EXHIBIT 4
XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2007
------------------------------------------------
XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2007-NC4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-NC4
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans...............................................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
Section 2.07 Enforcement of Obligations for Breach of Mortgage Loan
Representations..............................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers.................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between Subservicers, the
Master Servicer and the Trustee..............................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Master Servicer..............................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................
Section 3.10 Collection Accounts..........................................
Section 3.11 Withdrawals from the Collection Accounts.....................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account.........................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements...................................................
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee..........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants
Attestation Report...........................................
Section 3.24 Master Servicer to Act as Servicer...........................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
Section 3.27 Optional Purchase of Delinquent Mortgage Loans...............
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 Swap Account.................................................
Section 4.07 The Certificate Insurance Policy.............................
Section 4.08 Effect of Payments by the Certificate Insurer; Subrogation...
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
Section 5.07 Voting Rights of the Certificate Insurer.....................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others...................................................
Section 6.04 Limitation on Resignation of the Servicer....................
Section 6.05 Additional Indemnification by the Servicer; Third-Party
Claims.......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Master Servicer to Act; Appointment of Successor.............
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement.................
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's
Obligations..................................................
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................
Section 9.03 Representations and Warranties of the Master Servicer........
Section 9.04 Master Servicer Events of Default............................
Section 9.05 Waiver of Default............................................
Section 9.06 Successor to the Master Servicer.............................
Section 9.07 Compensation of the Master Servicer..........................
Section 9.08 Merger or Consolidation......................................
Section 9.09 Resignation of the Master Servicer...........................
Section 9.10 Assignment or Delegation of Duties by the Master Servicer....
Section 9.11 Limitation on Liability of the Master Servicer...............
Section 9.12 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities Administrator.......
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans...............................................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities Administrator........
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator................................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Assignment; Sales; Advance Facilities........................
Section 12.08 Limitation on Rights of Certificateholders...................
Section 12.09 Inspection and Audit Rights..................................
Section 12.10 Certificates Nonassessable and Fully Paid....................
Section 12.11 Rule of Construction.........................................
Section 12.12 Waiver of Jury Trial.........................................
Section 12.13 Rights of the Third Parties..................................
Section 12.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness...............................................
Section 12.15 The Certificate Insurer Default..............................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Saxon, as Servicer
Schedule II-A Further Representations and Warranties of Saxon
Schedule III Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to the Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C-1 Form of Class R Certificate
Exhibit C-2 Form of Class RX Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of
Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Annual Certification to be provided to the
Master Servicer
Exhibit N Form of Certification to be provided by Saxon to
Depositor
Exhibit O Form of Servicer Power of Attorney
Exhibit P Servicing Criteria To Be Addressed in Assessment of
Compliance
Exhibit Q Additional Form 10-D Disclosure
Exhibit R Additional Form 10-K Disclosure
Exhibit S Form 8-K Disclosure Information
Exhibit T Interest Rate Swap Agreement
Exhibit U Form of Saxon Servicer Reports
Exhibit V Saxon Standard File Layout - Delinquency Reporting
Exhibit W [Reserved]
Exhibit X Form of Additional Disclosure Notification
Exhibit Y Representations and Warranties Agreement
Exhibit Z Certificate Insurance Policy
Exhibit AA Insurance Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of May 1, 2007 among
XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation, as depositor (the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association ("Xxxxx Fargo"), as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator"), SAXON MORTGAGE SERVICES, INC., a Texas corporation, as servicer
("Saxon" or the "Servicer"), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a
national banking association, as trustee (the "Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator, on behalf of the Trustee shall elect
that five segregated asset pools within the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets, (iii) the Excess Reserve Fund
Account, and (iv) the right of the LIBOR Certificates to receive Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts
and the obligation to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising five REMICs (Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC, respectively,
and each, a "Trust REMIC"). The Class X Interest, the Class IO Interest and each
Class of LIBOR Certificates (other than the right of each Class of LIBOR
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls) represents ownership of a regular interest in a REMIC for purposes
of the REMIC Provisions. The Class R Certificates represent ownership of the
sole class of residual interest in each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class RX Certificates represent ownership of the sole class of
residual interest in the Class X REMIC for purposes of the REMIC provisions. The
Startup Day for each Trust REMIC described herein is the date referenced in
Section 2.05. The latest possible maturity date for each regular interest is the
latest date referenced in Section 2.05. The Class X REMIC shall hold as assets
the Class UT-X Interest and the Class UT-IO Interest as set out below. The
Upper-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC shall hold as
assets the several classes of uncertificated Pooling-Tier REMIC-2 Regular
Interests. Pooling-Tier REMIC-2 shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-1 Regular Interests. Pooling-Tier REMIC-1
shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets, (iii) the Excess Reserve Fund
Account, and (iv) the right of the LIBOR Certificates to receive Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts
and the obligation to pay Class IO Shortfalls).
