show all expenses individually and all credits
as
separate line items. Claim packages are due on the remittance report date.
Late
submissions may result in claims not being passed until the following month.
The
Servicer is responsible to remit all funds pending loss approval and /or
resolution of any disputed items.
1.
2. The
numbers on the 332 form correspond with the numbers listed below.
1. The
Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
an
Amortization Schedule from date of default through liquidation breaking out
the
net interest and servicing fees advanced is required.
2. The
Total
Interest Due less the aggregate amount of servicing fee that would have been
earned if all delinquent payments had been made as agreed. For documentation,
an
Amortization Schedule from date of default through liquidation breaking out
the
net interest and servicing fees advanced is required.
3.
Accrued
Servicing Fees based upon the Scheduled Principal Balance of the Mortgage
Loan
as calculated on a monthly basis. For documentation, an Amortization Schedule
from date of default through liquidation breaking out the net interest and
servicing fees advanced is required.
4-12. Complete
as applicable. Required documentation:
*
For
taxes and insurance advances - see page 2 of 332 form - breakdown required
showing period
of
coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances.
*
For
escrow advances - complete payment history
(to
calculate advances from last positive escrow balance forward)
*
Other
expenses - copies of corporate advance history showing all payments
*
REO
repairs > $1500 require explanation
*
REO
repairs >$3000 require evidence of at least 2 bids.
*
Short
Sale or Charge Off require P&L supporting the decision and
WFB’s approved Officer Certificate
*
Unusual
or extraordinary items may require further documentation.
13. The
total
of lines 1 through 12.
3. Credits:
14-21. Complete
as applicable. Required documentation:
*
Copy of
the HUD 1 from the REO sale. If a 3rd
Party
Sale, bid instructions and Escrow
Agent / Attorney
Letter
of
Proceeds
Breakdown.
*
Copy of
EOB for any MI or gov't guarantee
*
All
other credits need to be clearly defined on the 332
form
22.
|
The
total of lines 14 through 21.
|
Please
Note: For
HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for
Part
B/Supplemental proceeds.
23. The
total
derived from subtracting line 22 from 13. If the amount represents a realized
gain, show
the
amount in parenthesis ( ).
Exhibit
3A: Calculation
of Realized Loss/Gain Form 332
Prepared
by: __________________ Date:
_______________
Phone:
______________________ Email
Address:_____________________
Servicer
Loan No.
|
Servicer
Name
|
Servicer
Address
|
XXXXX
FARGO BANK, N.A. Loan No._____________________________
Borrower's
Name: _________________________________________________________
Property
Address: _________________________________________________________
Liquidation
Type: REO
Sale 3rd
Party Sale Short
Sale Charge
Off
Was
this loan granted a Bankruptcy deficiency or cramdown Yes No
If
“Yes”,
provide deficiency or cramdown amount
_______________________________
Liquidation
and Acquisition Expenses:
(1)
Actual
Unpaid Principal Balance of Mortgage Loan
|
$_________________
|
(1)
|
|
(2)
Interest
accrued at Net Rate
|
__________________
|
(2)
|
|
(3)
Accrued
Servicing Fees
|
__________________
|
(3)
|
|
(4)
Attorney's
Fees
|
__________________
|
(4)
|
|
(5)
Taxes
(see page 2)
|
__________________
|
(5)
|
|
(6)
Property
Maintenance
|
__________________
|
(6)
|
|
(7)
MI/Hazard
Insurance Premiums (see page 2)
|
__________________
|
(7)
|
|
(8)
Utility
Expenses
|
__________________
|
(8)
|
|
(9)
Appraisal/BPO
|
__________________
|
(9)
|
|
(10)
Property
Inspections
|
__________________
|
(10)
|
|
(11)
FC
Costs/Other Legal Expenses
|
__________________
|
(11)
|
|
(12)
Other
(itemize)
|
__________________
|
(12)
|
|
Cash
for Keys__________________________
|
__________________
|
(12)
|
|
HOA/Condo
Fees_______________________
|
__________________
|
(12)
|
|
______________________________________
|
__________________
|
(12)
|
|
Total
Expenses
|
$________________
|
(13)
|
|
Credits:
|
|||
(14)
Escrow Balance
|
$_________________
|
(14)
|
|
(15)
HIP Refund
|
__________________
|
(15)
|
|
(16)
Rental Receipts
|
__________________
|
