Exhibit 4.1
HSI ASSET SECURITIZATION CORPORATION,
Depositor,
CITIMORTGAGE, INC.,
Master Servicer,
CITIBANK, N.A.,
Securities Administrator
▇▇▇▇▇ FARGO BANK, N.A.,
Custodian,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2007
HSI ASSET LOAN OBLIGATION TRUST 2007-AR1
MORTGAGE PASS THROUGH CERTIFICATES,
SERIES 2007-AR1
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans............................... 39
Section 2.02 Acceptance by the Custodian of the Mortgage Loans.......... 41
Section 2.03 Remedies for Breaches of Representations and Warranties
with Respect to the Mortgage Loans......................... 42
Section 2.04 Execution and Delivery of Certificates..................... 44
Section 2.05 [Reserved]................................................. 44
Section 2.06 [Reserved]................................................. 44
Section 2.07 Representations and Warranties of the Depositor............ 44
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Establishment of Certain Accounts.......................... 45
Section 3.02 Investment of Funds in the Distribution Account and the
Master Servicing Account................................... 47
Section 3.03 Report on Assessment of Compliance with Relevant Servicing
Criteria................................................... 47
Section 3.04 Report on Attestation of Compliance with Relevant Servicing
Criteria................................................... 48
Section 3.05 Annual Officer's Certificates.............................. 49
Section 3.06 Indemnification............................................ 50
Section 3.07 Advances................................................... 50
ARTICLE IV
DISTRIBUTIONS
Section 4.01 The Distribution Account................................... 52
Section 4.02 Priorities of Distribution................................. 52
Section 4.03 Monthly Statements to Certificateholders................... 58
Section 4.04 Allocation of Realized Losses.............................. 60
Section 4.05 [Reserved]................................................. 61
Section 4.06 [Reserved]................................................. 61
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TABLE OF CONTENTS
(continued)
PAGE
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ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates........................................... 61
Section 5.02 Certificate Register; Registration of Transfer and Exchange
of Certificates............................................ 62
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.......... 67
Section 5.04 Persons Deemed Owners...................................... 67
Section 5.05 Access to List of Certificateholders' Names and Addresses.. 68
Section 5.06 Maintenance of Office or Agency............................ 68
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor............................... 68
Section 6.02 Merger or Consolidation of the Depositor................... 68
Section 6.03 Limitation on Liability of the Depositor and Others........ 68
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer to Act; Appointment of Successor........... 69
Section 7.02 Notification to Certificateholders......................... 72
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee...................................... 72
Section 8.02 Certain Matters Affecting the Trustee...................... 73
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans...... 74
Section 8.04 Trustee May Own Certificates............................... 74
Section 8.05 Trustee's Fees Indemnification and Expenses................ 74
Section 8.06 Eligibility Requirements for the Trustee................... 76
Section 8.07 Resignation and Removal of the Trustee..................... 76
Section 8.08 Successor Trustee.......................................... 77
Section 8.09 Merger or Consolidation of the Trustee..................... 77
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............. 77
Section 8.11 [Reserved]................................................. 79
Section 8.12 Commission Reporting....................................... 79
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TABLE OF CONTENTS
(continued)
PAGE
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of each
Servicer's Obligations..................................... 86
Section 9.02 Provision to the Securities Administrator of Loan-Level
Information................................................ 87
Section 9.03 [Reserved]................................................. 87
Section 9.04 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.................................................. 87
Section 9.05 Representations and Warranties of the Master Servicer...... 88
Section 9.06 Master Servicer Events of Default.......................... 89
Section 9.07 Waiver of Default.......................................... 91
Section 9.08 Successor to the Master Servicer........................... 91
Section 9.09 [Reserved]................................................. 92
Section 9.10 Merger or Consolidation.................................... 92
Section 9.11 Resignation of the Master Servicer......................... 92
Section 9.12 Assignment or Delegation of Duties by the Master Servicer.. 93
Section 9.13 Limitation on Liability of the Master Servicer............. 93
Section 9.14 Indemnification; Third Party Claims........................ 94
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator......................... 94
Section 10.02 Certain Matters Affecting the Securities Administrator..... 95
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans............................................. 97
Section 10.04 Securities Administrator May Own Certificates.............. 98
Section 10.05 Securities Administrator's Fees and Expenses............... 98
Section 10.06 Eligibility Requirements for Securities Administrator...... 99
Section 10.07 Resignation and Removal of Securities Administrator........ 99
Section 10.08 Successor Securities Administrator......................... 100
Section 10.09 Merger or Consolidation of Securities Administrator........ 101
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator.............................................. 101
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TABLE OF CONTENTS
(continued)
PAGE
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ARTICLE XI
REMIC PROVISIONS
Section 11.01 REMIC Administration....................................... 102
Section 11.02 [Reserved]................................................. 105
Section 11.03 Designation of REMIC(s).................................... 105
Section 11.04 Distributions on Uncertificated REMIC 1 Regular Interests,
REMIC 2 Regular Interests, and REMIC 3 Regular Interests... 105
Section 11.05 Compliance with Withholding Requirements................... 106
ARTICLE XII
TERMINATION
Section 12.01 Termination upon Liquidation or Purchase of the Mortgage
Loans...................................................... 107
Section 12.02 Final Distribution on the Certificates..................... 107
Section 12.03 Additional Termination Requirements........................ 108
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment.................................................. 109
Section 13.02 Recordation of Agreement; Counterparts..................... 111
Section 13.03 Governing Law.............................................. 111
Section 13.04 Intention of Parties....................................... 111
Section 13.05 Notices.................................................... 112
Section 13.06 Severability of Provisions................................. 113
Section 13.07 [Reserved]................................................. 113
Section 13.08 Limitation on Rights of Certificateholders................. 113
Section 13.09 Certificates Nonassessable and Fully Paid.................. 114
Section 13.10 Rule of Construction....................................... 114
Section 13.11 Waiver of Jury Trial....................................... 114
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EXHIBITS
Exhibit A Form of Senior Certificates and Senior Subordinate Certificate
Exhibit B Form of Junior Subordinate Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class P Certificate
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Investment Letter
Exhibit J Form of Request for Release
Exhibit K Contents for Each Mortgage File
Exhibit L Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to be provided with Form 10 K
Exhibit M List of Servicing Agreements
Exhibit N Form of Servicing Function Participant Back-up Sarbanes Oxely
Certification
Exhibit O [Reserved]
Exhibit P [Reserved]
Exhibit Q Transfer Agreements
Exhibit R [Reserved]
Exhibit S Servicing Criteria Matrix
Exhibit T Transaction Parties
Exhibit U Form of Annual Compliance Certificate
Exhibit V Additional Form 10-D Disclosure
Exhibit W Additional Form 10-K Disclosure
Exhibit X Form 8-K Disclosure Information
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Exhibit Y Additional Disclosure Notification
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THIS POOLING AND SERVICING AGREEMENT, dated as of January 1, 2007, among
HSI ASSET SECURITIZATION CORPORATION, as depositor (the "Depositor"),
CITIMORTGAGE, INC., a New York corporation (the "Master Servicer"), CITIBANK,
N.A., a national banking association ( the "Securities Administrator"), ▇▇▇▇▇
FARGO BANK, N.A., a national banking association (the "Custodian") and DEUTSCHE
BANK NATIONAL TRUST COMPANY, a national banking association, as trustee (the
"Trustee").
WITNESSETH:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT:
The Depositor intends to sell Mortgage Pass-Through Certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund (as defined herein). As provided herein, the Securities
Administrator will make an election to treat the entire segregated pool of
assets relating to the Mortgage Loans, as described in the definition of REMIC 1
below, as a real estate mortgage investment conduit (a "REMIC") for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC 1." The Class R-I Certificates will represent the sole class of "residual
interests" in REMIC 1 for purposes of the REMIC Provisions (as defined herein)
under federal income tax law. The following table irrevocably sets forth the
designation, the REMIC 1 Remittance Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.
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Initial
Uncertificated
REMIC 1 REMIC 1 Principal Latest Possible
Regular Interest Remittance Rate Balance Maturity Date(1)
---------------- ---------------- --------------- ----------------
Uncertificated REMIC I Regular Interest I-A Variable Rate(2) $ 36.87 January 2037
Uncertificated REMIC I Regular Interest I-B Variable Rate(2) $ 819.17 January 2037
Uncertificated REMIC I Regular Interest II-A Variable Rate(2) $ 1,256.01 January 2037
Uncertificated REMIC I Regular Interest II-B Variable Rate(2) $ 27,910.12 January 2037
Uncertificated REMIC I Regular Interest III-A Variable Rate(2) $ 395.61 January 2037
Uncertificated REMIC I Regular Interest III-B Variable Rate(2) $ 8,790.81 January 2037
Uncertificated REMIC I Regular Interest IV-A Variable Rate(2) $ 265.03 January 2037
Uncertificated REMIC I Regular Interest IV-B Variable Rate(2) $ 5,889.13 January 2037
Uncertificated REMIC I Regular Interest ZZZ $434,046,767.25 January 2037
Uncertificated REMIC I Regular Interest R-II $ 50.00 January 2037
As provided herein, the Securities Administrator will elect to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as REMIC 2. The Class R-II Certificates will represent the sole class
of "residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation and Initial Class Certificate Balance for each of the "regular
interests" in REMIC 2 (the "REMIC 2 Regular Interests"). The "latest possible
maturity date" (determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii)) for each REMIC 2 Regular Interest shall be the
first
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the stated
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
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Distribution Date that follows the stated maturity date for the Mortgage Loan
included in the Trust Fund as of the Closing Date with the longest remaining
term to stated maturity.
THE SERIES 2007-AR1 CERTIFICATES
Initial
Principal
Balance or
Notional Related Loan Initial Interest S&P Fitch
Class Amount(1) Group Rate Designation Rating Rating
----- ------------ ------------ ---------------- --------------------------- ------ ------
Offered Certificates
CLASS I-A-1 $ 7,823,000 I VARIABLE(3) SENIOR/PASS-THROUGH AAA AAA
CLASS II-A-1 $254,547,000 II VARIABLE(4) SUPER SENIOR/PASS-THROUGH AAA AAA
CLASS II-A-2 $ 11,994,000 II VARIABLE(4) SENIOR SUPPORT/PASS-THROUGH AAA AAA
CLASS III-A-1 $ 80,174,000 III VARIABLE(5) SUPER SENIOR/PASS-THROUGH AAA AAA
CLASS III-A-2 $ 3,778,000 III VARIABLE(5) SENIOR SUPPORT/PASS-THROUGH AAA AAA
CLASS IV-A-1 $ 53,710,000 IV VARIABLE(6) SUPER SENIOR/PASS-THROUGH AAA AAA
CLASS IV-A-2 $ 2,531,000 IV VARIABLE(6) SENIOR SUPPORT/PASS-THROUGH AAA AAA
CLASS B-1 $ 9,768,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR AA
CLASS B-2 $ 3,256,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR A
CLASS B-3 $ 2,388,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR BBB
------------
Total Offered: $429,969,000
------------
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Initial
Principal
Balance or
Notional Related Loan Initial Interest S&P Fitch
Class Amount(1) Group Rate Designation Rating Rating
----- ------------ ------------ ---------------- --------------------------- ------ ------
Non-Offered Certificates(8)
CLASS B-4 $ 1,736,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR BB
CLASS B-5 $ 1,302,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR B
CLASS B-6 $ 1,084,▇▇▇ (▇) ▇▇▇▇▇▇▇▇(7) SUBORDINATE NR NR
CLASS R-I $ 50 II VARIABLE(4) SENIOR/RESIDUAL NR NR
CLASS R-II $ 50 II VARIABLE(4) SENIOR/RESIDUAL NR NR
CLASS P $ 100 (2) N/A PREPAYMENT PENALTIES NR NR
------------
Total Non-Offered: $ 4,123,180
------------
Total: $434,092,180
============
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(1) Approximate. Subject to variance of plus or minus 5%.
(2) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 and
Class P Certificates will be related to each of loan group I, loan group
II, loan group III and loan group IV as further described in this
Prospectus Supplement.
(3) For each distribution date, the certificate rate for the Class I-A-1
Certificates will equal a per annum rate equal to the weighted average of
the net rates for the mortgage loans in loan group I. The initial
pass-through rate for the Class I-A-1 Certificates will be equal to
approximately 6.19991% per annum.
(4) For each distribution date, the certificate rate for the Class II-A-1,
Class II-A-2, Class R-I and Class R-II Certificates will equal a per annum
rate equal to the weighted average of the net rates for the mortgage loans
in loan group II. The initial pass-through rate for the Class II-A-1, Class
II-A-2, Class R-I and Class R-II Certificates will be equal to
approximately 6.18250% per annum.
(5) For each distribution date, the certificate rate for the Class III-A-1 and
Class III-A-2 Certificates will equal a per annum rate equal to the
weighted average of the net rates for the mortgage loans in loan group III.
The initial pass-through rate for the Class III-A-1 and Class III-A-2
Certificates will be equal to approximately 6.09339% per annum.
(6) For each distribution date, the certificate rate for the Class IV-A-1 and
Class IV-A-2 Certificates will equal a per annum rate equal to the weighted
average of the net rates for the mortgage loans in loan group IV. The
initial pass-through rate for the Class IV-A-1 and IV-A-2 Certificates will
be equal to approximately 6.18370% per annum.
(7) The pass-through rate on the Class B-1, Class B-2 and Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates will be equal to weighted average of
the net mortgage rates of the Mortgage Loans in loan group I, loan group
II, loan group III and loan group IV, weighted in proportion to the results
of
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subtracting from the aggregate principal balance of the related loan group
the aggregate certificate principal balance of the senior certificates
related to that loan group. The initial pass-through rate for the Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates
will be equal to approximately 6.16495% per annum.
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Final
Scheduled
Record Delay/Accrual Distribution Minimum Incremental
Class Date(1) Period(2) Date(3) Denomination(4) Denomination CUSIP Number ISIN Number
----- ------- ------------- ------------ ------------------------ ------------ ------------ ------------
Offered Certificates
CLASS I-A-1 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAA61
CLASS II-A-1 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAB45
CLASS II-A-2 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAC28
CLASS III-A-1 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAD01
CLASS III-A-2 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAE83
CLASS IV-A-1 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAF58
CLASS IV-A-2 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAG32
CLASS B-1 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAH15
CLASS B-2 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAJ70
CLASS B-3 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAK44
Non-Offered
Certificates
CLASS B-4 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAN82
CLASS B-5 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAP31
CLASS B-6 DD 24 DAY JANUARY 2037 $25,000 $1 ▇▇▇▇▇▇▇▇▇ US40431LAQ14
CLASS R-I CM 24 DAY JANUARY 2037 20% PERCENTAGE INTERESTS N/A ▇▇▇▇▇▇▇▇▇ US40431LAM00
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Final
Scheduled
Record Delay/Accrual Distribution Minimum Incremental
Class Date(1) Period(2) Date(3) Denomination(4) Denomination CUSIP Number ISIN Number
----- ------- ------------- ------------ ------------------------ ------------ ------------ ------------
CLASS R-II CM 24 DAY JANUARY 2037 20% PERCENTAGE INTERESTS N/A ▇▇▇▇▇▇▇▇▇ US40431LAR96
CLASS P CM N/A JANUARY 2037 20% PERCENTAGE INTERESTS N/A ▇▇▇▇▇▇▇▇▇ US40431LAL27
----------
(1) CM = For any distribution date, the last business day of the calendar month
immediately preceding the distribution date. DD = For any distribution
date, the close of business on the business day immediately preceding the
distribution date.
(2) 24 Day = For any distribution date, the interest accrual period will be the
calendar month immediately preceding the month in which the related
distribution date occurs.
(3) Calculated as the distribution date in the month following the month in
which the latest maturity date of any mortgage loan included in the related
loan group occurs.
(4) With respect to the initial European investors, the underwriters will only
sell offered certificates in minimum total investment amounts of $100,000.
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The Mortgage Loans have an aggregate Stated Principal Balance as of the
Cut-off Date of $434,092,081.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates....... All Classes of Certificates other than the
Class R Certificates and Class P Certificates.
Class A Certificates.......... Class I-A-1, Class II-A-1, Class II-A-2, Class
III-A-1, Class III-A-2, Class IV-A-1 and Class
IV-A-2 Certificates.
Class I-A Certificates........ The Class I-A-1 Certificates.
Class II-A Certificates....... The Class II-A-1 and Class II-A-2 Certificates.
Class III-A Certificates...... Class III-A-1 and Class III-A-2 Certificates.
Class IV-A Certificates....... Class IV-A-1 and Class IV-A-2 Certificates.
Class P Certificates.......... The Class P Certificates.
Class R Certificates.......... Class R-I and Class R-II Certificates.
ERISA-Restricted The Junior Subordinate Certificates, Class R
Certificates.................. Certificates, Class P Certificates and any
Certificate with a rating which falls below the
lowest applicable permitted rating under the
Underwriters' Exemption.
Group 1 Certificates.......... The Class I-A-1 Certificates.
Group 2 Certificates.......... Any one of the Class II-A-1, Class II-A-2
Certificates and the Class R Certificates.
Group 3 Certificates:......... Class III-A-1 and Class III-A-2 Certificates.
Group 4 Certificates:......... Class IV-A-1 and Class IV-A-2 Certificates.
Junior Subordinate Class B-4, Class B-5 and Class B-6
Certificates.................. Certificates.
Offered Certificates.......... All Classes of Certificates other than the
Private Certificates.
Physical Certificates:........ Any one of the Class P or Class R Certificates.
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Private Certificate........... Any Junior Subordinate Certificate, Class R
Certificate or Class P Certificate.
Rating Agencies............... Standard & Poor's and Fitch.
Regular Certificates.......... All Classes of Certificates other than the
Class R Certificates.
Residual Certificates......... Class R Certificates.
Senior Certificate............ Any one of the Group 1 Certificates, the Group
2 Certificates, the Group 3 Certificates or the
Group 4 Certificates.
Senior Subordinate Class B-1, Class B-2 and Class B-3
Certificates.................. Certificates.
Senior Support Certificates... The Class II-A-2, Class III-A-2 or Class IV-A-2
Certificates.
Subordinate Certificate....... Any one of the Senior Subordinate Certificates
or Junior Subordinate Certificates.
Super Senior Certificates..... The Class II-A-1, Class III-A-1 or the Class
IV-A-1 Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
10-K Filing Deadline: As defined in Section 8.12(a)(ii).
Accepted Servicing Practices: With respect to any Mortgage Loan and the
related Servicer, the servicing and administration of such Mortgage Loan (i) in
the same manner in which, and with the same care, skill, prudence and diligence
with which such Servicer generally services and administers similar mortgage
loans with similar mortgagors (A) for other third parties, giving due
consideration to customary and usual standards of practice of prudent
institutional residential mortgage lenders servicing their own mortgage loans or
(B) held in such Servicer's own portfolio, whichever standard is higher, and
(ii) in accordance with applicable local, state and federal laws, rules and
regulations.
Account: Any of the Collection Accounts, the Master Servicing Account, the
Reserve Fund, the Class P Reserve Fund, the Distribution Account and any Escrow
Account. Each Account shall be an Eligible Account.
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Accrued Certificate Interest: With respect to each Distribution Date, in
the case of each class of Offered Certificates interest accrued during the
related Interest Accrual Period on the Class Certificate Balance thereof,
immediately prior to that Distribution Date at the related Pass-Through Rate.
Accrued Certificate Interest on any Class of Certificates will be reduced by the
amount of:
(i) Prepayment Interest Shortfalls on the Mortgage Loans in the
related Loan Group (to the extent not offset by the related Servicer with a
payment of Compensating Interest as provided in the related Servicing
Agreement); and
(ii) any other interest shortfalls not allocated solely to one or more
Specific Classes of Certificates pursuant to Section 4.04, including
interest that is not collectible from the Mortgagor pursuant to the Relief
Act.
The related Loan Group Senior Percentage of these reductions with respect
to the related Loan Group, will be allocated among the Holders of the related
Senior Certificates, in proportion to the amounts of Accrued Certificate
Interest that would have been payable to those Certificates on that Distribution
Date absent such reductions. The remainder of these reductions will be allocated
among the Holders of the Subordinate Certificates, in proportion to the
respective amounts of Accrued Certificate Interest that would have been payable
to those Certificates on that Distribution Date absent such reductions. In
addition to that portion of the reductions described in the preceding sentences
that are allocated to any Class of Subordinate Certificates, Accrued Certificate
Interest on such Class of Subordinate Certificates will be reduced by the
interest portion of Realized Losses that are allocated solely to such Class of
Subordinate Certificates pursuant to Section 4.04.
Additional Disclosure Notification: The form of notice set forth on Exhibit
Y.
Additional Form 10-D Disclosure: As defined in Section 8.12(a)(i).
Additional Form 10-K Disclosure: As defined in Section 8.12(a)(ii).
Advance: Any P&I Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Subordinate Percentage: means, as of each Distribution Date and
for all Mortgage Loans, the percentage equal to the aggregate Class Certificate
Balance of the Subordinate Certificates immediately prior to that Distribution
Date divided by the aggregate Stated Principal Balance of all Mortgage Loans
immediately prior to that Distribution Date (without giving effect to any
principal collections on such Mortgage Loans received or advanced and to be
distributed on such Distribution Date).
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Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
American Home: American Home Mortgage Servicing, Inc.
Amounts Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Accounts of the
Servicers at the close of business on the related Determination Date on account
of (i) Principal Prepayments, Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and Subsequent Recoveries on the Mortgage Loans received
after the end of the related Prepayment Period and (ii) all Scheduled Payments
on the Mortgage Loans due after the end of the related Due Period.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form (other than the assignee's name and
recording information not yet returned from the recording office), reflecting
the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and each Loan Group,
to the extent received by the Securities Administrator (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees and any
Lender paid Primary Mortgage Insurance Policy premiums) and principal due on the
Due Date on the related Mortgage Loans in the related Due Period and received by
the Servicers on or prior to the related Determination Date, together with any
P&I Advances in respect thereof; (ii) all Condemnation Proceeds, Insurance
Proceeds, Liquidation Proceeds and Subsequent Recoveries received by the
Servicers during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all curtailments or Principal
Prepayments in Full on the related Mortgage Loans received by the Servicers
during the related Prepayment Period together with all Compensating Interest
paid by the Servicers in connection therewith (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans in such Loan Group that occur on or prior to the
related Determination Date; (v) all amounts received with respect to such
Distribution Date as the Repurchase Price in respect of a Mortgage Loan
repurchased by a Mortgage Loan Seller or the Sponsor on or prior to the related
Determination Date; and (vi) the proceeds with respect to the termination of the
Trust Fund pursuant to clause (a) of Section 12.01; reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans in
such Loan Group and other amounts as to which the Servicers, the Depositor, the
Master Servicer, the Securities Administrator or the Trustee are entitled to be
paid or reimbursed pursuant to the Servicing Agreements or this Agreement.
Back-up Certification: As defined in Section 3.05.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions, in (a) the States of New York,
California, Maryland or Minnesota, (b) the Commonwealth of Pennsylvania or any
other State in which any Servicer's
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servicing operations are located, or (c) any State in which the Corporate Trust
Office is located, are authorized or obligated by law or executive order to be
closed.
Cash Liquidation: As to any defaulted Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition occurred, a determination by the applicable
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which such Servicer reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Group: As applicable, each of the Group 1 Certificates, the
Group 2 Certificates, the Group 3 Certificates or the Group 4 Certificates.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any Affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100.00% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Securities Administrator is entitled to
rely conclusively on a certification of the Depositor or any Affiliate of the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.
Certification Parties: As defined in Section 3.05.
Certifying Person: As defined in Section 3.05.
Citibank: Citibank, N.A. or its successor in interest.
CitiMortgage: CitiMortgage, Inc. or its successor in interest.
Class: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class I-A Certificates: As specified in the Preliminary Statement.
Class I-A-1 Certificates: All Certificates bearing the Class designation of
"Class ▇-▇-▇".
-▇▇-
▇▇▇▇▇ ▇▇-▇-▇ Certificates: All Certificates bearing the Class designation
of "Class II-A-1".
Class II-A-2 Certificates: All Certificates bearing the Class designation
of "Class II-A-2".
Class III-A-1 Certificates: All Certificates bearing the Class designation
of "Class III-A-1".
Class III-A-2 Certificates: All Certificates bearing the Class designation
of "Class III-A-2".
Class IV-A-1 Certificates: All Certificates bearing the Class designation
of "Class IV-A-1".
Class IV-A-2 Certificates: All Certificates bearing the Class designation
of "Class IV-A-2".
Class II-A Certificates: The Class II-A-1 and Class II-A-2 Certificates.
Class III-A Certificates: The Class III-A-1 and Class III-A-2 Certificates.
Class IV-A Certificates: The Class IV-A-1 and Class IV-A-2 Certificates.
Class II-A-1 Certificates: All Certificates bearing the Class designation
of "Class II-A-1".
Class A Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the Class designation of
"Class B-1".
Class B-2 Certificates: All Certificates bearing the Class designation of
"Class B-2".
Class B-3 Certificates: All Certificates bearing the Class designation of
"Class B-3".
Class B-4 Certificates: All Certificates bearing the Class designation of
"Class B-4".
Class B-5 Certificates: All Certificates bearing the Class designation of
"Class B-5".
Class B-6 Certificates: All Certificates bearing the Class designation of
"Class B-6".
Class Certificate Balance: With respect to any Offered Certificate, as of
any date of determination, an amount equal to the initial Class Certificate
Balance of that Certificate reduced by the aggregate of (a) all amounts
allocable to principal previously distributed with respect to that Certificate
and (b) any reductions in the Class Certificate Balance of that Certificate
deemed to have occurred in connection with allocations of Realized Losses in the
manner described in this Agreement, provided that, the Class Certificate Balance
of any Class of Certificates outstanding with the Highest Priority to which
Realized Losses related to a Mortgage Loan, have been allocated shall be
increased by any Subsequent Recoveries related to that Mortgage Loan
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not previously allocated as set forth in Section 4.02(h), and the Class
Certificate Balance of the Class of Certificates with a Class Certificate
Balance greater than zero with the Lowest Priority shall be further reduced by
an amount equal to the percentage interest evidenced thereby multiplied by the
excess, if any, of (i) the then-aggregate Class Certificate Balance of all
Classes of Certificates then outstanding over (ii) the then-aggregate Stated
Principal Balance of all of the Mortgage Loans.
Class P Certificates: All certificates bearing the designation of "Class
P".
Class P Reserve Fund: The Eligible Account established pursuant to Section
3.01(e).
Class R Certificates: As set forth in the Preliminary Statement.
Closing Date: January 26, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: With respect to each Servicer, the account defined as
"Custodial Account" in the related Servicing Agreement.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a) the
amount, if any, by which the Prepayment Interest Shortfall related to a Loan
Group, if any, for such Distribution Date, with respect to all voluntary
Principal Prepayments for such Loan Group (excluding any payments made upon
liquidation of any Mortgage Loan) exceeds all Prepayment Interest Excesses for
such Distribution Date and for such Loan Group, and (b) the aggregate amount of
the Servicing Fees actually retained by or paid to the applicable Servicer for
such Distribution Date and for such Loan Group.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation.
Corporate Trust Office: With respect to the Securities Administrator, (i)
for transfer, presentation or surrender of Certificates, the office at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, 15th Floor Window, New York, New York 10005, Attention: Corporate Trust
Services - HALO 2007-AR1, and (ii) for all other purposes, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Agency and
Trust - HALO 2007-AR1 or at such other address as the Securities Administrator
may designate from time to time by notice to the Certificateholders, the
Depositor, the Master Servicer and the Trustee. With respect to the Trustee, the
designated office of the Trustee in the State of California at which any
particular time its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, and
its telephone number is (▇▇▇) ▇▇▇-▇▇▇▇ and which is also the address to which
notices to and correspondence with the Trustee under this Agreement should be
directed.
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Countrywide Servicing: Countrywide Home Loans Servicing LP.
Credit Support Depletion Date: The First Distribution Date on which the
aggregate Class Certificate Balances of the Subordinate Certificates has been
reduced to zero.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial File: The meaning assigned to such term in Section 2.01(b).
Custodian: Initially, ▇▇▇▇▇ Fargo, or any successor custodian appointed
hereunder.
Cut-off Date: January 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Data Tape Information: With respect to each Mortgage Loan, the same
information (provided as of the Cut-off Date) included in the data fields
specified under the definition of "Mortgage Loan Schedule" in the applicable
Transfer Agreement, with such additions and modifications as agreed upon by the
applicable Mortgage Loan Seller and the Depositor.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the United States Bankruptcy
Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan repurchased by a Mortgage Loan
Seller or the Sponsor and removed from the Trust Fund.
Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Certificate Balance of this Certificate" (or
initial notional balance, in the case of the Interest Only Certificates) or the
Percentage Interest appearing on the face thereof.
Depositor: HSI Asset Securitization Corporation, a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
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Depository Institution: Any depository institution or trust company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the United States of America or any State thereof, (b) is
subject to supervision and examination by federal or state banking authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated P-1 by Moody's, F1+ by Fitch and A-1 by Standard
& Poor's, if the amounts on deposit represent less than 20% of the initial par
value of the securities, are not intended to be used as credit enhancement, and
are to be held in the account for less than 30 days.
