ARTICLE
I
DEFINITIONS
Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall
have the following meanings:
10-K Filing Deadline: As defined in Section
8.12(a)(ii).
Account : Any of the Collection Accounts, the
Distribution Account and any Escrow Account, with respect to the
Supplemental Interest Trust, the Excess Reserve Fund Account and
the Supplemental Interest Trust Account and with respect to the
Final Maturity Reserve Trust, the Final Maturity Reserve Fund. Each
Account shall be an Eligible Account.
Additional Disclosure Notification
: The form of notice set forth on
Exhibit Y.
Additional Form 10-D Disclosure
: As defined in Section
8.12(a)(i).
Additional Form 10-K Disclosure
: As defined in Section
8.12(a)(ii).
Additional Termination Event
: As defined in the Cap Agreement or
the Swap Agreement, as applicable.
Adjustable Rate Mortgage Loan
: A Mortgage Loan which provides for
the adjustment of the Mortgage Rate payable in respect
thereto.
Adjusted Lower Tier WAC: For any Distribution Date (and the related
Accrual Period), an amount equal to (i) two, multiplied by (ii) the
weighted average of the interest rates for such Distribution Date
for the Class LT2-I-A-1, LT2-II-A-1, LT2-II-A-2, LT2-II-A-3,
LT2-II-A-4, LT2-II-A-5, LT2-M-1, LT2-M-2, LT2-M-3, LT2-M-4,
LT2-M-5, LT2-M-6, LT2-M-7, LT2-M-8, LT2-M-9, LT2-M-10 and LT2-Q
Interests, weighted in proportion to their Class Principal Amounts
as of the beginning of the related Accrual Period and computed by
subjecting the rate on the Class LT2-Q Interest to a cap of 0.00%,
and by subjecting the rate on each of the Class LT2-I-A-1,
LT2-II-A-1, LT2-II-A-2, LT2-II-A-3, LT2-II-A-4, LT2-II-A-5,
LT2-M-1, LT2-M-2, LT2-M-3, LT2-M-4, LT2-M-5, LT2-M-6, LT2-M-7,
LT2-M-8, LT2-M-9 and LT2-M-10 Interests to a cap that corresponds
to the Interest Rate (determined by substituting the REMIC 2 Net
Funds Cap for the applicable Available Funds Cap) for the
Corresponding Class of Certificates; provided, however ,
that for each Class of LIBOR Certificates, the Certificate Interest
Rate shall be multiplied by the quotient of (a) the actual number
of days in the Interest Accrual Period, divided by (b)
30.
Advance : Any P&I Advance or Servicing
Advance.
Affected Party: As defined in the Swap Agreement.
Affiliate : With respect to any Person, any other Person
controlling, controlled by or under common control with such first
Person. For the purposes of this definition, “control”
means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have
meanings correlative to the foregoing.
Agreement : This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amounts Held for Future Distribution
: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection
Accounts of the Servicers at the close of business on the related
Determination Date on account of (i) Principal Prepayments,
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end
of the related Prepayment Period and (ii) all Scheduled
Payments on the Mortgage Loans due after the end of the related Due
Period.
Applied Realized Loss Amount
: With respect to any Distribution
Date, the amount, if any, by which the aggregate
Class Certificate Balance of the LIBOR Certificates and the
Principal-Only Certificates after distributions of principal on
such Certificates on such Distribution Date exceeds the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value : The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of the Mortgaged Property.
Assignment of Mortgage : An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than
the assignee’s name and recording information not yet
returned from the recording office), reflecting the sale of the
Mortgage to the Trustee.
Available Funds : With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer
(x) the sum of (i) all scheduled installments of interest
(net of the related Expense Fees) and principal due on the Due Date
on such Mortgage Loans in the related Due Period and received by
the Servicers on or prior to the related Determination Date,
together with any P&I Advances in respect thereof;
(ii) all Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds and Subsequent Recoveries received by the
Servicers during the related Prepayment Period (in each case, net
of unreimbursed expenses incurred in connection with a liquidation
or foreclosure and unreimbursed Advances, if any); (iii) all
partial or full prepayments on the Mortgage Loans received by the
Servicers during the related Prepayment Period together with all
Compensating Interest paid by the Servicers in connection therewith
(excluding any Prepayment Charges); (iv) all Substitution
Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur on or prior to the related Determination Date;
(v) all amounts received with respect to such Distribution
Date as the Repurchase Price in respect of a Mortgage Loan
repurchased by a Mortgage Loan Seller or the Sponsor on or prior to
the related Determination Date; and (vi) the proceeds with
respect to the termination of the Trust Fund pursuant to
clause (a) of Section 11.01; reduced by
(y) amounts in reimbursement for Advances previously made with
respect to the Mortgage Loans and other amounts as to which a
Servicer, the Depositor, the Master Servicer, the Securities
Administrator, the Credit Risk Manager or the Trustee are entitled
to be paid or reimbursed pursuant to the Servicing Agreements or
this Agreement.
Back-up Certification : As defined in Section 3.05.
Basic Principal Payment Amount
: With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for
such Distribution Date over (ii) the Excess
Overcollateralization Amount, if any, for such Distribution
Date.
Basis Risk Carryover Amount
: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of
(A) if on such Distribution Date the Interest Rate for any
Class of LIBOR Certificates is based upon the Group I
Available Funds Cap, the Group II Available Funds Cap or the Class
M Available Funds Cap, as applicable, the excess of (i) the
amount of interest such Class of Certificates would otherwise
be entitled to receive on such Distribution Date had such Interest
Rate been calculated (x) as the sum of LIBOR and the applicable
Interest Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on
such Class of Certificates, in the case of any Group I
Certificates, based on the Group I Available Funds Cap, Class of
Group II Certificates, based on the Group II Available Funds Cap
and in the case of any Class of Class M Certificates, based on the
Class M Available Funds Cap and (B) the portion of any such
excess described in clause (A) for such Class of
Certificates from all previous Distribution Dates not previously
paid, together with interest thereon at a rate equal the applicable
Interest Rate for each such Class of Certificates for such
Distribution Date.
Basis Risk Payment : For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carryover
Amounts of the LIBOR Certificates and (ii) the Class X
Distributable Amount (prior to any reduction for Basis Risk
Payments).
Book-Entry Certificates : As specified in the Preliminary
Statement.
Business Day : Any day other than (i) Saturday or
Sunday, or (ii) a day on which banking and savings and loan
institutions, in (a) the States of New York, California,
Maryland or Minnesota, (b) the Commonwealth of Pennsylvania or
any other State in which a Servicer’s servicing operations
are located, or (c) any State in which the Corporate Trust
Office is located, are authorized or obligated by law or executive
order to be closed.
Cap Account : The sub-account of the Supplemental Interest
Trust Account created pursuant to Section 4.06(a).
Cap Agreement : The interest rate cap agreement entered into
by the Supplemental Interest Trust and the Cap Counterparty, dated
November 3, 2006, which agreement provides for the monthly payment
specified to the securities administrator of the Supplemental
Interest Trust (for the benefit of Certificateholders) commencing
with the Distribution Date in May 2007 and ending on the
Distribution Date in November 2013, by the Cap Counterparty, but
subject to the conditions set forth therein, together with any
schedule, confirmations or other agreements relating thereto,
attached as Exhibit P
Cap Amount : With respect to each Distribution Date, the
amount of any Cap Payment deposited into the Cap
Account.
Cap Counterparty : The counterparty to the Supplemental Interest
Trust under the Cap Agreement, and any successor in interest or its
assigns. Initially, the Cap Counterparty shall be Wachovia Bank,
National Association.
Cap Payment : With respect to each Distribution Date, any
payment required to be made by the Cap Counterparty to the
Supplemental Interest Trust pursuant to the terms of the Cap
Agreement.
Cap Payment Dat e: For as long as the Cap Agreement is in effect
or any amounts remain unpaid thereunder, the Business Day
immediately preceding each Distribution Date.
Cap Replacement Receipts : As defined in Section 4.08(b)(i).
Cap Replacement Receipts Account
: As defined in Section
4.08(b)(i).
Cap Termination Payment : Upon the designation of an “Early
Termination Date” as defined in the Cap Agreement, the
payment required to be made by the Cap Counterparty to the
Supplemental Interest Trust pursuant to the terms of the Cap
Agreement and any unpaid amounts due on previous Cap Payment Dates
and accrued interest thereon as provided in the Cap Agreement, as
calculated by the Cap Counterparty and furnished to the Securities
Administrator.
Cap Termination Receipts : As defined in Section 4.08(b)(i).
Cap Termination Receipts Account
: As defined in Section
4.08(b)(i).
Certificate : Any one of the Certificates executed by the
Securities Administrator in substantially the forms attached hereto
as exhibits.
