NEW CENTURY MORTGAGE CORPORATION, as Servicer NEW CENTURY HOME EQUITY LOAN TRUST 2006-1, as Issuing Entity and DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee SERVICING AGREEMENT Dated as of March 30, 2006 Mortgage Loans New Century Home...
NEW
CENTURY MORTGAGE CORPORATION,
as
Servicer
as
Issuing Entity
and
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
Dated
as
of March 30, 2006
Mortgage
Loans
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions
Section
1.02. Other
Definitional Provisions.
Section
1.03. Interest
Calculations
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section
2.01. Representations
and Warranties Regarding the Servicer
Section
2.02. Existence
Section
2.03. Enforcement
of Representations and Warranties
ARTICLE
III
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
3.01. Servicer
to Act as Servicer.
Section
3.02. Sub-Servicing
Agreements Between Servicer and Sub-Servicers.
Section
3.03. Successor
Sub-Servicers.
Section
3.04. Liability
of the Servicer.
Section
3.05. No
Contractual Relationship Between Sub-Servicers, the Indenture
Trustee
or the Noteholders.
Section
3.06. Assumption
or Termination of Sub-Servicing Agreements by the
Indenture
Trustee.
Section
3.07. Collection
of Certain Mortgage Loan Payments.
Section
3.08. Sub-Servicing
Accounts.
Section
3.09. Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
Section
3.10. Collection
Account and Payment Account.
Section
3.11. Withdrawals
from the Collection Account and Payment Account.
Section
3.12. Investment
of Funds in the Collection Account and the Payment Account.
Section
3.13. [Reserved].
Section
3.14. Maintenance
of Hazard Insurance and Errors and Omissions
and
Fidelity Coverage.
Section
3.15. Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
Section
3.16. Realization
Upon Defaulted Mortgage Loans.
Section
3.17. Trustee
to Cooperate; Release of Mortgage Files.
Section
3.18. Servicing
Compensation.
Section
3.19. Reports
to the Indenture Trustee and Others; Collection Account
Statements.
Section
3.20. Statement
as to Compliance.
Section
3.21. Independent
Public Accountants’ Servicing Report.
Section
3.22. Access
to
Certain Documentation.
Section
3.23. Title,
Management and Disposition of REO Property.
Section
3.24. Obligations
of the Servicer in Respect of Prepayment
Interest
Shortfalls.
Section
3.25. Obligations
of the Servicer in Respect of Mortgage Rates and
Monthly
Payments.
Section
3.26. Advance
Facility.
ARTICLE
IV
SERVICING
CERTIFICATE
Section
4.01. Remittance
Reports and P&I Advances
Section
4.02. Exchange
Act Reporting.
ARTICLE
V
THE
SERVICER
Section
5.01. Liability
of the Servicer
Section
5.02. Merger
or
Consolidation of or Assumption of the Obligations of
the
Servicer
Section
5.03. Limitation
on Liability of the Servicer and Others
Section
5.04. Servicer
Not to Resign
Section
5.05. Delegation
of Duties
Section
5.06. Rights
of
the Issuing Entity in Respect of the Servicer
Section
5.07. Indemnification
ARTICLE
VI
DEFAULT
Section
6.01. Servicer
Events of Default.
Section
6.02. Indenture
Trustee to Act; Appointment of Successor.
Section
6.03. Notification
to Noteholders.
Section
6.04. Waiver
of
Servicer Events of Default.
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.01. Amendment
Section
7.02. GOVERNING
LAW
Section
7.03. Notices
Section
7.04. Severability
of Provisions
Section
7.05. Third-Party
Beneficiaries
Section
7.06. Counterparts
Section
7.07. Effect
of
Headings and Table of Contents
Section
7.08. Termination
Section
7.09. No
Petition
Section
7.10. No
Recourse
Section
7.11. Indenture
Trustee Rights
ARTICLE
VIII
DUTIES
OF
THE SERVICER AS ADMINISTRATOR
Section
8.01. Administrative
Duties.
Section
8.02. Records
Section
8.03. Additional
Information to be Furnished
Section
8.04. No
Recourse to Owner Trustee
EXHIBITS
Exhibit
A Mortgage
Loan Schedule
Exhibit
B Form
of
Request for Release
Exhibit
C-1 Form
of
Certification to Be Provided by the Depositor with Form 10-K
Exhibit
C-2 Form
of
Certification to Be Provided to the Depositor by the Indenture
Trustee
Exhibit
D Form
of
Officer’s Certificate Regarding Annual Statement of Compliance
Exhibit
E
Servicing
Criteria
Exhibit
F Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
This
Servicing Agreement, dated as of March 30, 2006, among New Century Mortgage
Corporation, as Servicer (the “Servicer”), New Century Home Equity Loan Trust
2006-1, as Issuing Entity (the “Issuing Entity”) and Deutsche Bank National
Trust Company, as Indenture Trustee (the “Indenture Trustee”).
W
I T
N E S S E T H T H A T :
WHEREAS,
pursuant to the terms of the Mortgage Loan Purchase Agreement, New Century
Mortgage Securities LLC (the “Depositor”) will acquire the Mortgage
Loans;
WHEREAS,
the Depositor will create New Century Home Equity Loan Trust 2006-1, a Delaware
statutory trust, and will transfer the Mortgage Loans and all of its rights
under the Mortgage Loan Purchase Agreement to the Issuing Entity;
WHEREAS,
pursuant to the terms of an Amended and Restated Trust Agreement dated as of
March 30, 2006 (the “Trust Agreement”) among the Depositor, as depositor,
Wilmington Trust Company, as owner trustee (the “Owner Trustee”) and Deutsche
Bank National Trust Company, as certificate registrar and certificate paying
agent, the Depositor will convey the Mortgage Loans to the Issuing Entity in
exchange for the Certificates (as defined below);
WHEREAS,
pursuant to the terms of the Trust Agreement, the Issuing Entity will issue
and
transfer to or at the direction of the Depositor, the Trust Certificates, Series
2006-1 (the “Certificates”);
WHEREAS,
pursuant to the terms of an Indenture dated as of March 30, 2006 (the
“Indenture”) between the Issuing Entity and Deutsche Bank National Trust Company
(the “Indenture Trustee”), the Issuing Entity will pledge the Mortgage Loans and
issue and transfer to or at the direction of the Purchaser the Asset-Backed
Notes, Series 2006-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇, Class A-2c, Class
M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and
Class M-9 Notes (collectively, the “Notes”); and
WHEREAS,
pursuant to the terms of this Servicing Agreement, the Servicer will service
the
Mortgage Loans set forth on the Mortgage Loan Schedule attached hereto as
Exhibit A directly or through one or more Sub-Servicers;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions.
For all
purposes of this Servicing Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
contained in Appendix A to the Indenture which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section
1.02. Other
Definitional Provisions.
(a) All
terms
defined in this Servicing Agreement shall have the defined meanings when used
in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As
used
in this Servicing Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Servicing Agreement or in any such certificate or other document, and accounting
terms partly defined in this Servicing Agreement or in any such certificate
or
other document, to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that
the definitions of accounting terms in this Servicing Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Servicing Agreement or in any such certificate or other document shall
control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Servicing Agreement shall refer to this Servicing Agreement as a whole and
not
to any particular provision of this Servicing Agreement; Section and Exhibit
references contained in this Servicing Agreement are references to Sections
and
Exhibits in or to this Servicing Agreement unless otherwise specified; and
the
term “including” shall mean “including without limitation”.
(d) The
definitions contained in this Servicing Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as the
feminine and neuter genders of such terms.
(e) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Section
1.03. Interest
Calculations.
All
calculations of interest hereunder that are made in respect of the Stated
Principal Balance of a Mortgage Loan shall be made on the basis of a 360-day
year consisting of twelve 30-day months, notwithstanding the terms of the
related Mortgage Note and Mortgage.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section
2.01. Representations
and Warranties Regarding the Servicer.
The
Servicer hereby represents, warrants and covenants to the Issuing Entity and
for
the benefit of the Indenture Trustee, as pledgee of the Mortgage Loans, and
the
Noteholders that as of the Closing Date or as of such date specifically provided
herein:
(i) The
Servicer is a corporation duly organized and validly existing under the laws
of
the State of California and is duly authorized and qualified to transact any
and
all business contemplated by this Servicing Agreement to be conducted by the
Servicer in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to
the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Servicing
Agreement;
(ii) The
Servicer has the full power and authority to conduct its business as presently
conducted by it and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Servicing Agreement. The
Servicer has duly authorized the execution, delivery and performance of this
Servicing Agreement, has duly executed and delivered this Servicing Agreement,
and this Servicing Agreement, assuming due authorization, execution and delivery
by the Depositor and the Indenture Trustee, constitutes a legal, valid and
binding obligation of the Servicer, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity;
(iii) The
execution and delivery of this Servicing Agreement by the Servicer, the
servicing of the Mortgage Loans by the Servicer hereunder, the consummation
by
the Servicer of any other of the transactions herein contemplated, and the
fulfillment of or compliance with the terms hereof are in the ordinary course
of
business of the Servicer and will not (A) result in a breach of any term or
provision of the charter or by-laws of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which the Servicer is
a
party or by which it may be bound, or any statute, order or regulation
applicable to the Servicer of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Servicer; and the Servicer
is
not a party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which materially and adversely affects or,
to
the Servicer’s knowledge, would in the future materially and adversely affect,
(x) the ability of the Servicer to perform its obligations under this Servicing
Agreement or (y) the business, operations, financial condition, properties
or
assets of the Servicer taken as a whole;
(iv) The
Servicer is a HUD approved servicer. No event has occurred, including but not
limited to a change in insurance coverage, that would make the Servicer unable
to comply with HUD eligibility requirements or that would require notification
to HUD;
(v) The
Servicer does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant made by it and contained in this
Servicing Agreement;
(vi)
[Reserved];
(vii) No
litigation is pending against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Servicing Agreement
or
the ability of the Servicer to service the Mortgage Loans or to perform any
of
its other obligations hereunder in accordance with the terms
hereof;
(viii) There
are
no actions or proceedings against, or investigations known to it of, the
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Servicing Agreement, (B) seeking to prevent
the
consummation of the transactions contemplated by this Servicing Agreement or
(C)
that might prohibit or materially and adversely affect the performance by the
Servicer of its obligations under, or validity or enforceability of, this
Servicing Agreement;
(ix) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Servicer
of,
or compliance by the Servicer with, this Servicing Agreement or the consummation
by it of the transactions contemplated by this Servicing Agreement, except
for
such consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date;
(x) The
Servicer will not waive any Prepayment Charge unless it is waived in accordance
with the standard set forth in Section 3.01; and
(xi) The
Servicer has fully furnished and will continue to fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information Company
or
their successors on a monthly basis.
The
foregoing representations and warranties shall survive any termination of the
Servicer hereunder.
It
is
understood and agreed that the representations, warranties and covenants set
forth in this Section 2.01 shall survive delivery of the Mortgage Files to
the
Indenture Trustee and shall inure to the benefit of the Servicer, the Indenture
Trustee, the Depositor and the Noteholders. Upon discovery by any of the
Depositor, the Servicer or the Indenture Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of
the
Noteholders, the party discovering such breach shall give prompt written notice
(but in no event later than two Business Days following such discovery) to
the
Indenture Trustee. Subject to Section 6.01, unless such breach shall not be
susceptible of cure within 90 days, the obligation of the Servicer set forth
in
this Section 2.01 to cure breaches shall constitute the sole remedy against
the
Servicer available to the Noteholders, the Depositor, the Servicer and the
Indenture Trustee on behalf of the Noteholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.01.
Notwithstanding the foregoing, within 90 days of the earlier of discovery by
the
Servicer or receipt of notice by the Servicer of the breach of the
representation or covenant of the Servicer set forth in Section 2.01(x) above,
which breach materially and adversely affects the interests of the Holders
of
the Certificates in any Prepayment Charge, the Servicer must pay the amount
of
such waived Prepayment Charge, for the benefit of the holders of the Notes,
by
depositing such amount into the Collection Account.
Section
2.02. Existence.
The
Issuing Entity will keep in full effect its existence, rights and franchises
as
a statutory trust under the laws of the State of Delaware (unless it becomes,
or
any successor Issuing Entity hereunder is or becomes, organized under the laws
of any other state or of the United States of America, in which case the Issuing
Entity will keep in full effect its existence, rights and franchises under
the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Servicing
Agreement.
Section
2.03. Enforcement
of Representations and Warranties.
(a)
The
Servicer (to the extent it is not NC Capital or an Affiliate of NC Capital,
and
otherwise the Indenture Trustee) shall enforce the representations and
warranties and related obligations for breaches thereof of NC Capital pursuant
to the Mortgage Loan Purchase Agreement. Upon the discovery or receipt of notice
of any materially defective document in, or that a document is missing from,
a
Mortgage File or of a breach by NC Capital of any of the representations and
warranties made in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan that materially and adversely affects the value of the value
of
such Mortgage Loan or the interests therein of the Noteholders, the Indenture
Trustee shall give prompt written notice to NC Capital and the Servicer of
such
defect, missing document or breach and request that NC Capital deliver such
missing document or cure such defect or breach within 60 days from the date
NC
Capital was notified of such missing document, defect or breach, and if NC
Capital does not deliver such missing document or cure such defect or breach
in
all material respects during such period, the Servicer, to the extent it is
not
NC Capital or an Affiliate of NC Capital, and otherwise the Indenture Trustee,
shall enforce the obligations of NC Capital under the Mortgage Loan Purchase
Agreement to repurchase such Mortgage Loan from the Issuing Entity at the
Purchase Price within 90 days after the date on which NC Capital was notified
of
such missing document, defect or breach, if and to the extent that NC Capital
is
obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be remitted to the Servicer for
deposit in the Collection Account and the Indenture Trustee, upon receipt of
written certification from the Servicer of such deposit, shall release to NC
Capital the related Mortgage File and the Indenture Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as NC Capital shall furnish to it and as shall be necessary to vest
in
NC Capital any Mortgage Loan released pursuant hereto. The Indenture Trustee
shall not have any further responsibility with regard to such Mortgage File.
In
lieu of repurchasing any such Mortgage Loan as provided above, if so provided
in
the Mortgage Loan Purchase Agreement, NC Capital may cause such Mortgage Loan
to
be removed from the Trust Estate (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans
in
the manner and subject to the limitations set forth in Section 2.03(b);
provided, however, NC Capital may not substitute a Qualified Substitute Mortgage
Loan for any Deleted Mortgage Loan that violates any predatory or abusive
lending law. It is understood and agreed that the obligation of NC Capital
to
cure or to repurchase (or to substitute for) any Mortgage Loan as to which
a
document is missing, a material defect in a constituent document exists or
as to
which such a breach has occurred and is continuing shall constitute the sole
remedy respecting such omission, defect or breach available to the Indenture
Trustee and the Noteholders. The Indenture Trustee will be reimbursed for
reasonable expenses incurred in connection with any breach or defect giving
rise
to the purchase obligation under this Section 2.03 pursuant to Section
3.11(a)(viii).
With
respect to the representations and warranties made by NC Capital in the Mortgage
Loan Purchase Agreement, the Indenture Trustee shall not be charged with
knowledge of any breach of any such representation or warranty by NC Capital
unless a Responsible Officer of the Indenture Trustee at the Corporate Trust
Office obtains actual knowledge of such breach or a Responsible Officer of
the
Indenture Trustee receives written notice of such breach from the Depositor,
the
Servicer or the Noteholders.