For federal income tax purposes, each Class of LIBOR Certificates
represents a beneficial ownership of a regular interest in the Upper-Tier REMIC,
the right to receive Basis Risk CarryForward Amounts and without duplication,
Upper-Tier CarryForward Amounts, and the obligation to pay Class IO Shortfalls;
the Class X Certificates represent beneficial ownership of the Class X Interest,
the Class IO Interest, the Interest Rate Swap Agreement, the Swap Account, the
Excess Reserve Fund Account and the right to receive Class IO Shortfalls,
subject to the obligation to pay Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts; and the Class P Certificates
represent beneficial ownership of the Prepayment Premiums, which portions of the
Trust Fund shall be treated as a grantor trust under subpart E, Part I of
subchapter J of the Code (the "Grantor Trust").
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Pooling-Tier REMIC-1 Initial Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 Interest Interest Rate Principal Amount
----------------------------- -------------------- ----------------------------
Class PT1-I-1 (1) $ 32,535,134.33
Class PT1-I-2A (2) $ 4,122,674.18
Class PT1-I-2B (3) $ 4,122,674.18
Class PT1-I-3A (2) $ 3,988,394.28
Class PT1-I-3B (3) $ 3,988,394.28
Class PT1-I-4A (2) $ 3,861,027.55
Class PT1-I-4B (3) $ 3,861,027.55
Class PT1-I-5A (2) $ 3,740,037.61
Class PT1-I-5B (3) $ 3,740,037.61
Class PT1-I-6A (2) $ 3,624,904.33
Class PT1-I-6B (3) $ 3,624,904.33
Class PT1-I-7A (2) $ 3,515,124.70
Class PT1-I-7B (3) $ 3,515,124.70
Class PT1-I-8A (2) $ 3,410,213.87
Class PT1-I-8B (3) $ 3,410,213.87
Class PT1-I-9A (2) $ 3,309,706.17
Class PT1-I-9B (3) $ 3,309,706.17
Class PT1-I-10A (2) $ 3,213,034.39
Class PT1-I-10B (3) $ 3,213,034.39
Class PT1-I-11A (2) $ 3,119,906.50
Class PT1-I-11B (3) $ 3,119,906.50
Class PT1-I-12A (2) $ 3,029,553.97
Class PT1-I-12B (3) $ 3,029,553.97
Class PT1-I-13A (2) $ 2,940,309.99
Class PT1-I-13B (3) $ 2,940,309.99
Class PT1-I-14A (2) $ 2,828,799.01
Class PT1-I-14B (3) $ 2,828,799.01
Class PT1-I-15A (2) $ 2,708,481.42
Class PT1-I-15B (3) $ 2,708,481.42
Class PT1-I-16A (2) $ 2,596,765.66
Class PT1-I-16B (3) $ 2,596,765.66
Class PT1-I-17A (2) $ 2,482,648.00
Class PT1-I-17B (3) $ 2,482,648.00
Class PT1-I-18A (2) $ 2,384,943.82
Class PT1-I-18B (3) $ 2,384,943.82
Class PT1-I-19A (2) $ 2,299,926.35
Class PT1-I-19B (3) $ 2,299,926.35
Class PT1-I-20A (2) $ 2,335,829.08
Class PT1-I-20B (3) $ 2,335,829.08
Class PT1-I-21A (2) $ 10,547,956.53
Class PT1-I-21B (3) $ 10,547,956.53
Class PT1-I-22A (2) $ 3,023,819.88
Class PT1-I-22B (3) $ 3,023,819.88
Class PT1-I-23A (2) $ 1,492,823.88
Class PT1-I-23B (3) $ 1,492,823.88
Class PT1-I-24A (2) $ 1,423,898.89
Class PT1-I-24B (3) $ 1,423,898.89
Class PT1-I-25A (2) $ 1,381,115.66
Class PT1-I-25B (3) $ 1,381,115.66
Class PT1-I-26A (2) $ 1,459,236.47
Class PT1-I-26B (3) $ 1,459,236.47
Class PT1-I-27A (2) $ 9,823,927.39
Class PT1-I-27B (3) $ 9,823,927.39
Class PT1-I-28A (2) $ 2,236,825.50
Class PT1-I-28B (3) $ 2,236,825.50
Class PT1-I-29A (2) $ 723,117.01
Class PT1-I-29B (3) $ 723,117.01
Class PT1-I-30A (2) $ 701,541.09
Class PT1-I-30B (3) $ 701,541.09
Class PT1-I-31A (2) $ 975,033.07
Class PT1-I-31B (3) $ 975,033.07
Class PT1-I-32A (2) $ 863,123.33
Class PT1-I-32B (3) $ 863,123.33
Class PT1-I-33A (2) $ 5,789,907.76
Class PT1-I-33B (3) $ 5,789,907.76
Class PT1-I-34A (2) $ 1,144,445.37
Class PT1-I-34B (3) $ 1,144,445.37
Class PT1-I-35A (2) $ 331,000.97
Class PT1-I-35B (3) $ 331,000.97
Class PT1-I-36A (2) $ 279,238.80
Class PT1-I-36B (3) $ 279,238.80
Class PT1-I-37A (2) $ 563,793.81
Class PT1-I-37B (3) $ 563,793.81