Certificate Balance : With respect to any Certificate, other than a
Class X, Class P or Class R Certificate, at any
date, the maximum dollar amount of principal to which the Holder
thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal
previously made with respect thereto and in the case of any Class M
Certificates, reduced by any Applied Realized Loss Amounts
allocated to such Class of Certificates pursuant to
Section 4.05; provided, however , that immediately
following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any
Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in
order of seniority, by the amount of any Subsequent Recovery
distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amount for such Class or Classes for such
Distribution Date). The Class P Certificates are issued with
an initial Class P Principal Amount of $100. The Class X and
Class R Certificates have no Certificate Balance.
Certificate Owner : With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register : The register maintained pursuant to
Section 5.02.
Certificateholder or Holder : The person in whose name a
Certificate is registered in the Certificate Register, except that,
solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor
or any Affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount
of Percentage Interests necessary to effect such consent has been
obtained; provided, however , that if any such Person
(including the Depositor) owns 100.00% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall
be deemed to be Outstanding for purposes of any provision hereof
that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action
hereunder. The Securities Administrator is entitled to rely
conclusively on a certification of the Depositor or any Affiliate
of the Depositor in determining which Certificates are registered
in the name of an Affiliate of the Depositor.
Certification Parties : As defined in Section 3.05.
Certifying Person : As defined in Section 3.05.
Class : All Certificates bearing the same class
designation as set forth in the Preliminary Statement.
Class I-A Certificates
: All Certificates bearing the Class
designation of “Class I-A”.
Class II-A-1 Certificates
: All Certificates bearing the Class
designation of “Class II-A-1”.
Class II-A-2 Certificates
: All Certificates bearing the Class
designation of “Class II-A-2”.
Class II-A-3 Certificates
: All Certificates bearing the Class
designation of “Class II-A-3”.
Class II-A-4 Certificates
: All Certificates bearing the Class
designation of “Class II-A-4”.
Class II-A-5 Certificates
: All Certificates bearing the Class
designation of “Class II-A-5”.
Class A Certificates
: As specified in the Preliminary
Statement.
Class Certificate Balance
: With respect to any Class of LIBOR
Certificates and the Principal-Only Certificates and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date. With respect to
the Class X, Class P and Class R Certificates, zero. With respect
to any Lower Tier Interest and as to any date of determination, the
initial Class Principal Balance as shown or described in the table
set forth in the Preliminary Statement to this Agreement for the
issuing REMIC, as reduced by any principal distributed with respect
to such Lower Tier Interest and Realized Losses allocated to such
Lower Tier Interest.
Class I Shortfalls: As defined in Section 8.11
hereof. For purposes of
clarity, the Class I Shortfall for any Distribution Date shall
equal the amount payable to the Derivative Counterparty on such
Distribution Date in excess of the amount payable with respect to
the Class LT3-I interest in the Upper Tier REMIC on such
Distribution Date, all as further provided in Section 8.11
hereof.
Class M Available Funds Cap
: With respect to the Class M
Certificates as of any Distribution Date, a per annum rate equal to
the weighted average of the Group I Available Funds Cap and the
Group II Available Funds Cap, weighted on the basis of the Group
Subordinate Amount for the Group I Mortgage Loans and the Group
Subordinate Amount for the Group II Mortgage Loans,
respectively.
Class M Certificates
: As specified in the Preliminary
Statement.
Class M Principal Payment Amount
: With respect to any Distribution
Date and any Class of Class M Certificates, the lesser of
(i) the excess of (a) the Principal Payment Amount over
(b) the aggregate amount distributed on that Distribution Date
as principal to all Classes of Certificates more senior than that
Class of Class M Certificates ( provided, however
, for this purpose, the Class M-1, Class M-2 and Class M-3
Certificates will be treated as having the same seniority) and (ii)
the excess of (a) the sum of the aggregate Class Certificate
Balances of all Class of Certificates more senior than that
Class of Class M Certificates (after giving effect to all
amounts distributed on that Distribution Date to those Classes of
more senior certificates ( provided, however , for this
purpose, the Class M-1, Class M-2 and Class M-3 Certificates will
be treated as having the same seniority)) and the
Class Certificate Balance of that Class of Class M
Certificates immediately prior to that Distribution Date over (b)
the lesser of:
(x) the percentage set forth in the table below for
the applicable Class of Class M Certificates multiplied
by the aggregate Stated Principal Balance of the Mortgage Loans for
that Distribution Date:
|
Class
|
|
Percentage
|
|
|
|
81.30%*
|
|
|
|
84.50%
|
|
|
|
87.60%
|
|
|
|
90.40%
|
|
|
|
93.10%
|
|
|
|
94.60%
|
|
|
|
95.90%
|
|
|
|
97.50%
|
(y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date
over 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, until the
Class Certificate Balance of that Class of Class M
Certificates has been reduced to zero.
|
|
*
|
The amount
calculated according to such percentage will be allocated
sequentially to the Class M-1, Class M-2 and Class M-3
Certificates.
|
Class M-1 Certificates
: All Certificates bearing the Class
designation of “Class M-1”.
Class M-2 Certificates
: All Certificates bearing the Class
designation of “Class M-2”.
Class M-3 Certificates
: All Certificates bearing the Class
designation of “Class M-3”.
Class M-4 Certificates
: All Certificates bearing the Class
designation of “Class M-4”.
Class M-5 Certificates
: All Certificates bearing the Class
designation of “Class M-5”.
Class M-6 Certificates
: All Certificates bearing the Class
designation of “Class M-6”.
Class M-7 Certificates
: All Certificates bearing the Class
designation of “Class M-7”.
Class M-8 Certificates
: All Certificates bearing the Class
designation of “Class M-8”.
Class M-9 Certificates
: All Certificates bearing the Class
designation of “Class M-9”.
Class M-10 Certificates
: All Certificates bearing the Class
designation of “Class M-10”.
Class Notional Balance
: Not applicable.
Class P Certificates
: All Certificates bearing the Class
designation of “Class P”.
Class P Principal Amount
: As of the Closing Date,
$100.00.
Class R Certificates
: All Certificates bearing the Class
designation of “Class R”.
Class X Certificates
: All Certificates bearing the Class
designation of “Class X”.
Class X Distributable Amount
: With respect to any Distribution
Date, the amount of interest that has accrued on the Class X
Notional Balance, as described in the Preliminary Statement, but
that has not been distributed prior to such date. In addition, such
amount shall include the initial Overcollateralization Amount of
$15,914,838.14 ($15,914,938.14 less $100 of such amount allocated
to the Class P Certificates) to the extent such amount has not been
distributed on an earlier Distribution Date as part of the
Overcollateralization Reduction Amount.
Class X Notional Balance
: With respect
to any
Distribution Date (and the related Interest Accrual Period) the
aggregate principal balance of the regular interests in REMIC 2 as
specified in the Preliminary Statement hereto.
Closing Date : November 3, 2006.
Code :
The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account : With respect to each Servicer, the account
defined as a “Custodial Account” in the related
Servicing Agreement
Commission : The United States Securities and Exchange
Commission.
Compensating Interest : For any Distribution Date, the lesser of
(a) the amount, if any, by which the Prepayment Interest
Shortfall, if any, for such Distribution Date, with respect to all
voluntary Principal Prepayments (excluding any payments made upon
liquidation of any Mortgage Loan) exceeds all Prepayment Interest
Excesses for such Distribution Date, and (b) the aggregate
amount of the Servicing Fee actually retained by or paid to the
applicable Servicer for such Distribution Date.
Condemnation Proceeds : All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or
condemnation.
Corporate Trust Office : With respect to the Securities Administrator,
(i) for transfer, presentation or surrender of Certificates, the
office at Wells Fargo Center, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services
-HASCO 2006-HE1, and (ii) for all other purposes, 9062 Old
Annapolis Road, Columbia, Maryland 21045, Attention: Corporate
Trust Services - HASCO 2006-HE1 or at such other address as the
Securities Administrator may designate from time to time by notice
to the Certificateholders, the Depositor, the Master Servicer and
the Trustee. With respect to the Trustee, the designated office of
the Trustee in the State of California at which any particular time
its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this
Agreement is located at 1761 East St. Andrew Place, Santa Ana,
California 92705-4934, Attention: Trust Administration - HB06HE1,
facsimile number (714) 247-6329, and its telephone number is (714)
247-6000 and which is also the address to which notices to and
correspondence with the Trustee under this Agreement should be
directed.
Corresponding Class : As described in the Preliminary
Statement.
Countrywide Servicing : Countywide Home Loans Servicing LP.
Credit Enhancement Percentage
: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of
(i) the aggregate Class Certificate Balance of the
Class M Certificates and (ii) the Overcollateralization
Amount (assuming the Overcollateralization Amount is not less than
zero and in each case after taking into account the distributions
of the Principal Payment Amount for such Distribution Date assuming
no Trigger Event has occurred) by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date.
Credit Risk Manager : Clayton Fixed Income Services Inc., formerly
known as The Murrayhill Company, a Colorado corporation, and its
successors and assigns.
Credit Risk Management Agreement
: Each of the Credit Risk Management
Agreements, dated as of the Closing Date, entered into by (i) the
Servicers and the Credit Risk Manager, and (ii) the Master Servicer
and the Credit Risk Manager.