(b) As
to any
Deleted Mortgage Loan for which NC Capital substitutes a Qualified Substitute
Mortgage Loan or Loans, such substitution shall be effected by NC Capital
delivering to the Indenture Trustee, for such Qualified Substitute Mortgage
Loan
or Loans, the Mortgage Note, the Mortgage, the Assignment to the Indenture
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.1(b) of the Mortgage Loan
Purchase Agreement, together with an Officers’ Certificate providing that each
such Qualified Substitute Mortgage Loan satisfies the definition thereof and
specifying the Substitution Shortfall Amount (as described below), if any,
in
connection with such substitution. The Indenture Trustee shall acknowledge
receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten
Business Days thereafter, shall review such documents as specified in Section
2.1(b) of the Mortgage Loan Purchase Agreement and deliver to the Depositor
and
the Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans,
a certification substantially in the form attached as Exhibit C-1 to the
Indenture, with any applicable exceptions noted thereon. Within one year of
the
date of substitution, the Indenture Trustee shall deliver to the Depositor
and
the Servicer a certification substantially in the form of Exhibit C-2 to the
Indenture with respect to such Qualified Substitute Mortgage Loan or Loans,
with
any applicable exceptions noted thereon. Monthly Payments due with respect
to
Qualified Substitute Mortgage Loans in the month of substitution are not part
of
the Trust Estate and will be retained by NC Capital. For the month of
substitution, payments to Noteholders will reflect the Monthly Payment due
on
such Deleted Mortgage Loan on or before the Due Date in the month of
substitution, and NC Capital shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Servicer
shall give or cause to be given written notice to the Noteholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Servicing
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Indenture Trustee and the Owner Trustee. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool
and
shall be subject in all respects to the terms of this Servicing Agreement and
the Mortgage Loan Purchase Agreement, including, all applicable representations
and warranties thereof included in the Mortgage Loan Purchase
Agreement.
For
any
month in which NC Capital substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Servicer will determine the
amount (the “Substitution Shortfall Amount”), if any, by which the aggregate
Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate of,
as
to each such Qualified Substitute Mortgage Loan, the Stated Principal Balance
thereof as of the date of substitution, together with one month’s interest on
such Stated Principal Balance at the applicable Net Mortgage Rate, plus all
outstanding P&I Advances and Servicing Advances (including Nonrecoverable
P&I Advances and Nonrecoverable Servicing Advances) related thereto. On the
date of such substitution, NC Capital will deliver or cause to be delivered
to
the Servicer for deposit in the Collection Account an amount equal to the
Substitution Shortfall Amount, if any, and the Indenture Trustee, upon receipt
of the related Qualified Substitute Mortgage Loan or Loans and certification
by
the Servicer of such deposit, shall release to NC Capital the related Mortgage
File or Files and the Indenture Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, NC Capital
shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
ARTICLE
III
ADMINISTRATION
ANDSERVICING OF MORTGAGE LOANS
Section
3.01. Servicer
to Act as Servicer.
The
Servicer shall service and administer the Mortgage Loans on behalf of the Trust
Estate and in the best interests of and for the benefit of the Noteholders
(as
determined by the Servicer in its reasonable judgment) in accordance with the
terms of this Servicing Agreement and the respective Mortgage Loans and, to
the
extent consistent with such terms, in the same manner in which it services
and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard
to:
(i) any
relationship that the Servicer, any Sub-Servicer or any Affiliate of the
Servicer or any Sub-Servicer may have with the related Mortgagor;
(ii) the
ownership or non-ownership of any Note by the Servicer or any Affiliate of
the
Servicer;
(iii) the
Servicer’s obligation to make P&I Advances or Servicing Advances;
or
(iv) the
Servicer’s or any Sub-Servicer’s right to receive compensation for its services
hereunder or with respect to any particular transaction.
To
the
extent consistent with the foregoing, the Servicer (a) shall seek to maximize
the timely and complete recovery of principal and interest on the Mortgage
Notes
and (b) shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only
under the following circumstances: (i) such waiver is standard and customary
in
servicing similar Mortgage Loans and (ii) either (A) such waiver would, in
the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default or (B) such waiver is made in connection with a refinancing
of the related Mortgage Loan unrelated to a default or a reasonably foreseeable
default where (x) the related mortgagor has stated to the Servicer or an
applicable Sub-Servicer an intention to refinance the related Mortgage Loan
and
(y) the Servicer has concluded in its reasonable judgment that the waiver of
such Prepayment Charge would induce such mortgagor to refinance with the
Servicer or (iii) collection of the related Prepayment Charge would violate
applicable law. If a Prepayment Charge is waived as permitted by meeting both
of
the standards described in clauses (i) and (ii)(B) or (iii) above, then the
Servicer is required to pay the amount of such waived Prepayment Charge, for
the
benefit of the Holders of the Notes, by depositing such amount into the
Collection Account together with and at the time that the amount prepaid on
the
related Mortgage Loan is required to be deposited into the Collection
Account.
Subject
only to the above-described servicing standards and the terms of this Servicing
Agreement and of the respective Mortgage Loans, the Servicer shall have full
power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Sub-Servicer is hereby authorized and empowered by the
Indenture Trustee when the Servicer believes it appropriate in its best judgment
in accordance with the servicing standards set forth above, to execute and
deliver, on behalf of the Trust Estate, the Issuing Entity, the Noteholders
and
the Indenture Trustee or any of them, and upon written notice to the Indenture
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Indenture Trustee and Noteholders. The Servicer
shall service and administer the Mortgage Loans in accordance with applicable
state and federal law and shall provide to the Mortgagors any reports required
to be provided to them thereby. The Servicer shall also comply in the
performance of this Servicing Agreement with all reasonable rules and
requirements of each insurer under any standard hazard insurance policy. Subject
to Section 3.17, the Issuing Entity and the Indenture Trustee shall execute,
at
the written request of the Servicer, and furnish to the Servicer and any
Sub-Servicer any special or limited powers of attorney and other documents
necessary or appropriate to enable the Servicer or any Sub-Servicer to carry
out
their servicing and administrative duties hereunder and the Issuing Entity
and
the Indenture Trustee shall not be liable for the actions of the Servicer or
any
Sub-Servicers under such powers of attorney.
Subject
to Section 3.09 hereof, in accordance with the standards of the preceding
paragraph, the Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the timely payment of taxes and assessments on
the
Mortgaged Properties in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien, which advances shall be Servicing Advances reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section 3.09,
and further as provided in Section 3.11. Any cost incurred by the Servicer
or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating payments to
Noteholders, be added to the unpaid Stated Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
Notwithstanding
anything in this Servicing Agreement to the contrary, the Servicer may not
make
any future advances with respect to a Mortgage Loan (except as provided in
Section 4.01) and the Servicer shall not permit any modification with respect
to
any Mortgage Loan that would change the Mortgage Rate, reduce or increase the
principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such Mortgage Loan (unless,
as
provided in Section 3.07, the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable).
The
Servicer may delegate its responsibilities under this Servicing Agreement;
provided, however, that no such delegation shall release the Servicer from
the
responsibilities or liabilities arising under this Servicing
Agreement.
Section
3.02. Sub-Servicing
Agreements Between Servicer and Sub-Servicers.
(a) The
Servicer may enter into Sub-Servicing Agreements with Sub-Servicers for the
servicing and administration of the Mortgage Loans; provided, however, that
such
agreements would not result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Notes. The Indenture Trustee is hereby
authorized to acknowledge, at the request of the Servicer, any Sub-Servicing
Agreement that, based on an Officers’ Certificate of the Servicer delivered to
the Indenture Trustee (upon which the Indenture Trustee can conclusively rely),
meets the requirements applicable to Sub-Servicing Agreements set forth in
this
Servicing Agreement and that is otherwise permitted under this Servicing
Agreement.
Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated, if and
to
the extent required by applicable law to enable the Sub-Servicer to perform
its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a ▇▇▇▇▇▇▇
Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. Each Sub-Servicing Agreement
must
impose on the Sub-Servicer requirements conforming to the provisions set forth
in Section 3.08 and provide for servicing of the Mortgage Loans consistent
with
the terms of this Servicing Agreement. The Servicer will examine each
Sub-Servicing Agreement and will be familiar with the terms thereof. The terms
of any Sub-Servicing Agreement will not be inconsistent with any of the
provisions of this Servicing Agreement. The Servicer and the Sub-Servicers
may
enter into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Servicing Agreement, and that no such amendment or different
form shall be made or entered into which could be reasonably expected to be
materially adverse to the interests of the Noteholders without the consent
of
the Holders of Notes entitled to at least 66% of the Voting Rights; provided,
further, that the consent of the Holders of Notes entitled to at least 66%
of
the Voting Rights shall not be required (i) to cure any ambiguity or defect
in a
Sub-Servicing Agreement, (ii) to correct, modify or supplement any provisions
of
a Sub-Servicing Agreement, or (iii) to make any other provisions with respect
to
matters or questions arising under a Sub-Servicing Agreement, which, in each
case, shall not be inconsistent with the provisions of this Servicing Agreement.
Any variation without the consent of the Holders of Notes entitled to at least
66% of the Voting Rights from the provisions set forth in Section 3.08 relating
to insurance or priority requirements of Sub-Servicing Accounts, or credits
and
charges to the Sub-Servicing Accounts or the timing and amount of remittances
by
the Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent
with this Servicing Agreement and therefore prohibited. The Servicer shall
deliver to the Indenture Trustee, upon its request, copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Servicer’s execution and delivery of such instruments.
(b) As
part
of its servicing activities hereunder, the Servicer, for the benefit of the
Indenture Trustee and the Noteholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement, including, without
limitation, any obligation of a Sub-Servicer to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination
of
Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Servicer shall pay the costs of enforcing
the
obligations of a Sub-Servicer at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement,
to
the extent, if any, that such recovery exceeds all amounts due in respect of
the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses
or
attorneys’ fees against the party against whom such enforcement is
directed.
Section
3.03. Successor
Sub-Servicers.
The
Servicer shall be entitled to terminate any Sub-Servicing Agreement and the
rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement. In the event of termination of any Sub-Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Sub-Servicer or the Servicer, and
the Servicer either shall service directly the related Mortgage Loans or shall
enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 3.02.
Any
Sub-Servicing Agreement shall include the provision that such agreement may
be
immediately terminated by the Indenture Trustee (if the Indenture Trustee is
acting as Servicer) without fee, in accordance with the terms of this Servicing
Agreement, in the event that the Servicer (or the Indenture Trustee, if it
is
then acting as Servicer) shall, for any reason, no longer be the Servicer
(including termination due to a Servicer Event of Default).
Section
3.04. Liability
of the Servicer.
Notwithstanding
any Sub-Servicing Agreement or the provisions of this Servicing Agreement
relating to agreements or arrangements between the Servicer and a Sub-Servicer
or reference to actions taken through a Sub-Servicer or otherwise, the Servicer
shall remain obligated and primarily liable to the Indenture Trustee and the
Noteholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with a Sub-Servicer for indemnification
of
the Servicer by such Sub-Servicer and nothing contained in this Servicing
Agreement shall be deemed to limit or modify such indemnification.
Section
3.05. No
Contractual Relationship Between Sub-Servicers, the Indenture Trustee or the
Noteholders.
Any
Sub-Servicing Agreement that may be entered into and any transactions or
services relating to the Mortgage Loans involving a Sub-Servicer in its capacity
as such shall be deemed to be between the Sub-Servicer and the Servicer alone,
and the Indenture Trustee and the Noteholders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Sub-Servicer except as set forth in Section 3.06. The
Servicer shall be solely liable for all fees owed by it to any Sub-Servicer,
irrespective of whether the Servicer’s compensation pursuant to this Servicing
Agreement is sufficient to pay such fees.
Section
3.06. Assumption
or Termination of Sub-Servicing Agreements by the Indenture
Trustee.
In
the
event the Servicer shall for any reason no longer be the servicer (including
by
reason of the occurrence of a Event of Default), the Indenture Trustee, its
designee or other successor servicer shall thereupon assume all of the rights
and obligations of the Servicer under each Sub-Servicing Agreement that the
Servicer may have entered into, unless the Indenture Trustee, such designee
or
other successor servicer elects to terminate any Sub-Servicing Agreement in
accordance with its terms as provided in Section 3.03. Upon such assumption,
the
Indenture Trustee, its designee or the successor servicer appointed pursuant
to
Section 6.02 shall be deemed, subject to Section 3.03, to have assumed all
of
the Servicer’s interest therein and to have replaced the Servicer as a party to
each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Servicer and
(ii)
none of the Indenture Trustee, its designee or any successor Servicer shall
be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The
Servicer at its expense shall, upon request of the Indenture Trustee, deliver
to
the assuming party all documents and records relating to each Sub-Servicing
Agreement and the Mortgage Loans then being serviced and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
The
Servicing Fee payable to the Indenture Trustee or other successor servicer
shall
be payable from payments received on the Mortgage Loans in the amount and in
the
manner set forth in this Servicing Agreement.
Section
3.07. Collection
of Certain Mortgage Loan Payments.
The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Servicing Agreement and the terms
and
provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to
the
Mortgage Loans and held for its own account. Consistent with the foregoing,
the
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a “Short Pay-off”), or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor.
Section
3.08. Sub-Servicing
Accounts.
In
those
cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a
Sub-Servicing Agreement, the Sub-Servicer will be required to establish and
maintain one or more accounts (collectively, the “Sub-Servicing Account”). The
Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements of this Servicing Agreement relating to the Collection Account.
The
Sub-Servicer shall deposit in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Sub-Servicer’s receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation
to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Servicing Agreement, the Servicer shall be deemed
to have received payments on the Mortgage Loans when the Sub-Servicer receives
such payments.
Section
3.09. Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the “Servicing Accounts”), into which all
collections from the Mortgagors (or related advances from Sub-Servicers) for
the
payment of taxes, assessments, hazard insurance premiums and comparable items
for the account of the Mortgagors (“Escrow Payments”) shall be deposited and
retained. Servicing Accounts shall be Eligible Accounts. The Servicer shall
deposit in the clearing account in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer’s receipt thereof, all Escrow Payments collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the receipt
of
such Escrow Payments, all Escrow Payments collected on account of the Mortgage
Loans for the purpose of effecting the timely payment of any such items as
required under the terms of this Servicing Agreement. Withdrawals of amounts
from a Servicing Account may be made only to (i) effect payment of taxes,
assessments, hazard insurance premiums, and comparable items in a manner and
at
a time that assures that the lien priority of the Mortgage is not jeopardized
(or, with respect to the payment of taxes, in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure as
a
result of a tax lien); (ii) reimburse the Servicer (or a Sub-Servicer to the
extent provided in the related Sub-Servicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.14 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances
in
the Servicing Account; or (v) clear and terminate the Servicing Account at
the
termination of the Servicer’s obligations and responsibilities in respect of the
Mortgage Loans under this Servicing Agreement in accordance with Section 7.08.
As part of its servicing duties, the Servicer or Sub-Servicers shall pay to
the
Mortgagors interest on funds in the Servicing Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their own funds,
without any reimbursement therefor.
Section
3.10. Collection
Account and Payment Account.
(a) On
behalf
of the Trust Estate, the Servicer shall establish and maintain, or cause to
be
established and maintained, one or more accounts (such account or accounts,
the
“Collection Account”), held in trust for the benefit of the Owner Trustee, the
Indenture Trustee and the Noteholders. On behalf of the Trust, the Servicer
shall deposit or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer’s receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the Servicer’s receipt thereof, as and when received or as otherwise
required hereunder, the following payments and collections received or made
by
it subsequent to the Cut-off Date (other than in respect of principal or
interest on the related Mortgage Loans due on or before the Cut-off Date),
or
payments (other than Principal Prepayments) received by it on or prior to the
Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee) on each
Mortgage Loan;
(iii) all
Insurance Proceeds, Liquidation Proceeds (other than proceeds collected in
respect of any particular REO Property and amounts paid in connection with
the
redemption of the Notes pursuant to Section 8.07 of the Indenture) and
Subsequent Recoveries;
(iv) any
amounts required to be deposited pursuant to Section 3.12 in connection with
any
losses realized on Permitted Investments with respect to funds held in the
Collection Account;
(v) any
amounts required to be deposited by the Servicer pursuant to the second
paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all
proceeds of any Mortgage Loan repurchased or purchased in accordance with
Section 3.1 of the Mortgage Loan Purchase Agreement or Section
3.16;
(vii) all
amounts required to be deposited in connection with shortfalls in principal
amount of Qualified Substitute Mortgage Loans pursuant to Section 2.03(b)
hereof; and
(viii) all
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans.
The
foregoing requirements for deposit in the Collection Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges, modification or
assumption fees, or insufficient funds charges need not be deposited by the
Servicer in the Collection Account and may be retained by the Servicer as
additional compensation. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may
at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) On
behalf
of the Trust Estate, the Servicer shall deliver to the Indenture Trustee in
immediately available funds for deposit in the Payment Account by 1:00 p.m.