(16)
|
|
(17)
Hazard Loss Proceeds
|
__________________
|
(17)
|
|
(18)
Primary Mortgage Insurance / Gov’t Insurance
|
__________________
|
(18)
|
|
(18a)
HUD Part A
|
(18a)
|
||
(18b)
HUD Part B
|
(18b)
|
||
(19)
Pool Insurance Proceeds
|
____________________
|
(19)
|
|
(20)
Proceeds from Sale of Acquired Property
|
____________________
|
(20)
|
|
(21)
Other (itemize)
|
____________________
|
(21)
|
|
_____________________________________________________
|
(21)
|
||
Total
Credits
|
$___________________
|
(22)
|
|
Total
Realized Loss (or Amount of Gain)
|
$___________________
|
(23)
|
|
Escrow
Disbursement Detail
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of Coverage
|
Total
Paid
|
Base
Amount
|
Penalties
|
Interest
|
SCHEDULE
4
STANDARD
FILE LAYOUT- MASTER SERVICING
Standard
File Layout - Master Servicing
|
||||
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
Max
Size
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
|
Text
up to 10 digits
|
20
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
|
Text
up to 10 digits
|
10
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
|
Text
up to 10 digits
|
10
|
BORROWER_NAME
|
The
borrower name as received in the file. It is not separated by first
and
last name.
|
|
Maximum
length of 30 (Last, First)
|
30
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported
by the
Servicer.
|
4
|
Max
length of 6
|
6
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
6
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
|
MM/DD/YYYY
|
10
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment amount.
|
|
MM/DD/YYYY
|
10
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
|
MM/DD/YYYY
|
10
|
|
|
|
Action
Code Key: 15=Bankruptcy, 30xXxxxxxxxxxx, , 00xXXX, 63=Substitution,
65=Repurchase,70=REO
|
2
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
|||
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of
the cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the
current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SCHED_NET_INT
|
The
scheduled gross interest amount less the service fee amount for
the
current cycle as reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
ACTL_PRIN_AMT
|
The
actual principal amount collected by the Servicer for the current
reporting cycle -- only applicable for Actual/Actual
Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
ACTL_NET_INT
|
The
actual gross interest amount less the service fee amount for the
current
reporting cycle as reported by the Servicer -- only applicable
for
Actual/Actual Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
PREPAY_PENALTY_
AMT
|
The
penalty amount received when a borrower prepays on his loan as
reported by
the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
PREPAY_PENALTY_
WAIVED
|
The
prepayment penalty amount for the loan waived by the
servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
|
|
|
|
MOD_DATE
|
The
Effective Payment Date of the Modification for the loan.
|
|
MM/DD/YYYY
|
10
|
MOD_TYPE
|
The
Modification Type.
|
|
Varchar
- value can be alpha or numeric
|
30
|
DELINQ_P&I_ADVANCE_AMT
|
The
current outstanding principal and interest advances made by
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
SCHEDULE
5
STANDARD
FILE LAYOUT- SIMPLE INTEREST MORTGAGE LOANS
FldName
|
FldType
|
FldSize
|
PositionOffset
|
Comments
|
Loan_Nbr
|
Text
|
10
|
(1:10)
|
REQUIRED.
This is the loan Number as reported to the Investor. Data is left
justified - retaining any leading zeros that are part of the loan
number.
|
Svc_Seq_Num
|
Text
|
3
|
(11:13)
|
Servicer's
Sequence Number - for each loan the transactions within the reporting
period are assigned a sequence number indicating the order in which
they
were processed. For example, the first transaction for each loan
would
have sequence number 1. The next transaction, if any, for that
loan would
have sequence number 2, and so on. Data is right justified and
may or may
not have leading zeros.
|
Trans_Code
|
Text
|
6
|
(14:19)
|
This
is the servicer's transaction code as generated by its accounting
system.
If supplied, the data is right justified and may or may not have
leading
zeros.
|
Trans_Amt
|
Text
|
11
|
(20:30)
|
|
Last_Pay_Eff_Dt
|
Text
|
8
|
(31:38)
|
This
is the last effective payment date for the current transaction.