Credit Risk Manager’s Fee
: With respect to any Distribution
Date and each Mortgage Loan, an amount equal to the product of (a)
one twelfth, (b) the Credit Risk Manager’s Fee Rate and (c)
the Stated Principal Balance of such Mortgage Loan as of the first
day of the related Due Period.
Credit Risk Manager’s Fee
Rate :
0.014% per annum.
Cumulative Loss Percentage
: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred from the
Cut-off Date to the last day of the calendar month preceding the
month in which such Distribution Date occurs and the denominator of
which is the Cut-off Date Pool Principal Balance of the Mortgage
Loans.
Cumulative Loss Trigger Event
: If, with respect to any
Distribution Date, the quotient (expressed as a percentage) of
(x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period,
divided by (y) the Cut-off Date Pool Principal Balance,
exceeds the applicable loss percentages set forth below with
respect to such Distribution Date:
|
Distribution Date Occurring
In:
|
|
Loss
Percentage:
|
|
November 2008
through October 2009
|
|
1.30% for the
first month, plus an additional 1/12th of
1.60% for each
month thereafter
|
|
November 2009
through October 2010
|
|
2.90% for the
first month, plus an additional 1/12th of
1.70% for each
month thereafter
|
|
November 2010
through October 2011
|
|
4.60% for the
first month, plus an additional 1/12th of
1.30% for each
month thereafter
|
|
November 2011
through October 2012
|
|
5.90% for the
first month, plus an additional 1/12th of
0.75% for each
month thereafter
|
|
November 2012
through October 2013
|
|
6.65% for the
first month, plus an additional 1/12th of
0.05% for each
month thereafter
|
|
November 2013
and thereafter
|
|
6.70%
|
Custodial File : The meaning assigned to such term in Section
2.01(a).
Custodian: Initially, Wells Fargo, or any successor
custodian appointed hereunder.
Cut-off Date : October 1, 2006.
Cut-off Date Pool Principal Balance
: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance
: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the
Cut-off Date.
Data Tape Information : With respect to each Mortgage Loan, the same
information (provided as of the Cut-off Date) included in the data
fields specified under the definition of “Mortgage Loan
Schedule” in the applicable Transfer Agreement, with such
additions and modifications as agreed upon by the applicable
Mortgage Loan Seller and the Depositor. A copy of each Transfer
Agreement is attached at Exhibit Q hereto.
Debt Service Reduction : With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the
United States Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan which became final and non-appealable, except such a
reduction resulting from a Deficient Valuation or any reduction
that results in a permanent forgiveness of principal.
Defaulting Party: As defined in the Swap Agreement or Cap
Agreement, as applicable.
Deficient Valuation : With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than then outstanding principal
balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the United States Bankruptcy
Code.
Definitive Certificates : Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan : A Mortgage Loan repurchased by a Mortgage Loan
Seller or the Sponsor and removed from the Trust Fund.
Delinquency Rate : For any calendar month, a fraction, expressed
as a percentage, the numerator of which is the aggregate Stated
Principal Balance of 60+ Day Delinquent Mortgage Loans as of the
close of business on the last day of such month (not including
those Mortgage Loans that are liquidated as of the end of the
related Prepayment Period), and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the
close of business on the last day of such month (not including
those Mortgage Loans that are liquidated as of the end of the
related Prepayment Period).
Delinquency Trigger Event
: With respect to any Distribution
Date on or after the Stepdown Date, the circumstances in which the
Rolling Three Month Delinquency Rate as of the last day of the
immediately preceding calendar month exceeds the applicable
percentages of the Credit Enhancement Percentage for the prior
Distribution Date as set forth below for the most senior Class of
LIBOR Certificates then outstanding:
|
Class
|
|
Percentage
|
|
A
|
|
40.30%
|
|
M-1
|
|
49.77%
|
|
M-2
|
|
62.71%
|
|
M-3
|
|
74.78%
|
|
M-4
|
|
90.22%
|
|
M-5
|
|
112.77%
|
|
M-6
|
|
145.67%
|
|
M-7
|
|
202.67%
|
|
M-8
|
|
258.97%
|
|
M-9
|
|
341.08%
|
|
M-10
|
|
559.36%
|
Denomination : With respect to each Certificate, the amount
set forth on the face thereof as the “Initial Certificate
Balance of this Certificate” or the Percentage Interest
appearing on the face thereof.
Depositor : HSI Asset Securitization Corporation, a
Delaware corporation, and its successors in interest.
Depository : The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the
registered Holder of the Book-Entry Certificates. The Depository
shall at all times be a “clearing corporation” as
defined in Section 8-102(a)(5) of the Uniform Commercial
Code of the State of New York.
Depository Institution : Any depository institution or trust company,
including the Trustee and the Securities Administrator, that
(a) is incorporated under the laws of the United States of
America or any State thereof, (b) is subject to supervision
and examination by federal or state banking authorities and
(c) has outstanding unsecured commercial paper or other
short-term unsecured debt obligations that are rated P-1 by
Moody’s, F1+ by Fitch and A-1 by Standard &
Poor’s.
Depository Participant : A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited
with the Depository.
Derivative Agreement : The Swap Agreement and the Cap
Agreement.
Derivative Counterparty : Collectively, the Cap Counterparty and the
Swap Counterparty.
Derivative Payment Date : For so long as either the Cap Agreement or the
Swap Agreement is in effect, the Business Day preceding each
Distribution Date.
Determination Date : With respect to each Remittance Date, the
Business Day immediately preceding such Remittance Date.
Disqualified Non-U.S. Person
: With respect to a Class R
Certificate, any Non-U.S. Person or agent thereof other than
(i) a Non-U.S. Person that holds the Class R Certificate
in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Securities
Administrator with an effective IRS Form W-8ECI or (ii) a
Non-U.S. Person that has delivered to both the transferor and the
Securities Administrator an opinion of a nationally recognized tax
counsel to the effect that the transfer of the Class R
Certificate to it is in accordance with the requirements of the
Code and the regulations promulgated thereunder and that such
transfer of the Class R Certificate will not be disregarded
for federal income tax purposes.
Distribution Account : The separate Eligible Account created and
maintained by the Securities Administrator pursuant to
Section 3.01(c) in the name of the Securities Administrator as
paying agent for the benefit of the Trustee and the
Certificateholders and designated “Wells Fargo Bank, N.A. as
paying agent in trust for registered holders of HSI Asset
Securitization Corporation Trust 2006-HE1 Mortgage Pass-Through
Certificates, Series 2006-HE1”. Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date
: As to any Distribution Date, 12:00
noon New York City time on the third Business Day immediately
preceding such Distribution Date.
Distribution Date : The 25th day of each calendar month, or if
such day is not a Business Day, the next succeeding Business Day,
commencing in November 2006.
Document Certification and Exception
Report : The form of
report attached to Exhibit F hereto.
Due Date : The day of the month on which the Scheduled
Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Due Period : With respect to any Distribution Date, the
period commencing on the second day of the calendar month preceding
the month in which such Distribution Date occurs and ending on the
first day of the calendar month in which such Distribution Date
occurs.
Early Termination Event : As defined in the Derivative
Agreement.
EDGAR : The Commission’s Electronic Data
Gathering and Retrieval System.
Eligible Account : Either (i) an account maintained with a
federal or state-chartered depository institution or trust company
that complies with the definition of Eligible Institution, (ii) an
account maintained with the corporate trust department of a federal
depository institution or state-chartered depository institution
subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the U.S. Code of Federal Regulation Section 9.10(b),
which, in either case, has corporate trust powers and is acting in
its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts
maintained with the Securities Administrator.
Eligible Institution : A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt
obligations, or other short-term deposits of which are rated at
least “A-1+” by Standard & Poor’s if the
amounts on deposit are to be held in the account for no more than
365 days (or at least “A-2” if the amounts on deposit
are to be held in the account for no more than 30 days),
“P-1” by Moody’s and “F1+” by Fitch
(or a comparable rating if another Rating Agency is specified by
the Depositor by written notice to each of the Servicers and the
Securities Administrator) or long-term unsecured debt obligations
are rated at least “AA-” by Standard & Poor’s
if the amounts on deposit are to be held in the account for no more
than 365 days.
ERISA : The Employee Retirement Income Security Act of
1974, as amended.
ERISA-Qualifying Underwriting
: A best efforts or firm commitment
underwriting or private placement that meets the requirements of
Prohibited Transaction Exemption (“ PTE
”) 96-84, 61 Fed. Reg. 58234 (1996), as amended by
PTE 97-34, 62 Fed. Reg. 39021 (1997), PTE 2000-58, 65 Fed.
Reg. 67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487
(2002) (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of
Labor.
ERISA-Restricted Certificate
: As specified in the Preliminary
Statement.
ERISA-Restricted Trust Certificate:
As specified in the Preliminary
Statement.
Escrow Account : With respect to each Servicer, the meaning
assigned to such term in the related Servicing
Agreement.
Event of Default : With respect to each Servicer, the meaning
assigned to such term in the related Servicing
Agreement.