New
York time (i) on the Servicer Remittance Date, that portion of the Available
Payment Amount (calculated without regard to the references in clause (2) of
the
definition thereof to amounts that may be withdrawn from the Payment Account)
for the related Payment Date then on deposit in the Collection Account and
the
amount of all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.26 and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence,
the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of “Eligible
Account.” If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of “Eligible Account,” the Servicer shall, by 1:00 p.m. New York time on such
Business Day, withdraw from the Collection Account any and all amounts payable
or reimbursable to the Depositor, the Servicer, the Servicer, the Owner Trustee,
the Indenture Trustee, the Originator, the Seller or any Sub-Servicer pursuant
to Section 3.11 and shall pay such amounts to the Persons entitled
thereto.
(c) Funds
in
the Collection Account and the Payment Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Indenture Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. The Indenture Trustee shall give notice to the Servicer and the
Depositor of the location of the Payment Account when established and prior
to
any change thereof.
(d) Funds
held in the Collection Account at any time may be delivered by the Servicer
to
the Indenture Trustee for deposit in an account (which may be the Payment
Account and must satisfy the standards for the Payment Account as set forth
in
the definition thereof) and for all purposes of this Servicing Agreement shall
be deemed to be a part of the Collection Account (and in such event, the
Servicer shall provide the Indenture Trustee with written instructions regarding
the investment of such funds); provided, however, that the Indenture Trustee
shall have the sole authority to withdraw any funds held pursuant to this
subsection (d). In the event the Servicer shall deliver to the Indenture Trustee
for deposit in the Payment Account any amount not required to be deposited
therein, it may at any time request in writing that the Indenture Trustee
withdraw such amount from the Payment Account and remit to it any such amount,
any provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Indenture Trustee from time to time for deposit, and the
Indenture Trustee shall so deposit, in the Payment Account:
(i) any
P&I Advances, as required pursuant to Section 4.01;
(ii) any
amounts required to be deposited pursuant to Section 3.23(d) or (f) in
connection with any REO Property; and
(iii) any
amounts required to be deposited pursuant to Section 3.24 in connection with
any
Prepayment Interest Shortfall.
(e) The
Servicer shall deposit in the Collection Account any amounts required to be
deposited pursuant to Section 3.12(b) in connection with losses realized on
Permitted Investments with respect to funds held in the Collection Account
(and
the Payment Account to the extent that funds therein are deemed to be part
of
the Collection Account).
Section
3.11. Withdrawals
from the Collection Account and Payment Account.
(a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) to
remit
to the Indenture Trustee for deposit in the Payment Account the amounts required
to be so remitted pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject
to Section 3.16(d), to reimburse the Servicer for P&I Advances, but only to
the extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments on Mortgage Loans with respect
to
which such P&I Advances were made in accordance with the provisions of
Section 4.01;
(iii) subject
to Section 3.16(d), to pay the Servicer or any Sub-Servicer, as applicable,
(a)
any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances with respect
to each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received
with
respect to such Mortgage Loan and (c) any Nonrecoverable Servicing Advances
with
respect to the final liquidation of a Mortgage Loan, but only to the extent
that
Late Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Servicer or
any
Sub-Servicer for Servicing Advances;
(iv) to
pay to
the Servicer as servicing compensation (in addition to the Servicing Fee) on
the
Servicer Remittance Date any interest or investment income earned on funds
deposited in the Collection Account;
(v) to
pay to
the Servicer, the Depositor, the Originator or the Seller, as the case may
be,
with respect to each Mortgage Loan that has previously been purchased or
replaced pursuant to Section 3.1 of the Mortgage Loan Purchase Agreement or
Section 3.16(c) all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to
reimburse the Servicer for any P&I Advance previously made which the
Servicer has determined to be a Nonrecoverable P&I Advance in accordance
with the provisions of Section 4.01;
(vii) to
reimburse the Servicer or the Depositor for expenses incurred by or reimbursable
to the Servicer or the Depositor, as the case may be, pursuant to Section
3.02(b) and Section 5.03;
(viii) to
reimburse the Servicer or Indenture Trustee for expenses reasonably incurred
in
connection with any breach or defect giving rise to the purchase obligation
under Section 3.1 of the Mortgage Loan Purchase Agreement and Section 2.03
hereof, including any expenses arising out of the enforcement of the purchase
obligation;
(ix) to
pay,
or to reimburse the Servicer for Servicing Advances in respect of, expenses
incurred in connection with any Mortgage Loan pursuant to Section 3.16(b);
and
(x) to
clear
and terminate the Collection Account pursuant to Section 7.08.
The
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The Servicer
shall provide written notification to the Indenture Trustee, on or prior to
the
next succeeding Servicer Remittance Date, upon making any withdrawals from
the
Collection Account pursuant to subclauses (vi) and (vii) above; provided that
an
Officers’ Certificate in the form described under Section 4.01(d) shall suffice
for such written notification to the Indenture Trustee in respect of clause
(vi)
hereof.
(b) The
Indenture Trustee shall, from time to time, make withdrawals from the Payment
Account, for any of the following purposes, without priority:
(i) to
make
payments to Noteholders in accordance with Section 4.01;
(ii) to
pay
and reimburse itself and the Owner Trustee amounts to which it or the Owner
Trustee is entitled pursuant to Section 6.07 of the Indenture;
(iii) to
reimburse itself pursuant to Section 6.02;
(iv) to
pay to
an Advancing Person reimbursements for P&I Advances and/or Servicing
Advances pursuant to Section 3.26; and
(v) to
clear
and terminate the Payment Account pursuant to Section 4.10 of the
Indenture.
Section
3.12. Investment
of Funds in the Collection Account and the Payment Account.
(a) The
Servicer may direct any depository institution maintaining the Collection
Account or any REO Account (for purposes of this Section 3.12, an “Investment
Account”) to invest the funds in such Investment Account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Servicing Agreement, if a Person other than the
Indenture Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to
this
Servicing Agreement, if the Indenture Trustee is the obligor thereon. Amounts
in
the Payment Account shall be held uninvested unless directed otherwise pursuant
to Section 3.10(d) of the Servicing Agreement. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds
in
an Investment Account shall be made in the name of the Indenture Trustee for
the
benefit of the Noteholders. The Indenture Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Collection Account and any income and gain realized thereon) over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Indenture Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Indenture Trustee or its nominee. In the event amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:
(x) consistent
with any notice required to be given thereunder, demand that payment thereon
be
made on the last day such Permitted Investment may otherwise mature hereunder
in
an amount equal to the lesser of (1) all amounts then payable thereunder and
(2)
the amount required to be withdrawn on such date; and
(y) demand
payment of all amounts due thereunder promptly upon determination by a
Responsible Officer of the Indenture Trustee that such Permitted Investment
would not constitute a Permitted Investment in respect of funds thereafter
on
deposit in the Investment Account.
(b) All
income and gain realized from the investment of funds deposited in the
Collection Account and Payment Account, solely to the extent that the Servicer
gives the Indenture Trustee investment directions with respect to the funds
in
the Payment Account pursuant to Section 3.10(d), and any REO Account held by
or
on behalf of the Servicer, shall be for the benefit of the Servicer and shall
be
subject to its withdrawal in accordance with Section 3.11 or Section 3.23,
as
applicable. The Servicer shall deposit in the Collection Account or any REO
Account, as applicable, the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.
(c) Except
as
otherwise expressly provided in this Servicing Agreement, if any default occurs
in the making of a payment due under any Permitted Investment, or if a default
occurs in any other performance required under any Permitted Investment (of
which a Responsible Officer of the Indenture Trustee obtains actual knowledge),
the Indenture Trustee may and, subject to Section 6.01 of the Indenture, upon
the request of the Holders of Notes representing more than 50% of the Voting
Rights allocated to any Class of Notes, shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(d) The
Indenture Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Indenture Trustee’s economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable to the Indenture Trustee pursuant to Section 3.11 or
3.12.
Section
3.13. [Reserved].
Section
3.14. Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.
(a) The
Servicer shall cause to be maintained for each Mortgage Loan fire insurance
with
extended coverage on the related Mortgaged Property in an amount which is at
least equal to the lesser of the current principal balance of such Mortgage
Loan
and the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis,
in
each case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal
to
the lesser of (i) the maximum insurable value of the improvements which are
a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property, plus accrued interest
at
the Mortgage Rate and related Servicing Advances. The Servicer will comply
in
the performance of this Servicing Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to
be
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11, if received in respect of a Mortgage Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.23, if
received in respect of an REO Property. Any cost incurred by the Servicer in
maintaining any such insurance shall not, for the purpose of calculating
payments to Noteholders, be added to the unpaid Stated Principal Balance of
the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so
permit. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property or REO Property
is
at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards and flood insurance
has been made available, the Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that
the
area in which such Mortgaged Property is located is participating in such
program).
In
the
event that the Servicer shall obtain and maintain a blanket policy with an
insurer having a General Policy Rating of A:X or better in Best’s Key Rating
Guide (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed
to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.14, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.14, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Indenture Trustee and Noteholders, claims under any such blanket policy in
a
timely fashion in accordance with the terms of such policy.
(b) The
Servicer shall keep in force during the term of this Servicing Agreement a
policy or policies of insurance covering errors and omissions for failure in
the
performance of the Servicer’s obligations under this Servicing Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity
bond
in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, unless the Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall be deemed to have complied with this
provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days prior written notice to the Indenture Trustee. The Servicer
shall also cause each Sub-Servicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such
requirements.
Section
3.15. Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
The
Servicer will, to the extent it has knowledge of any conveyance or prospective
conveyance of any Mortgaged Property by any Mortgagor (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale”
clause, if any, applicable thereto; provided, however, that the Servicer shall
not be required to take such action if in its sole business judgment the
Servicer believes it is not in the best interests of the Trust Estate and shall
not exercise any such rights if prohibited by law from doing so. If the Servicer
reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause, or if any of the other conditions set forth in the proviso
to the preceding sentence apply, the Servicer will enter into an assumption
and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. The Servicer is also authorized
to
enter into a substitution of liability agreement with such person, pursuant
to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Originator and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with
any
assumption or substitution, the Servicer shall apply the Originator’s
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or
enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited
to
the related Mortgage Rate and the amount of the Monthly Payment) may be amended
or modified, except as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Indenture Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Indenture Trustee the executed original of such substitution, modification
or
assumption agreement, which document shall be added to the related Mortgage
File
and shall, for all purposes, be considered a part of such Mortgage File to
the
same extent as all other documents and instruments constituting a part
thereof.
Notwithstanding
the foregoing paragraph or any other provision of this Servicing Agreement,
the
Servicer shall not be deemed to be in default, breach or any other violation
of
its obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or by the terms of the Mortgage Note or any assumption which
the Servicer may be restricted by law from preventing, for any reason whatever.
For purposes of this Section 3.15, the term “assumption” is deemed to also
include a sale (of the Mortgaged Property) subject to the Mortgage that is
not
accompanied by an assumption or substitution of liability
agreement.
Section
3.16. Realization
Upon Defaulted Mortgage Loans.
(a) The
Servicer shall exercise its discretion, consistent with customary servicing
procedures and the terms of this Servicing Agreement, with respect to the
enforcement and servicing of defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest with respect thereto, including
but not limited to the modification of such Mortgage Loan, or foreclosure upon
the related Mortgaged Property and disposition thereof.
In
furtherance of the foregoing, the Servicer shall use its best efforts,
consistent with Accepted Servicing Practices, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs
and
expenses will be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.11 and Section 3.23. The foregoing is subject to
the
provision that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Servicer shall not be required to expend
its
own funds toward the restoration of such property unless it shall determine
in
its discretion that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan after reimbursement to itself for such
expenses.
(b) Notwithstanding
the foregoing provisions of this Section 3.16 or any other provision of this
Servicing Agreement, with respect to any Mortgage Loan as to which the Servicer
has received actual notice of, or has actual knowledge of, the presence of
any
toxic or hazardous substance on the related Mortgaged Property, the Servicer
shall not, on behalf of the Issuing Entity either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, or take any other action with respect
to,
such Mortgaged Property, if, as a result of any such action, the Indenture
Trustee, the Trust Estate or the Noteholders would be considered to hold title
to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of
such Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer has also previously determined,
based
on its reasonable judgment and a report prepared by an Independent Person who
regularly conducts environmental audits using customary industry standards,
that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Trust Estate to
take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of the Trust Estate to take such actions with respect to
the
affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 3.16 shall be
advanced by the Servicer, subject to the Servicer’s right to be reimbursed
therefor from the Collection Account as provided in Section 3.11(a)(ix), such
right of reimbursement being prior to the rights of Noteholders to receive
any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
If
the
Servicer determines, as described above, that it is in the best economic
interest of the Trust Estate to take such actions as are necessary to bring
any
such Mortgaged Property into compliance with applicable environmental laws,
or
to take such action with respect to the containment, clean-up or remediation
of
hazardous substances, hazardous materials, hazardous wastes or petroleum-based
materials affecting any such Mortgaged Property, then the Servicer shall take
such action as it deems to be in the best economic interest of the Trust Estate;
provided that any amounts disbursed by the Servicer pursuant to this Section
3.16(b) shall constitute Servicing Advances, subject to Section 4.01(d). The
cost of any such compliance, containment, cleanup or remediation shall be
advanced by the Servicer, subject to the Servicer’s right to be reimbursed
therefor from the Collection Account as provided in Section 3.11(a)(iii) and
(a)(ix), such right of reimbursement being prior to the rights of Noteholders
to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.
(c) The
Servicer may at its option, on behalf of the Issuing Entity, purchase from
the
Issuing Entity any Mortgage Loan or related REO Property that is 90 days or
more
delinquent, which the Servicer determines in good faith will otherwise become
subject to foreclosure proceedings (evidence of such determination to be
delivered in writing to the Indenture Trustee, in form and substance
satisfactory to the Indenture Trustee prior to purchase), at a price equal
to
the Purchase Price; provided, however, that the Servicer shall purchase any
such
Mortgage Loans or related REO Properties on the basis of delinquency, purchasing
the most delinquent Mortgage Loans or related REO Properties first. The Purchase
Price for any Mortgage Loan or related REO Property purchased hereunder shall
be
deposited in the Collection Account, and the Indenture Trustee, upon receipt
of
written certification from the Servicer of such deposit, shall release or cause
to be released to the Servicer the related Mortgage File and the Indenture
Trustee shall execute and deliver such instruments of transfer or assignment,
in
each case without recourse, as the Servicer shall furnish and as shall be
necessary to vest in the Servicer title to any Mortgage Loan or related REO
Property released pursuant hereto.
(d) Proceeds
received in connection with any Final Recovery Determination, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Liquidation
Proceeds or Subsequent Recoveries, in respect of any Mortgage Loan, will be
applied in the following order of priority: first, to reimburse the Servicer
or
any Sub-Servicer for any related unreimbursed Servicing Advances and P&I
Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Payment Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan.
If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
(e) The
Holder of the Certificates will have the option to purchase, at any one time,
1.0% (and in any case, at least 5 Mortgage Loans) of the Mortgage Loans, by
aggregate Stated Principal Balance of the Mortgage Loans as of such date, at
a
purchase price equal to the greater of (A) the aggregate Purchase Price of
such
Mortgage Loans and (B) the aggregate fair market value of such Mortgage Loans.
The Mortgage Loans that may be purchased by the Holder of the Trust Certificates
pursuant to this paragraph will be selected by the Servicer in its sole
discretion. If at any time the Holder of the Certificates exercises such option,
it shall immediately notify or cause to be notified the Indenture Trustee by
a
certification in the form of Exhibit B (which certification shall include a
statement to the effect that all amounts required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Indenture Trustee shall
promptly release the related Mortgage Files to the Holder of the Trust
Certificates.
Section
3.17. Trustee
to Cooperate; Release of Mortgage Files.