Class PT1-I-38A (2) $ 389,851.39
Class PT1-I-38B (3) $ 389,851.39
Class PT1-I-39A (2) $ 532,835.41
Class PT1-I-39B (3) $ 532,835.41
Class PT1-I-40A (2) $ 197,651.50
Class PT1-I-40B (3) $ 197,651.50
Class PT1-I-41A (2) $ 234,931.58
Class PT1-I-41B (3) $ 234,931.58
Class PT1-I-42A (2) $ 187,031.23
Class PT1-I-42B (3) $ 187,031.23
Class PT1-I-43A (2) $ 348,007.02
Class PT1-I-43B (3) $ 348,007.02
Class PT1-I-44A (2) $ 248,090.97
Class PT1-I-44B (3) $ 248,090.97
Class PT1-I-45A (2) $ 328,929.22
Class PT1-I-45B (3) $ 328,929.22
Class PT1-I-46A (2) $ 137,444.99
Class PT1-I-46B (3) $ 137,444.99
Class PT1-I-47A (2) $ 157,505.15
Class PT1-I-47B (3) $ 157,505.15
Class PT1-I-48A (2) $ 123,831.46
Class PT1-I-48B (3) $ 123,831.46
Class PT1-I-49A (2) $ 119,017.72
Class PT1-I-49B (3) $ 119,017.72
Class PT1-I-50A (2) $ 116,957.16
Class PT1-I-50B (3) $ 116,957.16
Class PT1-I-51A (2) $ 111,737.28
Class PT1-I-51B (3) $ 111,737.28
Class PT1-I-52A (2) $ 108,290.16
Class PT1-I-52B (3) $ 108,290.16
Class PT1-I-53A (2) $ 106,438.45
Class PT1-I-53B (3) $ 106,438.45
Class PT1-I-54A (2) $ 101,627.85
Class PT1-I-54B (3) $ 101,627.85
Class PT1-I-55A (2) $ 100,703.79
Class PT1-I-55B (3) $ 100,703.79
Class PT1-I-56A (2) $ 133,099.05
Class PT1-I-56B (3) $ 133,099.05
Class PT1-I-57A (2) $ 108,310.45
Class PT1-I-57B (3) $ 108,310.45
Class PT1-I-58A (2) $ 87,773.82
Class PT1-I-58B (3) $ 87,773.82
Class PT1-I-59A (2) $ 86,037.68
Class PT1-I-59B (3) $ 86,037.68
Class PT1-I-60A (2) $ 81,830.91
Class PT1-I-60B (3) $ 81,830.91
Class PT1-I-61A (2) $ 81,554.89
Class PT1-I-61B (3) $ 81,554.89
Class PT1-I-62A (2) $ 114,368.33
Class PT1-I-62B (3) $ 114,368.33
Class PT1-I-63A (2) $ 90,372.48
Class PT1-I-63B (3) $ 90,372.48
Class PT1-I-64A (2) $ 70,153.99
Class PT1-I-64B (3) $ 70,153.99
Class PT1-I-65A (2) $ 68,309.45
Class PT1-I-65B (3) $ 68,309.45
Class PT1-I-66A (2) $ 65,320.43
Class PT1-I-66B (3) $ 65,320.43
Class PT1-I-67A (2) $ 64,593.14
Class PT1-I-67B (3) $ 64,593.14
Class PT1-I-68A (2) $ 82,250.41
Class PT1-I-68B (3) $ 82,250.41
Class PT1-I-69A (2) $ 68,523.85
Class PT1-I-69B (3) $ 68,523.85
Class PT1-I-70A (2) $ 56,493.20
Class PT1-I-70B (3) $ 56,493.20
Class PT1-I-71A (2) $ 54,436.68
Class PT1-I-71B (3) $ 54,436.68
Class PT1-I-72A (2) $ 1,630,167.53
Class PT1-I-72B (3) $ 1,630,167.53
Class PT1-II-1 (4) $104,066,454.96
Class PT1-II-2A (5) $ 13,186,731.70
Class PT1-II-2B (6) $ 13,186,731.70
Class PT1-II-3A (5) $ 12,757,225.76
Class PT1-II-3B (6) $ 12,757,225.76
Class PT1-II-4A (5) $ 12,349,832.20
Class PT1-II-4B (6) $ 12,349,832.20
Class PT1-II-5A (5) $ 11,962,835.38
Class PT1-II-5B (6) $ 11,962,835.38
Class PT1-II-6A (5) $ 11,594,571.56
Class PT1-II-6B (6) $ 11,594,571.56
Class PT1-II-7A (5) $ 11,243,431.87
Class PT1-II-7B (6) $ 11,243,431.87
Class PT1-II-8A (5) $ 10,907,865.46
Class PT1-II-8B (6) $ 10,907,865.46
Class PT1-II-9A (5) $ 10,586,382.83
Class PT1-II-9B (6) $ 10,586,382.83
Class PT1-II-10A (5) $ 10,277,169.77
Class PT1-II-10B (6) $ 10,277,169.77
Class PT1-II-11A (5) $ 9,979,292.10
Class PT1-II-11B (6) $ 9,979,292.10
Class PT1-II-12A (5) $ 9,690,291.69
Class PT1-II-12B (6) $ 9,690,291.69
Class PT1-II-13A (5) $ 9,404,837.06
Class PT1-II-13B (6) $ 9,404,837.06
Class PT1-II-14A (5) $ 9,048,159.50
Class PT1-II-14B (6) $ 9,048,159.50
Class PT1-II-15A (5) $ 8,663,313.22
Class PT1-II-15B (6) $ 8,663,313.22
Class PT1-II-16A (5) $ 8,305,980.68
Class PT1-II-16B (6) $ 8,305,980.68
Class PT1-II-17A (5) $ 7,940,965.41
Class PT1-II-17B (6) $ 7,940,965.41
Class PT1-II-18A (5) $ 7,628,450.08
Class PT1-II-18B (6) $ 7,628,450.08
Class PT1-II-19A (5) $ 7,356,514.32
Class PT1-II-19B (6) $ 7,356,514.32