Excess Overcollateralization Amount
: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralization
Amount on such Distribution Date over (b) the
Overcollateralization Target Amount for such Distribution
Date.
Excess Reserve Fund Account
: The separate Eligible Account
created and maintained by the Securities Administrator under the
Supplemental Interest Trust pursuant to Sections 3.01(a) and
3.01(b) in the name of the Securities Administrator as paying agent
for the benefit of the LIBOR Certificateholders and the Class X
Certificateholders and designated “Wells Fargo Bank, N.A. as
paying agent in trust for registered holders of HSI Asset
Securitization Corporation Trust 2006-HE1, Mortgage Pass-Through
Certificates, Series 2006-HE1”. Funds in the Excess
Reserve Fund Account shall be held in trust for such
Certificateholders for the uses and purposes set forth in this
Agreement. Amounts on deposit in the Excess Reserve Fund Account
shall not be invested. The Excess Reserve Fund Account shall be
considered part of the Supplemental Interest Trust but not part of
any REMIC.
Exchange Act : The Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
Excluded Trust Assets: As defined in the Preliminary
Statement.
Expense Adjusted Mortgage Rate
: With respect to any Distribution
Date and as to each Mortgage Loan, the per annum rate equal to the
Mortgage Rate as of the first day of the related Due Period less
the Expense Fee Rate.
Expense Fee Rate : As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate and the Master Servicing
Fee Rate.
Expense Fees : As to each Mortgage Loan and any Distribution
Date, the sum of the Servicing Fee and the Master Servicing
Fee.
Extra Principal Payment Amount
: As of any Distribution Date, the
lesser of (x) the related Total Monthly Excess Spread for such
Distribution Date and (y) the related Overcollateralization
Deficiency for such Distribution Date.
Fannie Mae : The Federal National Mortgage Association, or
any successor thereto.
FDIC :
The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Maturity Required Deposit
: For any Distribution Date
beginning on the Distribution Date in November 2016 up to and
including the Final Maturity Reserve Funding Date will equal the
lesser of (a) the product of (i) 0.80% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans having an original
term to maturity of 40 years as of the last day of the related Due
Period (after giving effect to principal prepayments in the
Prepayment Period related to such Distribution Date) and (b) the
excess of (i) the Final Maturity Funding Cap for such Distribution
Date over (ii) the amount on deposit in the Final Maturity Reserve
Fund immediately prior to such Distribution Date.
Final Maturity Funding Cap
: For any Distribution Date
beginning with the Distribution Date in November 2016 will equal
the lesser of (i) the aggregate Class Certificate Balance of the
Certificates immediately prior to that Distribution Date and (ii)
the aggregate Stated Principal Balance of all outstanding Mortgage
Loans with original terms to maturity of 40 years as of the as of
the last day of the related Due Period (after giving effect to
principal prepayments received during the Prepayment Period related
to that Distribution Date).
Final Maturity OC Trigger Event
: The event in effect with respect
to any Distribution Date on or after the Distribution Date in
November 2026 if the sum of (x) the Overcollateralization Amount
and (y) the amount on deposit in the Final Maturity Reserve Fund on
that Distribution Date (after giving effect to any deposits into
the Final Maturity Reseve Fund on that Distribution Date) is less
than the outstanding Stated Principal Balance of all Mortgage Loans
with original terms to maturity of 40 years as of the last day of
the related Due Period (after giving effect to principal
prepayments in the Prepayment Period related to that Distribution
Date).
Final Maturity Reserve Fund
: The account created pursuant to
Section 4.09 of this Agreement.
Final Maturity Reserve Funding Date
: The earlier of (i) the
Distribution Date on which the amount on deposit in the Final
Maturity Reserve Fund is equal to the Final Maturity Funding Cap
and (ii) the Distribution Date in October 2036.
Final Maturity Reserve Trus
t: The corpus of a trust created
pursuant to Section 4.09 of this Agreement and designated as the
“Final Maturity Reserve Trust” consisting of the Final
Maturity Reserve Fund, but which is not an asset of any
REMIC.
Final Recovery Determination
: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or
REO Property purchased by the Mortgage Loan Seller or the Sponsor
as contemplated by this Agreement, any Transfer Agreement or the
Purchase Agreement, as applicable), a determination made by any
Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so
recovered.
Final Scheduled Distribution Date
: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date
occurring in October 2036.
Fitch : Fitch, Inc., or any successor thereto. If
Fitch is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05 the address for
notices to Fitch shall be Fitch, Inc., One State Street Plaza, New
York, New York 10004, Attention: MBS Monitoring - HASCO (HSI
Asset Securitization Corporation Trust 2006-HE1), or such other
address as Fitch may hereafter furnish to the Depositor and the
Securities Administrator.
Fixed Rate Mortgage Loan:
A Mortgage Loan with respect to
which the Mortgage Rate set forth in the Mortgage Note is fixed for
the term of such Mortgage Loan.
Form 8-K Disclosure Information
: As defined in Section
8.12(a)(iii).
Freddie Mac : The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing
under Title III of the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Gross Margin : With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage
Note to be added to the Index to determine the Mortgage
Rate.
Group I Available Funds Cap
: With respect to the Group I
Mortgage Loans as of any Distribution Date, the per annum rate
(subject to adjustment based on the actual number of days elapsed
in the related Interest Accrual Period) equal to (x) the weighted
average of the Expense Adjusted Mortgage Rate for each Group I
Mortgage Loan then in effect at the beginning of the related Due
Period (not including for this purpose any Group I Mortgage Loans
for which Principal Prepayments in Full have been received and
distributed in the month prior to that Distribution Date)
minus (y) a percentage equal to the product of (i) a
fraction, the numerator of which is equal to the sum of (a) the
portion of the Net Derivative Payment or Swap Termination Payment
(other than a Swap Termination Payment resulting from a Derivative
Counterparty Trigger Event) made to the Swap Counterparty with
respect to such Due Period allocated to the Group I Mortgage Loans
based on the applicable Group Percentage and (b) the portion of the
Final Maturity Required Deposit for such Due Period allocable to
the Group I Mortgage Loans based on the applicable Group Percentage
and the denominator of which is equal to the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the beginning
of the related Due Period and (ii) 12.
Group I Certificates
: As specified in the Preliminary
Statement.
Group I Mortgage Loans
: The Mortgage Loans identified on
the Mortgage Loan Schedule as Group I Mortgage
Loans.
Group I Principal Payment Amount
: With respect to any Distribution
Date prior to the Stepdown Date, the Principal Payment Amount
multiplied by the Group Principal Allocation Percentage for
the Group I Certificates.
Group I Senior Principal Payment
Amount : With respect to
any Distribution Date, the lesser of (i) the Group I Principal
Payment Amount for that Distribution Date and (ii) the excess of
(a) the aggregate Class Certificate Balance of the
Group I Certificates immediately prior to that Distribution
Date over (b) the lesser of (x) 65.30% of the aggregate
Stated Principal Balance of the Group I Mortgage Loans for
that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Group I Mortgage
Loans for that Distribution Date over 0.50% of the aggregate State
Principal Balance of the Group I Mortgage Loans as of the
Cut-off Date.
Group II Available Funds Cap
: With respect to the Group II
Mortgage Loans as of any Distribution Date, the per annum rate
(subject to adjustment based on the actual number of days elapsed
in the related Interest Accrual Period) equal to (x) the weighted
average of the Expense Adjusted Mortgage Rate for each Group II
Mortgage Loan then in effect at the beginning of the related Due
Period (not including for this purpose any Group II Mortgage Loans
for which Principal Prepayments in Full have been received and
distributed in the month prior to that Distribution Date)
minus (y) a percentage equal to the product of (i) a
fraction, the numerator of which is equal to the sum of (a) the
portion of the Net Derivative Payment or Swap Termination Payment
(other than a Swap Termination Payment resulting from a Derivative
Counterparty Trigger Event) made to the Swap Counterparty with
respect to such Due Period allocated to the Group II Mortgage Loans
based on the applicable Group Percentage and (b) the portion of the
Final Maturity Required Deposit for such Due Period allocable to
the Group II Mortgage Loans based on the applicable Group
Percentage and the denominator of which is equal to the aggregate
Stated Principal Balance of the Group II Mortgage Loans as of the
beginning of the related Due Period and (ii) 12.
Group II Certificates
: As specified in the Preliminary
Statement.
Group II Mortgage Loans
: The Mortgage Loans identified on
the Mortgage Loan Schedule as Group II Mortgage
Loans.
Group II Principal Payment
Amount : With respect to
any Distribution Date, the Principal Payment Amount multiplied by
the Group Principal Allocation Percentage for the
Group II Certificates.
Group II Senior Principal Payment
Amount : With respect to
any Distribution Date, the lesser of (i) the Group II
Principal Payment Amount for that Distribution Date and (ii) the
excess of (a) the aggregate Class Certificate Balance of
the Group II Certificates immediately prior to that
Distribution Date over (b) the lesser of (x) 65.30% of
the aggregate Stated Principal Balance of the Group II
Mortgage Loans for that Distribution Date and (y) the excess,
if any, of the aggregate Stated Principal Balance of the
Group II Mortgage Loans for that Distribution Date over 0.50%
of the aggregate State Principal Balance of the Group II
Mortgage Loans as of the Cut-off Date.