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: means, for each Servicer Remittance Date (i) with
respect to Countrywide Servicing, the Business Day immediately preceding such
Servicer Remittance Date, (ii) with respect to American Home Mortgage Servicing,
Inc., Residential Funding Company, LLC and SunTrust Mortgage, Inc., the 15th day
of the calendar month in which such Servicer Remittance Date occurs, or if that
day is not a Business Day, the immediately succeeding Business Day and (iii)
with respect to HSBC Mortgage, the 16th day of the calendar month in which such
Servicer Remittance Date occurs, or if that day is not a Business Day, the
immediately succeeding Business Day.
Disqualified Non-U.S. Person: With respect to a Class R Certificate, any
Non-U.S. Person or agent thereof other than (i) a Non-U.S. Person that holds the
Class R Certificate in connection with the conduct of a trade or business within
the United States and has furnished the transferor and the Securities
Administrator with an effective IRS Form W-8ECI or (ii) a Non-U.S. Person that
has delivered to both the transferor and the Securities Administrator an opinion
of a nationally recognized tax counsel to the effect that the transfer of a
Class R Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of a Class R
Certificate will not be disregarded for federal income tax purposes.
Distribution Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 3.01(c) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and the
Certificateholders and designated "Citibank, N.A. as paying agent in trust for
registered holders of HSI Asset Loan Obligation Trust 2007-AR1 Mortgage
Pass-Through Certificates, Series 2007-AR1". Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Date: The 25th day of each calendar month, or if such day is
not a Business Day, the next succeeding Business Day, commencing in February,
2007.
Document Certification and Exception Report: The form of report attached to
Exhibit F hereto.
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Due Date: For a Mortgage Loan, the date specified in the related Mortgage
Note on which the monthly scheduled payment of interest and principal (or
interest only during the applicable interest-only period, if any, following
origination) is due.
Due Period: With respect to any Distribution Date, the period commencing on
the second day of the calendar month preceding the month in which such
Distribution Date occurs and ending on the first day of the calendar month in
which such Distribution Date occurs.
▇▇▇▇▇: The Commission's Electronic Data Gathering and Retrieval System.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Securities Administrator.
Eligible Institution: A federal or state-chartered depository institution
or trust company the commercial paper, short-term debt obligations, or other
short-term deposits of which are rated at least "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" if the amounts on deposit are to be held in the account for
no more than 30 days, otherwise upon the loss of this required rating, the
accounts would need to be transferred immediately to accounts which have the
required rating), "P-1" by Moody's and "F1+" by Fitch (or a comparable rating if
another Rating Agency is specified by the Depositor by written notice to each of
the Servicers and the Securities Administrator) or long-term unsecured debt
obligations are rated at least "AA-" by Standard & Poor's if the amounts on
deposit are to be held in the account for no more than 365 days.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 96-84, 61 Fed. Reg. 58234 (1996), as amended by
▇▇▇ ▇▇-▇▇, ▇▇ ▇▇▇. ▇▇▇. ▇▇▇▇▇ (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and
PTE 2002-41, 67 Fed. Reg. 54487 (2002) (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: With respect to each Servicer, the meaning assigned to such
term in the related Servicing Agreement.
Event of Default: With respect to each Servicer, the meaning assigned to
such term in the related Servicing Agreement.
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Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
Expense Fees: As to each Mortgage Loan and any Distribution Date, the
Servicing Fees.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Mortgage Loan Seller or the Sponsor as contemplated by this Agreement, any
Transfer Agreement or the Purchase Agreement, as applicable), a determination
made by any Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 12.05 the
address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - HALO (HSI Asset Loan
Obligation Trust 2007-AR1), or such other address as Fitch may hereafter furnish
to the Depositor and the Securities Administrator.
Form 8-K Disclosure Information: As defined in Section 8.12(a)(iii).
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Group I Net WAC Rate: means, with respect to any Distribution Date and Loan
Group I, the weighted average of the Net Mortgage Rates of the Group I Mortgage
Loans as of the end of the calendar month immediately preceding the month in
which the related Distribution Date occurs.
Group II Net WAC Rate: means, with respect to any Distribution Date and
Loan Group II, the weighted average of the Net Mortgage Rates of the Group II
Loans as of the end of the calendar month immediately preceding the month in
which the related Distribution Date occurs.
Group III Net WAC Rate: means, with respect to any Distribution Date and
Loan Group III, the weighted average of the Net Mortgage Rates of the Group III
Loans as of the end of the calendar month immediately preceding the month in
which the related Distribution Date occurs.
Group IV Net WAC Rate: means, with respect to any Distribution Date and
Loan Group IV, the weighted average of the Net Mortgage Rates of the Group IV
Loans as of the end of the calendar month immediately preceding the month in
which the related Distribution Date occurs.
Group 1 Certificates: As specified in the Preliminary Statement.
Group I Mortgage Loans: The Mortgage Loans identified on the Mortgage Loan
Schedule as Group I Mortgage Loans.
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Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loans: The Mortgage Loans identified on the Mortgage Loan
Schedule as Group II Mortgage Loans.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Mortgage Loans: The Mortgage Loans identified on the Mortgage Loan
Schedule as Group III Mortgage Loans.
Group 4 Certificates: As specified in the Preliminary Statement.
Group 4 Mortgage Loans: The Mortgage Loans identified on the Mortgage Loan
Schedule as Group IV Mortgage Loans.
Highest Priority: As of any date of determination, the Class of
Certificates then outstanding with a Certificate Balance greater than zero, with
the earliest priority for payments pursuant to Section 4.02(a), in the following
order: Senior Certificates, Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates.
HSBC Mortgage: HSBC Mortgage Corporation (USA).
Independent: When used with respect to any accountants, a Person who is
"independent" within the meaning of Rule 2-01(B) of the Commission's Regulation
S-X. Independent means, when used with respect to any other Person, a Person who
(A) is in fact independent of another specified Person and any Affiliate of such
other Person, (B) does not have any material direct or indirect financial
interest in such other Person or any Affiliate of such other Person, (C) is not
connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions and (D) is not a member of the immediate family of
a Person defined in clause (B) or (C) above.
Initial Certificate Balance: With respect to each Class of Certificates,
the Certificate Balance of such Class of Certificates as of the Cut-off Date, in
the amount set forth in the Preliminary Statement.
Initial Certification: As defined in Section 2.02.
Initial Subordinate Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Balance of such Class of Subordinate Certificates divided by the
aggregate Stated Principal Balance of all the Mortgage Loans as of the Cut-off
Date as follows:
CLASS B-1: 2.25%
CLASS B-2: 0.75%
CLASS B-3: 0.55%
CLASS B-4: 0.40%
CLASS B-5: 0.30%
CLASS B-6: 0.25%
-25-
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including, but not limited to, any standard hazard
insurance policy, flood insurance policy, earthquake insurance policy, title
insurance policy or Primary Mortgage Insurance Policy (if any), including all
riders and endorsements thereto in effect, including any replacement policy or
policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
Insurance Policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: means, for the Certificates and any Distribution
Date, the calendar month immediately preceding the month in which the related
Distribution Date occurs assuming a 360-day year consisting of twelve 30-day
months.
Interest Transfer Amount: With respect to any Undercollateralized Group and
any Distribution Date, one month's interest on the applicable Principal Transfer
Amount at the Pass-Through Rate for the Class or Classes of Certificates of such
Undercollateralized Group, plus any shortfall of interest on the Class or
Classes of Certificates of the applicable Undercollateralized Group from prior
Distribution Dates.
IRS: The Internal Revenue Service.
Junior Subordinate Certificates: As specified in the Preliminary Statement.
Late Collections: With respect to any Mortgage Loan and any Due Period, all
amounts received after the Determination Date immediately following such Due
Period, whether as late payments of Scheduled Payments or as Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
applicable Servicer has certified to the Securities Administrator that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the liquidation of a
Liquidated Mortgage Loan, whether through a trustee's sale, foreclosure sale or
otherwise.
Loan Group: The Group I Mortgage Loans, the Group II Mortgage Loans, the
Group III Mortgage Loans or the Group IV Mortgage Loans, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I Mortgage
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
Mortgage Loans.
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Loan Group III: The group of Mortgage Loans comprised of the Group III
Mortgage Loans.
Loan Group IV The group of Mortgage Loans comprised of the Group IV
Mortgage Loans.
London Business Day: Any day on which dealings in deposits of United States
dollars are transacted in the London interbank market.
Lower Priority: As of any date of determination and any Class of
Certificates, any other Class of Certificates then outstanding with a
Certificate Balance greater than zero, with later priority for payments pursuant
to Section 4.02(a).
Lowest Priority: As of any date of determination, the Class of Certificates
then outstanding with the latest priority for payments pursuant to Section
4.02(a), in the following order: Senior Certificates, Class B-6, Class B-5,
Class B-4, Class B-3, Class B-2 and Class B-1 Certificates.
Master Servicer: CitiMortgage, Inc., and any successor in interest, and if
a successor master servicer is appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.06.
Master Servicer Float Period: With respect to each Distribution Date and
the related amounts in the Master Servicing Account, the period commencing on
the applicable Remittance Date immediately preceding the related Master Servicer
Remittance Date and ending on such Master Servicer Remittance Date.
Master Servicer Remittance Date: As to any Distribution Date, 12:00 noon
New York City time on the 23rd day of each month (or if the 23rd day is not a
Business Day, the immediately preceding Business Day).
Master Servicing Account: The separate Eligible Account created and
maintained by the Master Servicer pursuant to Section 3.01(c) in the name of the
Master Servicer for the benefit of the Trustee and the Certificateholders and
designated "CitiMortgage, Inc., in trust for registered holders of HSI Asset
Loan Obligation Trust 2007-AR1 Mortgage Pass-Through Certificates, Series
2007-AR1". Funds in the Master Servicing Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Master Servicing Officer: Any officer of the Master Servicer involved in,
or responsible for, the administration and master servicing of the Mortgage
Loans.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name
of MERS, as nominee for the holder from time to time of the Mortgage Note.
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MERS Procedure Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
MIN: The Mortgage Identification Number of Mortgage Loans registered with
MERS on the MERS(R) System.
Monthly Statement: The statement made available to the Certificateholders
by the Securities Administrator through its website pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 13.05(c) the
address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Pass-Through Group, HALO (HSI Asset Loan Obligation Trust Series 2007-AR1), or
such other address as Moody's may hereafter furnish to the Depositor and the
Securities Administrator.
Mortgage: The mortgage, deed of trust or other instrument identified on the
Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan contained
in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan that is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition, Prepayment Charges, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans prepared by the
Depositor, delivered to the Trustee on the Closing Date and referred to on
Schedule I, such schedule setting forth the Data Tape Information with respect
to each Mortgage Loan.
Mortgage Loan Sellers: The entities which sold the Mortgage Loans to the
Sponsor pursuant to the Transfer Agreements.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: With respect to any Mortgage Loan, the annual rate of
interest borne by the related Mortgage Note from time to time, as of the related
Due Date.
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Mortgaged Property: With respect to each Mortgage Loan, the real property
(or leasehold estate, if applicable) identified on the Mortgage Loan Schedule as
securing repayment of the debt evidenced by the related Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Mortgage Rate: As to any Mortgage Loan and any Distribution Date, the
excess of the Mortgage Rate over the sum of the applicable Servicing Fee Rate
and the rate at which any lender paid Primary Mortgage Insurance Policy premiums
are paid, if applicable.
Non-Permitted Transferee: A Person other than a Permitted Transferee.
Non-U.S. Person: A person that is not a U.S. Person.
Nonrecoverable P&I Advance: Any P&I Advance previously made or proposed to
be made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment (taking into account Accepted Servicing Practices) of the
applicable Servicer, the Master Servicer, as successor servicer, or any
successor master servicer including the Trustee, as applicable, will not or, in
the case of a proposed P&I Advance, would not be ultimately recoverable from
related Late Collections on such Mortgage Loan or REO Property as provided
herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously made or
proposed to be made in respect of a Mortgage Loan or REO Property, which, in
accordance with Accepted Servicing Practices, will not or, in the case of a
proposed Servicing Advance, would not be ultimately recoverable from related
Late Collections.
Notice of Final Distribution: The notice to be provided by the Securities
Administrator pursuant to Section 12.02 to the effect that final distribution on
any of the Certificates shall be made only upon presentation and surrender
thereof.
Offered Certificates: As specified in the Preliminary Statement.
Offering Documents: Collectively, the Prospectus, Prospectus Supplement and
the Private Placement Memorandum.
Officer's Certificate: As defined in the applicable Servicing Agreement.
Opinion of Counsel: A written opinion of counsel, which may be in-house or
outside counsel to the Depositor, the Sponsor, the Master Servicer or the
Trustee, acceptable to the Trustee or the Securities Administrator, as
applicable, except that any opinion of counsel relating to (a) the qualification
of any REMIC created hereunder as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
Option to Purchase: On the initial or any subsequent Optional Termination
Date, the Master Servicer at its own option may purchase, or upon instruction by
the Depositor shall purchase, the Mortgage Loans. In the event that the
Depositor wishes to instruct the Master Servicer to purchase the Mortgage Loans
on any Optional Termination Date, the Depositor shall
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provide instructions to the Master Servicer to exercise such option no later
than 5 p.m. on the third Business Day immediately preceding the Optional
Termination Date, in which event the exercise by the Master Servicer of its
option to purchase the Mortgage Loans shall be deemed to have been at the
Depositor's instruction.
Optional Termination Date: Any Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans, as of the last day of the
related Due Period, is less than or equal to 10.00% of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities Administrator
or delivered to the Securities Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Group: On any Distribution Date, when there is an
Undercollateralized Group, any Certificate Group on such Distribution Date that
is not itself an Undercollateralized Group.
Ownership Interest: As to any Residual Certificate, any ownership interest
in such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: means with respect to (i) the Group I Senior
Certificates on any Distribution Date, the Group I Net WAC Rate; (ii) the Group
II Senior Certificates on any Distribution Date, the Group II Net WAC Rate;
(iii) the Group III Senior Certificates on any Distribution Date, the Group III
Net WAC Rate and (iv) the Group IV Senior Certificates on any Distribution Date,
the Group IV Net WAC Rate and (v) the Subordinate Certificates on any
Distribution Date, the Subordinate Net WAC Rate. For federal income tax
purposes, however, the Pass-Through Rates set forth in (i) through (iv) above
shall be expressed as the weighted average of the REMIC I Remittance Rate on the
related Uncertificated REMIC I Regular Interest I-B, II-B, III-B or IV-B, as the
case may be, weighted on the basis of the Uncertificated Principal Balance of
such related Uncertificated REMIC Regular Interest immediately preceding the
relevant Distribution Date. The Pass-Through Rate set forth in (v) above shall
be expressed, for federal income tax purposes, as the weighted average of the
REMIC I Remittance Rates on Uncertificated REMIC I Regular ▇▇▇▇▇▇▇▇ ▇-▇, ▇▇-▇,
▇▇▇-▇ and IV-A weighted on the basis of the
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Uncertificated Principal Balance of each such Uncertificated REMIC I Regular
Interest immediately preceding the relevant Distribution Date.
P&I Advance: As to any Mortgage Loan or REO Property, any advance made by a
Servicer in respect of any Remittance Date representing the aggregate of all
payments of principal and interest, net of the applicable Servicing Fee and any
lender paid Primary Mortgage Insurance Policy premiums, that were due during the
related Due Period on the Mortgage Loans and that were delinquent on the related
Determination Date, plus certain amounts representing assumed payments not
covered by any current net income on the Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure as determined pursuant to the related
Servicing Agreement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Securities Administrator, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution and rated F1+ by Fitch, A-1+ by
Standard & Poor's and P-1 by Moody's;
(iii) repurchase obligations with respect to any security described in
clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of
America or any state thereof and that are rated by Fitch, Moody's and
Standard & Poor's (in each case, to the extent they are designated as
Rating Agencies in the Preliminary Statement), and by each other Rating
Agency that rates such securities, in its highest long-term unsecured
rating categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition thereof)
that is rated by Fitch, Moody's and Standard & Poor's (in each case, to the
extent they are designated as Rating Agencies
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in the Preliminary Statement), and by each other Rating Agency that rates
such securities, in its highest short-term unsecured debt rating available
at the time of such investment;
(vi) units of money market funds, including money market funds managed
by the Trustee, the Securities Administrator or an Affiliate thereof, that
have been rated "Aaa" by Moody's, "AAA" by Standard & Poor's and, if rated
by Fitch, "AAA" by Fitch; and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to each of the
Rating Agencies as a permitted investment of funds backing "Aaa" or "AAA"
rated securities; provided, however, that no instrument described hereunder
shall evidence either the right to receive (a) only interest with respect
to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provide
a yield to maturity at par greater than 120.00% of the yield to maturity at
par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, international organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual Certificate is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any REMIC formed
hereby to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Prepayment Assumption: With respect to the Mortgage Loans, a prepayment
assumption of 25% CPR, used for determining the accrual of original issue
discount and market discount and premium on the Certificates for federal income
tax purposes.
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Prepayment Charge: Any prepayment premium, penalty or charge collected by a
Servicer with respect to a Mortgage Loan from a Mortgagor in connection with any
Principal Prepayment pursuant to the terms of the related Mortgage Note.
Prepayment Distribution Percentage: With respect to any Distribution Date
and each Class of Subordinate Certificates for each Loan Group, under the
applicable circumstances set forth below, the respective percentages set forth
below:
(i) For any Distribution Date prior to the Distribution Date in
February 2014 (unless the Certificate Balances of the related Senior
Certificates other than the Class PO Certificates have been reduced to
zero), 0%.
(ii) For any Distribution Date for which clause (i) above does not
apply, and on which any Class of Subordinate Certificates is outstanding
with a Certificate Balance greater than zero:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment Distribution
Trigger has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Certificate Balance of such Class of
Subordinate Certificates then outstanding with the Highest Priority
immediately prior to such date and the denominator of which is the sum
of the Certificate Balances immediately prior to such date of (1) the
Class of Subordinate Certificates then outstanding with the Highest
Priority and (2) all other Classes of Subordinate Certificates for
which the respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of Subordinate Certificates
for which the Prepayment Distribution Triggers have not been
satisfied, 0%.
(iii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date (determined without regard
to the proviso to the definition of "Subordinate Principal Distribution
Amount") would result in a distribution as provided in Section 4.02 in
respect of principal of any Class or Classes of Subordinate Certificates in
an amount greater than the remaining Certificate Balance thereof (any such
class, a "Maturing Class"), then: (a) the Prepayment Distribution
Percentage of each Maturing Class shall be reduced to a level that, when
applied as described above, would exactly reduce the Certificate Balance of
such Class to zero; (b) the Prepayment Distribution Percentage of each
other Class of Subordinate Certificates (any such Class, a "Non-Maturing
Class") shall be recalculated in accordance with the provisions in
paragraph (ii) above, as if the Certificate Balance of each Maturing Class
had been reduced to zero (such percentage as recalculated, the
"Recalculated Percentage"); (c) the total amount of the reductions in the
Prepayment Distribution Percentages of the Maturing Class or Classes
pursuant to clause (a) of this sentence, expressed as an aggregate
percentage, shall be allocated among the Non-Maturing Classes in proportion
to their respective Recalculated Percentages (the portion of such aggregate
reduction so allocated to any Non-Maturing Class, the "Adjustment
Percentage"); and (d) for purposes
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of such Distribution Date, the Prepayment Distribution Percentage of each
Non-Maturing Class shall be equal to the sum of (1) the Prepayment
Distribution Percentage thereof, calculated in accordance with the
provisions in paragraph (ii) above as if the Certificate Balance of each
Maturing Class had not been reduced to zero, plus (2) the related
Adjustment Percentage.
Prepayment Distribution Trigger: With respect to any Distribution Date and
any Class of Subordinate Certificates (other than the Class B-1 Certificates), a
test that shall be satisfied if the fraction (expressed as a percentage) equal
to the sum of the Certificate Balances of such Class and each Class of
Subordinate Certificates with a Lower Priority than such Class immediately prior
to such Distribution Date divided by the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date is greater than or equal to the sum of the related Initial
Subordinate Class Percentages of such Classes of Subordinate Certificates.
Prepayment Interest Shortfall: With respect to each Servicer, the meaning
assigned to such term in the related Servicing Agreement for each Loan Group.
Prepayment Period: With respect to each Servicer, the meaning assigned to
such term in the related Servicing Agreement.
Primary Mortgage Insurance Policy: Any mortgage guaranty insurance, if any,
on an individual Mortgage Loan as evidenced by a policy or certificate, whether
such policy is obtained by the related Mortgage Loan Seller, the lender or the
borrower.
Principal Prepayment: Any full or partial payment or other recovery of
principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
that is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon, and that is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
Principal Transfer Amount: With respect to any Distribution Date and any
Undercollateralized Group, the excess of the aggregate Class Certificate Balance
of the Senior Certificates related to that Undercollateralized Group over the
aggregate Stated Principal Balance of the Mortgage Loans related to that
Undercollateralized Group.
Private Certificate: As specified in the Preliminary Statement.
Private Placement Memorandum: The Private Placement Memorandum, dated
January 26, 2007 relating to the offering of the Junior Subordinate
Certificates.
Prospectus: The Prospectus, dated December 27, 2006, as supplemented by the
Prospectus Supplement.
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Prospectus Supplement: The Prospectus Supplement, dated January 26, 2007
relating to the Offered Certificates.
PTCE: As defined in Section 5.02(b).
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of
January 1, 2007, between the Depositor and the Sponsor.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee and the Securities
Administrator. References herein to a given rating or rating category of a
Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 13.05, the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating Agency may hereafter furnish to the Depositor and the Securities
Administrator.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: means, with respect to the Offered Certificates, the Business
Day immediately preceding the related Distribution Date, unless the Offered
Certificates are issued in definitive form, in which case the Record Date will
be the last Business Day of the month immediately preceding the related
Distribution Date.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Regular Certificates: As specified in the Preliminary Statement.
Relevant Servicing Criteria: The Servicing Criteria applicable to the
parties having reporting obligations hereunder, as set forth on Exhibit S
attached hereto. For clarification purposes, multiple parties can have
responsibility for the same Relevant Servicing Criteria. With respect to any
Servicing Function Participant engaged by the Master Servicer, the Securities
Administrator, the Custodian or any 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
legislation or regulations as in effect from time to time.
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Relief Act Interest Shortfall: With respect to any Distribution Date and
any Mortgage Loan, any reduction in the amount of interest collectible on such
Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any applicable similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code. As used herein, the term "the REMIC" or "the REMICs"
shall mean one or more of the REMICs created under this Agreement.
REMIC 1: The segregated pool of assets, with respect to which a REMIC
election is made pursuant to this Agreement, consisting of:
(a) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(b) all payments on and collections in respect of the Mortgage Loans
due after the Cut off Date as shall be on deposit in any
Collection Account or in the Distribution Account and identified
as belonging to the Trust Fund,
(c) property that secured a Mortgage Loan and that has been acquired
for the benefit of the Certificateholders by foreclosure or deed
in lieu of foreclosure,
(d) the hazard insurance policies and Primary Insurance Policies, if
any, and
(e) all funds on deposit in the Class P Reserve Fund;
(f) all proceeds of clauses (a) through (e) above.
REMIC 1 Interest: The REMIC 1 Regular Interests and the Class R-I
Certificates.
REMIC 1 Regular Interest: Any of the ten separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. Each REMIC 1 Regular Interest shall accrue
interest at the related REMIC 1 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 1 Regular Interests are set forth in the Preliminary
Statement hereto.
REMIC 1 Remittance Rate: With respect to each of the Uncertificated REMIC I
Regular Interests I-A, II-A, III-A, IV-A and ZZZ, a per annum rate equal to the
weighted average of the Group I Net WAC Rate, Group II Net WAC Rate, Group III
Net WAC Rate and Group IV Net WAC Rate weighted on the basis of the Subordinate
Component for the related Loan Group. With respect to Uncertificated REMIC I
Regular Interests I-B, II-B, III-B and IV-B, the Group I Net WAC Rate, Group II
Net WAC Rate, Group III Net WAC Rate and Group IV Net WAC Rate, respectively.
With respect to Uncertificated REMIC I Regular Interest R-II, the Group II Net
WAC Rate.
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REMIC 1 Subordinated Balance Ratio: The ratio among the Uncertificated
Balances of each of the REMIC 1 Regular Interests ending with the designation
"A," equal to the ratio among, with respect to each such REMIC 1 Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Class Certificate Balance
of the Senior Certificates in the related Loan Group.
REMIC 2: The segregated pool of assets consisting of all of the REMIC 1
Regular Interests, with respect to which a separate REMIC election is to be
made.
REMIC 2 Certificate: Any Certificate, other than a Class R-I Certificate.
REMIC 2 Regular Certificate: Any REMIC 2 Certificate, other than a Class
R-II Certificate.
REMIC 2 Regular Interest: Any of the fourteen certificated beneficial
ownership interests in REMIC 2 issued hereunder, and, hereby, designated as a
"regular interest" in REMIC 2, as follows: Class I-A-1, Class II-A-1, Class
II-A-2, Class III-A-1, Class III-A-2, Class IV-A-1, Class IV-A-2, Class P, Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
Remittance Date: With respect to each Servicer, the 18th day of each month.
REO Acquisition: The acquisition by the applicable Servicer on behalf of
the Trustee for the benefit of the Certificateholders of any REO Property.
REO Disposition: The final sale by the applicable Servicer of any REO
Property.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property) which proceeds are required to be deposited into the
applicable Collection Account upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Event: As defined in Section 8.12(a)(iii).
Reporting Servicer: As defined in Section 8.12(a)(ii).
Repurchase Price: With respect to any Mortgage Loan, an amount equal to the
sum of (i) the unpaid principal balance of such Mortgage Loan as of the date of
repurchase, (ii) interest on such unpaid principal balance of such Mortgage Loan
at the Mortgage Rate from the last date through which interest has been paid to
the date of repurchase, (iii) all unreimbursed Servicing
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Advances, (iv) the amount of any costs and damages incurred by the Trust Fund as
a result of any violation of any applicable federal, state or local predatory-
or abusive-lending law arising from or in connection with the origination of
such Mortgage Loan and (v) all expenses incurred by the Master Servicer, the
Securities Administrator, the related Servicer or Trustee arising out of the
Master Servicer's, the related Servicer's or Trustee's enforcement of the
applicable Mortgage Loan Seller's or Sponsor's repurchase obligation hereunder.
Request for Release: The Request for Release submitted by a Servicer to the
Trustee, substantially in the form of Exhibit J.
Residential Funding Company: Residential Funding Company, LLC
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the Securities
Administrator or the Master Servicer, any vice president, any assistant vice
president, any assistant secretary, any assistant treasurer, any associate, or
any other officer of the Trustee, the Securities Administrator or the Master
Servicer customarily performing functions similar to those performed by any of
the above designated officers who at such time shall be officers to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and who, in
each case, shall have direct responsibility for the administration of this
Agreement.
Rule 144A Investment Letter: As defined in Section 5.02(b).
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act: The ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act is amended,
(b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act, 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
shall be as agreed to by the Master Servicer, and the Depositor following a
negotiation in good faith to determine how to comply with any such requirements.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan which,
unless otherwise specified herein, shall give effect to any Deficient Valuation
that affects the amount of the monthly payment due on such Mortgage Loan.
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Securities Act: The Securities Act of 1933, as amended and the rules and
regulations thereunder.
Securities Administrator: Citibank, N.A. and any successors in interest,
and if a successor securities administrator is appointed hereunder, such
successor.
Securities Administrator Float Period: With respect to the Distribution
Date and the related amounts in the Distribution Account, the period commencing
on the Master Servicer Remittance Date immediately preceding such Distribution
Date and ending on such Distribution Date.
Senior Accelerated Distribution Percentage means for each Loan Group and
any Distribution Date occurring prior to the 84th Distribution Date 100%. The
related Senior Accelerated Distribution Percentage for any Distribution Date
thereafter will be as follows:
(i) for any Distribution Date after the 84th Distribution Date but on
or prior to the 96th Distribution Date, the related Senior Percentage for
such Loan Group for such Distribution Date plus 70% of the related
Subordinate Percentage for that Loan Group for such Distribution Date;
(ii) for any Distribution Date after the 96th Distribution Date but on
or prior to the 108th Distribution Date, the related Senior Percentage for
such Loan Group for such Distribution Date plus 60% of the related
Subordinate Percentage for that Loan Group for such Distribution Date;
(iii) for any Distribution Date after the 108th Distribution Date but
on or prior to the 120th Distribution Date, the related Senior Percentage
for such Loan Group for such Distribution Date plus 40% of the related
Subordinate Percentage for that Loan Group for such Distribution Date;
(iv) for any Distribution Date after the 120th Distribution Date but
on or prior to the 132nd Distribution Date, the related Senior Percentage
for such Loan Group for such Distribution Date plus 20% of the related
Subordinate Percentage for that Loan Group for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage for
such Loan Group for such Distribution Date.
provided, however, (i) if on any Distribution Date the Senior Percentage for any
Loan Group exceeds the initial Senior Percentage for that Loan Group, then the
Senior Accelerated Distribution Percentage for each Loan Group for that
Distribution Date will once again equal 100%; (ii) if on any Distribution Date
on or prior to the January 2010 Distribution Date, the Aggregate Subordinate
Percentage is greater than or equal to twice such percentage calculated as of
the Closing Date, then the Senior Accelerated Distribution Percentage for each
Loan Group for such Distribution Date will equal the related Senior Percentage
plus 50% of the related Subordinate Percentage and (iii) if on or after the
February 2010 Distribution Date, the Aggregate Subordinate Percentage is greater
than or equal to twice such percentage calculated as
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of the Closing Date, then the Senior Accelerated Distribution Percentage for
each Loan Group for such Distribution Date will equal the related Senior
Percentage.