Class PT1-II-20A (5) $ 7,471,352.35
Class PT1-II-20B (6) $ 7,471,352.35
Class PT1-II-21A (5) $ 33,738,555.74
Class PT1-II-21B (6) $ 33,738,555.74
Class PT1-II-22A (5) $ 9,671,950.70
Class PT1-II-22B (6) $ 9,671,950.70
Class PT1-II-23A (5) $ 4,774,926.92
Class PT1-II-23B (6) $ 4,774,926.92
Class PT1-II-24A (5) $ 4,554,464.36
Class PT1-II-24B (6) $ 4,554,464.36
Class PT1-II-25A (5) $ 4,417,618.48
Class PT1-II-25B (6) $ 4,417,618.48
Class PT1-II-26A (5) $ 4,667,494.68
Class PT1-II-26B (6) $ 4,667,494.68
Class PT1-II-27A (5) $ 31,422,685.59
Class PT1-II-27B (6) $ 31,422,685.59
Class PT1-II-28A (5) $ 7,154,680.76
Class PT1-II-28B (6) $ 7,154,680.76
Class PT1-II-29A (5) $ 2,312,952.62
Class PT1-II-29B (6) $ 2,312,952.62
Class PT1-II-30A (5) $ 2,243,940.13
Class PT1-II-30B (6) $ 2,243,940.13
Class PT1-II-31A (5) $ 3,118,728.01
Class PT1-II-31B (6) $ 3,118,728.01
Class PT1-II-32A (5) $ 2,760,774.98
Class PT1-II-32B (6) $ 2,760,774.98
Class PT1-II-33A (5) $ 18,519,523.21
Class PT1-II-33B (6) $ 18,519,523.21
Class PT1-II-34A (5) $ 3,660,607.98
Class PT1-II-34B (6) $ 3,660,607.98
Class PT1-II-35A (5) $ 1,058,735.36
Class PT1-II-35B (6) $ 1,058,735.36
Class PT1-II-36A (5) $ 893,169.56
Class PT1-II-36B (6) $ 893,169.56
Class PT1-II-37A (5) $ 1,803,343.50
Class PT1-II-37B (6) $ 1,803,343.50
Class PT1-II-38A (5) $ 1,246,973.55
Class PT1-II-38B (6) $ 1,246,973.55
Class PT1-II-39A (5) $ 1,704,320.35
Class PT1-II-39B (6) $ 1,704,320.35
Class PT1-II-40A (5) $ 632,205.50
Class PT1-II-40B (6) $ 632,205.50
Class PT1-II-41A (5) $ 751,449.08
Class PT1-II-41B (6) $ 751,449.08
Class PT1-II-42A (5) $ 598,235.64
Class PT1-II-42B (6) $ 598,235.64
Class PT1-II-43A (5) $ 1,113,130.68
Class PT1-II-43B (6) $ 1,113,130.68
Class PT1-II-44A (5) $ 793,540.53
Class PT1-II-44B (6) $ 793,540.53
Class PT1-II-45A (5) $ 1,052,108.71
Class PT1-II-45B (6) $ 1,052,108.71
Class PT1-II-46A (5) $ 439,629.75
Class PT1-II-46B (6) $ 439,629.75
Class PT1-II-47A (5) $ 503,793.91
Class PT1-II-47B (6) $ 503,793.91
Class PT1-II-48A (5) $ 396,085.67
Class PT1-II-48B (6) $ 396,085.67
Class PT1-II-49A (5) $ 380,688.51
Class PT1-II-49B (6) $ 380,688.51
Class PT1-II-50A (5) $ 374,097.63
Class PT1-II-50B (6) $ 374,097.63
Class PT1-II-51A (5) $ 357,401.41
Class PT1-II-51B (6) $ 357,401.41
Class PT1-II-52A (5) $ 346,375.48
Class PT1-II-52B (6) $ 346,375.48
Class PT1-II-53A (5) $ 340,452.65
Class PT1-II-53B (6) $ 340,452.65
Class PT1-II-54A (5) $ 325,065.52
Class PT1-II-54B (6) $ 325,065.52
Class PT1-II-55A (5) $ 322,109.82
Class PT1-II-55B (6) $ 322,109.82
Class PT1-II-56A (5) $ 425,728.86
Class PT1-II-56B (6) $ 425,728.86
Class PT1-II-57A (5) $ 346,440.39
Class PT1-II-57B (6) $ 346,440.39
Class PT1-II-58A (5) $ 280,752.20
Class PT1-II-58B (6) $ 280,752.20
Class PT1-II-59A (5) $ 275,199.00
Class PT1-II-59B (6) $ 275,199.00
Class PT1-II-60A (5) $ 261,743.28
Class PT1-II-60B (6) $ 261,743.28
Class PT1-II-61A (5) $ 260,860.42
Class PT1-II-61B (6) $ 260,860.42
Class PT1-II-62A (5) $ 365,817.06
Class PT1-II-62B (6) $ 365,817.06
Class PT1-II-63A (5) $ 289,064.23
Class PT1-II-64B (6) $ 289,064.23
Class PT1-II-65A (5) $ 224,393.64
Class PT1-II-65B (6) $ 224,393.64
Class PT1-II-66A (5) $ 218,493.72
Class PT1-II-66B (6) $ 218,493.72
Class PT1-II-67A (5) $ 208,933.07
Class PT1-II-67B (6) $ 208,933.07
Class PT1-II-68A (5) $ 206,606.78
Class PT1-II-68B (6) $ 206,606.78
Class PT1-II-69A (5) $ 263,085.08
Class PT1-II-69B (6) $ 263,085.08
Class PT1-II-70A (5) $ 219,179.48
Class PT1-II-70B (6) $ 219,179.48
Class PT1-II-71A (5) $ 180,698.40
Class PT1-II-71B (6) $ 180,698.40
Class PT1-II-71A (5) $ 174,120.45
Class PT1-II-71B (6) $ 174,120.45