Group Available Funds Cap:
The Group I Available Funds Cap
or the Group II Available Funds Cap, as applicable.
Group Percentage: For any Distribution Date and for each of
the Group I Mortgage Loans and the Group II Mortgage Loans, a
fraction (expressed as a percentage) the numerator of which is the
aggregate Stated Principal Balance of the Mortgage Loans in such
Loan Group as of the beginning of the related Due Period and the
denominator of which is equal to the aggregate Stated Principal
Balance of all the Mortgage Loans as of such date.
Group Principal Allocation
Percentage : With respect
to any Distribution Date, the percentage equivalent of a fraction,
determined as follows:
(i) with respect to the Group I Certificates,
a fraction, the numerator of which is the portion of the Principal
Remittance Amount for that Distribution Date that is attributable
to the principal received or advanced on the Group I Mortgage
Loans and the denominator of which is the Principal Remittance
Amount for that Distribution Date; and
(ii) with respect to the Group II
Certificates, a fraction, the numerator of which is the
portion of the Principal Remittance Amount for that Distribution
Date that is attributable to the principal received or advanced on
the Group II Mortgage Loans and the denominator of which is
the Principal Remittance Amount for that Distribution
Date.
Group Subordinate Amount
: For any Distribution Date and
(i) for the Group I Mortgage Loans, the excess of the
aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the beginning of the related Due Period over the
Class Certificate Balance of the Group I Certificates
immediately prior to such Distribution Date and (ii) for the
Group II Mortgage Loans, the excess of the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the
beginning of the related Due Period over the aggregate
Class Certificate Balance of the Group II Certificates
immediately prior to the current Distribution Date
Independent : When used with respect to any accountants, a
Person who is “independent” within the meaning of Rule
2-01(B) of the Commission’s Regulation S-X. Independent
means, when used with respect to any other Person, a Person who (A)
is in fact independent of another specified Person and any
Affiliate of such other Person, (B) does not have any material
direct or indirect financial interest in such other Person or any
Affiliate of such other Person, (C) is not connected with such
other Person or any Affiliate of such other Person as an officer,
employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions and (D) is not a member of the
immediate family of a Person defined in clause (B) or (C)
above.
Index : As to each Adjustable Rate Mortgage Loan, the
six-month LIBOR index or one-year LIBOR index, as applicable, from
time to time in effect for the adjustment of the Mortgage Rate as
set forth in the related Mortgage Note.
Initial Certification : As defined in Section 2.02.
Insurance Policy : With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy, including, but not limited
to, any standard hazard insurance policy, flood insurance policy,
earthquake insurance policy, title insurance policy or Primary
Mortgage Insurance Policy (if any), including all riders and
endorsements thereto in effect, including any replacement policy or
policies.
Insurance Proceeds : With respect to each Mortgage Loan, proceeds
of Insurance Policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period : With respect to each Class of LIBOR
Certificates and any Distribution Date, the period commencing on
the Distribution Date occurring in the month preceding the month in
which the current Distribution Date occurs and ending on the day
immediately preceding the current Distribution Date (or, in the
case of the first Distribution Date, the period from and including
the Closing Date to but excluding such first Distribution Date).
For purposes of computing interest accruals on each Class of
LIBOR Certificates, each Interest Accrual Period has the actual
number of days in such month and each year is assumed to have
360 days.
Interest Carry Forward Amount
: As of any Distribution Date and
any Class of LIBOR Certificates, the sum of, if applicable,
(i) the portion of the Interest Payment Amount from Distribution
Dates prior to the current Distribution Date remaining unpaid
immediately prior to the current Distribution Date (excluding any
Basis Risk Carryover Amount with respect to such Class), and (ii)
interest on the amount in clause (i) above at the applicable
Interest Rate (to the extent permitted by applicable
law).
Interest Margin : Except as set forth in the following sentence,
with respect to each Class of Regular Certificates, the
following percentages: Class I-A Certificates, 0.140%;
Class II-A-1 Certificates, 0.050%; Class II-A-2
Certificates, 0.110%; Class II-A-3 Certificates, 0.160%;
Class II-A-4 Certificates, 0.240%; Class M-1
Certificates, 0.250%; Class M-2 Certificates, 0.310%;
Class M-3 Certificates, 0.340%; Class M-4 Certificates,
0.380%; Class M-5 Certificates, 0.410%; Class M-6
Certificates, 0.480%, Class M-7 Certificates, 0.850%,
Class M-8 Certificates, 1.100%, Class M-9 Certificates,
2.000% and Class M-10 Certificates, 2.000%. On the first
Distribution Date after the Optional Termination Date, the Interest
Margins shall increase to the following percentages: Class I-A
Certificates, 0.280%; Class II-A-1 Certificates, 0.100%;
Class II-A-2 Certificates, 0.220%; Class II-A-3
Certificates, 0.320%; Class II-A-4 Certificates, 0.480%;
Class M-1 Certificates, 0.375%; Class M-2 Certificates,
0.465%; Class M-3 Certificates, 0.510%; Class M-4
Certificates, 0.570%; Class M-5 Certificates, 0.615%;
Class M-6 Certificates, 0.720%, Class M-7 Certificates,
1.275%, Class M-8 Certificates, 1.650%, Class M-9
Certificates, 3.000% and Class M-10 Certificates,
3.000%.
Interest Payment Amount : With respect to any Distribution Date for each
Class of LIBOR Certificates, the amount of interest accrued
during the related Interest Accrual Period at the applicable
Interest Rate on the related Class Certificate Balance
immediately prior to such Distribution Date, as reduced by such
Class’s share of Net Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls for such Distribution Date allocated
to such Class pursuant to Section 4.02.
Interest Rate : For each Class of LIBOR Certificates, each
Class of Upper Tier REMIC Regular Interest and each class of Lower
Tier Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Interest Remittance Amount
: With respect to any Distribution
Date and the Mortgage Loans in a Loan Group, that portion of
Available Funds attributable to interest relating to the Mortgage
Loans in that Loan Group.
Investor : With respect to each MERS Designated Mortgage
Loan, the Person named on the MERS System as the investor pursuant
to the MERS Procedures Manual.
IRS :
The Internal Revenue Service.
Late Collections : With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date
immediately following such Due Period, whether as late payments of
Scheduled Payments or as Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, Subsequent Recoveries or otherwise, which
represent late payments or collections of principal and/or interest
due (without regard to any acceleration of payments under the
related Mortgage and Mortgage Note) but delinquent for such Due
Period and not previously recovered.
LIBOR : With respect to any Interest Accrual Period
for the LIBOR Certificates, the rate determined by the Securities
Administrator on the related LIBOR Determination Date on the basis
of the offered rate for one-month U.S. dollar deposits as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time)
on such date; provided , that if such rate does not appear
on Telerate Page 3750, the rate for such date will be
determined on the basis of the rates at which one-month U.S. dollar
deposits are offered by the Reference Banks at approximately
11:00 a.m. (London time) on such date to prime banks in the
London interbank market. In such event, the Securities
Administrator shall request the principal London office of each of
the Reference Banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations (rounded upwards if necessary
to the nearest whole multiple of 1/16%). If fewer than two
quotations are provided as requested, the rate for that date will
be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Securities Administrator (after
consultation with the Depositor), at approximately 11:00 a.m.
(New York City time) on such date for one-month U.S. dollar loans
to leading European banks.
LIBOR Certificates : As specified in the Preliminary
Statement.
LIBOR Determination Date:
With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day
preceding the commencement of such Interest Accrual
Period.
Liquidated Mortgage Loan : With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such
Distribution Date and as to which a Servicer has certified to the
Securities Administrator that it has received all amounts it
expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an
REO Property.
Liquidation Proceeds : Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a
trustee’s sale, foreclosure sale or otherwise.
Loan Group : The Group I Mortgage Loans or the Group II
Mortgage Loans, as applicable.
Loan-to-Value Ratio or LTV : As of any date and as to any
Mortgage Loan, the ratio (expressed as a percentage) of the
outstanding principal balance of the Mortgage Loan to (a) in
the case of a purchase, the lesser of (i) the sale price of
the Mortgaged Property and (ii) its appraised value at the
time of sale or (b) in the case of a refinancing or
modification, the appraised value of the Mortgaged Property at the
time of the refinancing or modification.
London Business Day : Any day on which dealings in deposits of
United States dollars are transacted in the London interbank
market.
Lower Tier Interest : An interest in any REMIC formed hereby other
than the Upper Tier REMIC.
Master Agreement : The ISDA Form Master Agreement, dated November
3, 2006, entered into between the Supplemental Interest Trust and
the Derivative Counterparty.
Master Servicer : Wells Fargo and any successors in interest,
and if a successor master servicer is appointed hereunder, such
successor.