The reductions in the Senior Accelerated Distribution Percentage for each
Loan Group described above will not occur, and the Senior Accelerated
Distribution Percentage for each Loan Group for such prior period will be
calculated without regard to clause (ii) or (iii) of the paragraph above, unless
both of the following conditions are satisfied with respect to the Mortgage
Loans, as of the last day of the month preceding the Distribution Date:
(a) the Stated Principal Balance of the Mortgage Loans delinquent 60
days or more as set forth in the Monthly Statements, including Mortgage
Loans in bankruptcy, foreclosure and REO, averaged over the last six
months, as a percentage of the aggregate Class Certificate Balance of the
Subordinate Certificates, is less than 50% and
(b) cumulative Realized Losses on the Mortgage Loans do not exceed:
(i) 20% of the original aggregate Class Certificate Balance of
the Subordinate Certificates if such Distribution Date occurs between
and including February 2007 and January 2010; and
(ii) 30% of the original aggregate Class Certificate Balance of
the Subordinate Certificates if such Distribution Date occurs on or
after February 2010.
Notwithstanding the foregoing, upon reduction of the Class Certificate
Balances of the Senior Certificates related to a Loan Group to zero, the Senior
Accelerated Distribution Percentage, as the case may be, will equal 0%.
Senior Certificates: As specified in the Preliminary Statement, as the
context requires.
Senior Interest Distribution Amount: With respect to any Distribution Date
and each Loan Group, the aggregate amount of Accrued Certificate Interest to be
distributed to the holders of the related Senior Certificates for that
Distribution Date pursuant to Section 4.02(a)(i).
Senior Percentage: means, for each Distribution Date and any Loan Group,
the percentage equal to the aggregate Class Certificate Balance of the related
Senior Certificates immediately prior to that Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans in the related
Loan Group immediately prior to that Distribution Date (without giving effect to
any principal collections on such Mortgage Loans received or advanced and to be
distributed on such Distribution Date).
Senior Principal Distribution Amount: With respect to each Loan Group and
any Distribution Date, the amount of related Available Funds, if any, to be
distributed to the related Senior Certificateholders pursuant to Section
4.02(a)(iii).
Senior Subordinate Certificates: As specified in the Preliminary Statement.
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Servicer: Countrywide Servicing, HSBC Mortgage, American Home, Residential
Funding or SunTrust, as applicable, and if a successor Servicer to any is
appointed hereunder, such successor. When the term "Servicer" is used in this
Agreement in connection with the administration of servicing obligations with
respect to any Mortgage Loan, Mortgaged Property, REO Property or Mortgage File,
"Servicer" shall mean the Person identified as the Servicer of such Mortgage
Loan on the Mortgage Loan Schedule.
Service(s)(ing): In accordance with Regulation AB, the act of servicing and
administering the Mortgage Loans or any other assets of the Trust Fund by an
entity that meets the definition of "servicer' set forth in Item 1101 of
Regulation AB and is subject to the disclosure requirements set forth in Item
1108 of Regulation AB. For clarification purposes, any uncapitalized occurrence
of this term in this Agreement shall have the meaning commonly understood by
participants in the residential mortgage-backed securitization market.
Servicing Agreement: Each reconstituted servicing agreement or assignment,
assumption and recognition agreement set forth on Exhibit M hereto and relating
to a Servicer and the servicing of the related Mortgage Loans by such Servicer,
as the same may be amended from time to time.
Servicing Advances: With respect to the Servicers and the Master Servicer
(including the Trustee in its capacity as successor master servicer), all
customary and reasonable "out of pocket" costs and expenses (including
reasonable attorneys' fees and expenses) incurred by the Servicers in the
performance of its servicing obligations under the related Servicing Agreement
or by the Master Servicer (including the Trustee in its capacity as successor
master servicer) in the performance of its obligations hereunder, including, but
not limited to, the cost of (i) the preservation, restoration, inspection and
protection of the Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of the
REO Property and (iv) any other expenses permitted to be reimbursed as Servicing
Advances under the related Servicing Agreement, as applicable.
Servicing Criteria: The criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Servicer, the meaning assigned to such
term in the related Servicing Agreement.
Servicing Fee Rate: means with respect to American Home Mortgage and
SunTrust, a fee equal to one-twelfth of 0.375% of the aggregate Stated Principal
Balance of the Mortgage Loans serviced by such Servicer as of the prior
Distribution Date (or the Cut-off Date in the case of the first Distribution
Date), with respect to HSBC Mortgage a fee equal to one-twelfth of 0.250% of the
aggregate Stated Principal Balance of the Mortgage Loans serviced by HSBC
Mortgage as of the prior Distribution Date (or the Cut-off Date in the case of
the first Distribution Date), with respect to Residential Funding Company, a fee
equal to one-twelfth of 0.300% of the aggregate Stated Principal Balance of the
Mortgage Loans serviced by Residential Funding Company and with respect to any
Mortgage Loan serviced by Countrywide Servicing as of the prior Distribution
Date (or the Cut-off Date in the case of the first Distribution Date) a fee
equal to one-twelfth of 0.175% or 0.250%, as specified in the related Servicing
Agreement,
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during the initial fixed rate period of such Mortgage Loan and one-twelfth of
0.200% or 0.375%, as specified in the related Servicing Agreement, after the
initial fixed rate period of such Mortgage Loan, of the Stated Principal Balance
of such Mortgage Loan.
Servicing File: With respect to each Servicer, the meaning assigned to such
term in the related Servicing Agreement.
Servicing Function Participant: Any Subservicer or Subcontractor of any
Servicer, the Master Servicer, the Custodian or the Securities Administrator,
respectively.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan, any extension of the final
maturity date of a Mortgage Loan, and any increase to the outstanding principal
balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid
principal and interest and other amounts owing under the Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in default, or for
which, in the judgment of the applicable Servicer, default is reasonably
foreseeable.
Servicing Officer: As defined in the applicable Servicing Agreement.
Similar Law: As defined in Section 5.02(b).
Sponsor: HSBC Bank USA, National Association, a national banking
association, and its successors in interest.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 13.05(c) the
address for notices to Standard & Poor's shall be Standard & Poor's, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group - (HSI Asset Loan Obligation Trust), Series 2007-AR1, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Securities Administrator.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any date of
determination, (a) the principal balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date
(whether or not received), minus (b) the sum of (i) all amounts previously
remitted to the Securities Administrator with respect to the related Mortgage
Loan representing payments or recoveries of principal including advances in
respect of scheduled payments of principal and (ii) any Realized Loss allocated
to Certificateholders with respect to such Mortgage Loan for any previous
Distribution Date. For purposes of any Distribution Date, the Stated Principal
Balance of any Mortgage Loan will give effect to any scheduled payments of
principal received by the related Servicer on or prior to the related
Determination Date or advanced by related Servicer for the related Remittance
Date and any unscheduled principal payments and other unscheduled principal
collections received during the related Prepayment Period, and the Stated
Principal Balance of any Mortgage Loan that has prepaid in full or has become a
Liquidated Mortgage Loan during the related Prepayment Period shall be zero.
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Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of the Mortgage Loans but performs one or
more discrete functions identified in Item 1122(d) of Regulation AB with respect
to Mortgage Loans under the direction or authority of any Servicer (or a
Subservicer of any Servicer), the Master Servicer, the Custodian or the
Securities Administrator.
Subordinate Certificate: As specified in the Preliminary Statement.
Subordinate Percentage: means as of any date of determination and with
respect to each Loan Group, a percentage equal to 100% minus the related Senior
Percentage as of that date for that Loan Group.
Subordinate Component: means with respect to each Loan Group and any
Distribution Date, the aggregate Stated Principal Balance of the Mortgage Loans
in that Loan Group for that Distribution Date (without giving effect to any
principal collections on such Mortgage Loans received or advanced and to the
distributed on such Distribution Date) minus the aggregate Class Certificate
Balance of the related Senior Certificates immediately prior to that
Distribution Date.
Subordinate Net WAC Rate: means with respect to any Distribution Date and
the Subordinate Certificates, a per annum rate equal to the weighted average of
the Group I Net WAC Rate, Group II Net WAC Rate, Group III Net WAC Rate and
Group IV Net WAC Rate weighted on the basis of the Subordinate Component for the
related Loan Group.
Subordinate Principal Distribution Amount: With respect to any Distribution
Date and each Class of Subordinate Certificates, the sum of (i) such Class's pro
rata share, based on the Class Certificate Balance of each Class of Subordinate
Certificates then outstanding of the aggregate of the amounts calculated for
such Distribution Date under clauses (1), (2) and (3) of Section 4.02(a)(iii)(A)
(without giving effect to the Senior Percentage) to the extent not payable to
the Senior Certificates; (ii) such Class's pro rata share, based on the Class
Certificate Balance of each Class of Subordinate Certificates then outstanding,
of the principal collections described in Section 4.02(a)(iii)(B)(b) (without
giving effect to the Senior Accelerated Distribution Percentage) to the extent
such collections are not otherwise distributed to the Senior Certificates; (iii)
the product of (x) the related Prepayment Distribution Percentage and (y) the
aggregate of all Principal Prepayments received in the related Prepayment Period
to the extent not payable to the Senior Certificates; and (iv) any amounts
described in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date, that remain undistributed to the extent that such amounts are
not attributable to Realized Losses which have been allocated to a Class of
Subordinate Certificates with a Lower Priority; provided, however, that the
Subordinate Principal Distribution Amount for any Class of Subordinate
Certificates on any Distribution Date shall in no event exceed the outstanding
Class Certificate Balance of such Class of Certificates immediately prior to
such date.
Subsequent Recoveries: As of any Distribution Date, amounts received by the
Servicers (net of any related expenses permitted to be reimbursed pursuant to
the related Servicing Agreement) or surplus amounts held by the Servicers to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by a Mortgage Loan Seller pursuant to
Section 2.03) specifically related to a Mortgage Loan that was the
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subject of a Cash Liquidation or an REO Disposition prior to the related
Prepayment Period that resulted in a Realized Loss.
Subservicer: Any Person that services Mortgage Loans on behalf of a
Servicer, and is responsible for the performance (whether directly or through
subservicers or Subcontractors) of servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: A Mortgage Loan substituted by a Mortgage Loan
Seller or the Sponsor for a Deleted Mortgage Loan which must, in the case of a
Mortgage Loan substituted by the Sponsor, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit J, (i)
have a Stated Principal Balance, after deduction of all Scheduled Payments due
in the month of substitution, not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate not lower than
and not more than 1.00% higher than that of the Deleted Mortgage Loan; (iii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Deleted Mortgage Loan; (iv) be of the same type as the
Deleted Mortgage Loan; and (v) conforms to each representation and warranty
applicable to the Deleted Mortgage Loan made in the Purchase Agreement.
Substitution Adjustment Amount: As provided in the related Transfer
Agreement with respect to each Mortgage Loan Seller, the amount (if any) by
which the aggregate unpaid principal balance of all Substitute Mortgage Loans as
of the date of substitution is less than the aggregate unpaid principal balance
of all Deleted Mortgage Loans, increased by the aggregate amount of any
unreimbursed Advances with respect to such Deleted Mortgage Loans. Such amount
to be remitted by the applicable Mortgage Loan Seller in accordance with its
respective Transfer Agreement.
SunTrust: SunTrust Mortgage Inc.
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 any REMIC due to its classification as a REMIC 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.
Termination Price: As defined in Section 12.01.
Total Transfer Amount: An amount equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for the Undercollaterized Group.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
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Transfer Agreement: The various agreements by which the Sponsor purchased
the Mortgage Loans from the Mortgage Loan Sellers.
Transfer Payments: collectively, the Interest Transfer Amount and Principal
Transfer Amount.
Transferor Certificate: As defined in Section 5.02(b).
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of (i) the
Mortgage Loans and all interest and principal with respect thereto received on
or after the related Cut-off Date (other than such amounts which were due on the
Mortgage Loans on or prior to the related Cut-off Date); (ii) the Accounts
(other than the Reserve Account) and all amounts deposited therein pursuant to
the applicable provisions of this Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure
or otherwise; (iv) the Depositor's rights under the Purchase Agreement, each
Transfer Agreement and each Servicing Agreement; (v) the Insurance Policies; and
(vi) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Uncertificated Interest: With respect to any REMIC 1 Regular Interest for
any Distribution Date, one month's interest at the REMIC 1 Remittance Rate
applicable to such REMIC 1 Regular Interest for such Distribution Date, accrued
on the Uncertificated Principal Balance (or Notional Balance) thereof
immediately prior to such Distribution Date. Uncertificated Interest in respect
of any REMIC 1 Regular Interest 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 1 Regular Interest, shall be reduced by any
interest shortfalls allocated to the Related Classes of Certificates on such
Distribution Date. In addition, Uncertificated Interest with respect to each
Distribution Date, as to any REMIC 1 Regular Interest shall be reduced by
interest portion of Realized Losses allocated to the Related Classes of
Certificates on such Distribution Date.
Uncertificated Principal Balance: The amount of any REMIC 1 Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Principal Balance of each REMIC 1 Regular Interest shall
equal the amount set forth in the Preliminary Statement hereto as its Initial
Uncertificated Principal Balance (or Notional Amount). On each Distribution
Date, the Uncertificated Principal Balance of each REMIC 1 Regular Interest
shall be reduced, first, by the portion of Realized Losses allocated in
reduction of the principal balances of the related Classes of Certificates on
such Distribution Date and, second, by all distributions of principal deemed
made on such REMIC 1 Regular Interest, as applicable, on such Distribution Date
pursuant to Section 11.04. The Uncertificated Principal Balance (or Notional
Amount) of each Uncertificated REMIC 1 Regular Interest shall never be less than
zero.
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Undercollateralized Group: Any Certificate Group in which the aggregate
Class Certificate Balance of the related Class or Classes of Senior Certificates
is greater than the aggregate Stated Principal Balance of the Mortgage Loans of
the related Loan Group.
Underwriters' Exemption: Any exemption listed under footnote 1 of, and
amended by, Prohibited Transaction Exemption 96-84, 61 Fed. Reg. 58234 (1996),
as amended by ▇▇▇ ▇▇-▇▇, ▇▇ ▇▇▇. ▇▇▇. ▇▇▇▇▇ (1997), PTE 2000-58, 65 Fed. Reg.
67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487 (2002), or any successor
exemption.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. As of any date of determination, (i)
0.50% of all Voting Rights shall be allocated pro rata to the Class R-1 and
Class R-2 Certificates; (ii) 1.00% of all Voting Rights shall be allocated to
the Class P Certificates; and (iii) the remaining Voting Rights shall be
allocated among Holders of the remaining Classes of Certificates in proportion
to the Certificate Balances of their respective Certificates on such date (such
Voting Rights to be allocated among the holders of Certificates of each such
Class in accordance with their respective Percentage Interests).
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, N.A., a national banking association, and
its successors in interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund including all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
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Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
(i) the Purchase Agreement, including the right to enforce the Sponsor's
obligation to repurchase or substitute defective Mortgage Loans under Section 4
of the Purchase Agreement and (ii) each Servicing Agreement and each Transfer
Agreement, to the extent assigned under the Purchase Agreement. The Trustee
hereby accepts such assignment, and as set forth herein in Section 2.03(d),
shall be entitled to exercise all the rights of the Depositor under the Purchase
Agreement as if, for such purpose, it were the Depositor.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Custodian for
the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements
necessary to show a complete chain of endorsements from the original payee,
endorsed in blank, "Pay to the order of _____________, without recourse",
and, if previously endorsed, signed in the name of the last endorsee by a
duly qualified officer of the last endorsee;
(ii) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Mortgage shall be
assigned, with assignee's name left blank;
(iii) the original of each guarantee executed in connection with the
Mortgage Note, if any;
(iv) the original recorded Mortgage, with evidence of recording
thereon. If in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Depositor shall deliver or cause to be delivered to
the Custodian, (A) in the case of a delay caused by the public recording
office, a copy of such Mortgage certified by the applicable Mortgage Loan
Seller, escrow agent, title insurer or closing attorney to be a true and
complete copy of the original recorded Mortgage and (B) in the case where a
public recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
(v) originals or a certified copy of each modification agreement, if
any;
(vi) the originals of all intervening assignments of Mortgage with
evidence of recording thereon evidencing a complete chain of ownership from
the 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
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such public recording office retains the original recorded intervening
assignments of Mortgage, a photocopy of such intervening assignment of
Mortgage, together with (A) in the case of a delay caused by the public
recording office, an officer's certificate of the applicable Mortgage Loan
Seller, escrow agent, closing attorney or the title insurer insuring the
Mortgage stating that such intervening assignment of Mortgage has been
delivered to the appropriate public recording office for recordation and
that such original recorded intervening assignment of Mortgage or a copy of
such intervening assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the party delivering the officer's
certificate or by the applicable Mortgage Loan Seller; or (B) in the case
of an intervening assignment of mortgage where a public recording office
retains the original recorded intervening assignment of Mortgage or in the
case where an intervening assignment of Mortgage is lost after recordation
in a public recording office, a copy of such intervening assignment of
Mortgage with recording information thereon certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment of Mortgage;
(vii) if the Mortgage Note, the Mortgage, any Assignment of Mortgage
or any other related document has been signed by a Person on behalf of the
Mortgagor, the copy of the power of attorney or other instrument that
authorized and empowered such Person to sign;
(viii) the original lender's title insurance policy (or a marked title
insurance commitment, in the event that an original lender's title
insurance policy has not yet been issued) in the form of an ALTA mortgage
title insurance policy, containing all required endorsements and insuring
the Trustee and its successors and assigns as to the first priority lien of
the Mortgage in the original principal amount of the Mortgage Loan;
(ix) if applicable, the original of any Primary Mortgage Insurance
Policy or certificate or, an electronic certification, evidencing the
existence of the Primary Mortgage Insurance Policy or certificate, if
private mortgage guaranty insurance is required; and
(x) original of any security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage, if any.
From time to time, the applicable Mortgage Loan Seller, the Depositor or
the applicable Servicer, as applicable, shall forward to the Custodian
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan, in accordance with
the terms of this Agreement, the Transfer Agreements and the Servicing
Agreements upon receipt of such documents. All such mortgage documents held by
the Custodian as to each Mortgage Loan shall constitute the "Custodial File".
Assignments of Mortgage shall not be required to be completed and submitted
for recording with respect to any Mortgage Loan if the Trustee and each Rating
Agency have received an Opinion of Counsel from the Depositor, satisfactory in
form and substance to the
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Trustee and each Rating Agency to the effect that the recordation of such
Assignments of Mortgage in any specific jurisdiction is not necessary to protect
the Trust Fund's interest in the related Mortgage Note. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned by the Mortgage Loan
Seller to "Deutsche Bank National Trust Company, as trustee under the Pooling
and Servicing Agreement dated as of January 1, 2007, for HSI Asset Loan
Obligation Trust 2007-AR1".
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "HSI Asset Loan Obligation
Trust 2007-AR1 and Deutsche Bank National Trust Company is hereby appointed as
Trustee and Citibank N.A. is appointed as Securities Administrator in accordance
with the provisions of this Agreement. The parties hereto acknowledge and agree
that it is the policy and intention of the Trust to acquire only Mortgage Loans
meeting the requirements set forth in this Agreement, including without
limitation, the representations and warranties set forth in the Schedules
hereto.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
Section 2.02 Acceptance by the Custodian of the Mortgage Loans. The
Custodian shall acknowledge, on the Closing Date, receipt by the Custodian of
the documents identified in the Initial Certification in the form annexed hereto
as Exhibit E ("Initial Certification"), and declares that it holds and will hold
such documents and the other documents delivered to it pursuant to Section 2.01,
and that it holds or will hold such other assets as are included in the Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Custodian shall maintain possession of the related
Mortgage Notes in the States of Minnesota, California, and Utah unless otherwise
permitted by the Rating Agencies.
In connection with the Closing Date, the Custodian shall be required to
deliver via facsimile (with original to follow the next Business Day) to the
Depositor, the Securities Administrator and the Trustee an Initial Certification
prior to the Closing Date, or, as the Depositor agrees on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
Mortgage Loan. The Custodian shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodian File.
Within 90 days of the Closing Date, the Custodian shall ascertain that all
documents identified in the Document Certification and Exception Report in the
form attached hereto as Exhibit F are in its possession, and shall deliver to
the Depositor, the Securities Administrator, the Trustee, the Mortgage Loan
Seller and the Servicers, a Document Certification and Exception Report, in the
form annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents identified
in the Document Certification and Exception Report and required to be reviewed
by it are in its possession; (ii) such documents have been
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reviewed by it and appear regular on their face and relate to such Mortgage
Loan; (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (1), (2), (3), (15), (18) and (22) of the Data
Tape Information respecting such Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 2.01 of this Agreement.
Neither the Trustee nor the Custodian shall be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Custodian shall retain possession and custody of each Custodial File in
accordance with and subject to the terms and conditions set forth herein.
Section 2.03 Remedies for Breaches of Representations and Warranties
with Respect to the Mortgage Loans.
(a) Upon the removal of a Deleted Mortgage Loan and the substitution
of a Substitute Mortgage Loan and the deposit to the related Collection Account
of the amount required to be deposited therein in connection with such
substitution, the Custodian shall release the Mortgage File held for the benefit
of the Certificateholders relating to such Deleted Mortgage Loan to the
applicable Mortgage Loan Seller and the Trustee, upon receipt of a Request for
Release certifying that all amounts required to be deposited in accordance with
this Section 2.03(a) have been deposited in the related Collection Account,
shall execute and deliver at the applicable Mortgage Loan Seller's direction
such instruments of transfer or assignment prepared by the applicable Mortgage
Loan Seller in each case without recourse, as shall be necessary to vest title
in the applicable Mortgage Loan Seller of the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
(b) In addition to the repurchase or substitution obligations referred
to in Section 2.03(d) below, the Sponsor shall indemnify the Depositor, any of
its Affiliates, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Trust and hold such parties harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses (including,
without limitation, any taxes payable by the Trust) resulting from any third
party claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach by the Sponsor of any of its representations and
warranties or obligations contained in this Agreement.
(c) Upon receipt of a Request for Release substantially in the form of
Exhibit J hereto, the Custodian shall release the related Custodial File held
for the benefit of the Certificateholders to the related Mortgage Loan Seller or
the Sponsor, as applicable, as directed by the applicable Servicer, and the
Trustee shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. In accordance with
Section 13.05(a), if a Responsible Officer of the Securities Administrator has
actual knowledge of a purchase of a Mortgage Loan pursuant to this Section 2.03
or pursuant to a Transfer Agreement, the Securities Administrator shall promptly
notify each Rating Agency of such purchase.
(d) The Trustee acknowledges that, except as provided in Section 5 of
the Purchase Agreement, the Sponsor shall not have any obligation or liability
with respect to any breach of a representation or warranty made by it with
respect to a Mortgage Loan sold by it,
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provided that such representation or warranty was also made by a Mortgage Loan
Seller with respect to the related Mortgage Loan. It is understood and agreed
that the representations and warranties of the Sponsor set forth in Section 4 of
the Purchase Agreement and assigned to the Trustee by the Depositor hereunder
shall survive the transfer of the Mortgage Loans by the Depositor to the Trustee
on the Closing Date, and shall inure to the benefit of the Trustee and the
Certificateholders notwithstanding any restrictive or qualified endorsement on
any Mortgage Note or Assignment of Mortgage and shall continue throughout the
term of this Agreement. Upon the discovery by any of the Sponsor, the Depositor,
the Securities Administrator, the Trustee, the Master Servicer or any Servicer
of a breach of any of the Sponsor's representations and warranties set forth in
Section 4 of the Purchase Agreement, the party discovering the breach shall give
prompt written notice to the others. Within 30 days of the earlier of either
discovery by or notice to the Sponsor of any breach of any of the foregoing
representations or warranties that materially and adversely affects the value of
any Mortgage Loan or the interest of the Trustee or the Certificateholders
therein, the Sponsor shall use its best efforts to cure such breach in all
material respects and, if such defect or breach cannot be remedied, the Sponsor
shall, at the Depositor's instructions as specified in writing and provided to
the Sponsor and the Trustee, (i) if such 30 day period expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan from the Trust
Fund and substitute in its place a Substitute Mortgage Loan, in the same manner
and subject to the same conditions set forth in this Section 2.03 or (ii)
repurchase such Mortgage Loan at the Repurchase Price; provided, however, that
any such substitution pursuant to clause (i) above shall not be effected prior
to the delivery to the Custodian of a Request for Release substantially in the
form of Exhibit J, and the delivery of the Mortgage File to the Custodian for
any such Substitute Mortgage Loan. It is understood and agreed that the
obligations of the Sponsor under this Agreement to cure, repurchase or
substitute any Mortgage Loan as to which a breach of a representation and
warranty has occurred and is continuing, together with any related
indemnification obligations of the Sponsor set forth in Section 2.03(b), shall
constitute the sole remedies against the Sponsor available to the
Certificateholders, the Depositor and any of its affiliates, or the Trustee on
their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Custodian for the benefit of the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to, or upon the order of the Depositor, the Certificates
in authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates.
Section 2.05 [Reserved].
Section 2.06 [Reserved].
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the other parties to this
agreement that as of the date of this Agreement or as of such date specifically
provided herein:
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(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the power and authority to convey the Mortgage
Loans and to execute, deliver and perform, and to enter into and consummate
transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite company action having been taken, and,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of, or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been received or obtained on or
prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder; and
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(h) Immediately prior to the transfer and assignment by the Depositor
to the Trustee on the Closing Date, the Depositor had good title to, and was the
sole owner of each Mortgage Loan, free of any interest of any other Person, and
the Depositor has transferred all right, title and interest in each Mortgage
Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage as and
in the manner contemplated by this Agreement is sufficient either (i) fully to
transfer to the Trustee, for the benefit of the Certificateholders, all right,
title, and interest of the Depositor thereto as note holder and mortgagee or
(ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 13.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Mortgage Files to the Custodian and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Establishment of Certain Accounts.
(a) The Master Servicer shall establish and maintain the Master
Servicing Account on behalf of the Certificateholders. The Master Servicer
shall, promptly upon receipt, deposit in the Master Servicing Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicers to the Master
Servicer pursuant to the Servicing Agreements;
(ii) any amount deposited by the Servicers pursuant to the Servicing
Agreements in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Master Servicing Account.
In the event that a Servicer shall remit any amount not required to be
remitted, it may at any time direct the Master Servicer in writing to withdraw
such amount from the Master Servicing Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Master Servicer which describes the amounts deposited in error in
the Master Servicing Account. All funds deposited in the Master Servicing
Account shall be held by the Master Servicer in trust for the Certificateholders
until disbursed in accordance with this Agreement. On each Master Servicer
Remittance Date, the entire amount on deposit in the Master Servicing Account
(subject to permitted withdrawals as set forth above) shall be remitted to the
Securities Administrator for deposit into the Distribution Account by wire
transfer in immediately available funds.
(b) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Securities
Administrator shall, promptly upon receipt, deposit in the Distribution Account
and retain therein the following:
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(i) the aggregate amount remitted by the Servicers to the Securities
Administrator pursuant to the Servicing Agreements;
(ii) any amount deposited by the Servicers pursuant to the Servicing
Agreements in connection with any losses on Permitted Investments;
(iii) any amount remitted by the Master Servicer from the Master
Servicing Account pursuant to this Agreement; and
(iv) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that a Servicer or the Master Servicer shall remit any amount
not required to be remitted, it may at any time direct the Securities
Administrator in writing to withdraw such amount from the Distribution Account,
any provision herein to the contrary notwithstanding. Such direction may be
accomplished by delivering notice to the Securities Administrator which
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Securities
Administrator in trust for the Certificateholders until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 4.02.
(c) On the Closing Date, the Securities Administrator shall establish
an account (the "Class P Reserve Fund"), which shall be an Eligible Account. The
Class P Reserve Fund shall be entitled "Class P Reserve Fund, Deutsche Bank
National Trust Company, as Trustee for the benefit of the holders of the HALO
2007-AR1 Class P Certificates." On the Closing Date the Depositor will deposit
$100 into the Class P Reserve Fund, which shall be uninvested. On each
Distribution Date, the Securities Administrator shall distribute the aggregate
of all Prepayment Charges for the Mortgage Loans collected or paid by the
Servicers and received by the Securities Administrator with respect to the
preceding Prepayment Period to the Class P Certificates. On the Distribution
Date in January 2037, the Class P Certificates shall be entitled to its
outstanding Class Principal Amount from amounts on deposit in the Class P
Reserve Fund under Section 4.02(j).
Section 3.02 Investment of Funds in the Distribution Account and the
Master Servicing Account. (a) During the Securities Administrator's Float
Period, the Securities Administrator shall hold the funds in the Distribution
Account uninvested, and shall have the benefit of the use of such funds. During
the Master Servicer's Float Period, the Master Servicer shall hold the funds in
the Master Servicing Account uninvested, and shall have the benefit of the use
of such funds.