Class PT1-II-72A (5) $ 5,214,232.52
Class PT1-II-72B (6) $ 5,214,232.52
Class PT1-R (7) (7)
------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to
a maximum rate of 10.64%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group I WAC Rate over (B) 10.64%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate subject to
a maximum rate of 10.64%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group II WAC Rate over (B) 10.64 %.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be deemed to be distributed to the Pooling-Tier REMIC-1 Regular Interests at the
rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group I
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group II
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
Pooling-Tier Corresponding Corresponding
REMIC-2 Pooling-Tier Corresponding Pooling-Tier Scheduled
Pooling-Tier REMIC-2 Interest REMIC-2 Initial Pooling-Tier REMIC-2 REMIC-1 Regular Crossover
Interest Rate Principal Amount IO Interest Interest Distribution Date
---------------------------------------------------------------------------------------------------------------------
Class PT2-I-1 (1) $ 32,535,134.33 N/A N/A N/A
Class PT2-I-2A (2) $ 4,122,674.18 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 4,122,674.18 N/A N/A N/A
Class PT2-I-3A (2) $ 3,988,394.28 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 3,988,394.28 N/A N/A N/A
Class PT2-I-4A (2) $ 3,861,027.55 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 3,861,027.55 N/A N/A N/A
Class PT2-I-5A (2) $ 3,740,037.61 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 3,740,037.61 N/A N/A N/A
Class PT2-I-6A (2) $ 3,624,904.33 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 3,624,904.33 N/A N/A N/A
Class PT2-I-7A (2) $ 3,515,124.70 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 3,515,124.70 N/A N/A N/A
Class PT2-I-8A (2) $ 3,410,213.87 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 3,410,213.87 N/A N/A N/A
Class PT2-I-9A (2) $ 3,309,706.17 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 3,309,706.17 N/A N/A N/A
Class PT2-I-10A (2) $ 3,213,034.39 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 3,213,034.39 N/A N/A N/A
Class PT2-I-11A (2) $ 3,119,906.50 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 3,119,906.50 N/A N/A N/A
Class PT2-I-12A (2) $ 3,029,553.97 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 3,029,553.97 N/A N/A N/A
Class PT2-I-13A (2) $ 2,940,309.99 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 2,940,309.99 N/A N/A N/A
Class PT2-I-14A (2) $ 2,828,799.01 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 2,828,799.01 N/A N/A N/A
Class PT2-I-15A (2) $ 2,708,481.42 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 2,708,481.42 N/A N/A N/A
Class PT2-I-16A (2) $ 2,596,765.66 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 2,596,765.66 N/A N/A N/A
Class PT2-I-17A (2) $ 2,482,648.00 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 2,482,648.00 N/A N/A N/A
Class PT2-I-18A (2) $ 2,384,943.82 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 2,384,943.82 N/A N/A N/A
Class PT2-I-19A (2) $ 2,299,926.35 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 2,299,926.35 N/A N/A N/A
Class PT2-I-20A (2) $ 2,335,829.08 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 2,335,829.08 N/A N/A N/A
Class PT2-I-21A (2) $ 10,547,956.53 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 10,547,956.53 N/A N/A N/A
Class PT2-I-22A (2) $ 3,023,819.88 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 3,023,819.88 N/A N/A N/A