The format
should be YYYYMMDD.
|
Curr_Pay_Eff_Dt
|
Text
|
8
|
(39:46)
|
|
Beg_Act_Prin_Bal
|
Text
|
11
|
(47:57)
|
This
will be the beginning actual principal balance for the current
transaction. The data is right justified and may or may not have
leading
zeros. The data will have 2 decimal places which are implied. If
the
amount is negative, the negative sign must immediately precede
the first
value in the number.
|
Beg_Accr_Int_Recvd
|
Text
|
11
|
(58:68)
|
This
is the beginning balance of accrued interest that is unpaid before
processing the current transaction. The data is right justified
and may or
may not have leading zeros. The data will have 2 decimal places
which are
implied. If the amount is negative, the negative sign must immediately
precede the first value in the number.
|
Curr_Int_Accr
|
Text
|
11
|
(69:79)
|
This
is the current interest accrual for this transaction. The data
is right
justified and may or may not have leading zeros. The data will
have 2
decimal places which are implied. If the amount is negative, the
negative
sign must immediately precede the first value in the
number.
|
Applied_Int_Amt
|
Text
|
11
|
(80:90)
|
This
is that portion of the transaction amount that is applied against
accrued
interest. The data is right justified and may or may not have leading
zeros. The data will have 2 decimal places which are implied. If
the
amount is negative, the negative sign must immediately precede
the first
value in the number.
|
End_Accr_Int_Recv
|
Text
|
11
|
(91:101)
|
REQUIRED.
This is the ending balance of accrued interest remaining unpaid
after the
current transaction is processed. The data is right justified and
may or
may not have leading zeros. The data will have 2 decimal places
which are
implied. If the amount is negative, the negative sign must immediately
precede the first value in the number.
|
Applied_Princ_Amt
|
Text
|
11
|
(102:112)
|
This
is that portion of the transaction amount that is being applied
against
principal when this transaction is processed. The data is right
justified
and may or may not have leading zeros. The data will have 2 decimal
places
which are implied. If the amount is negative, the negative sign
must
immediately precede the first value in the number.
|
End_Act_Princ_Bal
|
Text
|
11
|
(113:123)
|
REQUIRED.
This is the ending actual principal balance remaining after the
current
transaction is processed. The data is right justified and may or
may not
have leading zeros. The data will have 2 decimal places which are
implied.
If the amount is negative, the negative sign must immediately precede
the
first value in the number.
|
Sched_Secur_Int
|
Text
|
9
|
(124:132)
|
For
Scheduled / Actual deals where the servicer is passing through
scheduled
interest each period, this is the gross scheduled security interest
due
from servicer. For these kinds of deals this amount is to be supplied
whether or not a payment is being reported. When more than one
transaction
is being reported on a loan, this field would be populated only
for the
transaction with sequence number 1. The data is right justified
and may or
may not have leading zeros. The data will have 2 decimal places
which are
implied. If the amount is negative, the negative sign must immediately
precede the first value in the number.
|
Serv_Fee_Amt
|
Text
|
9
|
(133:141)
|
This
is the dollar amount of the servicer's fee associated with the
current
transaction only (each transaction may have a Serv_Fee_Amt associated
with
it). The data is right justified and may or may not have leading
zeros.
The data will have 2 decimal places which are implied. If the amount
is
negative, the negative sign must immediately precede the first
value in
the number.
|
Beg_Defer_Bal
|
Text
|
9
|
(142:150)
|
This
is the beginning balance of the deferred amount (if any) for the
current
transaction. The data is right justified and may or may not have
leading
zeros. The data will have 2 decimal places which are implied. If
the
amount is negative, the negative sign must immediately precede
the first
value in the number.
|
Chg_Defer_Bal
|
Text
|
9
|
(151:159)
|
This
is that portion of the transaction amount for the current transaction
that
is applied to the deferred amount. The data is right justified
and may or
may not have leading zeros. The data will have 2 decimal places
which are
implied. If the amount is negative, the negative sign must immediately
precede the first value in the number.
|
End_Defer_Bal
|
Text
|
9
|
(160:168)
|
REQUIRED.