(b) The Securities Administrator or its Affiliates are permitted to
receive compensation that could be deemed to be in the Securities
Administrator's economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or sub-custodian with
respect to certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments. The Master Servicer or its Affiliates are
permitted to receive compensation that could be deemed to be in the Master
Servicer's economic self-interest for (i) serving as
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investment adviser, administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments. Such compensation shall
not be considered an amount that is reimbursable for payable pursuant to this
Agreement.
Section 3.03 Report on Assessment of Compliance with Relevant
Servicing Criteria. On or before March 15th of each calendar year for so long as
the Depositor is required to file reports with respect to the Trust under the
Exchange Act, commencing in March 2008, the Master Servicer, the Securities
Administrator and the Custodian, 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 set forth in Exhibit S 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 8.12, 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.
Promptly after receipt of each such report on assessment of compliance as
well as the reports on assessment of compliance provided to the Depositor under
the Servicing Agreements, (i) the Depositor shall review each such report and,
if applicable, consult with the Master Servicer, the Securities Administrator,
any Servicer and any Servicing Function Participant engaged by any such party as
to the nature of any material instance of noncompliance with the Relevant
Servicing Criteria by each such party, and (ii) the Master Servicer 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 S or as set forth in the applicable Servicing
Agreement.
The Master Servicer shall enforce any obligation of each Servicer to cause
to be delivered to the Master Servicer an annual report on assessment of
compliance within the time frames set forth in the related Servicing Agreements,
and in such form and substance as required by the related Servicing Agreements.
The Master Servicer will promptly forward any assessment of compliance it
receives from any Servicer to the Securities Administrator.
In the event the Master Servicer, the Securities Administrator, the
Custodian or any Servicing Function Participant engaged by any such party 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 3.03, or to such other applicable agreement, for the period of time
in such reporting period prior to such termination, assignment or resignation,
notwithstanding any such termination, assignment or resignation.
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Section 3.04 Report on Attestation of Compliance with Relevant
Servicing Criteria. On or before March 15th of each calendar year for so long as
the Depositor is required to file reports with respect to the Trust under the
Exchange Act, commencing in March 2008, the Master Servicer, the Securities
Administrator and the Custodian, 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,
the Custodian or such other Servicing Function Participants, as the case may be)
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 Public Company Accounting
Oversight Board, 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.
Prior to executing any Form 10-K, the Master Servicer shall confirm that
each assessment submitted pursuant to Section 3.03 and the Servicing Agreements
is coupled with an attestation meeting the requirements of this Section and
notify the Depositor of any exceptions.
The Master Servicer shall enforce any obligation of each Servicer to cause
to be delivered to the Master Servicer an attestation within the time frames set
forth in the related Servicing Agreements, and in such form and substance as may
be required by the related Servicing Agreements. The Master Servicer will
promptly forward any attestation it receives on behalf of any Servicer to the
Securities Administrator.
In the event the Master Servicer, the Securities Administrator, the
Custodian or any Servicing Function Participant engaged by any such party, is
terminated, assigns its rights and duties under, or resigns pursuant to the
terms of, this Agreement or any other applicable agreement, as the case may be,
such party shall cause a registered public accounting firm to provide an
attestation pursuant to this Section 3.04, or to such other applicable
agreement, notwithstanding any such termination, assignment or resignation.
Section 3.05 Annual Officer's Certificates. (a) Each Form 10-K filed
with the Commission shall include a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification exactly as set
forth in Exhibit L attached hereto, required to be included therewith pursuant
to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Securities Administrator and the Custodian shall,
and shall cause any Servicing Function Participant engaged by them to, provide
to the Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying
Person"), by March 10th 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 L, 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
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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 facsimile at ▇▇▇-▇▇▇-▇▇▇▇. In the event any such party or
any Servicing Function Participant engaged by any such party 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 3.05 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 Securities
Administrator shall not be required to deliver a Back-Up Certification to the
Master Servicer 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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.
(b) On or before March 15th of each calendar year, for so long as the
Depositor is required to file reports with respect to the Trust under the
Exchange Act, commencing in March 2008, the Master Servicer shall deliver (or
otherwise make available) (and the Master Servicer shall cause any Servicing
Function Participant engaged by it to deliver) to the Depositor and the
Securities Administrator, an Officer's Certificate substantially in the form of
Exhibit U 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 a 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 a 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.
In the event the Master Servicer or any Servicing Function Participant
engaged by any such party is terminated 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 covering the portion of the reporting period for which it served
pursuant to this Section 3.05 or to such applicable agreement, as the case may
be, notwithstanding any such termination, assignment or resignation.
The Master Servicer shall enforce any obligation of each Servicer to cause
to be delivered to the Master Servicer such annual Officer's Certificate (in
respect of Item 1123 of Regulation AB) within the time frames set forth in the
related Servicing Agreements, and in such form and substance as required by the
related Servicing Agreements. The Master Servicer will promptly forward any such
Officer's Certificate it receives from any Servicer to the Securities
Administrator.
Section 3.06 Indemnification. (a) Each of the Depositor, the Master
Servicer, the Securities Administrator, the Custodian, and any Servicing
Function Participant (each, an "Indemnifying Party") engaged by any such party,
shall indemnify and hold harmless the Trustee and each other Indemnifying Party,
and each of its directors, officers, employees, agents, and
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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 hereunder, including particularly its obligations to
provide any annual statement of compliance, annual assessment of compliance with
Servicing Criteria or attestation report 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 including any material misstatement or material omission in (i) any annual
statement of compliance or annual assessment of compliance with Servicing
Criteria 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 Information provided by
it, or (c) the negligence, bad faith or willful misconduct of such indemnifying
party in connection with its performance hereunder. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or the
Depositor, as the case may be, then each Indemnifying Party agrees that it shall
contribute to the amount paid or payable by the Master Servicer, the Securities
Administrator, the Trustee, the Custodian 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.
(b) The Depositor, the Securities Administrator, the Custodian and the
Trustee shall immediately notify the Master Servicer if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans which would
entitle the Depositor, the Securities Administrator, the Custodian, the Trustee
or the Trust to indemnification from the Master Servicer, whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. If the Master Servicer and any such indemnified party
have a conflict of interest with respect to any such claim, the indemnified
party shall have the right to retain separate counsel.
Section 3.07 Advances. (a) To the extent provided in the related
Servicing Agreement, the amount of P&I Advances to be made by each Servicer for
any Remittance Date shall equal, subject to Section 3.07(c), the sum of (i) the
aggregate amount of Scheduled Payments (with each interest portion thereof net
of the related Servicing Fee), due during the Due Period immediately preceding
such Remittance Date in respect of the Mortgage Loans, which Scheduled Payments
were not received as of the close of business on the related Determination Date,
plus (ii) with respect to each REO Property, which REO Property was acquired
during or prior to the related Prepayment Period and as to which such REO
Property an REO Disposition did not occur during the related Prepayment Period,
an amount equal to the excess, if any, of the Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee) that would have been
due on the related Due Date in respect of the related Mortgage Loans, over the
net income from such REO Property transferred to the Collection Account for
distribution on such Remittance Date.
(b) To the extent provided in the related Servicing Agreement, on each
Remittance Date, each Servicer shall remit in immediately available funds to the
Master Servicer
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or Securities Administrator, as applicable, an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of the Collection Account that Amounts Held for Future Distribution
have been, as permitted by this Section 3.07, used by it in discharge of any
such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the applicable
Servicer with respect to the Mortgage Loans and REO Properties. To the extent
provided in the related Servicing Agreement, any Amounts Held for Future
Distribution and so used shall be appropriately reflected in the applicable
Servicer's records and replaced by such Servicer by deposit in the Collection
Account on or before any future Remittance Date to the extent required.
(c) To the extent provided in the related Servicing Agreement, the
obligation of each Servicer to make such P&I Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan or REO Property, shall continue until a
Final Recovery Determination in connection therewith or the removal thereof from
coverage under this Agreement, except as otherwise provided in this Section.
(d) To the extent provided in the related Servicing Agreement,
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. To the extent provided in the
related Servicing Agreement, the determination by any Servicer that it has made
a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance or that any
proposed P&I Advance or Servicing Advance, if made, would constitute a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance, respectively,
shall be evidenced by a Servicing Officer's certificate of the applicable
Servicer delivered to the Master Servicer. In addition, to the extent provided
in the related Servicing Agreement, the Servicer shall not be required to
advance any Relief Act Interest Shortfalls.
(e) To the extent provided in the related Servicing Agreement, except
as otherwise provided herein, the Servicer shall be entitled to reimbursement
pursuant the applicable section of its related Servicing Agreement for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds,
Condemnation Proceeds and Subsequent Recoveries) with respect to the related
Mortgage Loan.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 The Distribution Account. On each Remittance Date, the
Securities Administrator shall deposit in the Distribution Account all funds
remitted to it by the Servicers pursuant to the Servicing Agreements and on each
Master Servicer Remittance Date, the Securities Administrator shall deposit in
the Distribution Account all Funds remitted to it by
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the Master Servicer pursuant to this Agreement. The Securities Administrator may
retain or withdraw from the Distribution Account, (i) amounts necessary to
reimburse the Servicers pursuant to the Servicing Agreements, (ii) amounts
necessary to reimburse the Master Servicer for any previously unreimbursed
Advances and any Advances the Master Servicer deems to be nonrecoverable from
the related Mortgage Loan proceeds, (iii) an amount to indemnify the Master
Servicer or the Servicers for amounts due in accordance with this Agreement,
(iv) all amounts representing Prepayment Charges (payable to the Class P
Certificateholders in accordance with Section 4.02(j)), (v) to reimburse the
Master Servicer, the Securities Administrator, any Servicer or the Trustee, as
the case may be, for expenses reasonably incurred in respect of any breach or
defect giving rise to the repurchase obligation of a Mortgage Loan Seller under
a Transfer Agreement or the Sponsor under this Agreement that were included in
the Repurchase Price of the Mortgage Loan, including any expenses arising out of
the enforcement of the repurchase obligation, to the extent not otherwise paid
pursuant to the terms hereof and (vi) any other amounts that each of the
Depositor, Trustee, Master Servicer and the Securities Administrator is entitled
to receive hereunder for reimbursement, indemnification or otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall make the disbursements and transfers
from amounts then on deposit in the Distribution Account, and shall distribute
such amounts in the following order of priority and to the extent of the related
Available Funds:
(i) to the related Senior Certificates, on a pro rata basis based on
Accrued Certificate Interest payable on such Certificates with respect to
such Distribution Date, Accrued Certificate Interest on such Classes of
Certificates for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a), in each
case in respect of interest on such Class;
(ii) [Reserved]
(iii) to the Group Certificates, the Group 2 Certificates, the Group 3
Certificates and the Group 4 Certificates from the Available Funds for Loan
Group I, Loan Group II, Loan Group III and Loan Group IV, respectively, in
each case in the priorities and amounts set forth in Section 4.02(b), the
sum of the following amounts for each Loan Group (applied to reduce the
Class Certificate Balance of such Certificates):
(A) the Senior Percentage for that Loan Group for such
Distribution Date times the sum of the following:
1. The principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan whether
or not received on or prior to the related Determination Date;
2. The Stated Principal Balance of any Mortgage Loan
repurchased during the preceding calendar month (or deemed to
have been so repurchased in accordance with Section 3.07(b))
pursuant to Section
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2.03 or the amount of any Substitution Adjustment Amount
deposited in the related Collection Account in connection with
the substitution of a Deleted Mortgage Loan pursuant to Section
2.03 during the preceding calendar month; and
3. The principal portion of all other collections (other
than Scheduled Payments, Principal Prepayments in Full,
Curtailments and amounts received in connection with a Cash
Liquidation or REO Disposition of a Mortgage Loan described in
Section 4.02(a)(iii)(B), including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) including
Subsequent Recoveries received during the preceding calendar
month to the extent applied by the Servicer as recoveries of
principal of the related Mortgage Loan pursuant to the related
Servicing Agreement;
(B) with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the preceding
calendar month, an amount equal to the lesser of (a) the related
Senior Percentage for such Distribution Date times the Stated
Principal Balance of such Mortgage Loan and (b) the related Senior
Accelerated Distribution Percentage for such Distribution Date times
the related unscheduled collections (including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the
extent applied by the Servicer as recoveries of principal of the
related Mortgage Loan pursuant to the related Servicing Agreement;
(C) the related Senior Accelerated Distribution Percentage for
such Distribution Date times the aggregate of all Principal
Prepayments received in the related Prepayment Period;
(D) [Reserved]
(E) any amounts described in subsection (iii), clauses (A), (B)
and (C) of this Section 4.02(a), as determined for any previous
Distribution Date, which remain unpaid after application of amounts
previously distributed pursuant to this clause (E) to the extent that
such amounts are not attributable to Realized Losses which have been
allocated to the Subordinate Certificates;
(iv) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(v) to the Holders of the Class B-1 Certificates, an amount equal to
the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, applied in reduction of the Class
Certificate Balance of the Class B-1 Certificates;
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(vi) to the Holders of the Class B-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class B-2 Certificates, an amount equal to
the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, applied in reduction of the Class
Certificate Balance of the Class B-2 Certificates;
(viii) to the Holders of the Class B-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(ix) to the Holders of the Class B-3 Certificates, an amount equal to
the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, applied in reduction of the Class
Certificate Balance of the Class B-3 Certificates;
(x) to the Holders of the Class B-4 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the Class B-4 Certificates, an amount equal to
the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, applied in reduction of the Class
Certificate Balance of the Class B-4 Certificates;
(xii) to the Holders of the Class B-5 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-5 Certificates, an amount equal
to the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, applied in reduction of the Class
Certificate Balance of the Class B-5 Certificates;
(xiv) to the Holders of the Class B-6 Certificates, an amount equal to
the Accrued Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xv) to the Holders of the Class B-6 Certificates, an amount equal to
the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date;
(xvi) to the Senior Certificates related to any Loan Group, in the
priority set forth in Section 4.02(b), the portion, if any, of the related
Available Funds remaining after the foregoing distributions, applied to
reduce the Class Certificate Balances of such
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Senior Certificates, but in no event more than the aggregate of the
outstanding Class Certificate Balances of each such Class of Senior
Certificates, and thereafter, to each Class of Subordinate Certificates
then outstanding beginning with such Class with the Highest Priority, any
portion of the related Available Funds remaining after the related Senior
Certificates have been retired, applied to reduce the Class Certificate
Balance of each such Class of Subordinate Certificates, but in no event
more than the outstanding Class Certificate Balance of each such Class of
Subordinate Certificates;
(xvii) to the Class R-I Certificates, the balance, if any, of the
Available Funds for any Loan Group.
Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate Certificates are no longer
outstanding, the Senior Certificates, Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date shall be distributable only
to the extent that (1) a shortfall in the amounts available to pay Accrued
Certificate Interest in any Class of related certificates results from an
interest rate reduction in connection with a Servicing Modification on a
Mortgage Loan in the related Loan Group, or (2) such unpaid Accrued Certificate
Interest was attributable to interest shortfalls relating to the failure of the
related Servicer to the Master Servicer to make any required Advance, or the
determination by the Servicer or the Master Servicer that any proposed Advance
would be a Nonrecoverable P&I Advance with respect to the related Mortgage Loan
where such Mortgage Loan has not yet been the subject of a Cash Liquidation or
REO Disposition.
(b) Distributions of principal on the Senior Certificates on each
Distribution Date occurring prior to the Credit Support Depletion Date shall be
made as follows:
(i) the Available Funds for Loan Group I available for distribution
pursuant to Section 4.02(a)(iii) shall be distributed to the Class I-A-1
Certificates until the Class Certificate Balance thereof has been reduced
to zero;
(ii) the Available Funds for Loan Group 2 available for distribution
pursuant to Section 4.02(a)(iii) shall be distributed sequentially as
follows:
(A) to the Class R-I and Class R-II Certificates, pro rata, in
accordance with their respective Class Certificate Balances, until the
Class Certificate Balances thereof have been reduced to zero; and
(B) to the Class II-A-1 and Class II-A-2 Certificates, pro rata
in accordance with their respective Class Certificate Balances, until
the Class Certificate Balances thereof have been reduced to zero;
(iii) the Available Funds for Loan Group 3 available for distribution
pursuant to Section 4.02(a)(iii) shall be distributed to the Class III-A-1
and Class III-A-2 Certificates, pro rata in accordance with their
respective Class Certificate Balances, until the Class Certificate Balances
thereof have been reduced to zero; and
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(iv) the Available Funds for Loan Group 4 available for distribution
pursuant to Section 4.02(a)(iii) shall be distributed to the Class IV-A-1
and Class IV-A-2 Certificates, pro rata in accordance with their respective
Class Certificate Balances, until the Class Certificate Balances thereof
have been reduced to zero;
(c) After the reduction of the Class Certificate Balances of the
Senior Certificates related to any Loan Group to zero but prior to the Credit
Support Depletion Date, if either (i) the Aggregate Subordinate Percentage on
that date is less than 200% of the Subordinate Aggregate Percentage as of the
Closing Date, (ii) the Stated Principal Balance of the Mortgage Loans in any
Loan Group delinquent 60 days or more (including, for this purpose, Mortgage
Loans in REO, foreclosure or bankruptcy status) averaged over the six months
prior to the Determination Date, as a percentage of the aggregate Class
Certificate Balance of the Subordinate Certificates is greater than or equal to
50% or (iii) the cumulative Realized Losses on the Mortgage Loans do not exceed
(a) 20% of the aggregate Class Certificate Balance of the Subordinate
Certificates as of the Closing Date if such Distribution Date occurs between and
including February 2007 and January 2010, and (b) 30% of the aggregate Class
Certificate Balance of the Subordinate Certificates as of the Closing Date if
such Distribution Date occurs on or after February 2010, then 100% of all
Principal Prepayments received or advanced with respect to the Mortgage Loans in
the Loan Group relating to the Senior Certificates of which the aggregate Class
Certificate Balance has been paid in full, will be applied on the related
Distribution Date as a distribution of principal to the remaining Senior
Certificates of such other Certificate Groups, pro rata, on the basis of the
aggregate Class Certificate Balance of the Senior Certificates of such
Certificate Groups rather than applied as a principal distribution to the
Subordinate Certificates. Such principal will be distributed on the related
Distribution Date in the same priority as those Senior Certificates would
receive other distributions of principal.
(d) If on any Distribution Date any Loan Group is an
Undercollateralized Group and any other Loan Group is an Overcollateralized
Group, in each case after giving effect to distributions to be made to the
related Senior Certificates on such Distribution Date, all Scheduled Payments,
Principal Prepayments and any other payments of principal received or advanced
with respect to the Mortgage Loans allocable to the related Overcollateralized
Group will be paid in the following priority: (1) first, such amount, up to the
Total Transfer Amount for that Undercollateralized Group will be distributed
first to the Senior Certificates related to the Undercollateralized Group in
payment of accrued but unpaid interest, if any, and then to those Senior
Certificates as principal (in accordance with the priorities set forth in
Section 4.02(b)) and (2) second, any remaining amount will be distributed to the
Subordinate Certificates (in accordance with the priorities set forth in Section
4.02(b); provided, that if more than one Undercollateralized Group exists on any
Distribution Date, the related Transfer Payments shall be allocated among such
Undercollateralized Groups, pro rata, on the basis of the amount by which the
aggregate Class Certificate Balance of the related Senior Certificates
immediately prior to such Distribution Date is greater than the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group; provided,
further, that if more than one Overcollateralized Group exists on any
Distribution Date the related Transfer Payments shall be allocated among such
Overcollateralized Groups, pro rata, on the basis of the Class Certificate
Balance of the related Senior Certificates.
(e) [Reserved]
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(f) After the reduction of the Class Certificate Balances of the
Senior Certificates of any Certificate Group to zero but prior to the Credit
Support Depletion Date, the Senior Certificates shall be entitled to no further
distributions of principal thereon, and the related Available Funds shall be
distributed solely to the holders of the Subordinate Certificates, in each case
as described herein.
(g) [Reserved]
(h) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the related Servicer shall deposit such funds into the
related Collection Account. If, after taking into account such Subsequent
Recoveries, the amount of a Realized Loss with respect to any Mortgage Loan is
reduced, the amount of such Subsequent Recoveries will be applied to increase
the Class Certificate Balance of the Class of related Subordinate Certificates
with the Highest Priority to which Realized Losses for such Mortgage Loan, have
been allocated, but not by more than the amount of Realized Losses with respect
to such Mortgage Loan previously allocated to that Class of Certificates
pursuant to Section 4.04. The amount of any remaining Subsequent Recoveries from
such Mortgage Loan will be applied to increase the Class Certificate Balance of
the Class of Certificates with the next Lower Priority, up to the amount of such
Realized Losses previously allocated to that Class of Certificates pursuant to
Section 4.04. Any remaining Subsequent Recoveries from the related Mortgage Loan
will in turn be applied to increase the Class Certificate Balance of the Class
of Certificates with the next Lower Priority up to the amount of such Realized
Losses previously allocated to that Class of Certificates pursuant to Section
4.04, and so on. Holders of such Certificates will not be entitled to any
payment in respect of Accrued Certificate Interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any application of Subsequent Recoveries to the
Senior Certificates will be made in proportion to the allocation of the original
Realized Loss to the Senior Certificates of the related Loan Group. Any such
increases shall be applied to the Class Certificate Balance of each Certificate
of such Class in accordance with its respective Percentage Interest.
(i) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be solely
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
Securities Administrator, the Sponsor, the Depositor or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(j) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and will distribute these amounts to the holders of the Class P
Certificates. On the first Distribution Date immediately following the
expiration of the latest prepayment penalty term on the Mortgage Loans, the
Securities Administrator will distribute all amounts on deposit in the Class P
Reserve Fund established for
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the benefit of the Class P Certificates pursuant to Section 3.01(e) to the
holders of the Class P Certificates, up to its Class Certificate Balance.
(k) [Reserved]
(l) [Reserved]
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Master Servicer, each Servicer, the Depositor,
the Trustee and each Rating Agency a statement, based on information and to the
extent provided by the Servicers, setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal (other than with respect
to the Interest Only Certificates), separately identifying the aggregate
amount of any Principal Prepayments, Liquidation Proceeds and Subsequent
Recoveries;
(ii) the amount thereof allocable to interest for such Distribution
Date;
(iii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the shortfall
and the allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Expense Fees (in the aggregate and separately
stated) paid to or retained by the Servicers and any Subservicer with
respect to such Distribution Date;
(vii) the Interest Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) by Loan Group, and in the aggregate, the amount of P&I Advances
included in the distribution on such Distribution Date and the aggregate
amount of P&I Advances outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(ix) by Loan Group, and in the aggregate, the number and aggregate
outstanding principal balances of Mortgage Loans (except those Mortgage
Loans that are liquidated as of the end of the related Prepayment Period)
(1) as to which the Scheduled Payment is delinquent 31 to 60 days, 61 to 90
days and 91 or more days, (2) that have become REO Property, (3) that are
in foreclosure and (4) that are in bankruptcy, in each case as of the close
of business on the last Business Day of the immediately preceding month;
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(x) by Loan Group, and in the aggregate, with respect to Mortgage
Loans that became REO Properties during the preceding calendar month, the
number and the aggregate Stated Principal Balance of such Mortgage Loans as
of the close of business on the Determination Date preceding such
Distribution Date and the date of acquisition thereof;
(xi) by Loan Group, and in the aggregate, the total number and
aggregate principal balance of any REO Properties as of the close of
business on the Determination Date preceding such Distribution Date;
(xii) in the aggregate and for each Class of Certificates, the
aggregate amount of Realized Losses incurred during the preceding calendar
month and aggregate Realized Losses through such Distribution Date; and
(xiii) [Reserved]
(xiv) Prepayment Charges collected by the Servicers.
(b) For purposes of preparing the Monthly Statement, delinquencies
shall be determined and reported by the Master Servicer based on the so-called
"OTS" methodology irrespective of the method for determining delinquencies
utilized by the applicable Servicer on mortgage loans similar to the Mortgage
Loans. By way of example, a Mortgage Loan would be delinquent with respect to a
Scheduled Payment due on a Due Date if such Scheduled Payment is not made by the
close of business on the Mortgage Loan's next succeeding Due Date, and a
Mortgage Loan would be more than 30-days Delinquent with respect to such
Scheduled Payment if such Scheduled Payment were not made by the close of
business on the Mortgage Loan's second succeeding Due Date.
(c) The Securities Administrator's responsibility for making available
the above statement to the Certificateholders, each Rating Agency, the Master
Servicer, each Servicer, the Trustee and the Depositor is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer and the Servicers. The Securities Administrator will provide the above
statement via the Securities Administrator's internet website. The Securities
Administrator's website will initially be located at
▇▇▇▇▇://▇▇▇.▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ and assistance in using the website can be
obtained by calling the Securities Administrator's customer service desk at
(▇-▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above distribution method
are entitled to have a paper copy mailed to them via first Class mail by
notifying the Securities Administrator at Citibank, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Agency and
Trust - HALO 2007-AR1. The Securities Administrator shall have the right to
change the manner in which the above statement is distributed in order to make
such distribution more convenient and/or more accessible, and the Securities
Administrator shall provide timely and adequate notification to the
Certificateholders and the parties hereto regarding any such changes. A paper
copy of the statement will also be made available upon written request.
(d) Within a reasonable period of time after the end of each calendar
year, the Securities Administrator shall, upon written request, cause to be
furnished to each Person who at
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any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii), and (a)(vi) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall have previously been provided by
the Securities Administrator pursuant to any requirements of the Code as from
time to time in effect.
Section 4.04 Allocation of Realized Losses. Prior to each Distribution
Date, the Master Servicer shall determine the total amount of Realized Losses,
based solely upon the information provided by the Servicers (to the extent
provided by them), if any, that resulted from any Cash Liquidation, Servicing
Modification, Deficient Valuation or REO Disposition that occurred during the
related Prepayment Period or, in the case of a Servicing Modification that
constitutes a reduction of the interest rate on a Mortgage Loan, the amount of
the reduction in the interest portion of the Scheduled Payment due during the
related Due Period. The amount of each Realized Loss shall be based solely on
and evidenced by an Officers' Certificate provided by the Servicers. With
respect to all Realized Losses (i) the principal portion of Realized Losses,
shall be allocated by the Securities Administrator as follows: first, to the
Class B-6 Certificates until the Class Certificate Balance thereof has been
reduced to zero; second, to the Class B-5 Certificates until the Class
Certificate Balance thereof has been reduced to zero; third, to the Class B-4
Certificates until the Class Certificate Balance thereof has been reduced to
zero; fourth, to the Class B-3 Certificates until the Class Certificate Balance
thereof has been reduced to zero; fifth, to the Class B-2 Certificates until the
Class Certificate Balance thereof has been reduced to zero; sixth, to the Class
B-1 Certificates until the Class Certificate Balance thereof has been reduced to
zero; and, thereafter, the amount of any Realized Loss on any Mortgage Loan
included in any Loan Group will be allocated among all remaining classes of
Senior Certificates related to that Loan Group on a pro rata basis until the
Class Certificate Balances thereof have been reduced to zero, and (ii) the
interest portion of Realized Losses, shall be allocated by the Securities
Administrator as follows: first, to the Subordinate Certificates in reverse
order of seniority, in reduction of the Accrued Certificate Interest thereon
payable on the related Distribution Date and then in reduction of the Class
Certificate Balance of such Subordinate Certificate, and, second, to the
remaining classes of Senior Certificates related to such Loan Group on a pro
rata basis until the Class Certificate Balances thereof have been reduced to
zero; provided, however, that (A) such Realized Losses otherwise allocable to
the Class II-A-1, Class III-A-1 and Class IV-A-1 Certificates will be allocated
to the Class II-A-2, Class III-A-2 and Class IV-A-2 Certificates, respectively,
until the Class Certificate Balances of the Class II-A-2, Class III-A-2 and
Class IV-A-2 Certificates have been reduced to zero.
On any Distribution Date, Realized Losses will be allocated by the
Securities Administrator as set forth herein after distributions of principal on
the Certificates as set forth herein.
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 Balances prior
to giving effect to distributions to be made on such Distribution Date in the
case of the principal portion of a Realized Loss or based on the Accrued
Certificate Interest thereon payable on such Distribution Date (without regard
to any Compensating Interest
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for such Distribution Date) in the case of an interest portion of a Realized
Loss. Except as provided in the following sentence, any allocation of the
principal portion of Realized Losses to a Class of Certificates shall be made by
reducing the Certificate Balance thereof by the amount so allocated, which
allocation shall be deemed to have occurred on such Distribution Date; provided
that no such reduction shall reduce the aggregate Certificate Balance of the
Certificates below the aggregate Stated Principal Balance of the Mortgage Loans.
Section 4.05 [Reserved].
Section 4.06 [Reserved].
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be substantially
in the forms attached hereto as exhibits. The Certificates shall be issuable in
registered form, in the minimum denominations, integral multiples in excess
thereof (except that one Certificate in each Class may be issued in a different
amount) and aggregate denominations per Class set forth in the Preliminary
Statement. The Depositor hereby directs the Securities Administrator to register
the Class P Certificates in the name of HSBC Securities (USA) Inc. or its
designee.