(a) Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full shall be escrowed in a manner customary for
such purposes, the Servicer will immediately notify or cause to be notified
the
Indenture Trustee by a certification in the form of Exhibit B (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of
the
Mortgage File. Upon receipt of such certification and request, the Indenture
Trustee shall promptly release and deliver the related Mortgage File to the
Servicer (at the expense of the Servicer and at no cost to the Indenture Trustee
or the Trust Estate). No expenses incurred in connection with any instrument
of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Payment Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, including, for this purpose, collection under any insurance policy
relating to the Mortgage Loans, the Indenture Trustee shall, upon any request
made by or on behalf of the Servicer and delivery to the Indenture Trustee
of a
Request for Release in the form of Exhibit B, release the related Mortgage
File
to the Servicer, and the Indenture Trustee shall, at the direction of the
Servicer, execute such documents as shall be necessary to the prosecution of
any
such proceedings. Such Request for Release shall obligate the Servicer to return
each and every document previously requested from the Mortgage File to the
Indenture Trustee when the need therefor by the Servicer no longer exists,
unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account
or
the Mortgage File or such document has been delivered to an attorney, or to
a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure
of
the Mortgaged Property either judicially or non-judicially, and the Servicer
has
delivered, or caused to be delivered, to the Indenture Trustee an additional
Request for Release certifying as to such liquidation or action or proceedings.
Upon the request of the Indenture Trustee, the Servicer shall provide notice
to
the Indenture Trustee of the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of
such
delivery. Upon receipt of a certificate of a Servicing Officer stating that
such
Mortgage Loan was liquidated and that all amounts received or to be received
in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, any outstanding Requests for Release with respect to such
Mortgage Loan shall be released by the Indenture Trustee to the Servicer or
its
designee.
(c) Upon
written certification of a Servicing Officer, the Indenture Trustee shall
execute and deliver to the Servicer or the Sub-Servicer, as the case may be,
any
court pleadings, requests for trustee’s sale or other documents necessary to the
foreclosure or trustee’s sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note
or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies
or
rights provided by the Mortgage Note or Mortgage or otherwise available at
law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Indenture Trustee and a statement
as
to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Indenture Trustee will not invalidate or otherwise
affect the lien of the Mortgage, except for the termination of such a lien
upon
completion of the foreclosure or trustee’s sale.
Section
3.18. Servicing
Compensation.
As
compensation for the activities of the Servicer hereunder, the Servicer shall
be
entitled to the Servicing Fee with respect to each Mortgage Loan payable solely
from payments of interest in respect of such Mortgage Loan, subject to Section
3.24. In addition, the Servicer shall be entitled to recover unpaid Servicing
Fees out of Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries
to
the extent permitted by Section 3.11(a)(iii) and out of amounts derived from
the
operation and sale of an REO Property to the extent permitted by Section 3.23.
Except as provided in Sections 3.26, the right to receive the Servicing Fee
may
not be transferred in whole or in part except in connection with the transfer
of
all of the Master Servicer’s responsibilities and obligations under this
Servicing Agreement; provided, however, that the Master Servicer may pay from
the servicing fees and other compensation to it hereunder any amounts due to
a
Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section
3.02.
Additional
servicing compensation in the form of assumption or modification fees, late
payment charges, insufficient funds charges or otherwise (subject to Section
3.24 and other than Prepayment Charges) shall be retained by the Servicer only
to the extent such fees or charges are received by the Servicer. The Servicer
shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the
Collection Account and pursuant to Section 3.23(b) to withdraw from any REO
Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required
by
Section 3.14, to the extent such premiums are not paid by the related Mortgagors
or by a Sub-Servicer, servicing compensation of each Sub-Servicer, and to the
extent provided herein in Section 8.05, the expenses of the Indenture Trustee)
and shall not be entitled to reimbursement therefor except as specifically
provided herein.
Section
3.19. Reports
to the Indenture Trustee and Others; Collection Account
Statements.
Not
later
than twenty days after each Payment Date, the Servicer shall forward to the
Indenture Trustee (upon the Indenture Trustee’s request) and the Depositor the
most current available bank statement for the Collection Account. Copies of
such
statement shall be provided by the Indenture Trustee to any Noteholder and
to
any Person identified to the Indenture Trustee as a prospective transferee
of a
Note, upon request at the expense of the requesting party, provided such
statement is delivered by the Servicer to the Indenture Trustee.
In
addition, on each Payment Date, the Servicer shall forward to the Rating
Agencies and the Indenture Trustee a report setting forth the percentage of
Mortgage Loans that are 30 or more days delinquent, in foreclosure, have been
converted to REO Properties or have been discharged by reason of
bankruptcy.
Section
3.20. Statement
as to Compliance.
The
Servicer will deliver to the Indenture Trustee, not later than March
15th
of each
calendar year beginning in 2007, an Officers’ Certificate (an “Annual Statement
of Compliance”) stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers’ supervision and (ii) to
the best of such officers’ knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement in all material respects
throughout such year, 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 of cure provisions thereof. Such Annual
Statement of Compliance shall contain no restrictions or limitations on its
use.
The Servicer shall deliver a similar Annual Statement of Compliance by any
Sub-Servicer to which the Servicer has delegated any servicing responsibilities
with respect to the Mortgage Loans, to the Indenture Trustee as described above
as and when required with respect to the Servicer.
If
the
Servicer cannot deliver the related Annual Statement of Compliance by March
15th
of such
year, the Depositor may permit a cure period for the Servicer to deliver such
Annual Statement of Compliance, but in no event later than March 20th
of such
year or if March 20th
is not a
Business Day, the preceding Business Day.
Failure
of the Servicer to timely comply with this Section 3.20 (taking into account
the
cure period if permitted as set forth in the preceding paragraph) shall be
deemed a Servicer Event of Default, and the Indenture Trustee may (with
the
consent of the Depositor),
in
addition to whatever rights the Indenture Trustee may have under this Agreement
and at law or equity or to damages, including injunctive relief and specific
performance, give notice to Noteholders that they have ten Business Days to
object. If no such objection is received, the Indenture Trustee shall
immediately terminate all the rights and obligations of the Servicer under
this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same (other than as provided herein with
respect to ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances or accrued and
unpaid Servicing Fees). This paragraph shall supercede any other provision
in
this Agreement or any other agreement to the contrary.
The
Servicer shall indemnify and hold harmless the Depositor and the Indenture
Trustee, as applicable and their respective officers, directors and Affiliates
from and against any actual losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other
costs
and expenses that such Person may sustain based upon a breach of the Servicer’s
obligations under this Section 3.20.
Section
3.21. Independent
Public Accountants’ Servicing Report.
Pursuant
to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB,
the Servicer shall deliver to the Indenture Trustee on or before March
15th
of each
calendar year beginning in 2007, a report regarding the Servicer’s assessment of
compliance (an “Assessment of Compliance”) with the applicable Servicing
Criteria (as set forth in Exhibit E) during the preceding calendar year. The
Assessment of Compliance must contain the following:
(a) A
statement by such officer of its responsibility for assessing compliance with
the Servicing Criteria applicable to the Servicer;
(b) A
statement by such officer that such officer used the Servicing Criteria, and
which will also be attached to the Assessment of Compliance, to assess
compliance with the Servicing Criteria applicable to the Servicer;
(c) An
assessment by such officer of the Servicer’s compliance with the applicable
Servicing Criteria for the period consisting of the preceding calendar year,
including disclosure of any material instance of noncompliance with respect
thereto during such period, which assessment shall be based on the activities
it
performs with respect to asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type as the Mortgage
Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the Servicer’s Assessment of Compliance for the period consisting of
the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Servicer, which statement shall be based on the activities it performs
with
respect to asset-backed securities transactions taken as a whole involving
the
Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit E hereto which are indicated as applicable to the Servicer.
On
or
before March 15th
of each
calendar year beginning in 2007, the Servicer shall furnish to the Indenture
Trustee a report (an “Attestation Report”) by a registered public accounting
firm that attests to, and reports on, the Assessment of Compliance made by
the
Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122(b) of Regulation AB, which Attestation Report must be made in accordance
with standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board.
The
Servicer shall cause the Servicer, any Sub-Servicer, and each subcontractor
determined by the Servicer to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, to deliver to the Indenture
Trustee and the Depositor an Assessment of Compliance and Attestation Report
as
and when provided above.
Such
Assessment of Compliance, as to any Sub-Servicer, shall address each of the
Servicing Criteria applicable to the Sub-Servicer. Notwithstanding the
foregoing, as to any subcontractor determined by the Servicer to be
“participating in the servicing function,” an Assessment of Compliance is not
required to be delivered unless it is required as part of a Form 10-K with
respect to the Trust.
If
the
Servicer cannot deliver any Assessment of Compliance or Attestation Report
by
March 15th
of such
year, the Depositor, may permit a cure period for the Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than
March
20th
of such
year or if March 20th
is not a
Business Day, the preceding Business Day.
Failure
of the Servicer to timely comply with this Section 3.21 (taking into account
the
cure period if permitted as set forth in the preceding paragraph) shall be
deemed a Servicer Event of Default, and the Indenture Trustee may (with the
consent of the Depositor), in addition to whatever rights the Indenture Trustee
may have under this Agreement and at law or equity or to damages, including
injunctive relief and specific performance, give notice to Noteholders that
they
have ten Business Days to object. If no such objection is received, the
Indenture Trustee shall immediately terminate all the rights and obligations
of
the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Servicer for the same (other than
as
provided herein with respect to ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing
Advances or accrued and unpaid Servicing Fees). This paragraph shall supercede
any other provision in this Agreement or any other agreement to the
contrary.
The
Indenture Trustee shall also provide an Assessment of Compliance (with respect
to items (a) - (d) but not (e) above) and Attestation Report, as and when
provided above, which shall at a minimum address each of the Servicing Criteria
specified on Exhibit E hereto which are indicated as applicable to the
“indenture trustee”. Notwithstanding the foregoing, as to any indenture trustee,
an Assessment of Compliance is not required to be delivered unless it is
required as part of a Form 10-K with respect to the Trust.
The
Servicer shall indemnify and hold harmless the Depositor and the Indenture
Trustee and their respective officers, directors and Affiliates against and
from
any actual losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
that such Person may sustain based upon a breach of the Servicer’s obligations,
as applicable under this Section 3.21.
The
Indenture Trustee shall indemnify and hold harmless the Depositor and the
Servicer and their respective officers, directors and Affiliates against and
from any actual losses, damages, penalties, fines, forfeitures, reasonable
and
necessary legal fees and related costs, judgments and other costs and expenses
that such Person may sustain based upon the Indenture Trustee's failure to
deliver an Assessment of Compliance and Attestation Report required by this
Section 3.21.
Section
3.22. Access
to Certain Documentation.
The
Servicer shall provide to the Office of Thrift Supervision, the FDIC, and any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Noteholder or Note Owner, access to the
documentation in the Servicer’s possession regarding the Mortgage Loans required
by applicable laws and regulations. Such access shall be afforded without
charge, but only upon reasonable request and during normal business hours at
the
offices of the Servicer designated by it. In addition, access to the
documentation in the Servicer’s possession regarding the Mortgage Loans will be
provided to any Noteholder or Note Owner, the Indenture Trustee, the Owner
Trustee and to any Person identified to the Servicer as a prospective transferee
of a Note; provided, however, that providing access to such Person will not
violate any applicable laws, upon reasonable request during normal business
hours at the offices of the Servicer designated by it at the expense of the
Person requesting such access.
Section
3.23. Title,
Management and Disposition of REO Property.
(a) The
deed
or certificate of sale of any REO Property shall be taken in the name of the
Indenture Trustee, or its nominee, in trust for the benefit of the Noteholders.
The Servicer, on behalf of the Issuing Entity, shall either sell any REO
Property prior to the end of the third taxable year after the Issuing Entity
acquires ownership of such REO Property for purposes of the Code or request
from
the Internal Revenue Service, no later than 60 days before the day on which
the
three-year grace period would otherwise expire, an extension of the three-year
grace period. The Servicer shall manage, conserve, protect and operate each
REO
Property for the Noteholders solely for the purpose of its prompt disposition
and sale in a manner which does not cause such REO Property to fail to qualify
as “foreclosure property” within the meaning of the Code.
(b) The
Servicer shall segregate and hold all funds collected and received in connection
with the operation of any REO Property separate and apart from its own funds
and
general assets and shall establish and maintain, or cause to be established
and
maintained, with respect to REO Properties, an account held in trust for the
Indenture Trustee for the benefit of the Noteholders (the “REO Account”), which
shall be an Eligible Account. The Servicer shall be permitted to allow the
Collection Account to serve as the REO Account, subject to separate ledgers
for
each REO Property. The Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The
Servicer shall have the sole discretion to determine whether an immediate sale
of an REO Property or continued management of such REO Property is in the best
interests of the Noteholders. In furtherance of the foregoing, the Servicer
shall have full power and authority, subject only to the specific requirements
and prohibitions of this Servicing Agreement, to do any and all things in
connection with any REO Property as are consistent with the manner in which
the
Servicer manages and operates similar property owned by the Servicer or any
of
its Affiliates, all on such terms and for such period as the Servicer deems
to
be in the best interests of Noteholders. In connection therewith, the Servicer
shall deposit, or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer’s receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Servicer’s receipt thereof, all revenues received by it with respect
to an REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property including, without
limitation:
(i) all
insurance premiums due and payable in respect of such REO Property;
(ii) all
real
estate taxes and assessments in respect of such REO Property that may result
in
the imposition of a lien thereon; and
(iii) all
costs
and expenses necessary to maintain such REO Property.
To
the
extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance from
its own funds such amount as is necessary for such purposes if, but only if,
the
Servicer would make such advances if the Servicer owned the REO Property and
if
in the Servicer’s judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.
Notwithstanding
the foregoing, neither the Servicer nor the Indenture Trustee
shall:
(i) authorize
the Issuing Entity to enter into, renew or extend any New Lease with respect
to
any REO Property, if the New Lease by its terms will give rise to any income
that does not constitute Rents from Real Property;
(ii) authorize
any amount to be received or accrued under any New Lease other than amounts
that
will constitute Rents from Real Property;
(iii) authorize
any construction on any REO Property, other than the completion of a building
or
other improvement thereon, and then only if more than ten percent of the
construction of such building or other improvement was completed before default
on the related Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) authorize
any Person to Directly Operate any REO Property on any date more than 90 days
after its date of acquisition by the Issuing Entity;
unless,
in any such case, the Servicer has obtained an Opinion of Counsel, provided
to
the Indenture Trustee to the effect that such action will not cause such REO
Property to fail to qualify as “foreclosure property” within the meaning of the
Code at any time that it is held by the Issuing Entity, in which case the
Servicer may take such actions as are specified in such Opinion of
Counsel.
The
Servicer may contract with any Independent for the operation and management
of
any REO Property, provided that:
(i) the
terms
and conditions of any such contract shall not be inconsistent
herewith;
(ii) any
such
contract shall require, or shall be administered to require, that the
Independent contractor pay all costs and expenses incurred in connection with
the operation and management of such REO Property, including those listed above
and remit all related revenues (net of such costs and expenses) to the Servicer
as soon as practicable, but in no event later than thirty days following the
receipt thereof by such Independent contractor;
(iii) none
of
the provisions of this Section 3.23(c) relating to any such contract or to
actions taken through any such Independent contractor shall be deemed to relieve
the Servicer of any of its duties and obligations to the Indenture Trustee
on
behalf of the Noteholders with respect to the operation and management of any
such REO Property; and
(iv) the
Servicer shall be obligated with respect thereto to the same extent as if it
alone were performing all duties and obligations in connection with the
operation and management of such REO Property.
The
Servicer shall be entitled to enter into any agreement with any Independent
contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Servicer by such Independent contractor,
and nothing in this Servicing Agreement shall be deemed to limit or modify
such
indemnification. The Servicer shall be solely liable for all fees owed by it
to
any such Independent contractor, irrespective of whether the Servicer’s
compensation pursuant to Section 3.18 is sufficient to pay such fees; provided,
however, that to the extent that any payments made by such Independent
contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the
Servicer.
(d) In
addition to the withdrawals permitted under Section 3.23(c), the Servicer may
from time to time make withdrawals from the REO Account for any REO Property:
(i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect of the
related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for
unreimbursed Servicing Advances and P&I Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit
into
the Payment Account in accordance with Section 3.10(d)(ii), for payment on
the
related Payment Date in accordance with Section 3.05 of the Indenture, the
income from the related REO Property received during the prior calendar month,
net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).
(e) Subject
to the time constraints set forth in Section 3.23(a), each REO Disposition
shall
be carried out by the Servicer at such price and upon such terms and conditions
as the Servicer shall deem necessary or advisable, as shall be normal and usual
in its Accepted Servicing Practices.