Master Servicer Event of Default
: As defined in
Section 9.06.
Master Servicing Fee : As to any Distribution Date and each Mortgage
Loan, an amount equal to 1/12 th the product of (a) the
Master Servicing Fee Rate and (b) the outstanding Stated Principal
Balance of the Mortgage Loan serviced by Countrywide Servicing as
of the prior Distribution Date (or as of the Cut-off Date in the
case of the first Distribution Date).
Master Servicing Fee Rate
: With respect to any Mortgage Loan
serviced by Countrywide Servicing, a per annum rate equal to
0.005%.
Master Servicing Officer : Any officer of the Master Servicer involved
in, or responsible for, the administration and master servicing of
the Mortgage Loans.
MERS :
Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan
: Any Mortgage Loan as to which the
related Mortgage, or an Assignment of Mortgage, has been or will be
recorded in the name of MERS, as nominee for the holder from time
to time of the Mortgage Note.
MERS Procedure Manual : The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to
time.
MERS® System : MERS mortgage electronic registry system, as
more particularly described in the MERS Procedures
Manual.
MIN :
The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS® System.
Monthly Statement : The statement made available to the
Certificateholders by the Securities Administrator through its
website pursuant to Section 4.03.
Moody’s : Moody’s Investors Service, Inc. If
Moody’s is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05 the address for
notices to Moody’s shall be Moody’s Investors Service,
Inc., 99 Church Street, New York, New York 10007, Attention:
Residential Mortgage Pass-Through Group, HASCO (HSI Asset
Securitization Corporation Trust Series 2006-HE1), or such other
address as Moody’s may hereafter furnish to the Depositor and
the Securities Administrator.
Mortgage : The mortgage, deed of trust or other
instrument identified on the Mortgage Loan Schedule as securing a
Mortgage Note.
Mortgage File : The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial
File.
Mortgage Loan : An individual Mortgage Loan that is the
subject of this Agreement, each Mortgage Loan originally sold and
subject to this Agreement being identified on the Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File, the Scheduled Payments, Principal Prepayments,
Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, Prepayment Charges,
and all other rights, benefits, proceeds and obligations arising
from or in connection with such Mortgage Loan, excluding replaced
or repurchased Mortgage Loans.
Mortgage Loan Seller : Any entity which sold Mortgage Loans to the
Sponsor pursuant to a Transfer Agreement.
Mortgage Loan Schedule : A schedule of Mortgage Loans prepared by the
Depositor, delivered to the Trustee on the Closing Date and
referred to on Schedule I, such schedule setting forth the
Data Tape Information with respect to each Mortgage
Loan.
Mortgage Note : The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.
Mortgage Rate : The annual rate of interest borne on a
Mortgage Note, which shall be adjusted from time to
time.
Mortgaged Property : With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the
Mortgage Loan Schedule as securing repayment of the debt evidenced
by the related Mortgage Note.
Mortgagor : The obligor(s) on a Mortgage Note.
Net Derivative Payment: The net payment required to be made on the
Derivative Payment Date either by (a) the Supplemental Interest
Trust to the Derivative Counterparty, to the extent that the fixed
amount payable by the Supplemental Interest Trust under the terms
of the Swap Agreement exceeds the aggregate amount of the
corresponding floating amount payable by the Derivative
Counterparty under the terms of the Swap Agreement and any amounts
payable by the Derivative Counterparty under the Cap Agreement, or
(b) the Derivative Counterparty to the Supplemental Interest Trust,
to the extent that the aggregate amount of the floating amount
payable by the Derivative Counterparty under the terms of the Swap
Agreement and any such amount payable by the Derivative
Counterparty under the Cap Agreement exceeds the corresponding
fixed amount payable by the Supplemental Interest Trust under the
terms of the Swap Agreement, plus in the case of a payment made
under either clause (a) or clause (b) any unpaid amounts due under
such clause from previous Derivative Payment Dates, and accrued
interest thereon as provided in the applicable Derivative
Agreement, as calculated by the Derivative Counterparty and
furnished to the securities administrator of the Supplemental
Interest Trust. Any Swap Termination Payment or Cap Termination
Payment will be made exclusive of the Net Derivative Payment
required to be made by the Derivative Counterparty or Supplemental
Interest Trust, as applicable, under the Swap Agreement or the Cap
Agreement.
Net Monthly Excess Cash Flow
: For any Distribution Date, the
amount of interest and principal remaining for distribution
pursuant to subsection 4.02(a)(iii) (before giving effect to
distributions pursuant to such subsection).
Net Prepayment Interest Shortfall
: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for
such Distribution Date exceeds the sum of Compensating Interest
payments made with respect to such Distribution Date.
Net Swap Payment : With respect to each Swap Payment Date, the
net payment (not including any Swap Termination Payment) required
to be made pursuant to the terms of the Swap Agreement plus any
unpaid amounts due on previous Swap Payment Dates and accrued
interest thereon as provided in the Swap Agreement, as calculated
by the Swap Counterparty and furnished to the Securities
Administrator.
Net WAC Rate : With respect to any Distribution Date (and the
related Interest Accrual Period), a per annum rate equal to the
weighted average of the Expense Adjusted Mortgage Rates of the
Mortgage Loans as of the first day of the related Due Period (not
including for this purpose Mortgage Loans for which Principal
Prepayments in Full have been received and distributed in the month
prior to that Distribution Date).
NIM Issuer : The entity established as the issuer of the
NIM Securities.
NIM Securities : Any debt securities secured or otherwise
backed by some or all of the Class X and Class P
Certificates that are rated by any Rating Agency.
NIM Trustee : The indenture trustee for the NIM
Securities.
Non-Delay Certificates : As specified in the Preliminary
Statement.
Non-Permitted Transferee : A Person other than a Permitted
Transferee.
Non-U.S. Person : A person that is not a U.S. Person.
Nonrecoverable P&I Advance
: Any P&I Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment (taking into
account Accepted Servicing Practices) of the related Servicer, the
Master Servicer, as successor servicer, or any successor master
servicer including the Trustee, as applicable, will not or, in the
case of a proposed P&I Advance, would not be ultimately
recoverable from related Late Collections on such Mortgage Loan or
REO Property as provided herein.
Nonrecoverable Servicing Advance
: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in accordance with Accepted Servicing Practices,
will not or, in the case of a proposed Servicing Advance, would not
be ultimately recoverable from related Late Collections.
Notice of Final Distribution
: The notice to be provided by the
Securities Administrator pursuant to Section 11.02 to the
effect that final distribution on any of the Certificates shall be
made only upon presentation and surrender thereof.
Offered Certificates : As specified in the Preliminary
Statement.
Offering Documents: The Prospectus and the Private Placement
Memorandum.
Officer’s Certificate
: A certificate signed by an officer
of a Servicer or the Master Servicer, as applicable, with
responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee and the Securities Administrator
pursuant to this Agreement.
Opinion of Counsel : A written opinion of counsel, which may be
in-house or outside counsel to the Depositor, the Sponsor, the
Master Servicer or the Trustee, acceptable to the Trustee or the
Securities Administrator, as applicable, except that any opinion of
counsel relating to (a) the qualification of any REMIC created
hereunder as a REMIC or (b) compliance with the REMIC Provisions
must be an opinion of Independent counsel.
Option to Purchase: On the first Optional Termination Date and any
Distribution Date thereafter, the Master Servicer, upon instruction
by the Depositor, shall have the option to purchase the Mortgage
Loans. If the Depositor fails to instruct the Master Servicer to
purchase the Mortgage Loans, the Master Servicer has the right and,
at its own option, may purchase the Mortgage Loans on the first
Distribution Date and any Distribution Date thereafter on which the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period is less than or equal to 5.00%
of the Cut-off Date Pool Principal Balance.
Optional Termination Date
: Any Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the
last day of the related Due Period, is less than or equal to 10.00%
of the Cut-off Date Pool Principal Balance.
OTS :
Office of Thrift Supervision, and any successor thereto.
Outstanding : With respect to the Certificates as of any
date of determination, all Certificates theretofore executed and
authenticated under this Agreement except:
(i) Certificates theretofore canceled by the
Securities Administrator or delivered to the Securities
Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu
of which other Certificates have been executed and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan
: As of any Due Date, a Mortgage
Loan with a Stated Principal Balance greater than zero which was
not the subject of a Principal Prepayment in Full prior to such Due
Date and which did not become a Liquidated Mortgage Loan prior to
such Due Date.
Overcollateralization Amount
: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date over (b) the
aggregate of the Class Certificate Balances of the LIBOR
Certificates and the Principal-Only Certificates as of such
Distribution Date (after giving effect to the payment of the
Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency
: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralization
Target Amount applicable to such Distribution Date over
(b) the Overcollateralization Amount applicable to such
Distribution Date.
Overcollateralization Reduction
Amount : With respect to
any Distribution Date, an amount equal to the lesser of
(a) the Excess Overcollateralization Amount and (b) the
Net Monthly Excess Cash Flow.