Subject to Section 12.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the applicable Distribution Date or (y) by check mailed by first
Class mail to such Certificateholder at the address of such holder appearing in
the Certificate Register; provided, however, so long as such Certificate is a
Book-Entry Certificate, all distributions on such Certificate will be made
through the Depository or the Depository Participant.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in
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accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Securities Administrator shall
execute and deliver, in the name of the designated transferee or transferees,
one or more new Certificates of the same Class and aggregate Percentage
Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate, and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange shall
be cancelled and subsequently destroyed by the Securities Administrator in
accordance with the Securities Administrator's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. In the event
that a transfer of a Private Certificate which is a Physical Certificate is to
be made in reliance upon an exemption from the Securities Act and such laws, in
order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such transfer shall certify to the
Securities Administrator in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit H (the "Transferor Certificate") and
there shall be delivered to the Securities Administrator a letter in
substantially the form of Exhibit I (the "Rule 144A Investment Letter") or (ii)
there shall be delivered to the Securities Administrator at the expense of the
transferor an Opinion of Counsel stating that such transfer may be made without
registration under the Securities Act. In the event that a transfer of a Private
Certificate which is a Book-Entry Certificate is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer will be deemed to have made as of the transfer date each of the
certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Investment Letter, in
respect of
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such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. As directed by the Depositor, the Securities Administrator
shall provide to any Holder of a Private Certificate, and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Depositor, the Master Servicer and the Trustee shall cooperate with the
Securities Administrator in providing the Rule 144A information referenced in
the preceding sentence, including providing to the Securities Administrator such
information regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Securities Administrator shall reasonably
determine to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate, desiring to effect such transfer shall, and does hereby
agree to, indemnify the Securities Administrator, the Trustee, each Servicer,
the Master Servicer and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Securities Administrator shall have received either (i) a representation from
the transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Securities Administrator's receipt of a representation letter from
the transferee substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
Federal, state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or the Code, nor a person acting on behalf of any such plan
or arrangement nor using the assets of any such plan or arrangement to effect
such transfer, or (ii) in the case of an ERISA-Restricted Certificate (other
than a Residual Certificate or the Class P Certificate) that has been the
subject of an ERISA-Qualifying Underwriting, and the purchaser is an insurance
company, a representation that the purchaser is an insurance company that is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60) and that the purchase and holding of
such Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in
the case of any such ERISA-Restricted Certificate other than a Residual
Certificate or the Class P Certificate presented for registration in the name of
an employee benefit plan subject to Title I of ERISA, a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Depositor, the Trustee, the Master Servicer, the Servicers, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such ERISA-Restricted Certificate
will not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee, the Depositor, the Securities Administrator, the Master
Servicer or any Servicer to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a Physical
Certificate or a Residual Certificate, in the event the
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representation letter referred to in the preceding sentence is not furnished,
such representation shall be deemed to have been made to the Securities
Administrator by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate
that is a Physical Certificate or Residual Certificate or the Class P
Certificate, to or on behalf of an employee benefit plan subject to ERISA, the
Code or Similar Law without the delivery to the Securities Administrator of a
representation letter or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect and (b) any
purported transfer of a Residual Certificate or the Class P Certificate to a
transferee that does not make the representation in clause (i) above shall be
void and of no effect.
None of the Class R or Class P Certificates may be sold to any employee
benefit plan subject to Title I of ERISA, any plan subject to Section 4975 of
the Code, or any plan subject to any Similar Law or any person investing on
behalf or with plan assets of such plan.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Securities Administrator shall be under no liability to any
Person for any registration of transfer of any ERISA-Restricted Certificate that
is in fact not permitted by this Section 5.02(b) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as, in the
case of a Physical Certificate, the transfer was registered by the Securities
Administrator in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be registered
on the Closing Date or thereafter transferred, and the Securities
Administrator shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Securities Administrator under subparagraph (b) above, the Securities
Administrator shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Residual Certificate and (C) not to
Transfer its Ownership Interest in a Residual Certificate or to cause the
Transfer of an
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Ownership Interest in a Residual Certificate to any other Person if it has
actual knowledge that such Person is a Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(a) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall be
entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Securities Administrator or any Servicer, to the effect that the elimination of
such restrictions will not cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is a Non-Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
a Non-Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
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(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree in writing to initiate such termination, the Securities
Administrator shall notify all Certificate Owners, through the Depository, of
the occurrence of any such event and of the availability of definitive, fully
registered Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Securities Administrator of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Securities Administrator shall issue
the Definitive Certificates. None of the Servicers, the Depositor or the
Securities Administrator shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Securities Administrator
with an adequate inventory of Certificates to facilitate the issuance and
transfer of Definitive Certificates. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided, that the Securities Administrator shall not by virtue of its
assumption of such obligations become liable to any party for any act or failure
to act of the Depository.
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(f) Each Private Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9 in form satisfactory to the Securities Administrator, duly
executed by the Certificateholder or his attorney duly authorized in writing.
Each Certificate presented or surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Securities
Administrator in accordance with its customary practice. No service charge shall
be made for any registration of transfer or exchange of Private Certificates,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Securities Administrator, or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Securities Administrator and the Trustee such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to a Responsible Officer of the Securities Administrator that
such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Securities Administrator and any agent of the Trustee, the Depositor or the
Securities Administrator may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Trustee, the Depositor, the Securities Administrator
nor any agent of the Trustee, the Depositor or the Securities Administrator
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor or any Servicer shall request such information in
writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
Depositor, the applicable Servicer or such Certificateholders at such
recipients' expense the most recent list of the Certificateholders of such Trust
Fund held by the Securities Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by
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reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange. The Securities Administrator initially
designates its offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services HALO 2007-AR1. The
Securities Administrator shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by it herein.
Section 6.02 Merger or Consolidation of the Depositor. (a) The
Depositor will keep in full effect its existence, rights and franchises as a
corporation, under the laws of the United States or under the laws of one of the
states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any person succeeding to the business of the Depositor,
shall be the successor of the Depositor, 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.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor, nor any of its respective directors, officers, employees
or agents, shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, or any such Person against any breach
of representations or warranties made by it herein or protect the Depositor, or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or negligence (or gross negligence in the case
of the Depositor) in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, its Affiliates,
and any of their respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
its Affiliates, and any of their respective directors, officers, employees or
agents shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this
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Agreement or the Certificates other than any loss, liability or expense related
to any specific Mortgage Loan or Mortgage Loans (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement
and any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. The Depositor
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its respective duties hereunder and which in
its opinion may involve it in any expense or liability; provided, however, that
the Depositor may in its discretion undertake any such action (or direct the
Trustee to undertake such actions pursuant to Section 2.03 for the benefit of
the Certificateholders) that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Distribution Account.
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer to Act; Appointment of Successor. (a) The
Master Servicer or the Trustee (as successor master servicer), as applicable,
shall be entitled to terminate the rights and obligations of any Servicer under
the applicable Servicing Agreement in accordance with the terms and conditions
of such Servicing Agreement and without any limitation by virtue of this
Agreement. Upon termination of a Servicer under the applicable Servicing
Agreement, the Master Servicer or the Trustee (as successor master servicer), as
applicable, shall, subject to the rights of the Master Servicer or the Trustee
(as successor master servicer), as applicable, to appoint a successor servicer
pursuant to this Section 7.01, be the successor to such Servicer in its capacity
as servicer under the applicable Servicing Agreement, provided, however, that
the Master Servicer or the Trustee (as successor master servicer), as
applicable, shall not be (i) liable for losses of the predecessor Servicer with
respect to such predecessor's investment of funds in its Collection Account;
(ii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including but not limited to repurchases or substitutions pursuant to
Section 2.03, (iii) responsible for expenses of the predecessor servicer related
to any repurchase or substitution of Mortgage Loans hereunder, including but not
limited to repurchases or substitutions pursuant to Section 2.03, (iv) deemed to
have made any of the representations and warranties of the terminated Servicer
under the applicable Servicing Agreement or (v) liable for any obligations of
the predecessor Servicer incurred prior to its termination.
(b) It is understood and acknowledged by the parties hereto that there
will be a period of transition before the transfer of servicing obligations is
fully effective. Notwithstanding the foregoing, the Master Servicer or the
Trustee (as successor master servicer), as applicable, will have a period (not
to exceed 90 days) to complete the transfer of all servicing data and correct or
manipulate such servicing data as may be required by the Master Servicer or the
Trustee (as successor master servicer), as applicable, to correct any errors or
insufficiencies in the servicing data or otherwise enable the Master Servicer or
the Trustee (as successor master servicer), as applicable, to service the
Mortgage Loans in accordance with the applicable
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Servicing Agreement. Except as provided in Section 7.01(e) below, the Master
Servicer or the Trustee (as successor master servicer), as applicable, shall be
entitled to be reimbursed from each Servicer (or by the Trust Fund, if such
Servicer is unable to fulfill such obligation) for all costs associated with the
transfer of servicing from the predecessor servicer, including without
limitation, any 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 the Trustee (as successor
master servicer), as applicable, to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Master Servicer or the Trustee (as
successor master servicer), as applicable, to service the Mortgage Loans
properly and effectively. As compensation in its role as successor servicer, the
Master Servicer or the Trustee (as successor master servicer), as applicable,
shall be entitled to the applicable Servicing Fee and any income on investments
or gain related to the related Collection Account. Notwithstanding the
foregoing, if the Master Servicer or the Trustee (as successor master servicer),
as applicable, has become the successor to a Servicer pursuant to an Event of
Default, the Master Servicer or the Trustee (as successor master servicer), as
applicable, may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making P&I Advances and Servicing Advances
pursuant to the applicable Servicing Agreement, if it is otherwise unable to so
act, or at the written request of Certificateholders entitled to at least a
majority of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to the Servicer under the
applicable Servicing Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer thereunder.
(c) Any successor to a Servicer shall be an institution which is
willing to service the Mortgage Loans, having a net worth of not less than
$25,000,000, and which executes and delivers to the Depositor, the Master
Servicer and the Trustee (as successor master servicer) an agreement accepting
such delegation and assignment, containing an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
applicable Servicer (other than liabilities of the predecessor servicer incurred
prior to its termination), with like effect as if originally named as a party to
such Servicing Agreement; provided, that each Rating Agency acknowledges that
its rating of the Certificates in effect immediately prior to such assignment
and delegation will not be qualified or reduced, as a result of such assignment
and delegation. Pending appointment of a successor to a Servicer under any
Servicing Agreement, the Master Servicer or the Trustee (as successor master
servicer), as applicable, unless such party is prohibited by law from so acting,
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Master Servicer or the Trustee (as successor
master servicer), as applicable, may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor
shall agree in accordance with the applicable Servicing Agreement; provided,
however, that no such compensation shall be in excess of the applicable
Servicing Fee and any income on investments or gain related to the related
Collection Account. The Master Servicer or the Trustee (as successor master
servicer), as applicable, and such successor servicer shall take such action,
consistent with this Agreement and the applicable Servicing Agreement, as shall
be necessary to effectuate any such succession. Neither the Master Servicer nor
the Trustee (as 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
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perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of any Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
(d) Notwithstanding the foregoing, the parties hereto agree that the
Master Servicer or the Trustee (as successor master servicer), as applicable, in
its capacity as successor servicer, immediately shall assume all of the
obligations of such terminated Servicer to make Advances and the Master Servicer
or the Trustee (as successor master servicer), as applicable, will assume the
other duties of such Servicer as soon as practicable, but in no event later than
90 days after the Master Servicer or the Trustee (as successor master servicer),
as applicable, becomes successor servicer pursuant to the preceding paragraph.
If the Master Servicer or the Trustee (as successor master servicer), as
applicable, acts as a successor servicer, it will have no obligation to make an
Advance if it determines in its reasonable judgment that such Advance is
non-recoverable. To the extent that the Master Servicer or the Trustee (as
successor master servicer) is unable to find a successor servicer that is
willing to service the Mortgage Loans for the Servicing Fee because of the
obligation of the applicable Servicer to make Advances regardless of whether
such Advance is recoverable, the applicable Servicing Agreement may be amended
to provide that the successor servicer shall have no obligation to make an
Advance if it determines in its reasonable judgment that such Advance is
non-recoverable and provides an Officer's Certificate to such effect to the
Master Servicer and the Trustee. Notwithstanding the foregoing, the Master
Servicer or the Trustee (as successor master servicer), as applicable, in its
capacity as successor servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts;
provided, however, that any failure to perform any duties or responsibilities
caused by such Servicer's failure to provide information required by this
Agreement shall not be considered a default by the Trustee (as successor master
servicer) hereunder. In the Trustee's capacity as such successor, the Trustee
(as successor master servicer) shall have the same limitations on liability
granted to the Servicer under this Agreement and the related Servicing
Agreement.
(e) In the event that the Master Servicer or the Trustee (as successor
master servicer), as applicable, is the terminated Servicer (except in the case
where the Master Servicer in its role as successor servicer is being terminated
pursuant to an Event of Default caused solely by the Master Servicer as the
successor servicer and not by the predecessor Servicer's actions or omissions),
such costs shall be paid by such prior terminated Servicer promptly upon
presentation of reasonable documentation of such costs.
Section 7.02 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to any Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders and
each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating Agency
notice of each such Event of Default hereunder known to the Trustee, unless such
event shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the occurrence
of a Master Servicer Event of Default and after the curing of all Master
Servicer Events of Default that may have occurred, shall undertake to perform
such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they are in the form
required by this Agreement. The Trustee shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion, report,
document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believes in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates evidencing not less than 25.00% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other
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certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and the
Trustee shall have no responsibility to ascertain or confirm the genuineness of
any signature of any such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Holders of Certificates
evidencing not less than 25.00% of the Voting Rights allocated to each Class of
Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants, custodians, nominees or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agents,
accountants or attorneys appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default or an Event of Default,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Default or an Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby; and
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(j) if the Trustee, in its role as successor master servicer under
this Agreement, assumes the servicing or master servicing with respect to any of
the Mortgage Loans, it shall not assume liability for the representations and
warranties of any Servicer or the Master Servicer, as applicable, or for any
errors or omissions of any Servicer or the Master Servicer, as applicable.
(k) In order to comply with laws, rules, regulations and executive
orders in effect from time to time applicable to banking institutions, including
those relating to the funding of terrorist activities and money laundering
("Applicable Law"), the Trustee is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with the Trustee. Accordingly, each of the parties agrees to
provide to the Trustee upon its request from time to time such identifying
information and documentation as may be available to such party in order to
enable the Trustee to comply with Applicable Law.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, any Servicer, or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, such Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from any Collection Account, the
Master Servicing Account, the Distribution Account or any other fund or account
with respect to the Certificates by the Depositor, the Master Servicer, the
Servicers or the Securities Administrator.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees Indemnification and Expenses. (a) As
compensation for its activities under this Agreement, the Trustee shall be paid
its fee by the Sponsor from the Sponsor's own funds pursuant to a separate
agreement. The Trustee shall have no lien on the Trust Fund for the payment of
such fees.
(b) The Trustee shall be entitled to be reimbursed, from funds on
deposit in the Distribution Account, amounts sufficient to indemnify and hold
harmless the Trustee and any director, officer, employee, or agent of the
Trustee against any loss, liability, or expense (including reasonable attorneys'
fees and expenses) incurred in connection with any claim or legal action
relating to:
(i) this Agreement or any Servicing Agreement,
(ii) the Certificates, or
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(iii) the performance of any of the Trustee's duties under this
Agreement or any Servicing Agreement (including, but not limited to, its
execution of any tax returns),
other than any loss, liability, or expense (i) resulting from any breach of a
Servicer's obligations in connection with its respective Servicing Agreement for
which such Servicer has performed its obligation to indemnify the Trustee, (ii)
resulting from any breach of a Mortgage Loan Seller's obligations in connection
with its respective Transfer Agreement for which such Mortgage Loan Seller has
performed its obligation to indemnify the Trustee, (iii) resulting from any
breach of the Master Servicer's obligation hereunder for which the Master
Servicer has performed its obligation to indemnify the Trustee pursuant to this
Agreement or (iv) incurred because of willful misconduct, bad faith, or
negligence in the performance of any of the Trustee's duties under this
Agreement or any Servicing Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misconduct, the Trust Fund shall pay or reimburse the
Trustee for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the
Certificates, and
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform
services under this Agreement.
The Trustee's right to indemnity and reimbursement under this Section
8.05(b) shall survive the termination of this Agreement and the resignation or
removal of the Trustee under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other routine expenses incurred by the Trustee; provided,
further, that no expense shall be reimbursed hereunder if it would not
constitute an "unanticipated expense incurred by the REMIC" within the meaning
of the REMIC Provisions.
The Trustee shall not be (a) liable for any acts or omissions of any
Servicer (other than where the Trustee (as successor master servicer) is such
Servicer), (b) obligated to make any Advance if it is prohibited from doing so
under applicable law, (c) responsible for expenses of any Servicer (other than
where the Trustee (as successor master servicer) is such Servicer) pursuant to
the terms a Servicing Agreement, (d) liable for any amount necessary to induce
any successor servicer to act as successor servicer under a Servicing Agreement
and enter into the transactions set forth or provided for therein.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or
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examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates, the Master Servicer, the Securities
Administrator or the Servicers and their respective affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor or a Servicer
other than the Trustee in its role as successor to the Master Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Master Servicer, the
Securities Administrator and each Rating Agency not less than 60 days before the
date specified in such notice, when, subject to Section 8.08, such resignation
is to take effect and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If no
successor trustee meeting such qualifications shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and, subject to the
approval of the Rating Agencies, appoint a successor trustee by written
instrument, one copy of which shall be delivered to the Trustee, one copy of
which shall be delivered to the Master Servicer, one copy of which shall be
delivered to each Servicer and one copy of which shall be delivered to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the Voting
Rights may at any time remove the Trustee and, subject to the approval of the
Rating Agencies, appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which shall be delivered by the successor
Trustee to each Servicer, one complete set to the Trustee so removed and one
complete set to the successor so appointed. The successor trustee shall notify
each Rating Agency of any removal of the Trustee.
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Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to this Section 8.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and each Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein. The Depositor and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this Section
8.08 unless at the time of its acceptance, the successor trustee is eligible
under Section 8.06 and its appointment does not adversely affect then the
current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the 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 the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
appropriate. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
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Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon
the Trustee, except for the obligation of the Trustee (as successor master
servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor
to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
applicable Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment
shall not, and shall not be deemed to, constitute any such separate trustee
or co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 [Reserved].
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Section 8.12 Commission Reporting. (a) The Securities Administrator
shall, in accordance with industry standards, prepare (for execution by the
Master Servicer) and file with the Commission, via ▇▇▇▇▇, the following reports
in respect of the Trust as and to the extent required under the Exchange Act:
(i) (a) Within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall prepare and file on behalf of the Trust any Form 10-D required by the
Exchange Act, in form and substance as required by the Exchange Act. The
Securities Administrator shall file each Form 10-D with a copy of the
related Monthly Statement attached thereto. Any disclosure in addition to
the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set
forth on Exhibit V 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 the
inaccuracy of any Additional 10 D Disclosure provided by any party other
than the Securities Administrator, or for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure, except to the
extent of its obligations set forth in the next paragraph.
(b) As set forth on Exhibit V hereto, within 5 calendar days
after the related Distribution Date, (i) the parties specified in
Exhibit V hereto, shall be required to provide to the Securities
Administrator and to the Depositor, to the extent known, in
▇▇▇▇▇-compatible format, or in such other format as 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, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be,
the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Securities Administrator has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit V of their
duties under this paragraph or proactively solicit or procure from
such parties any Additional Form 10-D Disclosure information. The
Depositor shall be responsible for any reasonable fees and expenses
assessed or incurred by the Securities Administrator in connection
with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
(c) 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 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, 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 process for 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
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time or if a previously filed Form 10-D needs to be amended, the
Securities Administrator will follow the procedures set forth in
paragraph (d) of this Section 8.12. Each party to this Agreement
acknowledges that the performance by each of the Master Servicer and
the Securities Administrator of its duties under this Section
8.12(a)(i) 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 under this
Section 8.12(a)(i). The Depositor acknowledges that the performance by
each of the Master Servicer and the Securities Administrator of its
duties under this Section 8.12(i) related to the timely preparation,
execution and filing of Form 10-D is also contingent upon any
Servicing Function Participant strictly observing deadlines no later
than those set forth in this paragraph that are applicable to the
parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure
pursuant to any applicable 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 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 or any Servicing Function Participant needed to prepare,
arrange for execution or file such Form 10-D, not resulting from its
own negligence, bad faith or willful misconduct.
(d) Form 10-D requires the registrant to indicate (by checking
"yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days." The Depositor hereby instructs the
Administrator to check "Yes" for each item, unless the Depositor shall
notify the Securities Administrator in writing, no later than the
fifth calendar day after the related Distribution Date with respect to
the filing of a report on Form 10-D, that the answer to either item
should be "no." The Depositor has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the Depositor was required
to file such reports) and it has been subject to such filing
requirement for the past 90 days." The Securities Administrator shall
be entitled to rely on such representations in preparing, executing
and/or filing any such Form 10-D.
(ii) (a) 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), for so long as the Depositor
is required to file reports with respect to the Trust under the Exchange
Act, commencing in March 2008, the Securities Administrator shall prepare
(for execution by the Master Servicer) 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 or the Servicing
Agreements, (i) an annual compliance statement for each Servicer and the
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Master Servicer and any Servicing Function Participant engaged by any such
party (together with the Custodian and the Securities Administrator, each a
"Reporting Servicer") as described under Section 3.05(b), (ii)(A) the
annual reports on assessment of compliance with Servicing Criteria for each
Reporting Servicer, as described under Section 3.03, and (B) if any
Reporting Servicer's report on assessment of compliance with Servicing
Criteria described under Section 3.03 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any Reporting Servicer's report on assessment of compliance with Servicing
Criteria described under Section 3.03 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, provided, however, that the Securities
Administrator, at its discretion, may omit from the Form 10-K any
assessment of compliance or attestation report described in clause (iii)
below that is not required to be filed with such Form 10-K pursuant to
Regulation AB; (iii)(A) the registered public accounting firm attestation
report for each Reporting Servicer, as described under Section 3.04, and
(B) if any registered public accounting firm attestation report described
under Section 3.04 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such
registered public accounting firm attestation report is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and
an explanation why such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification as described in Section 3.05. 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 W 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 to the extent of its obligations set forth in
the next paragraph.
(b) As set forth on Exhibit W hereto, no later than March 10
(with a 5 calendar day cure period, but in no event later than March
15) of each year that the Trust is subject to the Exchange Act
reporting requirements, commencing in 2008, (i) the parties specified
on Exhibit W shall be required to provide to the Securities
Administrator and to the Depositor, to the extent known, in
▇▇▇▇▇-compatible format, or in such other format as 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
Securities Administrator has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit W of their
duties under this paragraph or proactively solicit or procure from
such parties any Additional Form 10-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 Additional Form 10-K Disclosure on Form 10-K
pursuant to this Section 8.12(a)(ii)(B).
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(c) 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 Business Days after receipt of such copy,
but no later than March 25th, 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, 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
process for 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 paragraph (d) of
this Section 8.12. Promptly (but no later than one 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 prepared and filed by the Securities Administrator. The parties
to this Agreement acknowledge that the performance by the Securities
Administrator of its duties under this Section 8.12(a)(ii) related to
the timely preparation, execution and filing of Form 10-K is
contingent upon such parties strictly observing all applicable
deadlines in the performance of their duties under this Section
8.12(a)(ii) and Sections 3.03, 3.04 and 3.05. The Depositor
acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 8.12(ii)
related to the timely preparation, execution and filing of Form 10-K
is also contingent upon any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph
that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Additional Form 10-K
Disclosure, any annual statement of compliance and any assessment of
compliance and attestation pursuant to any applicable 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 10-K, where such failure results from the
Securities Administrator's inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto or any
Servicing Function Participant needed to prepare, arrange for
execution or file such Form 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(d) Form 10-K requires the registrant to indicate (by checking
"yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days." The Depositor hereby instructs the
Securities Administrator to check "Yes" for each item, unless the
Depositor shall notify the Securities Administrator in writing, no
later than the 15th calendar day of March in any year in which the
Trust is subject to the reporting requirements of the Exchange Act,
that the answer to either item should be "no." The Depositor has filed
all reports required to be filed by Section 13 or 15(d) of the
Exchange
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Act during the preceding 12 months (or for such shorter period that
the Depositor was required to file such reports) and it has been
subject to such filing requirement for the past 90 days." The
Securities Administrator shall be entitled to rely on such
representations in preparing, executing and/or filing any such Form
10-K.
(iii) (a) Within four (4) Business Days after the occurrence of an
event requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), if directed by the Depositor, the Securities Administrator shall
prepare and file on behalf of the Trust Fund any Form 8-K, as required by
the Exchange Act, provided that the Depositor shall file the initial Form
8-K in connection with the issuance of the Certificates. Any disclosure or
information related to a Reportable Event or that is otherwise required to
be included on Form 8-K ("Form 8-K Disclosure Information") shall be
reported by the parties set forth on Exhibit X 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 to the extent
of its obligations set forth in the next paragraph.
(b) As set forth on Exhibit X hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the
close of business New York City time on the 2nd Business Day after the
occurrence of a Reportable Event (i) the parties hereto shall be
required to provide to the Securities Administrator and the Depositor,
to the extent known, in ▇▇▇▇▇-compatible format, or in such other
format as 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.
(c) 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, 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
process for 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 paragraph (d) of this Section 8.12. The
parties to this Agreement acknowledge that the performance by the
Securities Administrator of its duties
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under this Section 8.12(d)(iii) 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 Section 8.12(D)(iii). The Depositor
acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 8.12(D)(iii)
related to the timely preparation, execution and filing of Form 8-K is
also contingent upon any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph
that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure
Information pursuant to the related any applicable agreement. The
Securities Administrator shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 8-K, where such
failure results from the Securities Administrator's inability or
failure to obtain or receive, on a timely basis, any information from
any other party hereto or any Servicing Function Participant needed to
prepare, arrange for execution or file such Form 8-K, not resulting
from its own negligence, bad faith or willful misconduct.
(b) The Depositor acknowledges and agrees that the Securities
Administrator may include in any Exchange Act report all relevant information,
data, and exhibits as the Securities Administrator may receive in connection
with such report irrespective of any provision or Regulation AB that may permit
the exclusion of such material. By the way of example, the Securities
Administrator may file all assessments of compliance, attestation reports and
compliance statements timely received from any Item 1122 Servicing Function
Participant irrespective of any applicable minimum pool asset percentage
requirement for disclosure related to such Servicing Function Participant.
(c) The Depositor agrees to furnish promptly to the Securities
Administrator, from time to time upon request, such additional information,
data, reports, documents, and financial statements within the Depositor's
possession or control as the Securities Administrator reasonably requests as
necessary or appropriate to prepare and file the foregoing reports. The
Securities Administrator shall make available to the Depositor copies of all
Exchange Act reports filed hereunder.
(d) (i) On or before January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 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
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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, in the case of Form
10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Securities
Administrator will notify electronically the Depositor and such other
parties to this Agreement as are affected by this Amendment and such
parties will cooperate to prepare 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
master servicing, as applicable, of the Master Servicer. The parties to
this Agreement acknowledge that the performance by each of the Master
Servicer and the Securities Administrator of its duties under this Section
8.12(d) 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 Section. Neither the
Master Servicer nor the Securities Administrator shall have any liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare, execute and/or timely file any such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such
failure results from the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto or any Servicing Function Participant needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K,
10-D or 10-K, not resulting from its own negligence, bad faith or willful
misconduct. The Depositor shall be responsible for all costs and expenses
of the Securities Administrator related to the preparation and filing of
any such amendment. Notwithstanding the foregoing, if any Form 10-D needs
to be amended solely to change the information contained in the Monthly
Statement, the Securities Administrator shall not be required to notify the
Depositor of such amendment.
(e) Other than the Exchange Act reports specified above, the
Securities Administrator shall have no responsibility to file any items or
reports with the Commission under the Exchange Act or otherwise; provided,
however, the Securities Administrator and Master Servicer will cooperate with
the Depositor in connection with any additional filings with respect to the
Trust as the Depositor deems necessary under the Exchange Act.
(f) The Depositor shall pay all costs and expenses of the Securities
Administrator related to the preparation and filing of any current report on
Form 8-K, any periodic report on Form 10-D (other than the costs and expense of
the Securities Administrator associated with the preparation and filing of the
Monthly Statement), or any amendment to any Exchange Act report. Except as
otherwise provided herein, all expenses incurred by the Securities Administrator
in connection with its preparation and filing of Exchange Act reports hereunder
shall not be reimbursable from the Trust.
(g) Any notice required under this Section 8.12 may be given by
facsimile or by electronic mail.
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of each
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the obligations of each Servicer under their
respective Servicing Agreements, and (except as set forth below) shall use its
reasonable good faith efforts to cause each Servicer to duly and punctually
perform its duties and obligations under its respective Servicing Agreement.