Class PT2-I-23A (2) $ 1,492,823.88 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 1,492,823.88 N/A N/A N/A
Class PT2-I-24A (2) $ 1,423,898.89 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 1,423,898.89 N/A N/A N/A
Class PT2-I-25A (2) $ 1,381,115.66 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 1,381,115.66 N/A N/A N/A
Class PT2-I-26A (2) $ 1,459,236.47 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 1,459,236.47 N/A N/A N/A
Class PT2-I-27A (2) $ 9,823,927.39 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 9,823,927.39 N/A N/A N/A
Class PT2-I-28A (2) $ 2,236,825.50 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 2,236,825.50 N/A N/A N/A
Class PT2-I-29A (2) $ 723,117.01 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 723,117.01 N/A N/A N/A
Class PT2-I-30A (2) $ 701,541.09 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 701,541.09 N/A N/A N/A
Class PT2-I-31A (2) $ 975,033.07 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 975,033.07 N/A N/A N/A
Class PT2-I-32A (2) $ 863,123.33 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 863,123.33 N/A N/A N/A
Class PT2-I-33A (2) $ 5,789,907.76 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 5,789,907.76 N/A N/A N/A
Class PT2-I-34A (2) $ 1,144,445.37 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 1,144,445.37 N/A N/A N/A
Class PT2-I-35A (2) $ 331,000.97 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 331,000.97 N/A N/A N/A
Class PT2-I-36A (2) $ 279,238.80 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 279,238.80 N/A N/A N/A
Class PT2-I-37A (2) $ 563,793.81 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 563,793.81 N/A N/A N/A
Class PT2-I-38A (2) $ 389,851.39 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 389,851.39 N/A N/A N/A
Class PT2-I-39A (2) $ 532,835.41 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 532,835.41 N/A N/A N/A
Class PT2-I-40A (2) $ 197,651.50 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 197,651.50 N/A N/A N/A
Class PT2-I-41A (2) $ 234,931.58 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 234,931.58 N/A N/A N/A
Class PT2-I-42A (2) $ 187,031.23 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 187,031.23 N/A N/A N/A
Class PT2-I-43A (2) $ 348,007.02 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 348,007.02 N/A N/A N/A
Class PT2-I-44A (2) $ 248,090.97 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 248,090.97 N/A N/A N/A
Class PT2-I-45A (2) $ 328,929.22 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 328,929.22 N/A N/A N/A
Class PT2-I-46A (2) $ 137,444.99 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 137,444.99 N/A N/A N/A
Class PT2-I-47A (2) $ 157,505.15 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 157,505.15 N/A N/A N/A
Class PT2-I-48A (2) $ 123,831.46 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 123,831.46 N/A N/A N/A
Class PT2-I-49A (2) $ 119,017.72 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 119,017.72 N/A N/A N/A
Class PT2-I-50A (2) $ 116,957.16 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 116,957.16 N/A N/A N/A
Class PT2-I-51A (2) $ 111,737.28 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 111,737.28 N/A N/A N/A
Class PT2-I-52A (2) $ 108,290.16 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 108,290.16 N/A N/A N/A
Class PT2-I-53A (2) $ 106,438.45 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 106,438.45 N/A N/A N/A
Class PT2-I-54A (2) $ 101,627.85 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 101,627.85 N/A N/A N/A
Class PT2-I-55A (2) $ 100,703.79 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 100,703.79 N/A N/A N/A