Overcollateralization Target Amount
: Prior to the Stepdown Date, an
amount equal to 1.25% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off Date. On and after the
Stepdown Date provided a Trigger Event is not in effect, an amount
equal to the greater of (i) 2.50% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due
Period and (ii) 0.50% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off Date; provided, however
, that if, on any Distribution Date a Trigger Event exists, the
Overcollateralization Target Amount shall not be reduced to the
applicable percentage of then current aggregate Stated Principal
Balance of the Mortgage Loans until the Distribution Date on which
a Trigger Event no longer exists but rather shall remain the
Overcollateralization Target Amount as determined for the
immediately preceding Distribution Date. When the
Class Certificate Balance of each Class of LIBOR
Certificates and the Principal-Only Certificates have been reduced
to zero, the Overcollateralization Target Amount will thereafter
equal zero.
Ownership Interest : As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial.
P&I Advance : As to any Mortgage Loan or REO Property, any
advance made by a Servicer in respect of any Remittance Date
representing the aggregate of all payments of principal and
interest, net of the applicable Servicing Fee, that were due during
the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income
on the Mortgaged Properties acquired by foreclosure or deed in lieu
of foreclosure as determined pursuant to the related Servicing
Agreement.
Percentage Interest : As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the
related Class, such percentage interest being set forth on the face
thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of the same Class.
Permitted Investments : Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Securities Administrator, the
Trustee or any of their respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) demand and time deposits in, certificates of
deposit of, or bankers’ acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of
bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than
30 days) denominated in United States dollars and issued by,
any Depository Institution and rated F1+ by Fitch, A-1+ by Standard
& Poor’s and P-1 by Moody’s;
(iii) repurchase obligations with respect to any
security described in clause (i) above entered into with
a Depository Institution (acting as principal);
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the
laws of the United States of America or any state thereof and that
are rated by Fitch, Moody’s and Standard & Poor’s
(in each case, to the extent they are designated as Rating Agencies
in the Preliminary Statement), and by each other Rating Agency that
rates such securities, in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than
30 days after the date of acquisition thereof) that is rated
by Fitch, Moody’s and Standard & Poor’s (in each
case, to the extent they are designated as Rating Agencies in the
Preliminary Statement), and by each other Rating Agency that rates
such securities, in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds, including money
market funds managed or advised by the Trustee, the Securities
Administrator or an Affiliate thereof, that have been rated
“Aaa” by Moody’s, “AAA” by
Standard & Poor’s and, if rated by Fitch,
“AAA” by Fitch; and
(vii) if previously confirmed in writing to the
Securities Administrator, any other demand, money market or time
deposit, or any other obligation, security or investment, as may be
acceptable to each of the Rating Agencies as a permitted investment
of funds backing “Aaa” or “AAA” rated
securities;
provided,
however , that no
instrument described hereunder shall evidence either the right to
receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest
payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument
provide a yield to maturity at par greater than 120.00% of the
yield to maturity at par of the underlying obligations.
Permitted Transferee : Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency
or instrumentality of any of the foregoing, (ii) a foreign
government, international organization or any agency or
instrumentality of either of the foregoing, (iii) an
organization (except certain farmers’ cooperatives described
in Section 521 of the Code) which is exempt from tax imposed
by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income)
on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural
electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom
income from a Residual Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of such Person or any other U.S.
Person, (vi) an “electing large partnership”
within the meaning of Section 775 of the Code and
(vii) any other Person so designated by the Depositor based
upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any
REMIC formed hereby to fail to qualify as a REMIC at any time that
the Certificates are outstanding. The terms “United
States”, “State” and “international
organization” shall have the meanings set forth in
Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United
States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the
exception of Freddie Mac, a majority of its board of directors is
not selected by such government unit.
Person : Any individual, corporation, partnership,
joint venture, association, limited liability company, joint-stock
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
Physical Certificates : As specified in the Preliminary
Statement.
Pool Stated Principal Balance
: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans
for such Distribution Date that were Outstanding Mortgage Loans on
the Due Date in the related Due Period.
Prepayment Charge : Any prepayment premium, penalty or charge
collected by a Servicer with respect to a Mortgage Loan from a
Mortgagor in connection with any Principal Prepayment pursuant to
the terms of the related Mortgage Note.
Prepayment Interest Excess
: With respect to any Distribution
Date and any Mortgage Loan serviced by Wells Fargo, any interest
collected by Wells Fargo, as Servicer, with respect to any such
Mortgage Loan as to which a Principal Prepayment in Full occurs
from the 1st day of the month through the 13th day of the month in
which such Distribution Date occurs and that represents interest
that accrues from the 1st day of such month to the date of such
Principal Prepayment in Full; and with respect to any Distribution
Date and any Mortgage Loan serviced by Countrywide Servicing, any
interest collected by Countrywide Servicing with respect to any
such Mortgage Loan as to which a Principal Prepayment occurs from
the 1st day of the month through the 15th day of the month in which
such Distribution Date occurs and that represents interest that
accrues from the 1st day of such month to the date of such
Principal Prepayment in Full.
Prepayment Interest Shortfall
: With respect to each Servicer, the
meaning assigned to such term in the related Servicing
Agreement.
Prepayment Period : With respect to each Servicer, the meaning
assigned to such term (or to the term “Principal Prepayment
Period” with respect to Wells Fargo) in the related Servicing
Agreement.
Primary Mortgage Insurance Policy
: Any mortgage guaranty insurance,
if any, on an individual Mortgage Loan as evidenced by a policy or
certificate, whether such policy is obtained by the related
Mortgage Loan Seller, the lender or the borrower.
Principal-Only Certificate
: Any Class II-A-5
Certificate.
Principal Payment Amount : For any Distribution Date, the sum of
(i) the Basic Principal Payment Amount for such Distribution
Date and (ii) the Extra Principal Payment Amount for such
Distribution Date.
Principal Prepayment : Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) that is received in advance of its scheduled Due
Date, excluding any Prepayment Charge thereon, and that is not
accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent
to the month of prepayment.
Principal Prepayment in Full
: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Remittance Amount
: With respect to any Distribution
Date, the amount equal to the sum of the following amounts (without
duplication) with respect to the related Due Period: (i) each
scheduled payment of principal on a Mortgage Loan due during such
Due Period and received by the Servicers on or prior to the related
Determination Date or advanced by the Servicers for the related
Remittance Date, (ii) all Principal Prepayments received
during the related Prepayment Period; (iii) all net
Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds
on the Mortgage Loans allocable to principal, and all Subsequent
Recoveries, actually collected by the Servicers during the related
Prepayment Period; (iv) the portion of the Repurchase Price
allocable to principal with respect to each Mortgage Loan
repurchased by a Mortgage Loan Seller or the Sponsor, as the case
may be, that was repurchased on or prior to the related
Determination Date; and (v) all Substitution Adjustment
Amounts allocable to principal with respect to the substitutions of
Mortgage Loans that occur on or prior to the related Determination
Date; and (vi) the allocable portion of the proceeds received
with respect to the termination of the Trust Fund pursuant to
clause (a) of Section 11.01 (to the extent such
proceeds relate to principal).
Private Certificates : As specified in the Preliminary
Statement.
Private Placement Memorandum:
The Private Placement Memorandum,
dated November 1, 2006 relating to the offering of the Class M-10
Certificates.
Prospectus : The Prospectus, dated April 3, 2006, as
supplemented by the Prospectus Supplement.
Prospectus Supplement : The Prospectus Supplement, dated November 1,
2006 relating to the Offered Certificates.
PTCE :
As defined in Section 5.02(b).
Purchase Agreement : The Mortgage Loan Purchase Agreement, dated as
of October 1, 2006, between the Depositor and the
Sponsor.
Rating Agency : Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no
longer in existence, “Rating Agency” shall be such
nationally recognized statistical rating organization, or other
comparable Person, as is designated by the Depositor, notice of
which designation shall be given to the Trustee and the Securities
Administrator. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without
giving effect to any modifiers. For purposes of Section 12.05,
the addresses for notices to each Rating Agency shall be the
address specified therefor in the definition corresponding to the
name of such Rating Agency, or such other address as either such
Rating Agency may hereafter furnish to the Depositor and the
Securities Administrator.
Realized Losses : With respect to any date of determination and
any Liquidated Mortgage Loan, the amount, if any, by which
(a) the unpaid principal balance of such Liquidated Mortgage
Loan together with accrued and unpaid interest thereon exceeds
(b) the Liquidation Proceeds with respect thereto net of the
expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount
of unreimbursed Servicing Advances with respect to such Liquidated
Mortgage Loan.
Record Date : With respect to any Distribution Date and any
Certificate, the close of business on the Business Day immediately
preceding such Distribution Date; provided, however , that,
for any Certificate issued in definitive form, the Record Date
shall be the close of business on the last Business Day of the
month preceding the month in which such applicable Distribution
Date occurs (or, in the case of the first Distribution Date, the
Closing Date).
Reference Bank : As defined in Section 4.04.