Upon the occurrence of an Event of Default of which a Responsible Officer of the
Master Servicer or, if the Master Servicer and the applicable Servicer are the
same entity, the Trustee, has actual knowledge, the Master Servicer or the
Trustee, as applicable, shall promptly notify the Securities Administrator and
the Trustee, as applicable, and shall specify in such notice the action, if any,
the Master Servicer or the Trustee, as applicable, plans to take in respect of
such default. So long as an Event of Default shall occur and be continuing, the
Master Servicer or the Trustee, as applicable, shall take the actions specified
in Article VII.
If (i) a Servicer reports a delinquency on a monthly report and (ii) such
Servicer, by 11 a.m. (New York Time) on the related Remittance Date, neither
makes an Advance nor provides the Securities Administrator, the Master Servicer
and the Trustee with an Officer's Certificate certifying that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, then
the Master Servicer or, if the Master Servicer and such Servicer are the same
entity, the Trustee, shall deposit in the Distribution Account not later than
the Business Day immediately preceding the related Distribution Date an Advance
in an amount equal to the difference between (x) with respect to each Monthly
Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the related Servicer was required to make an
Advance pursuant to the related Servicing Agreement and (y) amounts deposited in
the related Collection Account to be used for Advances with respect to such
Mortgage Loan, except to the extent the Master Servicer or the Trustee, as
applicable, determines any such Advance to be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance. Subject to the foregoing and Section 7.01, the
Master Servicer or the Trustee, as applicable, shall continue to make such
Advances for so long as the applicable Servicer is required to do so under its
respective Servicing Agreement. If applicable, on the Business Day immediately
preceding the Distribution Date, the Master Servicer shall deliver an Officer's
Certificate to the Trustee stating that the Master Servicer elects not to make
an Advance in a stated amount and detailing the reason(s) it deems the Advance
to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. Any
amounts deposited by the Master Servicer or the Trustee, as applicable, pursuant
to this Section 9.01 shall be net of the Servicing Fee for the related Mortgage
Loans.
(b) The Master Servicer or the Trustee (as successor master servicer),
as applicable, shall pay the costs of monitoring the Servicers (including costs
associated with (i) termination of any Servicer, (ii) the appointment of a
successor servicer or (iii) the transfer to and assumption of the servicing by
the Master Servicer or the Trustee, as applicable) and shall, to the extent
permitted under the related Servicing Agreement, seek reimbursement therefor
initially from the terminated Servicer. In the event the full costs associated
with the transition of
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servicing responsibilities to the Master Servicer or the Trustee (as successor
master servicer), as applicable, are not paid for by the predecessor or
successor servicer (provided such successor servicer is not the Master Servicer
or the Trustee (as successor master servicer)), the Master Servicer or the
Trustee, as applicable, may be reimbursed therefor by the Trust for all costs
incurred by the Master Servicer or the Trustee (as successor master servicer),
as applicable, associated with any such transfer of servicing duties from the
applicable Servicer to the Master Servicer or the Trustee, as applicable, or any
other successor servicer.
(c) If the Master Servicer or the Trustee (as successor master
servicer), as applicable, assumes the servicing with respect to any of the
Mortgage Loans, it will not assume liability for the representations and
warranties of the applicable Servicer it replaces or for any errors or omissions
of such Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under that Servicer's Servicing Agreement without the prior written
consent of the Master Servicer and the Trustee, which consent shall not be
unreasonably withheld.
Section 9.02 Provision to the Securities Administrator of Loan-Level
Information. Not later than three Business Days preceding each Distribution
Date, the Master Servicer shall deliver to Securities Administrator, in a format
mutually agreed upon by the Master Servicer and Securities Administrator, "loan
level' information with respect to the Mortgage Loans as of the related
Determination date, to the extent that such information has been provided to the
Master Servicer by the Servicers.
Section 9.03 [Reserved].
Section 9.04 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 9.05 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a New York corporation, duly organized existing and in good
standing under the laws of the State of New York, with corporate power and
authority to conduct its business as presently conducted by it, and to
enter into, execute and deliver and to perform its obligations as Master
Servicer under this Agreement;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws, (B)
violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an
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event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or by
which it is bound or to which any of its assets are subject, which
violation, default or breach would materially and adversely affect the
Master Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement or
instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree, law
or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this Agreement
or the performance by the Master Servicer of its obligations under this
Agreement;
(vi) no litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(viii) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor, the
Securities Administrator, the Trustee and the Trust and hold them harmless
against any loss, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and other reasonable costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a material breach of the Master Servicer's representations and
warranties contained in Section 9.05(a)
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above. It is understood and agreed that the enforcement of the obligation of the
Master Servicer set forth in this Section 9.05 to indemnify the Depositor,
Securities Administrator, the Trustee and the Trust constitutes the sole remedy
of the Depositor and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, any termination
of this Agreement and resignation or removal of the Trustee.
Any cause of action against the Master Servicer relating to or arising out
of the breach of any representations and warranties made in this Section 9.05
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer, the Securities Administrator or the Trustee or notice thereof by any
one of such parties to the other parties.
Section 9.06 Master Servicer Events of Default. Each of the following
shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to make any P&I Advance
required to be made by the Master Servicer under the terms of this
Agreement which continues unremedied for a period of two (2) Business Days
after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by any
other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Master Servicer by the Trustee or to the Master Servicer and
Trustee by the holders of Certificates evidencing at least 25.00% of the
Voting Rights;
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force,
undischarged or unstayed for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations
for three (3) Business Days;
(f) Except as otherwise set forth herein, the Master Servicer attempts
to assign this Agreement or its responsibilities hereunder or to delegate
its duties hereunder
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(or any portion thereof) without the consent of the Securities
Administrator and the Depositor;
(g) the indictment of the Master Servicer for the taking of any action
by the Master Servicer, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, in each case, where such indictment
materially and adversely affects the ability of the Master Servicer to
perform its obligations under this Agreement (subject to the condition that
such indictment is not dismissed within ninety (90) days);
(h) After receipt of notice from the Securities Administrator, any
failure of the Master Servicer to remit to the Securities Administrator any
payment required to be made to the Securities Administrator for the benefit
of Certificateholders under the terms of this Agreement, including any
Advance, on any Master Servicer Remittance Date which such failure
continues unremedied for a period of one Business Day after the date upon
which notice of such failure shall have been given to the Master Servicer
by the Securities Administrator; or
(i) failure of the Master Servicer to timely provide the Depositor
with the assessment, attestation and annual statement of compliance
required by Item 1122 of Regulation AB in accordance with Sections 3.03,
3.04 and 3.05.
In each and every such case, so long as a Master Servicer Event of Default
shall not have been remedied, in addition to whatever rights the Trustee may
have at law or equity or to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least 51.00% of
the Voting Rights shall, terminate with cause all the rights and obligations of
the Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Agreement, shall pass to and be
vested in any successor master servicer appointed hereunder which accepts such
appointments. Upon written request from the Trustee or the Depositor, the Master
Servicer shall prepare, execute and deliver to the successor entity designated
by the Trustee any and all documents and other instruments related to the
performance of its duties hereunder as the Master Servicer and, place in such
successor's possession all such documents with respect to the master servicing
of the Mortgage Loans and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
at the Master Servicer's sole expense. The Master Servicer shall cooperate with
the Trustee and such successor master servicer in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including without
limitation, the transfer to such successor master servicer for administration by
it of all cash amounts which shall at the time be credited to the Master
Servicing Account or are thereafter received with respect to the Mortgage Loans.
Section 9.07 Waiver of Default. By a written notice, the Trustee may
at the direction of Holders of Certificates evidencing at least 51.00% of the
Voting Rights waive any default by the Master Servicer in the performance of its
obligations hereunder and its
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consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Master Servicer Event of Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
Section 9.08 Successor to the Master Servicer. Upon termination of the
Master Servicer's responsibilities and duties under this Agreement, the
Depositor shall use its reasonable good faith efforts to appoint a successor,
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Master Servicer under this Agreement prior to the
termination of the Master Servicer. Any successor shall be a ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac approved servicer in good standing and acceptable to the Depositor
and the Rating Agencies. In connection with such appointment and assumption, the
Depositor may make such arrangements for the compensation of such successor as
it and such successor shall agree; provided, however, that in no event shall the
master servicing fee paid to such successor master servicer be in excess of the
prevailing market rate at the time that the successor master servicer is
appointed. In the event that the Master Servicer's duties, responsibilities and
liabilities under this Agreement are terminated, the Master Servicer shall
continue to discharge its duties and responsibilities hereunder until the
effective date of such termination with the same degree of diligence and
prudence which it is obligated to exercise under this Agreement and shall take
no action whatsoever that might impair or prejudice the rights of its successor.
The termination of the Master Servicer shall not become effective until a
successor shall be appointed pursuant hereto and shall in no event (i) relieve
the Master Servicer of responsibility for the representations and warranties
made pursuant to Section 9.05(a) hereof and the remedies available to the
Trustee under Section 9.05(b) hereof, it being understood and agreed that the
provisions of Section 9.05 hereof shall be applicable to the Master Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Master Servicer or the termination of this Agreement; or (ii) affect the right
of the Master Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer continues to perform its duties
hereunder prior to the date the successor master servicer fully assumes its
duties).
If no successor master servicer has accepted its appointment within 90 days
of the time the Trustee receives the resignation of the Master Servicer, the
Trustee shall be the successor master servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances; provided, however, that any failure to perform any
duties or responsibilities caused by the Master Servicer's failure to provide
information required by this Agreement shall not be considered a default by the
Trustee hereunder. In the Trustee's capacity as such successor, the Trustee
shall have the same limitations on liability herein granted to the Master
Servicer. Notwithstanding anything herein to the contrary, the Trustee in its
role as successor master servicer shall have no obligation to monitor or
supervise any Servicer, shall only have the obligation to make Advances if it
terminates the Servicer pursuant to an Event of Default (in its role as
successor master servicer), and shall make such Advances only pursuant to
Section 7.01. As compensation therefor, the Trustee shall be entitled to receive
the compensation, reimbursement and indemnities otherwise payable to the Master
Servicer.
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Any successor master servicer appointed as provided herein, shall execute,
acknowledge and deliver to the Master Servicer, the Depositor and to the Trustee
an instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.05 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption of
such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the successor master
servicer shall notify by mail the Trustee, the Securities Administrator and the
Depositor of its appointment.
Section 9.09 [Reserved].
Section 9.10 Merger or Consolidation. Any Person into which the Master
Servicer may be merged or consolidated, or any Person resulting from any merger,
conversion, other change in form or consolidation to which the Master Servicer
shall be a party, or any Person succeeding to the business of the Master
Servicer, shall be the successor to the Master Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or resulting Person to the Master Servicer shall (i)
be a Person (or have an Affiliate) that is qualified and approved to service
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac (provided further that a successor
master servicer that satisfies subclause (i) through an Affiliate agrees to
service the Mortgage Loans in accordance with all applicable ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac guidelines) and (ii) have a net worth of not less than $25,000,000.
Section 9.11 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or a
successor master servicer satisfactory to the Trustee and the Depositor shall
have assumed, the Master Servicer's responsibilities and obligations under this
Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, CitiMortgage, as Master Servicer, resigns under this
Section 9.11, or is removed as Master Servicer pursuant to Section 9.06, then at
such time Citibank shall also resign (and shall be entitled to resign) as
Securities Administrator under this Agreement.
Section 9.12 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its
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rights, benefits or privileges hereunder to any other Person, or delegate to or
subcontract with, or authorize or appoint any other Person to perform any of the
duties, covenants or obligations to be performed by the Master Servicer;
provided, however, that the Master Servicer shall have the right with the prior
written consent of the Depositor (which shall not be unreasonably withheld,
denied, or delayed), and upon delivery to the Trustee and the Depositor of a
letter from each Rating Agency to the effect that such action shall not result
in a downgrade of the ratings assigned to any of the Certificates, to delegate
or assign to or subcontract with or authorize or appoint any qualified Person to
perform and carry out any duties, covenants or obligations to be performed and
carried out by the Master Servicer hereunder. Notice of such permitted
assignment shall be given promptly by the Master Servicer to the Depositor and
the Trustee. If, pursuant to any provision hereof, the duties of the Master
Servicer are transferred to a successor master servicer, the entire compensation
payable to the Master Servicer pursuant hereto shall thereafter be payable to
such successor master servicer but in no event shall the fee payable to the
successor master servicer exceed that payable to the predecessor master
servicer.
Section 9.13 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer or
any such person against any liability that would otherwise be imposed by reason
of willful malfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard for its obligations and duties under this
Agreement. The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Master Servicer shall be under no obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties as Master Servicer
with respect to the Mortgage Loans under this Agreement and that in its opinion
may involve it in any expenses or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action that it may deem
necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom, shall be liabilities of the Trust, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Distribution Account in
accordance with the provisions of Section 9.14.
The Master Servicer shall not be liable under this Agreement for any acts
or omissions of the Servicers except to the extent that damages or expenses are
incurred as a result of such acts or omissions and such damages and expenses
would not have been incurred but for the negligence, willful malfeasance, bad
faith or recklessness of the Master Servicer in supervising, monitoring and
overseeing the performance of the obligations of the Servicers as required under
this Agreement.
Section 9.14 Indemnification; Third Party Claims. The Master Servicer
agrees to indemnify and hold harmless the Trustee as successor master servicer
from and against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liabilities, fees
and expenses (including, but not limited to, reasonable attorneys' fees) that
the Trustee may sustain as a result of such liability or obligations of the
Master
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Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust will indemnify the Master Servicer and hold it harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, liabilities, fees and expenses
(including, but not limited to, reasonable attorneys' fees) that the Master
Servicer may incur or sustain in connection with, arising out of or related to
this Agreement or the Certificates, except to the extent that any such loss,
liability or expense is related to (i) a material breach of the Master
Servicer's representations and warranties in this Agreement, (ii) the Master
Servicer's willful malfeasance, bad faith or negligence or by reason of its
reckless disregard of its duties and obligations under this Agreement or (iii)
failure to provide the assessment, attestation and annual statement of
compliance in accordance with Sections 3.03, 3.04 and 3.05; provided that any
such loss, liability or expense constitutes an "unanticipated expense incurred
by the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to reimbursement for
any such indemnified amount from funds on deposit in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non-conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the Securities
Administrator of liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or
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obligations shall be read into this Agreement against the Securities
Administrator and the Securities Administrator may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Securities
Administrator and conforming to the requirements of this Agreement which it
believed in good faith to be genuine and to have been duly executed by the
proper authorities respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination not
subject to appeal, that the Securities Administrator was negligent in
ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect to
any action or inaction taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of Certificates
evidencing not less than 25.00% of the Voting Rights of Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Securities Administrator, or exercising or omitting
to exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall have
no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities Administrator.
Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties and the Securities Administrator shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(ii) the Securities Administrator may consult with counsel, financial
advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any action
or inaction taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument,
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opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25.00% of the Voting Rights allocated
to each Class of Certificates; provided, however, that if the payment
within a reasonable time to the Securities Administrator of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Securities Administrator, not
reasonably assured to the Securities Administrator by the security afforded
to it by the terms of this Agreement, the Securities Administrator may
require reasonable indemnity against such expense or liability as a
condition to so proceeding. Nothing in this clause (iv) shall derogate from
the obligation of the Securities Administrator to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors,
provided that the Securities Administrator shall have no liability for
disclosure required by this Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities Administrator
shall not be responsible for any misconduct or negligence on the part of
any such agent, attorney or custodian appointed by the Securities
Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer or the Trustee under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this Agreement
or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby;
(viii) the Securities Administrator shall have no obligation to appear
in, prosecute or defend any legal action that is not incidental to its
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Securities Administrator may in its
discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Collection Account.
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(ix) the Securities Administrator shall not be required to take notice
or be deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Securities Administrator shall have
received written notice or obtained actual knowledge thereof. In the
absence of receipt of such notice or actual knowledge, the Securities
Administrator may conclusively assume that there is no default or Event of
Default;
(x) the right of the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and the Securities Administrator shall not be answerable for other
than its negligence or willful misconduct in the performance of such act;
(xi) the Securities Administrator shall not be required to give any
bond or surety in respect of the execution of the Trust Fund created hereby
or the powers granted hereunder; and
(xii) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys or custodians, and the Securities Administrator
shall not be responsible for any misconduct or negligence on the part of
any such agent, attorney or custodian appointed by the Securities
Administrator with due care.
The Securities Administrator shall have no duty (A) to undertake or ensure
any recording, filing, or depositing of this Agreement or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
procure or maintain any insurance or (C) to pay or discharge any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the transferor, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement, or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The Securities
Administrator shall not be accountable for the use or application by the
Depositor, the Trustee, the Master Servicer, of any funds paid to the Depositor,
the Trustee, any Servicer, or the Master Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from any Collection Account or any other fund
or account with respect to the Certificates by the Depositor, the Trustee, any
Servicer or the Master Servicer.
The Securities Administrator executes and authenticates the Certificates
not in its individual capacity but solely as Securities Administrator of the
Trust Fund created by this Agreement, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Securities
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Administrator on behalf of the Trust Fund in the Certificates is made and
intended not as a personal undertaking or agreement by the Securities
Administrator but is made and intended for the purpose of binding only the Trust
Fund.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income and/or
earnings on and/or use of funds of the amounts in the Distribution Account
during the Securities Administrator Float Period. The Securities Administrator
and any director, officer, employee, agent or "control person" within the
meaning of the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended ("Control Person"), of the Securities Administrator
shall be indemnified by the Trust and held harmless against any loss, liability
or expense (including but not limited to reasonable attorney's fees) (i)
incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Securities Administrator's duties
hereunder, (ii) incurred in connection with the performance of any of the
Securities Administrator's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder or
(iii) incurred by reason of any action of the Securities Administrator taken at
the direction of the Certificateholders to the extent of indemnity provided by
the Certificateholders, provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the
Securities Administrator hereunder. Without limiting the foregoing, and except
for any such expense, disbursement or advance as may arise from the Securities
Administrator's negligence, bad faith or willful misconduct, or which would not
be an "unanticipated expense" within the meaning of the second preceding
sentence, the Securities Administrator shall be reimbursed by the Trust for all
reasonable expenses, disbursements and advances incurred or made by the
Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account.
The Securities Administrator shall be required to pay all expenses incurred
by it in connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
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Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor securities administrator (i) may not be a Mortgage Loan
Seller, the Master Servicer, a Servicer, the Depositor or an affiliate of the
Depositor unless such successor securities administrator's functions are
operated through an institutional trust department of the Securities
Administrator, (ii) must be authorized to exercise corporate trust powers under
the laws of its jurisdiction of organization, and (iii) must be rated at least
"A/F1" by Fitch, if Fitch is a Rating Agency and if rated by Fitch, or the
equivalent rating by Standard & Poor's or Moody's. If no successor securities
administrator shall have been appointed and shall have accepted appointment
within 60 days after the Securities Administrator ceases to be the Securities
Administrator pursuant to Section 10.07, then the Trustee may (but shall not be
obligated to) become the successor securities administrator. The Depositor shall
appoint a successor to the Securities Administrator in accordance with Section
10.07. The Trustee shall notify the Rating Agencies of any change of Securities
Administrator.
Section 10.07 Resignation and Removal of Securities Administrator. The
Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor and the Trustee and each Rating Agency not less
than 60 days before the date specified in such notice when, subject to Section
10.08, such resignation is to take effect, and acceptance by a successor
securities administrator in accordance with Section 10.08 meeting the
qualifications set forth in Section 10.06. If no successor securities
administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor securities
administrator.
If at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of Section 10.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Securities
Administrator shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent, or a receiver of the Securities Administrator or of its property
shall be appointed, or any public officer shall take charge or control of the
Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the
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Securities Administrator or the Trust Fund is located and the imposition of such
tax would be avoided by the appointment of a different securities administrator,
then the Depositor may remove the Securities Administrator and appoint a
successor securities administrator by written instrument, in triplicate, one
copy of which instrument shall be delivered to the Securities Administrator so
removed, one copy of which shall be delivered to the Master Servicer and one
copy to the successor securities administrator.
The Holders of Certificates entitled to at least 51.00% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
securities administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor securities administrator.
Any resignation or removal of the Securities Administrator and appointment
of a successor securities administrator pursuant to any of the provisions of
this Section 10.07 shall become effective upon acceptance by the successor
securities administrator of appointment as provided in Section 10.08 hereof.
If at any time, Citibank, as Securities Administrator, resigns under this
Section 10.07, or is removed as Securities Administrator pursuant to this
Section 10.07, then at such time CitiMortgage shall also resign (and shall be
entitled to resign) as Master Servicer under this Agreement.
Section 10.08 Successor Securities Administrator. Any successor
securities administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor and
to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor Securities Administrator shall become effective and such
successor securities administrator, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Securities Administrator herein. The Depositor, the Trustee, the Master Servicer
and the predecessor Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor securities
administrator all such rights, powers, duties, and obligations.
No successor securities administrator shall accept appointment as provided
in this Section 10.08 unless at the time of such acceptance such successor
securities administrator shall be eligible under the provisions of Section 10.06
hereof and its appointment shall not adversely affect then current rating of the
Certificates, as confirmed in writing by each Rating Agency.
Upon acceptance by a successor securities administrator of appointment as
provided in this Section 10.08, the Depositor shall mail notice of the
succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice
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within 10 days after acceptance by the successor securities administrator of
appointment, the successor securities administrator shall cause such notice to
be mailed at the expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator. Any
corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor and the Trustee.
If, pursuant to any provision hereof, the duties of the Securities Administrator
are transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the fee
payable to the successor securities administrator exceed that payable to the
predecessor securities administrator.
Section 10.11 Dissemination of Confidential Information.
Notwithstanding anything to the contrary herein, any and all communications
(both text and attachments) by or from the Securities Administrator or the
Master Servicer that the Securities Administrator or the Master Servicer,
respectively, in its sole discretion deems to contain confidential, proprietary,
and/or sensitive information and sent by electronic mail will be encrypted. The
recipient of the email communication will be required to complete a one-time
registration process. Information and assistance on registering and using the
email encryption technology shall be provided at Citibank's secure website at
▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇.▇▇▇ or by calling (866)
535-2504 (in the U.S.) or (▇▇▇) ▇▇▇-▇▇▇▇ at any time.
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ARTICLE XI
REMIC PROVISIONS
Section 11.01 REMIC Administration.
(a) The Securities Administrator shall make an election to treat
certain segregated assets comprising the Trust Fund, as defined herein, as two
REMICs under the Code and, if necessary, under applicable state law. The assets
of each REMIC are set forth in this Agreement. Such election shall be made on
Form 1066 or other appropriate federal tax or information return (including Form
8811) 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 elections in respect of the Trust Fund, Certificates and interests
to be designated as the "regular interests" and the sole class of "residual
interests" in each REMIC shall be set forth in Section 11.03. The Securities
Administrator and the Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in any REMIC elected in respect
of the Trust Fund other than the "regular interests" and "residual interests" so
designated.
(b) The Closing Date is hereby designated as the "startup day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Holder of the largest Percentage Interest of the Class R
Certificates shall act as tax matters person for each REMIC created hereunder,
within the meaning of Treasure Regulations Section 1.860F 4(d), and the
Securities Administrator is hereby designated as agent of such Certificateholder
for such purpose (or if the Securities Administrator is not so permitted, such
Holder shall be the tax matters person in accordance with the REMIC Provisions).
The Securities Administrator, as agent of the tax matters person, shall (i) act
on behalf of each REMIC in relation to any tax matter or controversy involving
the Trust Fund 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 legal expenses, including without
limitation attorneys' or accountants' fees, and costs of any such proceeding and
any liability resulting therefrom shall be expenses of the Trust Fund and the
Securities Administrator shall be paid with amounts otherwise to be distributed
to the Certificateholders, as provided in Section 4.02(a) unless such legal
expenses and costs are incurred by reason of the Securities Administrator's
willful misfeasance, bad faith or gross negligence.
(d) The Securities Administrator shall prepare or cause to be prepared
all of the Tax Returns that it determines are required with respect to each
REMIC created hereunder and deliver such Tax Returns in a timely manner to the
Trustee and the Trustee shall sign and file such Tax Returns in a timely manner.
The expenses of preparing such returns shall be borne by the Securities
Administrator without any right of reimbursement therefor. The Master Servicer
shall promptly provide the Securities Administrator with such information as the
Securities Administrator may from time to time request for the purpose of
enabling the Securities Administrator to prepare Tax Returns.
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(e) The Securities Administrator shall provide (i) to any Transferor
of a Class R Certificate such information as is necessary for the application of
any tax relating to the transfer of a Class R Certificate to any Person who is
not a Permitted Transferee, (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) 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 REMIC.
(f) None of the Master Servicer, the Securities Administrator or the
Trustee shall (i) permit the creation of any interests in any REMIC other than
the regular and residual interests set forth in the Preliminary Statement, (ii)
receive any amount representing a fee or other compensation for services (except
as otherwise permitted by this Agreement or the related Mortgage Loan documents)
or (iii) otherwise knowingly or intentionally take any action, cause the Trust
Fund to take any action or fail to take (or fail to cause to be taken) any
action reasonably within its control and the scope of duties more specifically
set forth herein, that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of any REMIC as a REMIC or (ii)
result in the imposition of a tax upon any REMIC or the Trust Fund (including
but not limited to the tax on "prohibited transactions" as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Securities Administrator receives an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party fails
to pay such expense, and the Securities Administrator determines that taking
such action is in the best interest of the Trust Fund and the
Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Securities Administrator) to the effect that the contemplated
action will not, with respect to the Trust Fund or any REMIC created hereunder,
endanger such status or result in the imposition of such a tax an "Adverse REMIC
Event"). The Master Servicer or the Securities Administrator, as applicable, may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not expressly permitted by this
Agreement, but in no event at the expense of the Master Servicer or the
Securities Administrator. At all times as may be required by the Code, the
Master Servicer shall to the extent within its control and the scope of its
duties more specifically set forth herein, maintain substantially all of the
assets of each REMIC created hereunder as "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(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
"net income from foreclosure property" of any 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 paid by (i) the Master Servicer, the Trustee, or the
Securities Administrator, as applicable, if such tax arises out of or results
from negligence of the Master Servicer, the Trustee or the Securities
Administrator, as applicable, in the performance of any of its obligations under
this Agreement, (ii) the Sponsor, if such tax arises out of or results from the
Sponsor's obligation to repurchase a Mortgage Loan pursuant to Section 2.03(d),
or (iii) in all other cases, or if the Master Servicer, the Trustee or the
Securities Administrator fails to honor
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its obligations under the preceding clause (i) or (ii), any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 4.02(a).
(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis or as otherwise may be
required by the REMIC Provisions.
(i) Following the Startup Day, none of the Master Servicer, The
Securities Administrator or the Trustee shall accept any contributions of assets
to any REMIC created hereunder unless (subject to Section 11.01(f)) the Master
Servicer, the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in such REMIC will
not cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(j) None of the Master Servicer, the Securities Administrator or the
Trustee shall (subject to Section 11.01(f)) enter into any arrangement by which
any REMIC created hereunder 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) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" for each of REMIC 1
and REMIC 2 Regular Interest shall be its latest possible maturity date as set
forth or described in the Preliminary Statement.
(l) Within 30 days after the Closing Date, the Securities
Administrator shall prepare and file with the Internal Revenue Service Form
8811, "Information Return for Real Estate Mortgage Investment Conduits (REMIC)
and Issuers of Collateralized Debt Obligations" for each REMIC created
hereunder.
(m) None of the Trustee, the Securities Administrator or the Master
Servicer shall sell, dispose of or substitute for any of the Mortgage Loans
(except in connection with (i) the default, imminent default or 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 any REMIC created hereunder, (iii) the termination of the applicable REMIC
pursuant to Article XII of this Agreement or (iv) a purchase of Mortgage Loans
pursuant to Article II or III of this Agreement) nor acquire any assets for any
such REMIC, nor sell or dispose of any investments in the applicable Collection
Account or the Distribution Account for gain nor accept any contributions to any
such REMIC after the Closing Date unless it has received an Opinion of Counsel
that such sale, disposition, substitution or acquisition will not (a) affect
adversely the status of such REMIC as a REMIC or (b) unless the Master Servicer
has determined in its sole discretion to indemnify the Trust Fund against such
tax, cause such REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
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(n) The Securities Administrator shall apply for an employer
identification number from the Internal Revenue Service on a Form SS-4 or any
other acceptable method for all tax entities.
Section 11.02 [Reserved].
Section 11.03 Designation of REMIC(s). The Securities Administrator
shall make an election to treat the entire segregated pool of assets described
in the definition of REMIC 1, and subject to this Agreement (including the
Mortgage Loans) as a REMIC ("REMIC 1"), and shall make an election to treat the
pool of assets comprised of the uncertificated REMIC 1 Regular Interests as a
REMIC ("REMIC 2") for federal income tax purposes.
The REMIC 1 Regular Interests will be "regular interests" in REMIC 1 and
the Class R-I Certificates will be the sole class of "residual interests" in
REMIC 1 for purposes of the REMIC Provisions (as defined herein) under the
federal income tax law.
The Class I-A-1, Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2,
Class IV-A-1, Class IV-A-2, Class P, Class B-1, Class B-2, Class B-3 Class B-4,
Class B-5 and Class B-6 Certificates, will be "regular interests" in REMIC 2,
and the Class R-II Certificates will be the sole class of "residual interests"
therein for purposes of the REMIC Provisions (as defined herein) under federal
income tax law.