This is the ending balance of the deferred amount after the current
transaction is processed. The data is right justified and may or
may not
have leading zeros. The data will have 2 decimal places which are
implied.
If the amount is negative, the negative sign must immediately precede
the
first value in the number.
|
Net_Int_Exc_Short
|
Text
|
9
|
(169:177)
|
Net
Simple Interest Excess / Shortfall is the difference between the
net
interest actually received by the servicer and the net interest
passed
through to the Investors with respect to current transaction (which
is not
a payment in full). The data is right justified and may or may
not have
leading zeros. The data will have 2 decimal places which are implied.
If
the amount is negative, the negative sign must immediately precede
the
first value in the number. Note, if this field is populated, then
the
fields <Prepay_Int_Exc_Short> and <Net_Int_Advance> will be
zero-filled. Only one of these three fields should contain a
value.
|
Prepay_Int_Exc_Short
|
Text
|
9
|
(178:186)
|
Prepayment
Interest Excess / Shortfall is the difference between the net interest
actually received by the servicer and the net interest passed through
to
the Investors with respect to current transaction (which is a payment
in
full). The data is right justified and may or may not have leading
zeros.
The data will have 2 decimal places which are implied. If the amount
is
negative, the negative sign must immediately precede the first
value in
the number. Note, if this field is populated, then the fields
<Net_Int_Exc_Short> and <Net_Int_Advance> will be zero-filled.
Only one of these three fields should contain a value.
|
Net_Int_Advance
|
Text
|
9
|
(187:195)
|
Net
Interest Advance is the difference between the net interest actually
received by the servicer and the net interest passed through to
the
Investors for those loans on which no payment has be received during
the
reporting period. The data is right justified and may or may not
have
leading zeros. The data will have 2 decimal places which are implied.
If
the amount is negative, the negative sign must immediately precede
the
first value in the number. Note, if this field is populated, then
the
fields <Prepay_Int_Exc_Short> and <Net_Int_Exc_Short> will be
zero-filled. Only one of these three fields should contain a
value.
|
Borr_Next_Due_Dt
|
Text
|
8
|
(196:203)
|
REQUIRED.
This is the borrower's next payment due date. The format should
be
YYYYMMDD.
|
Borr_Name
|
Text
|
30
|
(204:233)
|
This
is the borrower's name. If possible, please supply as LastName
followed by
as much of the first name as will fit ("Xxxxx, Xxxx"). The data
should be
left justified.
|
Pi_Pay_Amt
|
Text
|
9
|
(234:242)
|
This
is the P&I constant payment required under the note. This amount may
or may not be the same as the amount reported in the <Trans_Amt>
field. The data is right justified and may or may not have leading
zeros.
The data will have 2 decimal places which are implied. If the amount
is
negative, the negative sign must immediately precede the first
value in
the number.
|
Gross_Note_Rate
|
Text
|
6
|
(243:248)
|
This
is the current gross loan rate in effect for the current transaction.
The
data is right justified and may or may not have leading zeros.
The data
will have 4 decimal places which are implied.
|
Serv_Fee_Rate
|
Text
|
6
|
(249:254)
|
This
is the servicer's fee rate, if fee is expressed as a rate rather
than as a
fixed amount. The data is right justified and may or may not have
leading
zeros. The data will have 4 decimal places which are implied. If
the
amount is negative, the negative sign must immediately precede
the first
value in the number.
|
Action_Code
|
Text
|
3
|
(255:257)
|
This
will be the servicer's reported Action Code. If the code is supplied
the
data should be left justified.
|
Reversal_Flag
|
Text
|
1
|
(258:258)
|
This
field will Indicate whether the transaction reported is a reversal.
"Y"
will indicate a reversal. Any other value indicates that the transaction
is not a reversal.
|
SCHEDULE
6
SERVICING
ADVANCE SCHEDULE
[LOAN
NUMBER] [PRE-CUT-OFF
DATE ADVANCE
AMOUNT]
(AVAILABLE
UPON REQUEST)
SCHEDULE
7
SCHEDULED
MORTGAGE LOANS AS OF THE CUT-OFF DATE
(AVAILABLE
UPON REQUEST)