Regulation AB : Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such
may be amended from time to time, and subject to such clarification
and interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act Release
No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Regulation S: Regulation S promulgated under the Securities
Act or any successor provision thereto, in each case as the same
may be amended from time to time; and all references to any rule,
section or subsection of, or definition or term contained in,
Regulation S means such rule, section, subsection, definition or
term, as the case may be, or any successor thereto, in each case as
the same may be amended from time to time.
Regulation S Investment Letter:
As defined in Section
5.02(b).
Regular Certificates : As specified in the Preliminary
Statement.
Relevant Servicing Criteria
: The Servicing Criteria applicable
to the parties having reporting obligations hereunder, as set forth
on Exhibit S attached hereto. For clarification purposes, multiple
parties can have responsibility for the same Relevant Servicing
Criteria. With respect to any Servicing Function Participant
engaged by the Master Servicer, the Securities Administrator, the
Custodian or any Servicer, the term “Relevant Servicing
Criteria” may refer to a portion of the Relevant Servicing
Criteria applicable to such parties.
Relief Act Interest Shortfall
: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due
Period as a result of the application of the Servicemembers Civil
Relief Act or any applicable similar state statutes.
REMIC : Each pool of assets in the Trust Fund
designated as a REMIC pursuant to the Preliminary
Statement.
REMIC 1 : As described in the Preliminary
Statement.
REMIC 2 : As described in the Preliminary
Statement.
REMIC 3 : As described in the Preliminary
Statement.
REMIC 2 Net Funds Cap : For any Distribution Date (and the related
Interest Accrual Period) and any Class of LIBOR Certificates, an
amount equal to (i) the weighted average of the interest rates on
the Lower Tier Interests in REMIC 2, weighted in proportion to
their Class Certificate Balances as of the beginning of the related
Interest Accrual Period, multiplied by (ii) the quotient of (a) 30,
divided by (b) the actual number of days in the Interest Accrual
Period.
REMIC Provisions : Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear
at Sections 860A through 860G of Subchapter M of Chapter 1 of
the Code, and related provisions, and regulations promulgated
thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
Remittance Date : To the extent provided in the related
Servicing Agreement, (i) with respect to Wells Fargo, as Servicer,
the 18 th calendar day of any month, or if such 18
th day is not a Business Day, the first Business Day
immediately following and (ii) with respect to Countrywide
Servicing, the 24 th day of any month, or if such 24
th day is not a Business Day, the first Business Day
immediately preceding.
REO Disposition : The final sale by a Servicer of any REO
Property.
REO Property : A Mortgaged Property acquired by the Trust
Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
Reportable Event : As defined in Section 8.12(a)(iii).
Reporting Servicer : As defined in Section 8.12(a)(ii).
Repurchase Price : With respect to any Mortgage Loan, an amount
equal to the sum of (i) the unpaid principal balance of such
Mortgage Loan as of the date of repurchase, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage
Rate from the last date through which interest has been paid to the
date of repurchase, (iii) all unreimbursed Servicing Advances,
(iv) the amount of any costs and damages incurred by the Trust Fund
as a result of any violation of any applicable federal, state or
local predatory- or abusive-lending law arising from or in
connection with the origination of such Mortgage Loan and
(v) all expenses incurred by the Master Servicer, the related
Servicer or Trustee arising out of the Master Servicer’s, the
related Servicer’s or Trustee’s enforcement of the
applicable Mortgage Loan Seller’s or Sponsor’s
repurchase obligation hereunder.
Request for Release : The Request for Release submitted by a
Servicer to the Trustee, substantially in the form of
Exhibit J.
Residual Certificates : As specified in the Preliminary
Statement.
Responsible Officer : When used with respect to the Trustee, the
Securities Administrator, the Master Servicer, any vice president,
any assistant vice president, any assistant secretary, any
assistant treasurer, any associate, or any other officer of the
Trustee, the Securities Administrator or the Master Servicer
customarily performing functions similar to those performed by any
of the above designated officers who at such time shall be officers
to whom, with respect to a particular matter, such matter is
referred because of such officer’s knowledge of and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Rolling Three Month Delinquency Rate
: With respect to any Distribution
Date, the average of the Delinquency Rates for each of the three
(or one or two, in the case of the first and second Distribution
Dates) immediately preceding calendar months.
Rule 144A Investment Letter
: As defined in
Section 5.02(b).
Sarbanes-Oxley Act : The Sarbanes-Oxley Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including
any interpretations thereof by the Commission’s
staff).
Sarbanes-Oxley Certification
: A written certification signed by
an officer of the Master Servicer that complies with (i) the
Sarbanes-Oxley Act, and (ii) Exchange Act Rules 13a-14(d) and
15d-14(d), as in effect from time to time; provided that if, after
the Closing Date (a) the Sarbanes-Oxley Act is amended, (b) the
Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any
statement of a division thereof, or (c) any future releases, rules
and regulations are published by the Commission from time to time
pursuant to the Sarbanes-Oxley Act, which in any such case affects
the form or substance of the required certification and results in
the required certification being, in the reasonable judgment of the
Master Servicer, materially more onerous that then form of the
required certification as of the Closing Date, the Sarbanes-Oxley
Certification shall be as agreed to by the Master Servicer and the
Depositor following a negotiation in good faith to determine how to
comply with any such new requirements.
Scheduled Payment : The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on
such Mortgage Loan which, unless otherwise specified herein, shall
give effect to any related Debt Service Reduction and any Deficient
Valuation that affects the amount of the monthly payment due on
such Mortgage Loan.
Securities Act : The Securities Act of 1933, as amended and the
rules and regulations thereunder.
Securities Administrator : Wells Fargo and any successors in interest,
and if a successor securities administrator is appointed hereunder,
such successor.
Securities Administrator Float Period
: With respect to the Distribution
Date and the related amounts in the Distribution Account, the
period commencing on the Remittance Date immediately preceding such
Distribution Date and ending on such Distribution Date.
Senior Interest Payment Amount
: With respect to any Distribution
Date and any Class of Class A Certificates, the sum of
the Interest Payment Amount and the Interest Carry Forward Amount,
if any, for that Distribution Date for that Class.
Servicer : Each of Wells Fargo and Countrywide Servicing,
and any successors in interest.
Service(s)(ing) : In accordance with Regulation AB, the act of
servicing and administering the Mortgage Loans or any other assets
of the Trust Fund by an entity that meets the definition of
“servicer’ set forth in Item 1101 of Regulation AB and
is subject to the disclosure requirements set forth in Item 1108 of
Regulation AB. For clarification purposes, any uncapitalized
occurrence of this term in this Agreement shall have the meaning
commonly understood by participants in the residential
mortgage-backed securitization market.
Servicing Advances : With respect to the Servicers and the Master
Servicer (including the Trustee in its capacity as successor master
servicer), all customary and reasonable “out of pocket”
costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Servicers in the performance of its
servicing obligations under the related Servicing Agreement or by
the Master Servicer (including the Trustee in its capacity as
successor master servicer) in the performance of its obligations
hereunder, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the
Mortgaged Property, (ii) any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of the
REO Property and (iv) any other expenses permitted to be reimbursed
as Servicing Advances under the related Servicing Agreement, as
applicable.
Servicing Agreement : Each reconstituted servicing agreement or
assignment, assumption and recognition agreement set forth on
Exhibit M hereto and relating to a Servicer and the servicing of
the related Mortgage Loans by such Servicer, as the same may be
amended from time to time.
Servicing Criteria : The criteria set forth in paragraph (d) of
Item 1122 of Regulation AB, as such may be amended from time to
time.
Servicing Fee : With respect to each Servicer, the meaning
assigned to such term in the related Servicing
Agreement.
Servicing Fee Rate : With respect to each Mortgage Loan, the rate
specified in the related Servicing Agreement.
Servicing File : With respect to each Servicer, the meaning
assigned to such term in the related Servicing
Agreement.
Servicing Function Participant:
Any Sub-Servicer or
Subcontractor of a Servicer, the Master Servicer, the Custodian or
the Securities Administrator, respectively.
Servicing Officer : Any officer of a Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose name and facsimile signature appear on a list of
servicing officers furnished to the Master Servicer and the Trustee
by such Servicer on the Closing Date, as such list may from time to
time be amended.
Similar Law : As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan
: Each
Mortgage Loan with respect to which any portion of a Scheduled
Payment is, as of the last day of the prior Due Period, two months
or more past due (including any such Mortgage Loan in foreclosure,
any such Mortgage Loan related to REO Property and any such
Mortgage Loan where the related Mortgagor has filed for
bankruptcy), without giving effect to any grace period
.
Sponsor : HSBC Bank USA, National Association, a
national banking association, and its successors in
interest.
Standard & Poor’s
: Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies,
Inc. If Standard & Poor’s is designated as a Rating
Agency in the Preliminary Statement, for purposes of
Section 12.05 the address for notices to Standard &
Poor’s shall be Standard & Poor’s, 55 Water
Street, New York, New York 10041, Attention: Residential Mortgage
Surveillance Group - HASCO (HSI Asset Securitization