Section 11.04 Distributions on Uncertificated REMIC 1 Regular
Interests, REMIC 2 Regular Interests, and REMIC 3 Regular Interests. (a) On each
Distribution Date, the Securities Administrator, on behalf of REMIC 1, shall be
deemed to distribute to REMIC 2 in respect of the REMIC 1 Regular Interests, the
following amounts in the following order of priority to the extent of the
Available Funds reduced by distributions made to the Class R-I Certificates
pursuant to Section 4.02(a):
(i) Uncertificated Interest on the REMIC 1 Regular Interests for such
Distribution Date, plus any Uncertificated Interest thereon remaining
unpaid from any previous Distribution Date; and
(ii) Distributions of principal from the Group II Mortgage Loans shall
be deemed to be made to the Uncertificated REMIC I Regular Interest R-II,
pro rata, until the Uncertificated Principal Balance of such regular
interest has been reduced to zero. Distributions of principal shall be
deemed to be made to the REMIC 1 Regular Interests (other than
Uncertificated REMIC I Regular Interest R-II), in each case from the
related Loan Group, first, to each REMIC 1 Regular Interest ending with the
designation "A," so that the Uncertificated Balance of each such REMIC 1
Regular Interest is equal to 0.01% of the excess of (x) the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group
over (y) the Class Certificate Balance of the Senior Certificates in such
Loan Group (except that if any such excess is a larger number than on the
preceding Distribution Date, the least amount of principal shall be
distributed to such REMIC 1 Regular Interests such that the REMIC 1
Subordinated Balance Ratio is maintained as close as possible to the
related Subordinate Percentages for each Loan Group); second, so as to keep
the principal balance of each such related Uncertificated REMIC I Regular
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Interest ending with the designation "B" equal to 0.01% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group;
and third, any remaining principal shall be deemed distributed to
Uncertificated REMIC I Regular Interest ZZZ.
(b) The amount described in Section 11.04(a)(ii) shall be deemed
distributed by REMIC 1 to REMIC 2 in respect of the REMIC 1 Regular Interests
held by the Securities Administrator, on behalf of REMIC 2 (other than the Class
R-I Certificates), until the Uncertificated Balance of each such interest is
reduced to zero.
(c) [Reserved]
(d) [Reserved]
(e) The Uncertificated Interest amounts described in Section
11.04(a)(i) shall be deemed distributed by REMIC 1 ratably to each REMIC 2
Regular Interest in accordance with its entitlement to interest and the
applicable REMIC 1 Remittance Rate.
(f) [Reserved]
(g) In determining from time to time the amounts distributable on the
REMIC 1 Regular Interests, Realized Losses from each Loan Group shall be applied
after all distributions have been made on each Distribution Date, first, to the
related REMIC 1 Regular Interest ending with the designation "A," so that the
Uncertificated Balance of each such REMIC 1 Regular Interest is equal to 0.01%
of the excess of (x) the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the Class Certificate Balance of the
Senior Certificates in the related Loan Group (except that if any such excess is
a larger number than in the preceding distribution period, the least amount of
Realized Losses shall be applied to such REMIC 1 Regular Interests such that the
REMIC 1 Subordinated Balance Ratio is maintained as close as possible to the
related Subordinate Percentages for each Loan Group); second, so as to keep the
principal balance of each such related Uncertificated REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group; and third, any
remaining Realized Losses from each Loan Group shall be allocated to the
Uncertificated REMIC 1 Regular Interests ZZZ.
(h) On each Distribution Date, the Securities Administrator, on behalf
of REMIC 2, shall be deemed to distribute the amounts deemed received by REMIC 2
in respect of the REMIC 1 Regular Interests held by the Securities
Administrator, on behalf of REMIC 2, pursuant to Section 11.04(c) on such
Distribution Date, in the priority set forth in Sections 4.02(a), - (j) to the
Holders of each Class of REMIC 2 Certificates, the amounts distributable thereon
on such Distribution Date.
(i) Notwithstanding the deemed distributions on the Uncertificated
REMIC 1 Regular Interests described in this Section 11.04, distributions of
funds from the Certificate Account shall be made only in accordance with Section
4.02.
Section 11.05 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Securities
Administrator, shall comply with all federal
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withholding requirements respecting payments to Certificateholders, including
interest or original issue discount payments or advances thereof that the
Securities Administrator 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 Certificateholder pursuant to the terms of
such requirements.
ARTICLE XII
TERMINATION
Section 12.01 Termination upon Liquidation or Purchase of the Mortgage
Loans. Subject to Section 12.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to the Trust Fund shall terminate upon the earlier
of (a) the exercise of an Option to Purchase, on or after the Optional
Termination Date, in the aggregate of all Mortgage Loans (and REO Properties) at
the price (the "Termination Price") equal to the sum of (i) 100.00% of the
unpaid principal balance of each Mortgage Loan (other than in respect of REO
Property) plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, (ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Master Servicer at the expense of that Trust Fund and
(y) the unpaid principal balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (iii) all ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, Servicing
Advances and indemnification payments payable to the applicable Servicer and
(iv) any unreimbursed indemnification payments payable to the Trustee, the
Securities Administrator, the Master Servicer or the Depositor under this
Agreement and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement. In no event shall the trusts created hereby continue beyond the
expiration of 21 years from the death of the survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof.
Section 12.02 Final Distribution on the Certificates. If on any
Remittance Date, the Master Servicer determines that there are no Outstanding
Mortgage Loans and no other funds or assets in the Trust Fund other than the
funds in any Collection Account, the Master Servicer shall direct the Securities
Administrator promptly to send a Notice of Final Distribution to each
Certificateholder. If the Master Servicer (upon instruction from the Depositor
or voluntarily) elects to exercise their option to purchase the Mortgage Loans
pursuant to clause (a) of Section 12.01, at least 20 days prior to the date the
Notice of Final Distribution is to be mailed to the affected Certificateholders,
the Master Servicer shall notify the Depositor, and the Securities Administrator
of (a) the date on which the Master Servicer intends to exercise such purchase
option and (b) the Termination Price.
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A Notice of Final Distribution, specifying the Distribution Date on which
Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
Upon the final deposit with respect to the Trust Fund and the receipt by
the Custodian of a Request for Release therefor, the Custodian shall promptly
release to each Servicer the applicable Custodial Files for the Mortgage Loans
serviced by such Servicer.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers under the
Servicing Agreements, the Master Servicer, the Securities Administrator, the
Depositor and the Trustee), in each case on the final Distribution Date and in
the order set forth in Section 4.02, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, up
to an amount equal to (i) as to each Class of Regular Certificates, the
Certificate Balance thereof plus for each such Class accrued interest thereon in
the case of an interest-bearing Certificate and all other amounts to which such
Classes are entitled pursuant to Section 4.02 and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account (other than the amounts retained to meet claims) after application
pursuant to clause (i) above.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
Notice of Final Distribution, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after such second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 12.03 Additional Termination Requirements. In the event an
Option to Purchase is exercised with respect to the Mortgage Loans as provided
in Section 12.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the party upon whose instruction causes
the exercise of an Option to Purchase, to the effect that the failure to comply
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with the requirements of this Section 12.03 will not (i) result in the
imposition of taxes on "prohibited transactions" on any REMIC formed hereby as
defined in Section 860F of the Code or (ii) cause any REMIC formed hereby to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall sell
all of the assets of the Trust Fund to the party exercising the Option to
Purchase, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each
REMIC formed hereby; and
(b) The Securities Administrator shall attach a statement to the final
federal income tax return for each REMIC formed hereby stating that pursuant to
Treasury Regulations Section 1.860F-1, the first day of the 90-day liquidation
period for each such REMIC was the date on which the Securities Administrator on
behalf of the Trustee sold the assets of the Trust Fund to the Master Servicer.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment. (a) This Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Securities Administrator and
the Trustee, without the consent of any of the Certificateholders (i) to cure
any ambiguity or mistake, (ii) to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor, the Master
Servicer, the Servicers, the Securities Administrator or the Trustee, (iv) to
add any other provisions with respect to matters or questions arising hereunder,
(v) to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement, (vi) to comply with the requirements of the
Internal Revenue Code or (vii) to conform this Agreement to the Offering
Documents provided to investors in connection with the offering of the
Certificates; provided, that any action pursuant to clause (iv) or (v) above
shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall
not be an expense of the Trustee, the Master Servicer, the Securities
Administrator or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; provided, further, that any such action
pursuant to clause (iv) or (v) above shall not be deemed to adversely affect in
any material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor, the Master Servicer and the Securities Administrator also may at any
time and from time to time amend this Agreement, but without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each REMIC created hereunder under the Code, (ii) avoid or minimize the risk of
the imposition of any tax on any REMIC created hereunder pursuant to the Code
that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code; provided,
that the Trustee and the Master Servicer have been provided
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an Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, but with the
consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66 2/3% or (iii) reduce the aforesaid percentages of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee and
the Master Servicer shall not consent to any amendment to this Agreement unless
(i) it shall have first received an Opinion of Counsel, which opinion shall not
be an expense of the Trustee, the Master Servicer or the Trust Fund, to the
effect that such amendment will not cause the imposition of any tax on any REMIC
created hereunder or the Certificateholders or cause any such REMIC to fail to
qualify as a REMIC or the grantor trust to fail to qualify as a grantor trust at
any time that any Certificates are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a copy
of such notice to the Trustee and the Master Servicer) of such amendment,
stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 13.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee, any Certificate beneficially owned by the Depositor shall be deemed
not to be outstanding (and shall not be considered when determining the
percentage of Certificateholders consenting or when calculating the total number
of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 13.01 have been
obtained.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 13.01 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.
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Nothing in this Agreement shall require the Trustee, the Master Servicer or
the Securities Administrator to enter into an amendment without receiving an
Opinion of Counsel (which opinion shall not be an expense of the Trustee, the
Master Servicer, the Securities Administrator or the Trust Fund), satisfactory
to the Trustee, the Master Servicer and the Securities Administrator, as
applicable, that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with and (ii) either (A) the amendment does not adversely affect in any
material respect the interests of any Certificateholder or (B) the conclusion
set forth in the immediately preceding clause (A) is not required to be reached
pursuant to this Section 13.01.
(b) No party hereto shall agree to amend any Servicing Agreement
unless the party requesting such amendment, at such party's expense, has
delivered to the Trustee, the Securities Administrator and the Master Servicer
an Opinion of Counsel that such amendment (i) is permitted under the terms of
the applicable Servicing Agreement and (ii) will not materially adversely affect
the interest of the Certificateholders in the Mortgage Loans.
Section 13.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Securities Administrator at the direction and expense of the Depositor, but only
upon receipt of an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
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 13.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.04 Intention of Parties. (a) It is intended that the
conveyance of the Depositor's right, title and interest in and to property
constituting the Trust Fund pursuant to this Agreement shall constitute, and
shall be construed as, a sale of such property and not a grant of a security
interest to secure a loan. However, if such conveyance is deemed to be in
respect of a loan, it is intended that: (1) the rights and obligations of the
parties shall be established pursuant to the terms of this Agreement; (2) the
Depositor hereby grants to the Trustee for the benefit of the Holders of the
Certificates a first priority security interest to secure repayment of an
obligation in an amount equal to the aggregate Class Certificate Balances of the
Certificates in all of the Depositor's right, title and interest in, to and
under, whether now owned or hereafter acquired, in all proceeds of any and all
property constituting the Trust Fund to secure payment of the Certificates; and
(3) this Agreement shall constitute a security agreement under applicable
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law. If such conveyance is deemed to be in respect of a loan and the trust
created by this Agreement terminates prior to the satisfaction of the claims of
any Person holding any Certificate, the security interest created hereby shall
continue in full force and effect and the Trustee shall be deemed to be the
collateral agent for the benefit of such Person, and all proceeds shall be
distributed by the Securities Administrator as herein provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, such security interest would be deemed to be
a perfected security interest of first priority under applicable law and shall
be maintained as such throughout the term of this Agreement. The Depositor
shall, at its own expense, make all initial filings on or about the Closing Date
and shall forward a copy of such filing or filings to the Trustee. Without
limiting the generality of the foregoing, the Depositor shall prepare and
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the relevant UCC to perfect the Trustee's
security interest in or lien on the Mortgage Loans, including without limitation
(x) continuation statements, and (y) such other statements as may be occasioned
by (1) any change of name of the Sponsor, the Depositor or the Trustee, (2) any
change of location of the jurisdiction of organization of the Sponsor or the
Depositor, (3) any transfer of any interest of the Sponsor or the Depositor in
any Mortgage Loan or (4) any change under the relevant UCC or other applicable
laws. Neither the Sponsor nor the Depositor shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice of
such action to its immediate and intermediate transferee, including the Trustee.
Before effecting such change, the Sponsor or the Depositor proposing to change
its jurisdiction of organization shall prepare and file in the appropriate
filing office any financing statements or other statements necessary to continue
the perfection of the interests of its immediate and intermediate transferees,
including the Trustee, in the Mortgage Loans. In connection with the
transactions contemplated by this Agreement, each of the Sponsor and the
Depositor authorizes its immediate or intermediate transferee to file in any
filing office any initial financing statements, any amendments to financing
statements, any continuation statements, or any other statements or filings
described in this paragraph (b).
Section 13.05 Notices. (a) The Securities Administrator shall use its
best efforts to promptly provide notice to each Rating Agency with respect to
each of the following of which a Responsible Officer of the Securities
Administrator has actual knowledge:
1. Any amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of a Servicer, the Master Servicer,
the Securities Administrator or the Trustee and the appointment of any
successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03 or pursuant to a Transfer Agreement;
-120-
5. The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03; and
2. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.03.
(c) All directions, demands, consents and notices hereunder shall be
in writing and shall be deemed to have been duly given when delivered to:
(i) in the case of the Depositor, HSI Asset Securitization
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Head MBS Principal Finance, or such other address as may be
hereafter furnished to the other parties by the Depositor in writing;
(ii) in the case of the Master Servicer, CitiMortgage, Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Master Servicing Division,
Compliance Manager - HALO 2007-AR1, or such other address as may be
hereafter furnished to the to the other parties by CitiMortgage, Inc. in
writing;
(iii) in the case of the Securities Administrator, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance
Agency and Trust, HALO 2007-AR1, or such other address as may be hereafter
furnished to the other parties by Citibank, N.A. in writing;
(iv) in the case of the Trustee, the Corporate Trust Office
(Attention: Corporate Trust Services - HB07L1), or such other address as
may be hereafter furnished to the to the other parties by the Trustee in
writing; and
(v) in the case of each of the Rating Agencies, the address specified
therefor in the definition corresponding to the name of such Rating Agency.
Section 13.06 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 13.07 [Reserved].
Section 13.08 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
-121-
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as herein provided, and unless the
Holders of Certificates evidencing not less than 25.00% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 13.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 13.09 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 13.10 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 13.11 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
-122-
[SIGNATURE PAGE FOLLOWS]
-123-
IN WITNESS WHEREOF, each of the parties below have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
HSI ASSET SECURITIZATION CORPORATION,
as Depositor
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITIMORTGAGE, INC., as Master Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Pooling and Servicing Agreement
CITIBANK, N.A.,
as Securities Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇ FARGO BANK, N.A., as Custodian
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Pooling and Servicing Agreement
ACKNOWLEDGED BY HSBC BANK USA,
NATIONAL ASSOCIATION, as Sponsor,
solely for the purposes of Section 2.03(k).
By:
---------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director #14311
Pooling and Servicing Agreement
SCHEDULE I
Mortgage Loan Schedule
[To be retained in a separate closing binder entitled "[___] 2006-[__] Mortgage
Loan Schedules" at the Chicago, Illinois offices of Mayer, Brown, ▇▇▇▇ & Maw
LLP]
SCHEDULE I-1
EXHIBIT A
FORM OF CLASS [_]-A-[_] AND CLASS B-1, CLASS B-2, CLASS B-3
[THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
[AND THE CLASS B-1] [AND CLASS B-2 CERTIFICATES] DESCRIBED IN THE AGREEMENT (AS
DEFINED HEREIN). Include for the Class B-Certificates, as necessary]]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
EXHIBIT A-1
Certificate No: 1
Cut-off Date: January 1, 2007
First Distribution Date: February 26, 2007
Initial Class Certificate Balance $[__________]
of this Certificate [Exclude Class [_]-A- [_] Certificates
("Denomination"):
[Initial Class Certificate [Exclude for Class [_]-A- [_] Certificates
Balances of all Certificates
of this Class:]
[* Notional Amount] [Include for Class [_]-A-[_] Certificates]
[Interest Rate:] ___________________________________________
CUSIP: ___________________________________________
EXHIBIT A-2
ISIN: ___________________________________________
EXHIBIT A-3
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust, 2007-[__]
Mortgage Pass-Through Certificates, Series 2007- [___]
Class[[_]-A-[_]][B-1] [B-2] [Class B-3]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
[Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Class Certificate Balance at any time may be less
than the Class Certificate Balance as set forth herein.] This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate [Notional Balance] by the aggregate of the denominations of all
Certificates [Class Notional Balance] of the Class to which this Certificate
belongs) in certain monthly distributions of [principal] [and] [interest]
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among HSI Asset Securitization Corporation, as
depositor (the "Depositor"), CitiMortgage, Inc. as master servicer (the "Master
Servicer"), Citibank N.A., as securities administrator (the "Securities
Administrator") ▇▇▇▇▇ Fargo Bank, N.A., as custodian (the "Custodian"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually authenticated by an authorized
signatory of the Securities Administrator.
* * *
EXHIBIT A-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
-------------------
CITIBANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By:
----------------------------------
Authorized Signatory of
CITIBANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
EXHIBIT A-5
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Loan Obligation Trust 2007-[__] Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Class [I-A- [_]] Certificates have no Class
Certificate Balance.]
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in
EXHIBIT A-6
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 of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest in the Trust Fund will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any agent
of the Trustee, the Depositor or the Securities Administrator may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Depositor, the Securities Administrator
nor any such agent shall be affected by any notice to the contrary.
The Master Servicer, upon the instruction of the Depositor or at its own
discretion, shall purchase the Mortgage Loans and therefore cause the
termination of the Trust on any Optional Termination Date, which is any
Distribution Date in which the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period is less than or
equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The obligations and responsibilities created by the Agreement will
terminate as provided in Section 12.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
EXHIBIT A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
------------------------------
----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________
This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-8
EXHIBIT B
FORM OF CLASS B-[4] [-5] [-6] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES,
CLASS B-1, CLASS B-2 CERTIFICATES, [AND] CLASS B-3 CERTIFICATES, [AND CLASS B-4
CERTIFICATES,] [AND CLASS B-5 CERTIFICATES] DESCRIBED IN THE AGREEMENT (AS
DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(d) OF THE
AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 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") (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS) AND WILL NOT SUBJECT THE TRUSTEE, THE COMPANY OR THE MASTER SERVICER
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS AND LIABILITIES UNDER
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
DEPOSITOR OR THE MASTER SERVICER.
EXHIBIT B-1
Certificate No. [____] [____]% Pass-Through Rate
Class [B-___] Subordinate
Date of Pooling and Servicing Agreement Principal Balance of the Class B-_____
and Cut-off Date: Certificates as of the Cut-off Date:
January 1, 2007 $________
First Distribution Date: Initial Class Certificate Balance of
February 26, 2007 this Certificate:
$[______________]
Master Servicer:
CitiMortgage, Inc.
Assumed Final Distribution Date: CUSIP
[______________] [______________]
EXHIBIT B-2
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust, 2007-[__]
Mortgage Pass-Through Certificates, Series 2007-[___]
Class B[-__]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Class Certificate Balance at any time may be less
than the Class Certificate Balance as set forth herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial Class
Certificate Balance of this Certificate by the aggregate Initial Class
Certificate Balance of all Class B-___ Certificates, both as specified above) in
certain monthly distributions of principal and interest pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among HSI Asset Securitization Corporation, as depositor (the
"Depositor"), CitiMortgage, Inc., as master servicer (in such capacity, the
"Master Servicer"), Citibank N., A. as securities administrator (the "Securities
Administrator"), ▇▇▇▇▇ Fargo Bank, N.A. as custodian (the "Custodian"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). 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.
No transfer of this Class B Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Depositor may require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefore)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by Section 5.02(b) of the Agreement. The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Master Servicer and the Certificate Registrar acting on behalf of the
Trustee 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.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(b) of the Agreement stating that either (i) the transferee is
EXHIBIT B-3
not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person
(including, without limitation, an investment manager, a named fiduciary or a
trustee of any Plan) who is using "plan assets," within the meaning of the U.S.
Department of Labor regulation promulgated at 29 C.F.R. Section 2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition or (ii) the
transferee is an insurance company, the source of funds used to purchase or hold
such Certificate (or any interest therein) is an "insurance company general
account" (as defined in U.S. Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60 and the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied, or (b) an opinion of counsel acceptable to and
in form and substance satisfactory to the Trustee, the Depositor and the Master
Servicer to the effect that the purchase and holding of this Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), and will not subject
the Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually authenticated by an authorized
signatory of the Securities Administrator.
* * *
EXHIBIT B-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
------------------------------
CITIBANK, N.A.,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
---------------------------------
Authorized Signatory of
CITIBANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
EXHIBIT B-5
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Loan Obligation Trust 2007-[__] Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of the Class
B-[_] Certificates on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution. The Initial Class
Certificate Balance of this Certificate is set forth above. The Class
Certificate Balance hereof will be reduced to the extent of the distributions
allocable to principal and any Realized Losses allocable hereto.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this
EXHIBIT B-6
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest in the Trust Fund will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any agent
of the Trustee, the Depositor or the Securities Administrator may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Depositor, the Securities Administrator
nor any such agent shall be affected by any notice to the contrary.
The Master Servicer, upon the instruction of the Depositor or at its own
discretion, shall purchase the Mortgage Loans and therefore cause the
termination of the Trust on any Optional Termination Date, which is any
Distribution Date in which the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period is less than or
equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The obligations and responsibilities created by the Agreement will
terminate as provided in Section 12.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
EXHIBIT B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
------------------------------
----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________
This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B-8
EXHIBIT C
FORM OF CLASS R-[_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02I OF THE
AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR
A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No.: R-[_]
Cut-off Date: January 1, 2007
First Distribution Date: February 26, 2007
Percentage Interest of this Certificate: 100.00%
Interest Rate: None
EXHIBIT C-1
CUSIP: _________________________
ISN: _________________________
EXHIBIT C-2
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates, Series 2007-[__]
Class R-[_]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable monthly as
set forth herein. This Class R-[_] Certificate has no Certificate Balance and is
not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that HSBC SECURITIES (USA) INC. is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class R-[_] Certificates pursuant to a Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among HSI Asset
Securitization Corporation, as depositor (the "Depositor"), CitiMortgage, Inc.,
as master servicer (the "Master Servicer"), Citibank N.A., as securities
administrator (the "Securities Administrator") ▇▇▇▇▇ Fargo Bank, N.A. as
custodian (the "Custodian"), and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust will
be made only upon presentment and surrender of this Class R-[_] Certificate at
the offices designated by the Securities Administrator for such purpose, or such
other location specified in the notice to Certificateholders.
No transfer of a Class R-[_] Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Depositor, the Master Servicer or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
EXHIBIT C-3
Each Holder of this Class R-[_] Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-[_] Certificate
to have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-[_] Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-[_] Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R-[_] Certificate may be registered on the
Closing Date or thereafter transferred, and the Securities Administrator shall
not register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-[_] Certificate
shall agree (A) to obtain a Transfer Affidavit from any other Person to whom
such Person attempts to Transfer its Ownership Interest this Class R-[_]
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
Person is acting as nominee, trustee or agent in connection with any Transfer of
this Class R-[_] Certificate, (C) not to cause income with respect to the Class
R-[_] Certificate to be attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person and (D) not to Transfer the Ownership Interest
in this Class R-[_] Certificate or to cause the Transfer of the Ownership
Interest in this Class R-[_] Certificate to any other Person if it has actual
knowledge that such Person is a Non-Permitted Transferee and (iv) any attempted
or purported Transfer of the Ownership Interest in this Class R-[_] Certificate
in violation of the provisions herein shall be absolutely null and void and
shall vest no rights in the purported Transferee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually authenticated by an authorized
signatory of the Securities Administrator.
* * *
EXHIBIT C-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
-----------------
CITIBANK, N.A.,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
----------------------------------
Authorized Signatory of
CITIBANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
EXHIBIT C-5
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Loan Obligation Trust 2007-[__] Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purpose, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this
EXHIBIT C-6
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices designated by the Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest in the Trust Fund will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any agent
of the Trustee, the Depositor or the Securities Administrator may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Depositor, the Securities Administrator
nor any such agent shall be affected by any notice to the contrary.
The Master Servicer, upon the instruction of the Depositor or at its own
discretion, shall purchase the Mortgage Loans and therefore cause the
termination of the Trust on any Optional Termination Date, which is any
Distribution Date in which the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period is less than or
equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The obligations and responsibilities created by the Agreement will
terminate as provided in Section 12.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
EXHIBIT C-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
-----------------
----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to _____________________________________,
________________________________________________________________________________
This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-8
EXHIBIT D
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES EITHER A RULE 144A INVESTMENT
LETTER OR REGULATION S INVESTMENT LETTER IN THE FORM OF EXHIBIT I-A AND EXHIBIT
I-B, RESPECTIVELY, TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, STATING THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
Certificate No.: P-1
Cut-off Date: January 1, 2007
First Distribution Date: February 26, 2007
Percentage Interest of this Certificate: 100%
Interest: None
CUSIP: ____________________________________
ISIN: ____________________________________
EXHIBIT D-1
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[_]
Mortgage Pass-Through Certificates, Series 2007-[_]
Class P
evidencing a percentage interest in the distribution of Prepayment Charges
allocable to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Trustee or any other
party to the Agreement referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that HSBC SECURITIES (USA) INC. is the registered owner
of the Percentage Interest evidenced by this Certificate in certain monthly
distributions of Prepayment Charges pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
HSI Asset Securitization Corporation, as depositor (the "Depositor"),
CitiMortgage, Inc., as master servicer (in such capacity, the "Master
Servicer"), Citibank, N.A., as securities administrator (in such capacity, the
"Securities Administrator"), ▇▇▇▇▇ Fargo Bank, N.A., as custodian, and Deutsche
Bank National Trust Company, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have an Interest Rate and will solely be
entitled to receive distributions of Prepayment Charges to the extent set forth
in the Agreement. In addition, any distribution of the proceeds of any remaining
assets of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purpose, or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Investment Letter or a Regulation
S Investment Letter, as applicable, in either case substantially in the form
attached as Exhibit I-A and Exhibit I-B, respectively, to the Agreement, or (ii)
a written Opinion of Counsel to the Securities Administrator that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall be an expense of the transferor.
EXHIBIT D-2
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
EXHIBIT D-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
--------------------
CITIBANK, N.A.,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
---------------------------------
Authorized Signatory of
CITIBANK, N.A.,
not in its individual capacity,
but solely as Securities
Administrator
EXHIBIT D-4
HSI ASSET SECURITIZATION CORPORATION
HSI Asset Loan Obligation Trust 2007-[_]
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as HSI Asset Loan Obligation Trust 2007-[__] Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
constituting Prepayment Charges for payment hereunder and that neither the
Trustee nor the Securities Administrator is liable to the Certificateholders for
any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this
EXHIBIT D-5
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Depositor, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
The Master Servicer, upon the instruction of the Depositor or at its
own discretion, shall purchase the Mortgage Loans and therefore cause the
termination of the Trust on the initial Optional Termination Date, which is any
Distribution Date in which the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period is less than or
equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The obligations and responsibilities created by the Agreement will
terminate as provided in Section 12.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
EXHIBIT D-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------
----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number __________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to _____________________________________,
________________________________________________________________________________
This information is provided by _____________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D-7
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
HSI Asset Securitization Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: HSI Asset Securitization Corporation, Series 2007-[__]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of January 1, 2007 among HSI Asset
Securitization Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian,
CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee, for each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the following
form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
EXHIBIT E-1
▇▇▇▇▇ FARGO BANK, N.A., as Custodian
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
______, 20___
HSI Asset Securitization Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: HSI Asset Securitization Corporation, Series 2007-[__]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of January 1, 2007 among HSI Asset
Securitization Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian,
CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee, the
undersigned, as Custodian, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements
EXHIBIT F-1
showing a complete chain of endorsement from the applicable mortgage loan
seller to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided
in Section 2.01 of the Pooling and Servicing Agreement; or, if the Mortgage
Loan Seller has certified or the Custodian otherwise knows that the related
Mortgage has not been returned from the applicable recording office, a copy
of the assignment of the Mortgage (excluding information to be provided by
the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
applicable mortgage loan seller to the last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company.