Class PT2-I-56A (2) $ 133,099.05 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $ 133,099.05 N/A N/A N/A
Class PT2-I-57A (2) $ 108,310.45 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $ 108,310.45 N/A N/A N/A
Class PT2-I-58A (2) $ 87,773.82 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $ 87,773.82 N/A N/A N/A
Class PT2-I-59A (2) $ 86,037.68 Class PT2-I-IO-59 N/A N/A
Class PT2-I-59B (3) $ 86,037.68 N/A N/A N/A
Class PT2-I-60A (2) $ 81,830.91 Class PT2-I-IO-60 N/A N/A
Class PT2-I-60B (3) $ 81,830.91 N/A N/A N/A
Class PT2-I-61A (2) $ 81,554.89 Class PT2-I-IO-61 N/A N/A
Class PT2-I-61B (3) $ 81,554.89 N/A N/A N/A
Class PT2-I-62A (2) $ 114,368.33 Class PT2-I-IO-62 N/A N/A
Class PT2-I-62B (3) $ 114,368.33 N/A N/A N/A
Class PT2-I-63A (2) $ 90,372.48 Class PT2-I-IO-63 N/A N/A
Class PT2-I-63B (3) $ 90,372.48 N/A N/A N/A
Class PT2-I-64A (2) $ 70,153.99 Class PT2-I-IO-64 N/A N/A
Class PT2-I-64B (3) $ 70,153.99 N/A N/A N/A
Class PT2-I-65A (2) $ 68,309.45 Class PT2-I-IO-65 N/A N/A
Class PT2-I-65B (3) $ 68,309.45 N/A N/A N/A
Class PT2-I-66A (2) $ 65,320.43 Class PT2-I-IO-66 N/A N/A
Class PT2-I-66B (3) $ 65,320.43 N/A N/A N/A
Class PT2-I-67A (2) $ 64,593.14 Class PT2-I-IO-67 N/A N/A
Class PT2-I-67B (3) $ 64,593.14 N/A N/A N/A
Class PT2-I-68A (2) $ 82,250.41 Class PT2-I-IO-68 N/A N/A
Class PT2-I-68B (3) $ 82,250.41 N/A N/A N/A
Class PT2-I-69A (2) $ 68,523.85 Class PT2-I-IO-69 N/A N/A
Class PT2-I-69B (3) $ 68,523.85 N/A N/A N/A
Class PT2-I-70A (2) $ 56,493.20 Class PT2-I-IO-70 N/A N/A
Class PT2-I-70B (3) $ 56,493.20 N/A N/A N/A
Class PT2-I-71A (2) $ 54,436.68 Class PT2-I-IO-71 N/A N/A
Class PT2-I-71B (3) $ 54,436.68 N/A N/A N/A
Class PT2-I-72A (2) $ 1,630,167.53 Class PT2-I-IO-72 N/A N/A
Class PT2-I-72B (3) $ 1,630,167.53 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A June 2007
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A July 2007
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A August 2007
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A September 2007
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A October 2007
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A November 2007
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A December 2007
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A January 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A February 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A March 2008
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A April 2008
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A May 2008
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A June 2008
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A July 2008
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A August 2008
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A September 2008
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A October 2008
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A November 2008
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A December 2008
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A January 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A February 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A March 2009
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A April 2009
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A May 2009
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A June 2009
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A July 2009
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A August 2009
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A September 2009