(f) The
proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any payment
or reimbursement to the Servicer or any Sub-Servicer as provided above, shall
be
deposited in the Payment Account in accordance with Section 3.10(d)(ii) on
the
Servicer Remittance Date in the month following the receipt thereof for payment
on the related Payment Date in accordance with Section 3.05 of the Indenture.
Any REO Disposition shall be for cash only.
Section
3.24. Obligations
of the Servicer in Respect of Prepayment Interest Shortfalls.
The
Servicer shall deliver to the Indenture Trustee for deposit into the Payment
Account by 1:00 p.m. New York time on the Servicer Remittance Date from its
own
funds an amount equal to the lesser of (i) the aggregate of the Prepayment
Interest Shortfalls for the related Payment Date resulting from full or partial
Principal Prepayments during the related Prepayment Period and (ii) the
aggregate Servicing Fee for the related Prepayment Period. Any amounts paid
by
the Servicer pursuant to this Section 3.24 shall not be reimbursed by the Trust
Estate.
Section
3.25. Obligations
of the Servicer in Respect of Mortgage Rates and Monthly
Payments.
In
the
event that a shortfall in any collection on or liability with respect to any
Mortgage Loan results from or is attributable to adjustments to Mortgage Rates,
Monthly Payments or Stated Principal Balances that were made by the Servicer
in
a manner not consistent with the terms of the related Mortgage Note and this
Servicing Agreement, the Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Indenture Trustee for deposit in the Payment
Account from its own funds the amount of any such shortfall and shall indemnify
and hold harmless the Trust Estate, the Indenture Trustee, the Servicer, the
Depositor and any successor servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Servicing
Agreement. Notwithstanding the foregoing, this Section 3.25 shall not limit
the
ability of the Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by
law.
Section
3.26. Advance
Facility.
(a) Either
(i) the Servicer or (ii) the Indenture Trustee, on behalf of the Trust Estate,
with the consent of the Servicer, is hereby authorized to enter into a facility
with any Person which provides that such Person (an “Advancing Person”) may fund
P&I Advances and/or Servicing Advances to the Trust Estate under this
Servicing Agreement, although no such facility shall reduce or otherwise affect
the Servicer’s obligation to fund such P&I Advances and/or Servicing
Advances. If the Servicer enters into such an Advance Facility pursuant to
this
Section 3.26, upon reasonable request of the Advancing Person, the Indenture
Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advance Facility. If the Indenture Trustee
enters into such an Advance Facility pursuant to this Section 3.26, the Servicer
shall also be a party to such Advance Facility. To the extent that an Advancing
Person funds any P&I Advance or any Servicing Advance and the Servicer
provides the Indenture Trustee with an Officers’ Certificate that such Advancing
Person is entitled to reimbursement, such Advancing Person shall be entitled
to
receive reimbursement pursuant to this Servicing Agreement for such amount
to
the extent provided in Section 3.26(b). Such Officers’ Certificate must specify
the amount of the reimbursement, the Section of this Servicing Agreement that
permits the applicable P&I Advance or Servicing Advance to be reimbursed and
the section(s) of the Advance Facility that entitle the Advancing Person to
request reimbursement from the Indenture Trustee, rather than the Servicer
or
proof of a Servicer Event of Default under the Advance Facility. The Indenture
Trustee shall have no duty or liability with respect to any calculation of
any
reimbursement to be paid to an Advancing Person and shall be entitled to rely
without independent investigation on the Advancing Person’s notice provided
pursuant to this Section 3.26. An Advancing Person whose obligations hereunder
are limited to the funding of P&I Advances and/or Servicing Advances shall
not be required to meet the qualifications of the Servicer or a Sub-Servicer
pursuant to Section 3.02 hereof and will not be deemed to be a Sub-Servicer
under this Servicing Agreement.
(b) If
an
advancing facility is entered into, then the Servicer shall not be permitted
to
reimburse itself therefor under Section 3.11(a)(ii), Section 3.11(a)(iii) and
Section 3.11(a)(vi) prior to the remittance to the Trust Estate, but instead
the
Servicer shall remit such amounts in accordance with the documentation
establishing the Advance Facility to such Advancing Person or to a trustee,
agent or custodian (an “Advance Facility Trustee”) designated by such Advancing
Person. The Indenture Trustee is hereby authorized to pay to the Advancing
Person, reimbursements for P&I Advances and Servicing Advances from the
Payment Account to the same extent the Servicer would have been permitted to
reimburse itself for such P&I Advances and/or Servicing Advances in
accordance with 3.11(a)(ii), Section 3.11(a)(iii) and Section 3.11(a)(vi),
as
the case may be, had the Servicer itself funded such P&I Advance or
Servicing Advance. The Indenture Trustee is hereby authorized to pay directly
to
the Advancing Person such portion of the Servicing Fee as the parties to any
advancing facility agree in writing.
(c) All
P&I Advances and Servicing Advances made pursuant to the terms of this
Servicing Agreement shall be deemed made and shall be reimbursed on a “first
in-first out” (FIFO) basis.
(d) Any
amendment to this Section 3.26 or to any other provision of this Servicing
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.26, including amendments
to
add provisions relating to a successor Servicer, may be entered into by the
Indenture Trustee and the Servicer without the consent of any Noteholder,
notwithstanding anything to the contrary in this Servicing
Agreement.
ARTICLE
IV
SERVICING
CERTIFICATE
Section
4.01. Remittance
Reports and P&I Advances.
(a)
On the
Business Day following each Determination Date, the Servicer shall deliver
to
the Indenture Trustee by telecopy (or by such other means as the Servicer or
the
Indenture Trustee, as the case may be, may agree from time to time) a Remittance
Report with respect to the related Payment Date. On the same date, the Servicer
shall electronically transmit (in a format acceptable to the Indenture Trustee),
a data file containing the information set forth in such Remittance Report
with
respect to the related Payment Date or if electronic transmission is not
available, the Servicer shall forward to the Indenture Trustee by overnight
mail
a computer readable magnetic tape. Such Remittance Report will include (i)
the
amount of P&I Advances to be made by the Servicer in respect of the related
Payment Date, the aggregate amount of P&I Advances outstanding after giving
effect to such P&I Advances, and the aggregate amount of Nonrecoverable
P&I Advances in respect of such Payment Date and (ii) such other information
with respect to the Mortgage Loans as the Indenture Trustee may reasonably
require to perform the calculations necessary to make the payments contemplated
by Section 3.05 of the Indenture and to prepare the statements to Noteholders
contemplated by Section 3.26 of the Indenture. The Indenture Trustee shall
not
be responsible to recompute, recalculate or verify any information provided
to
it by the Servicer.
(b) The
amount of P&I Advances to be made by the Servicer for any Payment Date shall
equal, subject to Section 4.01(d), the sum of, (i) the aggregate amount of
Monthly Payments (with each interest portion thereof net of the related
Servicing Fee), due on the related Due Date in respect of the Mortgage Loans,
which Monthly Payments were delinquent as of the close of business on the
related Determination Date and (ii) with respect to each REO Property, which
REO
Property was acquired during or prior to the related Prepayment Period and
as to
which REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the REO Imputed
Interest on such REO Property for the most recently ended calendar month, over
the net income from such REO Property transferred to the Payment Account
pursuant to Section 3.23 for payment on such Payment Date; provided, however,
that the Servicer shall not be required to make P&I Advances with respect to
Relief Act Interest Shortfalls or Prepayment Interest Shortfalls in excess
of
their respective obligations under Section 3.24.
By
1:00
p.m. New York time on the Servicer Remittance Date, the Servicer shall remit
in
immediately available funds to the Indenture Trustee for deposit in the Payment
Account 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
Payment Date either (i) from its own funds or (ii) from the Collection Account,
to the extent of funds held therein for future payment (in which case it will
cause to be made an appropriate entry in the records of the Collection Account
that amounts held for future payment have been, as permitted by this Section
4.01, used by the Servicer in discharge of any such P&I Advance) or (iii) in
the form of any combination of (i) and (ii) aggregating the total amount of
P&I Advances to be made by the Servicer with respect to the Mortgage Loans
and REO Properties. Any amounts held for future payment and so used shall be
appropriately reflected in the Servicer’s records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Payment Amount for the related Payment
Date (determined without regard to P&I Advances to be made on the Servicer
Remittance Date) shall be less than the total amount that would be paid to
the
Classes of Noteholders pursuant to Section 3.26 of the Indenture on such Payment
Date if such amounts held for future payments had not been so used to make
P&I Advances. The Indenture Trustee will provide notice to the Servicer by
telecopy by the close of business on the Business Day prior to the Payment
Date
(so long as the Indenture Trustee receives the required remittance from the
Servicer) in the event that the amount remitted by the Servicer to the Indenture
Trustee on such date is less than the amount required to be remitted by the
Servicer as set forth in the Remittance Report for the related Payment
Date.
(c) The
obligation of the Servicer to make such P&I Advances is mandatory,
notwithstanding any other provision of this Servicing Agreement but subject
to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from the Trust Estate pursuant to any applicable provision
of
this Servicing Agreement, except as otherwise provided in this
Section.
(d) Notwithstanding
anything herein to the contrary, no P&I Advance or Servicing Advance shall
be required to be made hereunder by the Servicer if such P&I Advance or
Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively. The determination by the
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
Servicing Advance or that any proposed P&I Advance or Servicing Advance, if
made, would constitute a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance, respectively, shall be evidenced by an Officers’ Certificate
of the Servicer delivered to the Depositor and the Indenture
Trustee.
Section
4.02. Exchange
Act Reporting.
(a) The
Indenture Trustee and the Servicer shall reasonably cooperate with the Depositor
in connection with the Trust’s satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(b) (i)
Within 15 days after each Payment Date, the Indenture Trustee shall, in
accordance with industry standards, file with the Securities and Exchange
Commission (the “Commission”) via the Electronic Data Gathering and Retrieval
System (“▇▇▇▇▇”), a Distribution Report on Form 10-D, signed by the Depositor,
with a copy of the monthly statement to be furnished by the Indenture Trustee
to
the Noteholders for such Payment Date. Any disclosure in addition to the monthly
statement required to be included on the Form 10-D (“Additional Form 10-D
Disclosure”) shall be determined and prepared by the entity that is indicated in
Exhibit F as the responsible entity for providing that information in an ▇▇▇▇▇
compatible format.
Within
5
calendar days after the related Determination Date, each entity that is
indicated in Exhibit F as the responsible entity for providing Additional Form
10-D Disclosure shall be required to provide to the Indenture Trustee and the
Depositor, to the extent known, in an ▇▇▇▇▇ compatible format, clearly
identifying which item of Form 10-D the information relates to, any Additional
Form 10-D Disclosure, if applicable. The Indenture Trustee shall compile the
information provided to it, prepare the Form 10-D and forward the Form 10-D
to
the Depositor for verification. The Depositor will approve, as to form and
substance, or disapprove, as the case may be, the Form 10-D. No later than
three
Business Days prior to the 15th
calendar
day after the related Payment Date, an officer of the Depositor shall sign
the
Form 10-D and return an electronic or fax copy of such signed Form 10-D (with
an
original executed hard copy to follow by overnight mail) to the Indenture
Trustee.
(ii) Within
four (4) Business Days after the occurrence of an event requiring disclosure
on
Form 8-K (each such event, a “Reportable Event”), the Depositor shall prepare
and file any Form 8-K, as required by the Exchange Act, in addition to the
initial Form 8-K in connection with the issuance of the Certificates. Any
disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K (“Form 8-K Disclosure Information”) shall be
determined and prepared by the entity that is indicated in Exhibit F as the
responsible entity for providing that information in an ▇▇▇▇▇ compatible
format.
For
so
long as the Trust is subject to the Exchange Act reporting requirements, no
later than the end of business on the second Business Day after the occurrence
of a Reportable Event, the entity that is indicated in Exhibit F as the
responsible entity for providing Form 8-K Disclosure Information shall be
required to provide to the Depositor, to the extent known, the form and
substance of any Form 8-K Disclosure Information, if applicable. The Depositor
shall compile the information provided to it, and prepare and file the Form
8-K,
which shall be signed by an officer of the Depositor.
(iii) Prior
to
January 30 of the first year in which the Indenture Trustee is able to do so
under applicable law, the Indenture Trustee shall file a Form 15 Suspension
Notice with respect to the Trust, if applicable. Prior to (x) March 15, 2007
and
(y) unless and until a Form 15 Suspension Notice shall have been filed, prior
to
March 15 of each year thereafter, the Servicer shall provide the Indenture
Trustee with an Annual Compliance Statement, together with a copy of the
Assessment of Compliance and Attestation Report to be delivered by the Servicer
pursuant to Sections 3.20 and 3.21 (including with respect to any Sub-Servicer
or any subcontractor, if required to be filed). Prior to (x) March 31, 2007
and
(y) unless and until a Form 15 Suspension Notice shall have been filed, March
31
of each year thereafter, the Indenture Trustee shall file a Form 10-K with
respect to the Trust. Such Form 10-K shall include the Assessments of
Compliance, Attestation Reports, Annual Compliance Statements and other
documentation required by Sections 3.20 and 3.21 (including with respect to
any
Sub-Servicer or subcontractor, if required to be filed) and the Form 10-K
certification in the form attached hereto as Exhibit C-1 (the “Certification”)
signed by the senior officer of the Depositor in charge of securitization.
The
Depositor (with a copy to the Indenture Trustee) shall receive the items
described in the preceding sentence no later than March 15 of each calendar
year
prior to the filing deadline for the Form 10-K. If information, data and
exhibits to be included in the Form 10-K are not so timely delivered, the
Indenture Trustee shall cooperate with the Depositor to file an amended
Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Indenture Trustee.
Prior
to
(x) March 1, 2007 and (y) unless and until a Form 15 Suspension Notice shall
have been filed, prior to March 1 of each year thereafter, each entity that
is
indicated in Exhibit F as the responsible entity for providing any disclosure
or
information in addition to that described in the preceding paragraph that is
required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall
be required to provide to the Indenture Trustee and the Depositor, in an ▇▇▇▇▇
compatible format, to the extent known, the form and substance of any Additional
Form 10-K Disclosure Information, if applicable. The Indenture Trustee shall
compile the information provided to it, prepare the Form 10-K and forward the
Form 10-K to the Depositor for verification. The Depositor will approve, as
to
form and substance, or disapprove, as the case may be and an officer of the
Depositor shall sign the Form 10-K and return an electronic or fax copy of
such
signed Form 10-K (with an original executed hard copy to follow by overnight
mail) to the Indenture Trustee by no later than March 25 of the relevant year
(or the immediately preceding Buisness Day if March 25 is not a Business
Day).
The
Servicer shall be responsible for determining the pool concentration applicable
to any Sub-Servicer to which the Servicer delegated any of its responsibilities
with respect to the Mortgage Loans at any time, for purposes of disclosure
as
required by Items 1117 and 1119 of Regulation AB. The Indenture Trustee will
provide electronic or paper copies of all Form 10-D, 8-K and 10-K filings free
of charge to any Noteholder upon request. Any expenses incurred by the Indenture
Trustee in connection with the previous sentence shall be reimbursable to the
Indenture Trustee out of the Trust.
The
Indenture Trustee shall sign a certification (in the form attached hereto as
Exhibit C-2) for the benefit of the Depositor and its officers, directors
and Affiliates in respect of items 1 through 3 of the Certification (provided,
however, that the Indenture Trustee shall not undertake an analysis of the
Attestation Report attached as an exhibit to the Form 10-K). Such certification
shall be delivered to the Depositor by March 15th
of each
year (or if not a Business Day, the immediately preceding Business Day). The
Certification attached hereto as Exhibit C-1 shall be delivered to the
Indenture Trustee by March 15th
for
filing on or prior to March 30th
of each
year (or if not a Business Day, the immediately preceding Business
Day).