Based on its review and examination and only as to the foregoing documents,
(a) such documents appear regular on their face and related to such Mortgage
Loan, and (b) the information set forth in items (1), (2), (3), (15), (18) and
(22) of the Data Tape Information accurately reflects information set forth in
the Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Custodian
makes no representation as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Custodian
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT F-2
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates, Series 2007- [___]
STATE OF __________)
) ss.:
COUNTY OF _________)
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ___________________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "Certificate")
issued pursuant to the Pooling and Servicing Agreement (the "Agreement"),
relating to the above-referenced Series, dated as of January 1, 2007 among HSI
Asset Securitization Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as
custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee. Capitalized
terms used, but not defined herein, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee for the benefit of the Depositor, the
Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the date of
the Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate for its own account. The Transferee has no knowledge
that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are Non-Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is a Non-Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is a Non-Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
EXHIBIT G-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to
whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that, among other things, such Transferee has no
actual knowledge that the Person to which the Transfer is to be made is a
Non-Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate. The Transferee has historically paid its debts as they have come
due and intends to pay its debts as they come due in the future. The Transferee
intends to pay all taxes due with respect to the Certificate as they become due.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is not a Disqualified Non-U.S. Person as defined in the
Agreement.
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Residual Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other U.S.
Person.
12. Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities associated with
holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee to
acquire such Certificate;
EXHIBIT G-2
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated with
holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to pay tax
at the highest rate currently specified in Section 11(b) of the Code (but the
tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the highest
rate specified in Section 11(b) of the Code if the Transferee has been subject
to the alternative minimum tax under Section 55 of the Code in the preceding two
years and will compute its taxable income in the current taxable year using the
alternative minimum tax rate) and (ii) present values are computed using a
discount rate equal to the short-term Federal rate prescribed by Section 1274(d)
of the Code for the month of the transfer and the compounding period used by the
Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury Regulations
Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from the
Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the Transferee's
two fiscal years preceding the year of the transfer, the Transferee had
gross assets for financial reporting purposes (excluding any obligation of
a person related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and net
assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to acquire
the Certificate based on reasonable market assumptions (including, but not
limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that is subject to Title
I of ERISA or a plan that is subject to Section 4975 of the Code or a plan
subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
EXHIBIT G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of _______, 20__.
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Corporate Seal]
ATTEST:
-----------------------------
-------------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________, known or proved
to me to be the same person who executed the foregoing instrument and to be the
___________ of the Transferee, and acknowledged that he executed the same as his
free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ___ day of _______, 20__.
----------------------------------------
NOTARY PUBLIC
My Commission expires the __ day of
_________, 20__
EXHIBIT G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
HSI Asset Securitization Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head MBS Principal Finance
Citibank, N.A.,
as Securities Administrator
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - HSI Asset Loan Obligation Trust 2007-AR1
Re: HSI Asset Loan Obligation Trust 2007-AR1 Mortgage Pass-Through
Certificates, Series 2007-AR1, Class [__]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act and (c)
to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
In connection with any disposition of the above Certificates in accordance
with Rule 904 of Regulation S we hereby certify that:
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 responsibly believed the transferee was outside the
United States;
c. no directed selling efforts have been made in contravention of
the requirements of Rule 903 or Rule 904 of Regulation S, as
applicable;
EXHIBIT H-1
d the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act, as amended; and
e. the transferee is not a U.S. person (as defined in Regulation S).
Very truly yours,
----------------------------------------
Print Name of Transferor
By:
------------------------------------
Authorized Officer
EXHIBIT H-2
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
____________, 20__
HSI Asset Securitization Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head MBS Principal Finance
Citibank, N.A.,
as Securities Administrator
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - HSI Asset Loan Obligation Trust 2007-AR1
Re: HSI Asset Loan Obligation Trust 2007-AR1
Mortgage Pass-Through Certificates, Series 2007-AR1, Class [__]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) in the case of an ERISA-Restricted Certificate,
we are not an employee benefit plan that is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan or
arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, or a plan subject to materially similar provisions of
applicable federal, state or local law, nor are we acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such acquisition or, with respect to an ERISA-Restricted Certificate
other than a Class P Certificate, a Class X Certificate or a Residual
Certificate, such Certificate has been the subject of an ERISA-Qualifying
Underwriting and the purchaser is an insurance company that is purchasing this
certificate with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60) and that the purchase and holding of such Certificates are
covered under Sections I and III of PTCE 95-60, (e) in the case of an
ERISA-Restricted Trust Certificate, either (i) we are not an employee benefit
plan that is subject to Title I of ERISA, or a plan or arrangement that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor a
person acting on behalf of any such plan, nor are we using the assets of any
such plan to effect such transfer or (ii) our acquisition and holding of the
ERISA-Restricted Trust Certificate is eligible for exemptive relief
EXHIBIT I-1
under the statutory exemption for non-fiduciary service providers under Section
408(b)(17) of ERISA and Section 4975(d)(20) of the Code, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇,
▇▇▇▇ 91-38, PTCE 95-60 or PTCE 96-23 or some other applicable exemption, (f) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (g) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
EXHIBIT I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned and/or
invested on a discretionary basis $________(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
[ ] Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
[ ] Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
[ ] Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
[ ] Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
EXHIBIT I-3
[ ] Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
[ ] State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
[ ] ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
[ ] Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
[ ] Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
[ ] Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on
EXHIBIT I-4
the statements made herein because one or more sales to the Buyer may be in
reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
[ ] The Buyer owned $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
[ ] The Buyer is part of a Family of Investment Companies which owned
in the aggregate $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
EXHIBIT I-6
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
----------------------------------------
Print Name of Transferee
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
IF AN ADVISER:
----------------------------------------
Print Name of Transferee
Date:
---------------------------------
EXHIBIT I-7
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Custodian)
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of January 1, 2007 among HSI Asset Securitization
Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian,
CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee.
In connection with the administration of the Mortgage Loans held by you as
the Custodian on behalf of the Certificateholders, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code: __________________________________________
Mortgage Loan Number: __________________________________________________________
Send Custodial File to: ________________________________________________________
Delivery Method (check one)
[ ] 1. Regular mail
[ ] 2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
[ ] 1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
[ ] 2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
[ ] 3. Mortgage Loan Liquidated by _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation or
other
EXHIBIT J-1
liquidation have been finally received and credited to the Collection
Account pursuant to the Pooling and Servicing Agreement.)
[ ] 4. Mortgage Loan in Foreclosure.
[ ] 5. Other (explain). _____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File
was previously released to us, please release to us our previous request and
receipt on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[ ]
--------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
ACKNOWLEDGED AND AGREED:
[▇▇▇▇▇ FARGO BANK, N.A.]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
EXHIBIT J-2
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Depositor
and which shall be retained by the Servicer or delivered to and retained by the
Custodian:
(a) The documents or instruments set forth as items (i) to (ix) in
Section 2.01(b) of the Pooling and Servicing Agreement.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on Mortgagor.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
(l) If available, termite report, structural engineer's report, water
portability and septic certification.
(m) Sales contract, if applicable.
(n) Hazard insurance policy.
(o) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily contained
in a mortgage loan file and which are required to document the Mortgage
Loan or to service the Mortgage Loan.
(p) Amortization schedule, if available.
EXHIBIT K-1
(q) Payment history for Mortgage Loans that have been closed for more
than 90 days.
EXHIBIT K-2
EXHIBIT L
FORM OF ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION TO BE
PROVIDED BY MASTER SERVICER (OR OTHER CERTIFICATION PARTY)
WITH FORM 10-K
HSI Asset Loan Obligation Trust 2007-[__]
Mortgage Pass-Through Certificates
Series 2007-[__]
This Certification is being made pursuant to Section 3.05 and Section 8.12
of the Pooling and Servicing Agreement dated as of January 1, 2007 (the "Pooling
and Servicing Agreement") relating to the above-referenced Series, among HSI
Asset Securitization Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as
custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings assigned in the
Pooling and Servicing Agreement.
1. I have reviewed this annual report on Form 10-K, and all reports on Form
10-D required to be filed in respect of the period covered by this report on
Form 10-K of HSI Asset Loan Obligation Trust 2007-AR1 (the "Exchange Act
periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by each Servicer
and based on my knowledge and the compliance review conducted in preparing the
Servicer compliance statement required in this report under Item 1123 of
Regulation AB, and except as disclosed in the Exchange Act periodic reports,
each Servicer has fulfilled its obligations under its related Servicing
Agreement; and
5. All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on information
provided to me by the following parties: [_______].
EXHIBIT L-1
CITIMORTGAGE, INC.
as Master Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT L-2
EXHIBIT M
1. Master Mortgage Loan Purchase and Servicing Agreement, between HSBC
Mortgage Corporation (USA) and HSBC Bank USA, National Association, each as
reconstituted pursuant to an Assignment, Assumption and Recognition Agreement,
dated as of January 1, 2007, among HSBC Bank (USA), National Association, HSI
Asset Securitization Corporation and acknowledged by CitiMortgage, Inc., as
master servicer and Deutsche Bank National Trust Company, as trustee.
2. Servicing Agreement, as amended by Amendment Reg AB, dated as of
September 1, 2006, between HSBC Bank (USA), Nation Association and Countrywide
Home Loans, Inc, each as reconstituted pursuant to an Assignment, Assumption and
Recognition Agreement, dated as of January 1, 2007, among HSBC Bank (USA),
National Association, HSI Asset Securitization Corporation, Countrywide Home
Loans, Inc., Countrywide Home Loans Servicing LP and acknowledged by
CitiMortgage, Inc., as master servicer and Deutsche Bank National Trust Company,
as trustee.
3. Master Mortgage Loan Purchase and Servicing Agreement, dated as of
June 21, 2006, between HSBC Bank (USA), Nation Association, American Home
Mortgage Corp., and American Home Mortgage Servicing, Inc. each as reconstituted
pursuant to an Assignment, Assumption and Recognition Agreement, dated as of
January 1, 2007, among HSBC Bank (USA), National Association, HSI Asset
Securitization Corporation, Countrywide American Home Mortgage Corp., American
Home Mortgage Servicing, Inc., and acknowledged by CitiMortgage, Inc., as master
servicer and Deutsche Bank National Trust Company, as trustee.
4. Standard Terms and Provisions of Sale and Servicing Agreement,
dated as of July 1, 2006, between HSBC Bank (USA) and Residential Funding
Corporation, each as reconstituted pursuant to an Assignment, Assumption and
Recognition Agreement, dated as of January 1, 2007, among HSBC Bank (USA),
National Association, HSI Asset Securitization Corporation, Residential Funding
Corporation and acknowledged by CitiMortgage, Inc., as master servicer and
Deutsche Bank National Trust Company, as trustee.
5. Mortgage Loan Purchase Agreement, dated as of November 1, 2006,
between HSBC Bank (USA), Nation Association and SunTrust Mortgage, Inc., each as
reconstituted pursuant to an Assignment, Assumption and Recognition Agreement,
dated as of January 1, 2007, among HSBC Bank (USA), National Association, HSI
Asset Securitization Corporation, SunTrust Mortgage, Inc., and acknowledged by
CitiMortgage, Inc., as master servicer and Deutsche Bank National Trust Company,
as trustee.
EXHIBIT M-1
[EXHIBIT N-1]
FORM OF SERVICER (OR SERVICING FUNCTION
PARTICIPANT) BACK-UP CERTIFICATION
CitiMortgage, Inc.,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Master Servicing Division, Compliance Manager - HALO 2007-AR1
Re: HSI Asset Securitization Loan Obligation Trust 2007-AR1
[_______], the [_______] of [_______] (the "Company") hereby certifies to
the Depositor, the Master Servicer, the Trustee and the Securities
Administrator, and each of their officers, directors and affiliates that:
(1) I have reviewed the Company's report on assessment of compliance
with the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by [____] during 200[__] that were delivered by [____]
to any of the Depositor, the Master Servicer, the Securities Administrator,
and the Trustee pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on 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 Depositor, the Master Servicer, the Securities
Administrator and the Trustee;
(4) I am responsible for reviewing the activities performed by [____]
as [____] under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Servicing Assessment or the Attestation
Report, the Company has fulfilled its obligations under the Agreement in
all material respects; and
(5) The Servicing Assessment and Attestation Report required to be
provided by [____] and [by any Subservicer or Subcontractor] pursuant to
the Agreement, have been provided to the Depositor, the Master Servicer,
the Securities Administrator and the Trustee. Any material instances of
noncompliance described in such reports have been
EXHIBIT N-1
disclosed to the Depositor, the Master Servicer, the Securities
Administrator and the Trustee. Any material instance of noncompliance with
the Servicing Criteria has been disclosed in such reports.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Pooling Servicing Agreement, dated as of January 1, 2007 (the
"Pooling and Servicing Agreement"), by and among HSI Asset Securitization
Corporation, as depositor, CitiMortgage, Inc., as master servicer, Citibank,
N.A., as securities administrator, ▇▇▇▇▇ Fargo Bank, N.A., as custodian and
Deutsche Bank National Trust Company, as trustee.
[ ]
--------------------------------------
as [ ]
-----------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT N-2
EXHIBIT O
[Reserved]
EXHIBIT O-1
EXHIBIT P
[Reserved]
EXHIBIT P-1
EXHIBIT Q
TRANSFER AGREEMENTS
EXHIBIT Q-1
EXHIBIT R
[Reserved]
EXHIBIT R-1
EXHIBIT S
SERVICING CRITERIA MATRIX
The assessment of compliance to be delivered by CitiMortgage, Inc.
("CitiMortgage"), in its capacity as Master Servicer and by Citibank, N.A.
("Citibank"), in its capacity as Securities Administrator, shall address, at a
minimum, the criteria identified below as "Applicable Servicing Criteria":
Capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
January 1, 2007 (the "Pooling and Servicing Agreement"), by and among HSI Asset
Securitization Corporation, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian,
CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee.
MASTER SECURITIES
REG AB REFERENCE SERVICING CRITERIA SERVICER ADMINISTRATOR CUSTODIAN
---------------- ---------------------------------------------- -------- ------------- ---------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to X
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements X
to maintain a back-up servicer for the pool
assets are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions X
policy is in effect on the party participating
in the servicing function throughout the
reporting period in the amount of coverage
required by and otherwise in accordance with
the terms of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited into the X X
appropriate custodial bank accounts and
related bank clearing accounts no more than
two business days following receipt, or such
other number of days specified in the
transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf X X
of an obligor or to an investor are made only
by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding X
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
specified in the transaction agreements.
EXHIBIT S-1
MASTER SECURITIES
REG AB REFERENCE SERVICING CRITERIA SERVICER ADMINISTRATOR CUSTODIAN
---------------- ---------------------------------------------- -------- ------------- ---------
1122(d)(2)(iv) The related accounts for the transaction, such X X
as cash reserve accounts or accounts
established as a form of over
collateralization, are separately maintained
(e.g., with respect to commingling of cash) as
set forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a X X
federally insured depository institution as
set forth in the transaction agreements. For
purposes of this criterion, "federally insured
depository institution" with respect to a
foreign financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to X X
prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly X X
basis for all asset-backed securities related
bank accounts, including custodial accounts
and related bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days
after the bank statement cutoff date, or such
other number of days specified in the
transaction agreements; (C) reviewed and
approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These
reconciling items are resolved within 90
calendar days of their original
identification, or such other number of days
specified in the transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be X
filed with the Commission, are maintained in
accordance with the transaction agreements and
applicable Commission requirements.
Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set
forth in the transaction agreements; (B)
provide information calculated in accordance
with the terms specified in the transaction
agreements; (C) are filed with the Commission
as required by its rules and regulations; and
(D) agree with investors' or the trustee's
records as to the total unpaid principal
balance and number of pool assets serviced by
the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and X
remitted in accordance with timeframes,
distribution priority and other terms set
forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted X
within two business days to the Servicer's
EXHIBIT S-2
MASTER SECURITIES
REG AB REFERENCE SERVICING CRITERIA SERVICER ADMINISTRATOR CUSTODIAN
---------------- ---------------------------------------------- -------- ------------- ---------
investor records, or such other number of days
specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor X
reports agree with cancelled checks, or other
form of payment, or custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is X
maintained as required by the transaction
agreements or related pool asset documents.
1122(d)(4)(ii) Pool assets and related documents are X
safeguarded as required by the transaction
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to
the asset pool are made, reviewed and approved
in accordance with any conditions or
requirements in the transaction agreements.
1122(d)(4)(iv) Payments on pool assets, including any
payoffs, made in accordance with the related
pool asset documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated to
principal, interest or other items (e.g.,
escrow) in accordance with the related pool
asset documents.
1122(d)(4)(v) The Servicer's records regarding the pool
assets agree with the Servicer's records with
respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of X
an obligor's pool assets (e.g., loan
modifications or re-agings) are made, reviewed
and approved by authorized personnel in
accordance with the transaction agreements and
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with the
timeframes or other requirements established
by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are
maintained during the period a pool asset is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent pool assets including, for example,
phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed
EXHIBIT S-3
MASTER SECURITIES
REG AB REFERENCE SERVICING CRITERIA SERVICER ADMINISTRATOR CUSTODIAN
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temporary (e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of
return for pool assets with variable rates are
computed based on the related pool asset
documents.
1122(d)(4)(x) Regarding any funds held in trust for an
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's pool asset documents, on at least an
annual basis, or such other period specified
in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors
in accordance with applicable pool asset
documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar
days of full repayment of the related pool
assets, or such other number of days specified
in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as
tax or insurance payments) are made on or
before the related penalty or expiration
dates, as indicated on the appropriate bills
or notices for such payments, provided that
such support has been received by the servicer
at least 30 calendar days prior to these
dates, or such other number of days specified
in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with
any payment to be made on behalf of an obligor
are paid from the Servicer's funds and not
charged to the obligor, unless the late
payment was due to the obligor's error or
omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are
posted within two business days to the
obligor's records maintained by the servicer,
or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible X
accounts are recognized and recorded in
accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, X*
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as
set forth in the transaction agreements.
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* Solely with respect to premiums paid on certificate insurance policies, if
any.
EXHIBIT S-4
EXHIBIT T
Trustee: Deutsche Bank National Trust Company
Securities Administrator: Citibank, N.A.
Master Servicer: CitiMortgage, Inc.
Custodian: ▇▇▇▇▇ Fargo Bank, N.A.
Sponsor: HSBC Bank USA, National Association
Servicers: HSBC Mortgage Corporation (USA), Countrywide Home Loans Servicing LP,
American Home Mortgage Servicing, Inc., Residential Funding Company, LLC and
SunTrust Mortgage, Inc.
EXHIBIT T-1
EXHIBIT U
FORM OF ANNUAL COMPLIANCE CERTIFICATE
Via Overnight Delivery
[DATE]
HSI Asset Securitization Corporation,
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head MBS Principal Finance
Citibank, N.A.,
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Attention: Corporate Trust Services - [___] 2007-[__]
RE: Annual officer's certificate delivered pursuant to Section 3.05 of
that certain Pooling Servicing Agreement, dated as of January 1, 2007
(the "Pooling and Servicing Agreement"), among HSI Asset
Securitization Corporation, as depositor (the "Depositor"),
CitiMortgage, Inc. as master servicer (the "Master Servicer"),
Citibank, N.A. as securities administrator (the "Securities
Administrator") and ▇▇▇▇▇ Fargo Bank, N.A. as custodian, (the
"Custodian") and Deutsche Bank National Trust Company, as trustee (the
"Trustee")
[_______], the undersigned, a duly authorized [_______] of [Master Servicer]
[Securities Administrator] [Name of Subservicer], does hereby certify the
following for the [calendar year][identify other period] ending on December 31,
20[__]:
1. A review of the activities of the [Master Servicer] [Securities
Administrator] during the preceding calendar year (or portion thereof) and
of its performance under the Agreement for such period has been made under
my supervision.
2. To the best of my knowledge, based on such review, the [Master Servicer]
[Securities Administrator] has fulfilled all of its obligations under the
Agreement in all material respects throughout such year (or applicable
portion thereof), or, if there has been a failure to fulfill any such
obligation in any material respect, I have specifically identified to the
Depositor and the [Master Servicer][Securities Administrator] each such
failure known to me and the nature and status thereof, including the steps
being taken by the [Master Servicer] [Securities Administrator] to remedy
such default.
EXHIBIT U-1
Certified By:
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Name:
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Title:
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EXHIBIT U-2
EXHIBIT V
ADDITIONAL FORM 10-D DISCLOSURE
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
ITEM 1: DISTRIBUTION AND POOL
PERFORMANCE INFORMATION
Information included in the Master Servicer, each Servicer(1)
[Monthly Statement] Securities Administrator
Any information required by 1121 Depositor
which is NOT included on the [Monthly
Statement]
ITEM 2: LEGAL PROCEEDINGS
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by governmental authorities:
- Issuing Entity (Trust Fund) Master Servicer, Securities
Administrator, Each Servicer(1) and
Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Each Servicer Each Servicer(1)
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other Each Servicer(1)
than the Servicers, the Master
Servicer or Securities
Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
ITEM 3: SALE OF SECURITIES AND USE OF Depositor
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.
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(1) This information to be provided pursuant to the applicable Servicing
Agreement.
EXHIBIT V-1
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
Pricing information can be omitted if
securities were not registered.
ITEM 4: DEFAULTS UPON SENIOR Securities Administrator
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)
ITEM 5: SUBMISSION OF MATTERS TO A Securities Administrator
VOTE OF SECURITY HOLDERS
Information from Item 4 of Part II of
Form 10-Q
ITEM 6: SIGNIFICANT OBLIGORS OF POOL Depositor
ASSETS
Item 1112(b) - Significant Obligor
Financial Information*
* 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.
ITEM 7: SIGNIFICANT ENHANCEMENT
PROVIDER INFORMATION
Item 1114(b)(2) - Credit Enhancement
Provider Financial Information*
- Determining applicable Depositor
disclosure threshold
- Requesting required financial
Depositor information
(including any required
accountants' consent to the use
thereof) or effecting
incorporation by reference
ITEM 1115(B) - DERIVATIVE
COUNTERPARTY FINANCIAL INFORMATION*
- Determining current maximum Depositor
probably exposure
- Determining current significance Depositor
percentage
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference.
* 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.
EXHIBIT V-2
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
ITEM 8: OTHER INFORMATION
Disclose any information required to Any party responsible for the applicable
be reported on Form 8-K during the Form 8-K Disclosure item
period covered by the Form 10-D but
not reported
ITEM 9: EXHIBITS
Monthly Statement to Securities Administrator
Certificateholders
Exhibits required by Item 601 of Depositor
Regulation S-K, such as material
agreements
EXHIBIT V-3
EXHIBIT W
ADDITIONAL FORM 10-K DISCLOSURE
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
ITEM 1B: UNRESOLVED STAFF COMMENTS Depositor
ITEM 9B: OTHER INFORMATION
Disclose any information required to Any party responsible for disclosure
be reported on Form 8-K during the items on Form 8-K
fourth quarter covered by the Form
10-K but not reported
ITEM 15: EXHIBITS, FINANCIAL Securities Administrator
STATEMENT SCHEDULES Depositor
REG AB ITEM 1112(B): SIGNIFICANT
OBLIGORS OF POOL ASSETS
Significant Obligor Financial Depositor
Information*
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1114(B)(2): CREDIT
ENHANCEMENT PROVIDER FINANCIAL
INFORMATION
- Determining applicable Depositor
disclosure threshold
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1115(B): DERIVATIVE
COUNTERPARTY FINANCIAL INFORMATION
- Determining current maximum Depositor
portable exposure
- Determining current significance Depositor
percentage.
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1117: LEGAL PROCEEDINGS
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by governmental authorities:
- Issuing Entity (Trust Fund) Servicer and Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing
EXHIBIT W-1
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Servicer Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other Servicer
than the Servicers, Master
Servicer or Securities
Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
REG AB ITEM 1119: AFFILIATIONS AND
RELATIONSHIPS
Whether (a) the Sponsor (Seller), Depositor as to (a)
Depositor or Issuing Entity is an Sponsor/Seller as to (a)
affiliate of the following parties,
and (b) to the extent known and
material, any of the following
parties are affiliated with one
another:
- Master Servicer Master Servicer
- Servicer Servicer(1)
- Securities Administrator Securities Administrator
- Trustee Trustee
- Any other 1108(a)(3) servicer Servicer(1)
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivative Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
Whether there are any "outside the Depositor as to (a)
ordinary course business Sponsor/Seller as to (a)
arrangements" other than would be
obtained in an arm's length
transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity
on the one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material to a
Certificateholder's understanding of
the Certificates:
- Master Servicer Master Servicer
- Servicer Servicer(1)
- Securities Administrator Securities Administrator
- Trustee Depositor/Sponsor
- Any other 1108(a)(3) servicer Depositor/Sponsor
- Any 1110 Originator Depositor/Sponsor
EXHIBIT W-2
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
Whether there are any specific Depositor as to (a) Sponsor/Seller
relationships involving the as to (a)
transaction or the pool assets
between (a) the Sponsor (Seller),
Depositor or Issuing Entity on the
one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material:
- Master Servicer Master Servicer
- Servicer Servicer(1)
- Securities Administrator Securities Administrator
- Trustee Depositor/Sponsor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
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(1) This information to be provided pursuant to the applicable Servicing
Agreement.
EXHIBIT W-3
EXHIBIT X
FORM 8-K DISCLOSURE INFORMATION
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
ITEM 1.01- ENTRY INTO A MATERIAL All parties other than the Trustee
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
ITEM 1.02- TERMINATION OF A MATERIAL All parties other than the Trustee
DEFINITIVE AGREEMENT
Disclosure is required regarding
termination of any definitive
agreement that is material to the
securitization (other than expiration
in accordance with its terms), even
if depositor is not a party.
Examples: servicing agreement,
custodial agreement.
ITEM 1.03- BANKRUPTCY OR RECEIVERSHIP Depositor
Disclosure is required regarding the
bankruptcy or receivership, with
respect to any of the following:
- Sponsor (Seller) Depositor/Sponsor (Seller)
- Depositor Depositor
- Master Servicer Master Servicer
- Affiliated Servicer Servicer(1)
- Other Servicer servicing 20% or Servicer(1)
more of the pool assets at the
time of the report
- Other material servicers Servicer(1)
- Trustee Trustee
- Securities Administrator Securities Administrator
- Significant Obligor Depositor
- Credit Enhancer (10% or more) Depositor
- Derivative Counterparty Depositor
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(1) This information to be provided pursuant to the applicable Servicing
Agreement.
EXHIBIT X-1
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
- Custodian Custodian
ITEM 2.04- TRIGGERING EVENTS THAT Depositor
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 monthly
statements to the certificateholders.
ITEM 3.03- MATERIAL MODIFICATION TO Depositor
RIGHTS OF SECURITY HOLDERS
Disclosure is required of any
material modification to documents
defining the rights of
Certificateholders, including the
Pooling and Servicing Agreement.
ITEM 5.03- AMENDMENTS OF ARTICLES OF Depositor
INCORPORATION OR BYLAWS; CHANGE OF
FISCAL YEAR
Disclosure is required of any
amendment "to the governing documents
of the issuing entity".
ITEM 6.01- ABS INFORMATIONAL AND Depositor
COMPUTATIONAL MATERIAL
ITEM 6.02- CHANGE OF SERVICER OR Master Servicer/ Depositor/ Servicer(1)
SECURITIES ADMINISTRATOR
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 or
trustee.
Reg AB disclosure about any new Servicer(1)/Master Servicer/Depositor
servicer or master servicer is also
required.
Reg AB disclosure about any new Trustee
Trustee is also required.
ITEM 6.03- CHANGE IN CREDIT Depositor
ENHANCEMENT OR EXTERNAL SUPPORT
Covers termination of any enhancement
in manner other than by its terms,
the addition of an
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(1) This information to be provided pursuant to the applicable Servicing
Agreement.
EXHIBIT X-2
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
------------------------------------- ----------------------------------------
enhancement, or a material change in
the enhancement provided. Applies to
external credit enhancements as well
as derivatives.
Reg AB disclosure about any new Depositor
enhancement provider is also
required.
ITEM 6.04- FAILURE TO MAKE A REQUIRED Securities Administrator
DISTRIBUTION
ITEM 6.05- SECURITIES ACT UPDATING Depositor
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.
If there are any new servicers or Depositor
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.
ITEM 7.01- REG FD DISCLOSURE All parties other than the Trustee
ITEM 8.01- OTHER EVENTS Depositor
Any event, with respect to which
information is not otherwise called
for in Form 8-K, that the registrant
deems of importance to
certificateholders.
ITEM 9.01- FINANCIAL STATEMENTS AND Responsible party for
EXHIBITS reporting/disclosing the financial
statement or exhibit
EXHIBIT X-3
EXHIBIT Y
ADDITIONAL DISCLOSURE NOTIFICATION
** SEND TO CITIBANK VIA FAX TO (▇▇▇) ▇▇▇-▇▇▇▇ AND VIA EMAIL TO
▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ AND VIA OVERNIGHT MAIL TO THE ADDRESS
IMMEDIATELY BELOW. SEND TO THE DEPOSITOR AT THE ADDRESS BELOW**
Citibank, N.A.,
as Securities Administrator
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Agency and Trust - HSI Asset Loan Obligation
2007-AR1
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
HSI Asset Securitization Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head MBS Principal Finance
Attn: Corporate Trust Services - [DEAL NAME]-SEC REPORT PROCESSING
RE: **Additional Form [__] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section [__] of the Pooling and Servicing Agreement,
dated as of [__] [__], 2007, 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
[__].
Description of Additional Form [__] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [__]
Disclosure:
Any inquiries related to this notification should be directed to [__],
phone number: [__]; email address: [__].
EXHIBIT Y-1
[NAME OF PARTY]
as [role]
By:
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Name:
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Title:
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EXHIBIT Y-2