(c) (A)
The
Depositor shall indemnify and hold harmless the Indenture Trustee and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon
a
breach of the Depositor’s obligations under this Section 4.02 or the Depositor’s
negligence, bad faith or willful misconduct in connection therewith. (B) The
Indenture Trustee shall indemnify and hold harmless the Depositor and its
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon (i) a breach of the Indenture Trustee’s obligations under this Section 4.02
caused by the Indenture Trustee’s negligence, bad faith or willful misconduct in
connection therewith or (ii) any material misstatement or omission in the
Assessment of Compliance delivered by the Indenture Trustee pursuant to Section
3.21, and (C) the Servicer shall indemnify and hold harmless the Depositor,
the
Indenture Trustee and their respective officers, directors and Affiliates from
and against any actual losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other
costs
and expenses arising out of or based upon any material misstatement or omission
in the Statement as to Compliance delivered by the Servicer pursuant to Section
3.20 or the Assessment of Compliance delivered by the Servicer pursuant to
Section 3.21.
(d) If
the
indemnification provided for in Section 4.02(c)(A), (B) or (C) is unavailable
or
insufficient to hold harmless an indemnified party under Sections 4.02(c)(A),
(B) or (C) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in Section 4.04(c)(A), (B) or (C) above
in
such proportion as is appropriate to reflect (1) the relative fault and benefits
of (a) the indemnifying party on the one hand and (b) the indemnified party
on
the other hand, as well as (2) any other relevant equitable
considerations.
(e) The
Indenture Trustee will have no duty to verify the accuracy or sufficiency of
any
information not prepared by it included in any Form 10-D, Form 10-K or Form
8-K.
The Indenture Trustee shall have no liability with respect to any failure to
properly prepare or file any Form 10-D or Form 10-K resulting from or relating
to the Indenture Trustee’s inability or failure to obtain any information in a
timely manner from the party responsible for delivery of such disclosure
information. The Indenture Trustee shall have no liability with respect to
any
failure to properly file any Form 10-D or 10-K resulting from or relating to
the
Depositor’s failure to timely comply with the provisions of this section.
Nothing herein shall be construed to require the Indenture Trustee or any
officer, director or Affiliate thereof to sign any Form 10-D, Form 10-K or
Form
8-K.
(f) Upon
any
filing with the Commission, the Indenture Trustee shall promptly deliver to
the
Depositor a copy of any such executed report, statement or
information.
ARTICLE
V
THE
SERVICER
Section
5.01. Liability
of the Servicer.
The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Servicer
herein.
Section
5.02. Merger
or Consolidation of or Assumption of the Obligations of the
Servicer.
Subject
to the following paragraph, the Servicer will keep in full effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of
its
incorporation. The Servicer will 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 Servicing Agreement, the Certificates or any of the
Mortgage Loans and to perform its respective duties under this Servicing
Agreement.
The
Servicer may be merged or consolidated with or into any Person, or transfer
all
or substantially all of its assets to any Person, in which case any Person
resulting from any merger or consolidation to which the Servicer shall be a
party, or any Person succeeding to the business of the Servicer, shall be the
successor of the 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
surviving Person to the Servicer shall be qualified to service mortgage loans
on
behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; and provided,
further,
that
each Rating Agency’s rating of the Notes in effect immediately prior to such
merger or consolidation will not be qualified, reduced, or withdrawn as a result
thereof (as evidenced by a letter to such effect from each Rating
Agency).
Section
5.03. Limitation
on Liability of the Servicer and Others.
None of
the Servicer or any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuing Entity, the Depositor,
the
Owner Trustee, the Indenture Trustee or the Noteholders for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties, representations or covenants made herein, or against any specific
liability imposed on the Servicer pursuant hereto, or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or
negligence in the performance of duties or by reason of reckless disregard
of
obligations and duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of
any
kind which, prima
facie,
is
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer and any director, officer, employee or agent of the
Servicer shall be indemnified and held harmless by the Trust against any loss,
liability or expense incurred in connection with any legal action relating
to
this Servicing Agreement or the Notes, other than any loss, liability or expense
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement) or any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Servicing Agreement; provided, however, that the
Servicer may in its discretion undertake any such action which it may deem
necessary or desirable with respect to this Servicing Agreement and the rights
and duties of the parties hereto and the interests of the Noteholders hereunder.
In such event, the legal expenses and costs of such action and any liability
resulting therefrom (except any loss, liability or expense incurred by reason
of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust, and the
Servicer shall be entitled to be reimbursed therefor from the Collection Account
as and to the extent provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Noteholders to receive any amount in the
Collection Account.
Section
5.04. Servicer
Not to Resign.
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except upon determination that its duties hereunder are no longer permissible
under applicable law. Any such determination pursuant to the preceding sentence
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect obtained at the expense of the Servicer and delivered
to
the Indenture Trustee. No resignation of the Servicer shall become effective
until the Indenture Trustee or a successor Servicer shall have assumed the
Servicer’s responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Servicing Agreement.
Except
as
expressly provided herein, the Servicer shall not assign or transfer any of
its
rights, benefits or privileges hereunder to any other Person, or delegate to
or
subcontract with, or authorize or appoint any other Person to perform any of
the
duties, covenants or obligations to be performed by the Servicer hereunder.
The
foregoing prohibition on assignment shall not prohibit the Servicer from
designating a Sub-Servicer as payee of any indemnification amount payable to
the
Servicer hereunder; provided, however, that as provided in Section 3.06 hereof,
no Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto shall not be required to recognize any Sub-Servicer as an indemnitee
under this Servicing Agreement. If, pursuant to any provision hereof, the duties
of the Servicer are transferred to a successor servicer, the entire amount
of
the Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor servicer.
Section
5.05. Delegation
of Duties.
In the
ordinary course of business, the Servicer at any time may delegate any of its
duties hereunder to any Person, including any of its Affiliates, who agrees
to
conduct such duties in accordance with standards comparable to those with which
the Servicer complies pursuant to Section 3.01. Such delegation shall not
relieve the Servicer of its liabilities and responsibilities with respect to
such duties and shall not constitute a resignation within the meaning of Section
5.04.
Section
5.06. Rights
of the Issuing Entity in Respect of the Servicer.
The
Servicer shall afford (and any Sub-Servicing Agreement shall provide that each
Sub-Servicer shall afford) the Issuing Entity and the Indenture Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Servicer (and any such Sub-Servicer) in respect of the
Servicer’s rights and obligations hereunder and access to officers of the
Servicer (and those of any such Sub-Servicer) responsible for such obligations.
Upon request, the Servicer shall furnish to the Issuing Entity and the Indenture
Trustee its (and any such Sub-Servicer’s) most recent financial statements and
such other information relating to the Servicer’s capacity to perform its
obligations under this Servicing Agreement as it possesses (and that any such
Sub-Servicer possesses). To the extent such information is not otherwise
available to the public, the Issuing Entity and the Indenture Trustee shall
not
disseminate any information obtained pursuant to the preceding two sentences
without the Servicer’s written consent, except as required pursuant to the Basic
Documents or to the extent that it is appropriate to do so (i) in working with
legal counsel, auditors, taxing authorities or other governmental agencies
or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or
decree of any court or governmental authority having jurisdiction over the
Depositor, the Indenture Trustee or the Trust Estate, and in any case, the
Issuing Entity or the Indenture Trustee as the case may be, (iii) disclosure
of
any and all information that is or becomes publicly known, or information
obtained by the Indenture Trustee from sources other than the Issuing Entity
or
the Servicer, (iv) disclosure as required pursuant to this Servicing Agreement
or (v) disclosure of any and all information (A) in any preliminary or final
offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Basic Documents approved
in
advance by the Issuing Entity or the Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Indenture
Trustee having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed, shall use its best efforts to assure the confidentiality of any
such
disseminated non-public information. The Issuing Entity may, but is not
obligated to, enforce the obligations of the Servicer under this Servicing
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Servicer under this Servicing Agreement
or exercise the rights of the Servicer under this Servicing Agreement; provided
that the Servicer shall not be relieved of any of its obligations under this
Servicing Agreement by virtue of such performance by the Issuing Entity or
its
designee. The Issuing Entity shall not have any responsibility or liability
for
any action or failure to act by the Servicer and is not obligated to supervise
the performance of the Servicer under this Servicing Agreement or
otherwise.
Section
5.07. Indemnification.
(a)
The
Servicer agrees to indemnify the Indenture Trustee and the Owner Trustee for,
and to hold the Indenture Trustee and the Owner Trustee, as the case may be,
harmless against, any claim, tax, penalty, loss, liability or expense of any
kind whatsoever, incurred without negligence (gross negligence in the case
of
the Owner Trustee) or willful misconduct on its part, arising out of, or in
connection with, the failure by the Servicer to perform its duties in compliance
with this Servicing Agreement, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against any claim in
connection with the exercise or performance of any of its powers or duties
under
any Basic Document, provided that:
(i) with
respect to any such claim, the Indenture Trustee or Owner Trustee, as the case
may be, shall have given the Servicer written notice thereof as soon as
practicable after a Responsible Officer of the Indenture Trustee or Owner
Trustee, as the case may be, shall have actual knowledge thereof, it being
understood that failure to give such notice shall not relieve the Servicer
of
its indemnification obligations hereunder;
(ii) while
maintaining control over its own defense, the Depositor, the Indenture Trustee
or Owner Trustee, as the case may be, shall cooperate and consult fully with
the
Servicer in preparing such defense; and
(iii) notwithstanding
anything in this Servicing Agreement to the contrary, the Servicer shall not
be
liable for settlement of any claim by the Indenture Trustee, or the Owner
Trustee, as the case may be, entered into without the prior consent of the
Servicer, which consent shall not be unreasonably withheld.
To
the
extent that the Indenture Trustee is not indemnified by the Servicer hereunder,
it shall be indemnified by the Issuing Entity pursuant to Section 6.07 of the
Indenture.
(b) The
Servicer agrees to indemnify the Indemnified Parties for, and to hold the
Indemnified Parties, harmless against, any Expenses which may at any time be
imposed on, incurred by, or asserted against any Indemnified Party in any way
relating to or arising out of this Agreement, any other Basic Document, the
Trust Estate, the administration of the Trust Estate or the action or inaction
of such Indemnified Party, except to the extent such Expense is (i) caused
by
such Indemnified Party’s own willful misconduct, gross negligence or bad faith
or grossly negligent failure to act or (ii) incurred as a result of the
inaccuracy of any representation or warranty contained in Section 6.03 of the
Trust Agreement expressly made by the Owner Trustee, solely with respect to
the
Owner Trustee.
(c) No
termination of this Servicing Agreement or the resignation or removal of the
Owner Trustee or the Indenture Trustee shall affect the obligations created
by
this Section 5.06 of the Servicer to indemnify the Indenture Trustee and the
Owner Trustee under the conditions and to the extent set forth herein. This
section shall survive the termination of this Servicing Agreement and the
resignation or removal of the Servicer. Any amounts to be paid by the Servicer
pursuant to this Subsection may not be paid from the Trust Estate.
ARTICLE
VI
DEFAULT
Section
6.01. Servicer
Events of Default.
(a) “Servicer
Event of Default,” wherever used herein, means any one of the following
events:
(i) any
failure by the Servicer to remit to the Indenture Trustee for payment to the
Noteholders any payment (other than a P&I Advance required to be made from
its own funds on any Servicer Remittance Date pursuant to Section 4.03) required
to be made under the terms of the Notes and this Servicing Agreement which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or the Indenture Trustee (in which
case notice shall be provided by telecopy), or to the Servicer, the Depositor
and the Indenture Trustee by the Holders of not less than 25% of the aggregate
Note Balances of the Notes; or
(ii) any
failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
contained in this Servicing Agreement, or the breach by the Servicer of any
representation and warranty contained in Section 2.01, which continues
unremedied for a period of 30 days (or if such failure or breach cannot be
remedied within 30 days, then such remedy shall have been commenced within
30
days and diligently pursued thereafter; provided, however, that in no event
shall such failure or breach be allowed to exist for a period of greater than
90
days) after the earlier of (i) the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the
Depositor, the Indenture Trustee or to the Servicer, the Depositor and the
Indenture Trustee by the Holders of Notes entitled to at least 25% of the Voting
Rights and (ii) actual knowledge of such failure by a Servicing Officer of
the
Servicer; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed
for a
period of 90 days; or
(iv) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to it or of or relating to
all
or substantially all of its property; or
(v) the
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) any
failure by the Servicer of the Servicer Termination Test; or
(vii) any
failure of the Servicer to make any P&I Advance on any Servicer Remittance
Date required to be made from its own funds pursuant to Section 4.01 which
continues unremedied until 11:00 a.m. New York time on the Business Day
immediately following the Servicer Remittance Date.
If
a
Servicer Event of Default described in clauses (i) through (vi) of this Section
shall occur, then, and in each and every such case, so long as a Servicer Event
of Default shall not have been remedied, the Depositor or the Indenture Trustee
may, and at the written direction of the Holders of Notes entitled to at least
51% of Voting Rights, the Indenture Trustee shall, by notice in writing to
the
Servicer and the Depositor, terminate all of the rights and obligations of
the
Servicer in its capacity as Servicer under this Servicing Agreement, to the
extent permitted by law, and in and to the Mortgage Loans and the proceeds
thereof. If a Servicer Event of Default described in clause (vii) hereof shall
occur, the Indenture Trustee shall, by notice in writing to the Servicer and
the
Depositor, terminate all of the rights and obligations of the Servicer in its
capacity as Servicer under this Servicing Agreement and in and to the Mortgage
Loans and the proceeds thereof and the Indenture Trustee or a successor Servicer
appointed in accordance with Section 6.02, shall immediately make such P&I
Advance and assume, pursuant to Section 6.02, the duties of a successor
Servicer. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Servicing Agreement, whether
with
respect to the Notes (other than as a Holder of any Note) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Indenture Trustee pursuant
to
and under this Section, and, without limitation, the Indenture Trustee is hereby
authorized and empowered, as attorney-in-fact or otherwise, to execute and
deliver, on behalf of and at the expense of the Servicer, any and all documents
and other instruments and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees promptly (and in
any
event no later than ten Business Days subsequent to such notice) to provide
the
Indenture Trustee with all documents and records requested by it to enable
it to
assume the Servicer’s functions under this Servicing Agreement, and to cooperate
with the Indenture Trustee in effecting the termination of the Servicer’s
responsibilities and rights under this Servicing Agreement, including, without
limitation, the transfer within one Business Day to the Indenture Trustee for
administration by it of all cash amounts which at the time shall be or should
have been credited by the Servicer to the Collection Account held by or on
behalf of the Servicer, the Payment Account or any REO Account or Servicing
Account held by or on behalf of the Servicer or thereafter be received with
respect to the Mortgage Loans or any REO Property serviced by the Servicer
(provided, however, that the Servicer shall continue to be entitled to receive
all amounts accrued or owing to it under this Servicing Agreement on or prior
to
the date of such termination, whether in respect of P&I Advances, Servicing
Advances or otherwise, and shall continue to be entitled to the benefits of
Section 5.03, notwithstanding any such termination, with respect to events
occurring prior to such termination). For purposes of this Section 6.01, the
Indenture Trustee shall not be deemed to have knowledge of a Servicer Event
of
Default unless a Responsible Officer of the Indenture Trustee assigned to and
working in the Indenture Trustee’s Corporate Trust Office has actual knowledge
thereof or unless written notice of any event which is in fact such a Servicer
Event of Default is received by a Responsible Officer of the Indenture Trustee
and such notice references the Notes, the Trust Estate or this Servicing
Agreement.
Section
6.02. Indenture
Trustee to Act; Appointment of Successor.
(a)(1) On
and
after the time the Servicer receives a notice of termination, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as Servicer under this Servicing Agreement and the transactions set forth or
provided for herein, and all the responsibilities, duties and liabilities
relating thereto and arising thereafter shall be assumed by the Indenture
Trustee (except for any representations or warranties of the Servicer under
this
Servicing Agreement, the responsibilities, duties and liabilities contained
in
Section 2.01 and the obligation to deposit amounts in respect of losses pursuant
to Section 3.12) by the terms and provisions hereof including, without
limitation, the Servicer’s obligations to make P&I Advances pursuant to
Section 4.01; provided, however, that if the Indenture Trustee is prohibited
by
law or regulation from obligating itself to make advances regarding delinquent
mortgage loans, then the Indenture Trustee shall not be obligated to make
P&I Advances pursuant to Section 4.01; and provided further, that any
failure to perform such duties or responsibilities caused by the Servicer’s
failure to provide information required by Section 6.01 shall not be considered
a default by the Indenture Trustee as successor to the Servicer hereunder.
As
compensation therefor, the Indenture Trustee shall be entitled to the Servicing
Fee and all funds relating to the Mortgage Loans to which the Servicer would
have been entitled if it had continued to act hereunder. Notwithstanding the
above and subject to Section 6.02(a)(2) below, the Indenture Trustee may, if
it
shall be unwilling to so act, or shall, if it is unable to so act or if it
is
prohibited by law from making advances regarding delinquent mortgage loans
or if
the Holders of Notes entitled to at least 51% of the Voting Rights so request
in
writing to the Indenture Trustee, promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and having a net worth of not
less
than $15,000,000, as the successor to the Servicer under this Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer under this Servicing Agreement.
The
Indenture Trustee or other successor servicer shall be entitled to be reimbursed
by the Servicer (or by the Trust Estate if the Servicer is unable to fulfill
its
obligations hereunder or if the Indenture Trustee is acting as successor
Servicer) for all reasonable out-of-pocket costs (such expenses of the Indenture
Trustee to be documented by the Indenture Trustee to the extent possible)
associated with the transfer of servicing from the predecessor servicer,
including without limitation, any such 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 Indenture Trustee
to correct any errors or insufficiencies in the servicing data or otherwise
to
enable the Indenture Trustee to service the Mortgage Loans properly and
effectively.
(2) No
appointment of a successor to the Servicer under this Servicing Agreement shall
be effective until the assumption by the successor of all of the Servicer’s
responsibilities, duties and liabilities hereunder. In connection with such
appointment and assumption described herein, the Indenture Trustee may make
such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer as such
hereunder. The Depositor, the Indenture Trustee and such successor shall take
such action, consistent with this Servicing Agreement, as shall be necessary
to
effectuate any such succession. Pending appointment of a successor to the
Servicer under this Servicing Agreement, the Indenture Trustee shall act in
such
capacity as hereinabove provided.
Section
6.03. Notification
to Noteholders.
(a) Upon
any
termination of the Servicer pursuant to Section 6.01 above or any appointment
of
a successor to the Servicer pursuant to Section 6.02 above, the Indenture
Trustee shall give prompt written notice thereof to the Owner Trustee, the
Depositor and Noteholders at their respective addresses appearing in the Note
Register.
(b) Not
later
than the later of 60 days after the occurrence of any event, which constitutes
or which, with notice or lapse of time or both, would constitute a Servicer
Event of Default or five days after a Responsible Officer of the Indenture
Trustee becomes aware of the occurrence of such an event, the Indenture Trustee
shall transmit by mail to all Holders of Notes notice of each such occurrence,
unless such default or Servicer Event of Default shall have been cured or
waived.
Section
6.04. Waiver
of Servicer Events of Default.
The
Holders representing at least 66% of the Voting Rights evidenced by all Classes
of Notes affected by any default or Servicer Event of Default hereunder may
waive such default or Servicer Event of Default; provided, however, that a
default or Servicer Event of Default under clause (i) or (vii) of Section 6.01
may be waived only by all of the Holders of the Notes. Upon any such waiver
of a
default or Servicer Event of Default, such default or Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Servicer Event of Default or impair any right consequent thereon except to
the
extent expressly so waived.
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.01. Amendment.
This
Servicing Agreement may be amended from time to time by the parties hereto,
provided that any amendment be accompanied by a letter from the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to the Notes or the rating then assigned to the Notes,
and
the consent of the Indenture Trustee.
Section
7.02. GOVERNING
LAW.
THIS
SERVICING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN
ACCORDANCE WITH SUCH LAWS.
Section
7.03. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if when delivered to:
(a) in
the
case of the Servicer:
New
Century Mortgage Corporation
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
(b) in
the
case of Rating Agencies:
▇▇▇▇▇’▇
Investors Service, Inc.
4th
Floor
▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Residential Mortgage Monitoring Unit
Standard
& Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇
▇▇▇▇▇
▇▇▇▇▇▇ - 41st
Floor
Attention:
Asset Backed Surveillance Group
Fitch
Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(c) in
the
case of the Owner Trustee, the Corporate Trust Office:
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Administration
(d) in
the
case of the Issuing Entity, to New Century Home Equity Loan Trust
2006-1:
c/o
New
Century Mortgage Securities LLC
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
(e) in
the
case of the Indenture Trustee:
Deutsche
Bank National Trust Company
▇▇▇▇
▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Trust Administration/New Century Home Equity Trust Series 2006-1 (NC0601)
or,
as to
each party, at such other address as shall be designated by such party in a
written notice to each other party. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid,
at
the address of such Noteholder as shown in the Note Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder
receives such notice. Any notice or other document required to be delivered
or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation
and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section
7.04. Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Servicing
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 Servicing Agreement and
shall
in no way affect the validity or enforceability of the other provisions of
this
Servicing Agreement or of the Notes or the rights of the Noteholders
thereof.
Section
7.05. Third-Party
Beneficiaries.
This
Servicing Agreement will inure to the benefit of and be binding upon the parties
hereto, the Noteholders, the Owner Trustee, the Indenture Trustee and their
respective successors and permitted assigns. Except as otherwise provided in
this Servicing Agreement, no other Person will have any right or obligation
hereunder. The Indenture Trustee shall have the right to exercise all rights
of
the Issuing Entity under this Servicing Agreement.
Section
7.06. Counterparts.
This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
7.07. Effect
of Headings and Table of Contents.
The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section
7.08. Termination.
The
respective obligations and responsibilities of the Servicer and the Issuing
Entity created hereby shall terminate upon the satisfaction and discharge of
the
Indenture pursuant to Section 4.10 thereof.
Section
7.09. No
Petition.
The
Servicer, by entering into this Servicing Agreement, hereby covenants and agrees
that it will not at any time institute against the Issuing Entity, or join
in
any institution against the Issuing Entity, any bankruptcy proceedings under
any
United States federal or state bankruptcy or similar law in connection with
any
obligations of the Issuing Entity. This section shall survive the termination
of
this Servicing Agreement by one year.
Section
7.10. No
Recourse.
The
Servicer acknowledges that no recourse may be had against the Issuing Entity,
except as may be expressly set forth in this Servicing Agreement.
Section
7.11. Indenture
Trustee Rights.
The
Indenture Trustee shall be entitled to the same rights, protections, indemnities
and immunities afforded to it under the Indenture as if specifically set forth
herein.
Section
7.12. Compliance.
To help
fight the funding of terrorism and money laundering activities, the Indenture
Trustee will obtain, verify, and record information that identifies individuals
or entities that establish a relationship or open an account with the Indenture
Trustee. The Indenture Trustee will ask for the name, address, tax
identification number and other information that will allow the Indenture
Trustee to identify the individual or entity who is establishing the
relationship or opening the account. The Indenture Trustee may also ask for
formation documents such as articles of incorporation, an offering memorandum,
or other identifying documents to be provided.
Section
7.13. Intention
of Parties and Interpretation.
Each of
the parties acknowledges and agrees that the purpose of Sections 3.20, 3.21
and
4.02 of this Agreement is to facilitate compliance by the Depositor with the
provisions of Regulation AB promulgated by the Commission under the 1934 Act
(17
C.F.R. §§ 229.1100 - 229.1123), as such may be amended from time to time and
subject to clarification and interpretive advice as may be issued by the staff
of the Commission from time to time. Therefore, each of the parties agrees
that
(a) the obligations of the parties hereunder shall be interpreted in such a
manner as to accomplish that purpose, (b) the parties’ obligations hereunder
will be supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB, (c) the parties
shall comply with requests made by the Depositor for delivery of additional
or
different information as the Depositor may determine in good faith is necessary
to comply with the provisions of Regulation AB, and (d) no amendment of this
Agreement shall be required to effect any such changes in the parties’
obligations as are necessary to accommodate evolving interpretations of the
provisions of Regulation AB..
ARTICLE
VIII
DUTIES
OF
THE
SERVICER
AS ADMINISTRATOR
Section
8.01. Administrative
Duties.
(a) Duties
with Respect to the Indenture.
The
Administrator shall perform all its duties and the duties of the Issuing Entity
under the Indenture. In addition, the Administrator shall consult with the
Owner
Trustee as the Administrator deems appropriate regarding the duties of the
Issuing Entity under the Indenture. The Administrator shall monitor the
performance of the Issuing Entity and shall advise the Owner Trustee when action
is necessary to comply with the Issuing Entity’s duties under the Indenture. The
Administrator shall prepare for execution by the Issuing Entity or shall cause
the preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of
the
Issuing Entity to prepare, file or deliver pursuant to the Indenture. In
furtherance of the foregoing, the Administrator shall take all necessary action
that is the duty of the Issuing Entity to take pursuant to the
Indenture.
(b) Duties
with Respect to the Issuing Entity.
(i) In
addition to the duties of the Administrator set forth in this Servicing
Agreement or any of the Basic Documents, the Administrator shall perform such
calculations and shall prepare for execution by the Issuing Entity or the Owner
Trustee or shall cause the preparation by other appropriate Persons of all
such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuing Entity or the Owner Trustee to prepare, file or
deliver pursuant to this Servicing Agreement or any of the Basic Documents
or
under state and federal tax and securities laws (including, but not limited
to,
UCC filings in applicable jurisdictions and annual compliance certificates,
if
any), and at the request of the Owner Trustee or the Indenture Trustee shall
take all appropriate action that it is the duty of the Issuing Entity to take
pursuant to this Servicing Agreement or any of the Basic Documents. In
accordance with the directions of the Issuing Entity or the Owner Trustee,
the
Administrator shall administer, perform or supervise the performance of such
other activities in connection with the Notes (including the Basic Documents)
as
are not covered by any of the foregoing provisions and as are expressly
requested by the Issuing Entity, the Indenture Trustee or the Owner
Trustee.
(ii) Notwithstanding
anything in this Servicing Agreement or any of the Basic Documents to the
contrary, the Administrator shall be responsible for promptly notifying the
Owner Trustee and Certificate Paying Agent in the event that any withholding
tax
is imposed on the Issuing Entity’s payments (or allocations of income) to an
Owner (as defined in the Trust Agreement) as contemplated in Section 5.03 of
the
Trust Agreement. Any such notice shall be in writing and specify the amount
of
any withholding tax required to be withheld by the Owner Trustee or the
Certificate Paying Agent pursuant to such provision.
(iii) In
carrying out the foregoing duties or any of its other obligations under this
Servicing Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; provided,
however,
that
the terms of any such transactions or dealings shall be in accordance with
any
directions received from the Issuing Entity and shall be, in the Administrator’s
opinion, no less favorable to the Issuing Entity in any material respect than
with terms made available to unrelated third parties.
(c) Tax
Matters.
The
Administrator shall prepare, on behalf of the Owner Trustee, financial
statements and such annual or other reports of the Issuing Entity as are
necessary for the preparation by the Indenture Trustee of tax returns and
information reports as provided in Section 5.03 of the Trust Agreement,
including, without limitation, Form 1099.
(d) Non-Ministerial
Matters.
With
respect to matters that in the reasonable judgment of the Administrator are
non-ministerial, the Administrator shall not take any action pursuant to this
Article VIII unless within a reasonable time before the taking of such action,
the Administrator shall have notified the Owner Trustee and the Indenture
Trustee of the proposed action and the Owner Trustee and, with respect to items
(A), (B), (C) and (D) below, the Indenture Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, “non-ministerial matters” shall include:
(A) the
amendment of or any supplement to the Indenture;
(B) the
initiation of any claim or lawsuit by the Issuing Entity and the compromise
of
any action, claim or lawsuit brought by or against the Issuing Entity (other
than in connection with the collection of the Mortgage Loans);
(C) the
amendment, change or modification of this Servicing Agreement or any of the
Basic Documents to which the Indenture Trustee or the Owner Trustee, as
applicable, is a party;
(D) the
appointment of successor Certificate Paying Agents and successor Indenture
Trustees pursuant to the Indenture or the appointment of successor Servicers
or
the consent to the assignment by the Certificate Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture; and
(E) the
removal of the Indenture Trustee.
(e) Servicer
shall act as Administrator.
By
execution of this Agreement, the Servicer agrees to be bound as Administrator
and shall perform the obligations of the Administrator as described
herein.
Section
8.02. Records.
The
Administrator shall maintain appropriate books of account and records relating
to services performed under this Servicing Agreement, which books of account
and
records shall be accessible for inspection by the Issuing Entity, the Indenture
Trustee and the Owner Trustee at any time during normal business
hours.
Section
8.03. Additional
Information to be Furnished.
The
Administrator shall furnish to the Issuing Entity, the Indenture Trustee and
the
Owner Trustee from time to time such additional information regarding the
Mortgage Loans and the Notes as the Issuing Entity, the Indenture Trustee or
the
Owner Trustee shall reasonably request.
Section
8.04. No
Recourse to Owner Trustee.
It is
expressly understood and agreed by the parties hereto that (a) this Agreement
is
executed and delivered by Wilmington Trust Company, not individually or
personally, but solely as Owner Trustee of New Century Home Equity Loan Trust
2006-1, in the exercise of the powers and authority conferred and vested in
it,
(b) each of the representations, undertakings and agreements herein made on
the
part of the Issuing Entity is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose for binding only the Issuing Entity, (c) nothing herein
contained shall be construed as creating any liability of Wilmington Trust
Company, individually or personally, to perform any covenant either expressed
or
implied contained herein, all such liability, if any, being expressly waived
by
the parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Issuing
Entity or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuing Entity under this
Agreement or any other related documents.
IN
WITNESS WHEREOF, the Servicer, the Issuing Entity and the Indenture Trustee
have
caused this Servicing Agreement to be duly executed by their respective officers
or representatives all as of the day and year first above written.
|
NEW
CENTURY MORTGAGE CORPORATION,
as
Servicer
|
||
| |
|
|
| By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ | ||
|
|
||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
Executive Vice President
|
||
|
NEW
CENTURY HOME EQUITY LOAN TRUST
2006-1,
as Issuing Entity
By:
Wilmington Trust Company, not in its individual
capacity,
but solely as Owner Trustee
|
||
| |
|
|
| By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
|
||
| Name:
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Title:
Vice
President
|
||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
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| |
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| By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | ||
|
|
||
| Name:
▇▇▇▇
▇▇▇▇▇▇▇
Title:
Associate
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| |
|
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| By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
|
|
||
| Name:
▇▇▇▇▇▇▇
▇▇▇▇▇
Title:
Vice
President
|
||
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
Filed
Previously By Form 8-K
EXHIBIT
B
FORM
OF
REQUEST FOR RELEASE
(for
Indenture Trustee)
LOAN
INFORMATION
|
Name
of Mortgagor:
|
______________________________
|
|
Master
Servicer
|
|
|
Loan
No.:
|
______________________________
|
INDENTURE
TRUSTEE
|
Name:
|
______________________________
|
|
Address:
|
______________________________
|
|
______________________________
|
|
|
Trustee
Mortgage
|
|
|
File
No.:
|
______________________________
|
ISSUER
|
Name:
|
|
|
Address:
|
______________________________
|
|
Certificates:
|
Asset-Backed
Notes, Series 2006-1.
|
The
undersigned Master Servicer hereby acknowledges that it has received from
Deutsche Bank National Trust Company, as Indenture Trustee for the Holders
of
Asset-Backed Notes, Series 2006-1, the documents referred to below (the
“Documents”). All capitalized terms not otherwise defined in this Request for
Release shall have the meanings given them in the Servicing Agreement, dated
as
of March 30, 2006, among the Indenture Trustee, the Issuing Entity, the Servicer
and the Master Servicer (the “Servicing Agreement”).
|
( )
|
Promissory
Note dated _______________, 20__, in the original principal sum of
$__________, made by _____________________, payable to, or endorsed
to the
order of, the Indenture Trustee.
|
|
( )
|
Mortgage
recorded on _________________________ as instrument no.
____________________ in the County Recorder’s Office of the County of
_______________, State of __________________ in
book/reel/docket_________________ of official records at page/image
_____________.
|
|
( )
|
Deed
of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder’s Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image
______________.
|
|
( )
|
Assignment
of Mortgage or Deed of Trust to the Indenture Trustee, recorded on
__________________ as instrument no. _________ in the County Recorder’s
Office of the County of _______________, State of _______________________
in book/reel/docket ____________ of official records at page/image
____________.
|
|
( )
|
Other
documents, including any amendments, assignments or other assumptions
of
the Mortgage Note or Mortgage.
|
|
( )
|
___________________________________
|
|
( )
|
___________________________________
|
|
( )
|
___________________________________
|
|
( )
|
___________________________________
|
The
undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1)
The
Master Servicer shall hold and retain possession of the Documents in trust
for
the benefit of the Indenture Trustee, solely for the purposes provided in the
Servicing Agreement.
(2)
The
Master Servicer shall not cause or permit the Documents to become subject to,
or
encumbered by, any claim, liens, security interest, charges, writs of attachment
or other impositions nor shall the Master Servicer assert or seek to assert
any
claims or rights of setoff to or against the Documents or any proceeds
thereof.
(3)
The
Master Servicer shall return each and every Document previously requested from
the Mortgage File to the Indenture Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Collection Account and except
as expressly provided in the Servicing Agreement.
(4)
The
Documents and any proceeds thereof, including any proceeds of proceeds, coming
into the possession or control of the Master Servicer shall at all times be
earmarked for the account of the Indenture Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer’s possession, custody or control.
Dated:
|
NEW
CENTURY MORTGAGE CORPORATION
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
|
||
EXHIBIT
C-1
FORM
OF
CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Certification
Re: New
Century Home Equity Loan Trust 2006-1 (the “Trust” or the “Issuing
Entity”)
Asset-Backed
Notes, Series 2006-1
I,
[identify the certifying individual], certify, that:
1. I
have
reviewed this report on Form 10-K, and all reports on Form 10-D required to
be
filed in respect of the period covered by this report on Form 10-K of New
Century Home Equity Loan Trust ▇▇▇▇-▇, ▇▇▇▇▇ Backed Notes, Series 2006-1 (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. Based
on
my knowledge and the master servicer compliance statement required in this
report under Item 1123 of Regulation AB, and except as disclosed in the Exchange
Act periodic reports, the master servicer has fulfilled its obligations under
the servicing agreement; and
5. All
of
the reports on assessment of compliance with servicing criteria for asset-backed
securities and their related attestation reports on assessment of compliance
with servicing criteria for asset-backed securities required to be included
in
this report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on From 10-K.
In
giving
the certifications above, I have reasonably relied on information provided
to me
by the following unaffiliated parties: Deutsche Bank National Trust
Company.
|
NEW
CENTURY MORTGAGE SECURITIES LLC
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
Date:
|
||
EXHIBIT
C-2
FORM
OF
CERTIFICATION TO BE
PROVIDED
TO THE DEPOSITOR BY THE INDENTURE TRUSTEE
Re: New
Century Home Equity Loan Trust 2006-1 (the “Trust” or the “Issuing
Entity”)
Asset-Backed
Notes, Series 2006-1
I,
[identify the certifying individual], a [title] of Deutsche Bank National Trust
Company, as Indenture Trustee, hereby certify to New Century Mortgage Securities
LLC (the “Depositor”), and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification,
that:
1. I
have
reviewed the annual report on Form 10-K for the fiscal year 2006, and all
reports on Form 10-D containing distribution reports filed in respect of periods
included in the year covered by that annual report, of the Depositor relating
to
the above-referenced trust;
2. Based
on
my knowledge and assuming the accuracy and completeness of the information
provided to the Indenture Trustee by the Servicer, the information in these
distribution reports prepared by the Indenture Trustee, taken as a whole, does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by that annual report provided to me by the Servicer; and
3. Based
on
my knowledge, the distribution information required to be provided under Form
10-D by the Indenture Trustee under the Servicing Agreement is included in
these
distribution reports.
Capitalized
terms used but not defined herein have the meanings ascribed to them in Appendix
A to the Indenture, dated March 30, 2006 (the “Indenture”), between New Century
Home Equity Loan Trust 2006-1, as issuer, and Deutsche Bank National Trust
Company, as indenture trustee.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
Date:
|
||
EXHIBIT
D
OFFICER’S
CERTIFICATE
REGARDING
ANNUAL STATEMENT OF COMPLIANCE
___________________
Trust, Series 200_-___
_______________
Asset-Backed Notes
I,
_____________________, hereby certify that I am a duly appointed
__________________________ of _______________________________ (the “Servicer”),
and further certify as follows:
1. This
certification is being made pursuant to the terms of the Servicing Agreement,
dated as of ____________, _____ (the “Servicing Agreement”), among
_____________________, as issuer, the Servicer as servicer and ________________,
as indenture trustee.
2. I
have
reviewed the activities of the Servicer during the preceding calendar year
and
the Servicer’s performance under the Servicing Agreement has been made under my
supervision and to the best of my knowledge, based on such review, the Servicer
has fulfilled all of its obligations under the Servicing Agreement in all
material respects throughout the year.
Capitalized
terms not otherwise defined herein have the meanings set forth in the Servicing
Agreement.
Dated:
_________________
IN
WITNESS WHEREOF, the undersigned has executed this Certificate as of
_____________.
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|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
|
||
I,
_________________________, a (an) __________________ of the Servicer, hereby
certify that _________________ is a duly elected, qualified, and acting
_______________________ of the Servicer and that the signature appearing above
is his/her genuine signature.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________.
|
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
|
||
EXHIBIT
E
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
Definitions
Primary
Servicer - transaction party having borrower contact
Servicer
- aggregator of pool assets
Securities
Administrator - waterfall calculator (may be the Indenture Trustee, or may
be
the Servicer)
Primary
Servicer, follow Primary Servicer obligations)
Custodian
- safe keeper of pool assets
Paying
Agent - distributor of funds to ultimate investor
Indenture
Trustee - fiduciary of the transaction
Note:
The
definitions above describe the essential function that the party performs,
rather than the party’s title. So, for example, in a particular transaction, the
indenture trustee may perform the “paying agent” and “securities administrator”
functions, while in another transaction, the securities administrator may
perform these functions.
Where
there are multiple checks for criteria the attesting party will identify in
their management assertion that they are attesting only to the portion of the
distribution chain they are responsible for in the related transaction
agreements.
| Key: |
X
- obligation
|
[X]
- under consideration for obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Servicer
|
Indenture
Trustee
|
|
General
Servicing Considerations
|
||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
X
|
X
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
To
the extent applicable
|
X
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets are maintained.
|
|||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
X
|
|
|
Cash
Collection and Administration
|
||||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or paymnets,
and
any interest or other fees charged for such advances, are made, reviewed
and approved as specified in the transaction agreements.
|
X
|
X
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
[X]
|
X
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
X
|
X
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
If
applicable
|
||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
X
|
X
|
|
Investor
Remittances and Reporting
|
||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the indenture trustee’s records as to the total unpaid
principal balance and number of Pool Assets serviced by the Servicer.
|
X
|
X
|
X
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
X
|
X
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
X
|
X
|
|
Pool
Asset Administration
|
||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
X
|
|
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
X
|
|
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance with
the
related pool asset documents.
|
X
|
||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
X
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
X
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
X
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents and
state
laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
||
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
X
|
X
|
EXHIBIT
F
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Entity shall
be primarily responsible for reporting the information to the Indenture Trustee
pursuant to Section 4.02(b). If the Indenture Trustee is indicated below as
to
any item, then the Indenture Trustee is primarily responsible for obtaining
that
information.
Under
Item 1 of Form 10-D: a) items marked “7.05 statement” are required to be
included in the periodic Payment Date statement under Section 7.05 of the
Indenture, provided by the Indenture Trustee based on information received
from
the Servicer; and b) items marked “Form 10-D report” are required to be in the
Form 10-D report but not the 7.05 statement, provided by the party indicated.
Information under all other Items of Form 10-D is to be included in the Form
10-D report.
|
Form
|
Item
|
Description
|
Responsible
Entity
|
|
|
10-D
|
Must
be filed within 15 days of the Payment Date.
|
|||
|
1
|
Distribution
and Pool Performance Information
|
|||
|
Item
1121(a) - Distribution and Pool Performance
Information
|
||||
|
(1)
Any applicable record dates, accrual dates, determination dates for
calculating payments and actual payment dates for the payment
period.
|
7.05
statement
|
|||
|
(2)
Cash flows received and the sources thereof for payments, fees and
expenses.
|
7.05
statement
|
|||
|
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
7.05
statement
|
|||
|
(i)
Fees or expenses accrued and paid, with an identification of the
general
purpose of such fees and the party receiving such fees or
expenses.
|
7.05
statement
|
|||
|
(ii)
Payments accrued or paid with respect to enhancement or other support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of the
general
purpose of such payments and the party receiving such
payments.
|
7.05
statement
|
|||
|
(iii)
Principal, interest and other distributions accrued and paid on the
asset-backed securities by type and by class or series and any principal
or interest shortfalls or carryovers.
|
7.05
statement
|
|||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
7.05
statement
|
|||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
7.05
statement
|
|||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
7.05
statement
|
|||
|
(6)
Beginning and ending balances of transaction accounts, such as reserve
accounts, and material account activity during the period.
|
7.05
statement
|
|||
|
(7)
Any amounts drawn on any credit enhancement or other support identified
in
Item 1114 of Regulation AB, as applicable, and the amount of coverage
remaining under any such enhancement, if known and
applicable.
|
7.05
statement
|
|||
|
(8)
Number and amount of pool assets at the beginning and ending of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average life, weighted average remaining term, pool
factors and prepayment amounts.
|
7.05
statement
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
|||
|
(9)
Delinquency and loss information for the period.
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool
assets.
|
7.05
statement.
Form
10-D report: Depositor
|
|||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of funds
advanced and the general source of funds for
reimbursements.
|
7.05
statement
|
|||
|
(11)
Any material modifications, extensions or waivers to pool asset terms,
fees, penalties or payments during the distribution period or that
have
cumulatively become material over time.
|
Form
10-D report; Servicer
|
|||
|
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
Form
10-D report: Servicer
|
|||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger and
whether
the trigger was met.
|
7.05
statement
|
|||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
[information
regarding] any pool asset changes (other than in connection with
a pool
asset converting into cash in accordance with its terms), such as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
Disclose
any material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or pool selection criteria or procedures,
as
applicable, used to originate, acquire or select the new pool
assets.
|
Form
10-D report: Depositor
Form
10-D report: Depositor
Form
10-D report: Depositor
|
|||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
Depositor
|
|||
|
2
|
Legal
Proceedings
|
|||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Noteholders, including
proceedings known to be contemplated by governmental
authorities:
Seller
Depositor
Indenture
Trustee
Issuing
entity
Servicer
Originator
Custodian
|
Seller
Depositor
Indenture
Trustee
Depositor
Servicer
Originator
Custodian
|
|||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or issuing
entity, that are backed by the same asset pool or are otherwise issued
by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing information
can be omitted if securities were not registered.
|
Depositor
|
|||
|
4
|
Defaults
Upon Senior Securities
|
|||
|
Information
from Item 3 of Part II of Form 10-Q:
Report
the occurrence of any Event of Default (after expiration of any grace
period and provision of any required notice)
|
N/A
|
|||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|||
|
Information
from Item 4 of Part II of Form 10-Q
|
Indenture
Trustee
|
|||
|
6
|
Significant
Obligors of Pool Assets
|
|||
|
Item
1112(b) - Significant
Obligor Financial Information*
|
N/A
|
|||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Item.
|
||||
|
7
|
Significant
Enhancement Provider Information
|
|||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
Determining
applicable disclosure threshold
Obtaining
required financial information or effecting incorporation by
reference
|
N/A
N/A
|
|||
|
Item
1115(b) - Derivative Counterparty Financial Information*
Determining
current maximum probable exposure
Determining
current significance percentage
Obtaining
required financial information or effecting incorporation by
reference
|
Indenture
Trustee
Indenture
Trustee
Depositor
|
|||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Items.
|
||||
|
8
|
Other
Information
|
|||
|
Disclose
any information required to be reported on Form 8-K during the period
covered by the Form 10-D but not reported
|
The
Responsible Entity for the applicable Form 8-K item as indicated
below
|
|||
|
9
|
Exhibits
|
|||
|
Distribution
report
|
Indenture
Trustee
|
|||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
Depositor
|
|||
|
8-K
|
Must
be filed within four business days of an event reportable on Form
8-K.
|
|||
|
1.01
|
Entry
into a Material Definitive Agreement
|
|||
|
Disclosure
is required regarding entry into or amendment of any definitive agreement
that is material to the securitization, even if depositor is not
a party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are fully
disclosed in the prospectus
|
Depositor
|
|||
|
1.02
|
Termination
of a Material Definitive Agreement
|
|||
|
Disclosure
is required regarding termination of any definitive agreement that
is
material to the securitization (other than expiration in accordance
with
its terms), even if depositor is not a party.
Examples:
servicing agreement, custodial agreement.
|
Depositor
|
|||
|
1.03
|
Bankruptcy
or Receivership
|
|||
|
Disclosure
is required regarding the bankruptcy or receivership, if known to
the
Depositor, Servicer or Indenture Trustee, with respect to any of
the
following:
Sponsor
(Seller), Depositor, Servicer, Indenture Trustee, Swap Provider,
Cap
Provider, Custodian
|
Depositor/Servicer/Indenture
Trustee
|
|||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are disclosed
in the 7.05 statement
|
N/A
|
|||
|
3.03
|
Material
Modification to Rights of Security Holders
|
|||
|
Disclosure
is required of any material modification to documents defining the
rights
of Noteholders, including the Pooling and Servicing
Agreement
|
Party
requesting material modification
|
|||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
Depositor
|
|||
|
5.06
|
Change
in Shell Company Status
|
|||
|
[Not
applicable to ABS issuers]
|
Depositor
|
|||
|
6.01
|
ABS
Informational and Computational Material
|
|||
|
[Not
included in reports to be filed under Section 4.07]
|
Depositor
|
|||
|
6.02
|
Change
of Servicer or Indenture Trustee
|
|||
|
Requires
disclosure of any removal, replacement, substitution or addition
of any
servicer, affiliated servicer, other servicer servicing 10% or more
of
pool assets at time of report, other material servicers, certificate
administrator or indenture trustee. Reg AB disclosure about any new
servicer or indenture trustee is also required.
|
Indenture
Trustee, Servicer or Servicer
|
|||
|
6.03
|
Change
in Credit Enhancement or Other External Support
|
|||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as derivatives.
Reg AB disclosure about any new enhancement provider is also
required.
|
Depositor
|
|||
|
6.04
|
Failure
to Make a Required Payment
|
Indenture
Trustee
|
||
|
6.05
|
Securities
Act Updating Disclosure
|
|||
|
If
any material pool characteristic differs by 5% or more at the time
of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
Depositor
|
|||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
Depositor
|
|||
|
7.01
|
Regulation
FD Disclosure
|
Depositor
|
||
|
8.01
|
Other
Events
|
|||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to security
holders.
|
Depositor
|
|||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Entity applicable to reportable event
|
||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
|||
|
9B
|
Other
Information
|
|||
|
Disclose
any information required to be reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Entity for the applicable Form 8-K item as indicated
above
|
|||
|
15
|
Exhibits
and Financial Statement Schedules
|
|||
|
Item
1112(b) - Significant
Obligor Financial Information
|
N/A
|
|||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
Determining
applicable disclosure threshold
Obtaining
required financial information or effecting incorporation by
reference
|
N/A
N/A
|
|||
|
Item
1115(b) - Derivative Counterparty Financial Information
Determining
current maximum probable exposure
Determining
current significance percentage
Obtaining
required financial information or effecting incorporation by
reference
|
[TBD]
[TBD]
Depositor
|
|||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Noteholders:
Seller
Depositor
Indenture
Trustee
|
Seller
Depositor
Indenture
Trustee (only
with respect to affiliations and relationships with the sponsor,
depositor
or issuing entity)
|
|||
|
Issuing
entity
Servicer
Originator
Credit
Enhancer/Support Provider, if any
Significant
Obligor, if any
Custodian
|
Issuing
entity
Servicer
Originator
Depositor
Depositor
Custodian
(only with respect to affiliations and relationships with the sponsor,
depositor or issuing entity)
|
|||
| Item 1122 - Assessment of Compliance with Servicing Criteria | Each Party participating in the servicing function | ||
|
Item
1123 -Servicer Compliance Statement
|
Servicer |