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A October 2009
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A November 2009
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A December 2009
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A January 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A February 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A March 2010
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A April 2010
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A May 2010
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A June 2010
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A July 2010
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A August 2010
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A September 2010
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A October 2010
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A November 2010
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A December 2010
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A January 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A February 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A March 2011
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A April 2011
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A May 2011
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A June 2011
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A July 2011
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A August 2011
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A September 2011
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A October 2011
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A November 2011
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A December 2011
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-57A January 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-58A February 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-59A March 2012
Class PT2-I-IO-60 (4) (4) N/A Class PT1-I-60A April 2012
Class PT2-I-IO-61 (4) (4) N/A Class PT1-I-61A May 2012
Class PT2-I-IO-62 (4) (4) N/A Class PT1-I-62A June 2012
Class PT2-I-IO-63 (4) (4) N/A Class PT1-I-63A July 2012
Class PT2-I-IO-64 (4) (4) N/A Class PT1-I-64A August 2012
Class PT2-I-IO-65 (4) (4) N/A Class PT1-I-65A September 2012
Class PT2-I-IO-66 (4) (4) N/A Class PT1-I-66A October 2012
Class PT2-I-IO-67 (4) (4) N/A Class PT1-I-67A November 2012
Class PT2-I-IO-68 (4) (4) N/A Class PT1-I-68A December 2012
Class PT2-I-IO-69 (4) (4) N/A Class PT1-I-69A January 2013
Class PT2-I-IO-70 (4) (4) N/A Class PT1-I-70A February 2013
Class PT2-I-IO-71 (4) (4) N/A Class PT1-I-71A March 2013
Class PT2-I-IO-72 (4) (4) N/A Class PT1-I-72A April 2013
Class PT2-II-1 (5) $104,066,454.96 N/A N/A N/A
Class PT2-II-2A (6) $ 13,186,731.70 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 13,186,731.70 N/A N/A N/A
Class PT2-II-3A (6) $ 12,757,225.76 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 12,757,225.76 N/A N/A N/A
Class PT2-II-4A (6) $ 12,349,832.20 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 12,349,832.20 N/A N/A N/A
Class PT2-II-5A (6) $ 11,962,835.38 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 11,962,835.38 N/A N/A N/A
Class PT2-II-6A (6) $ 11,594,571.56 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 11,594,571.56 N/A N/A N/A
Class PT2-II-7A (6) $ 11,243,431.87 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 11,243,431.87 N/A N/A N/A
Class PT2-II-8A (6) $ 10,907,865.46 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 10,907,865.46 N/A N/A N/A
Class PT2-II-9A (6) $ 10,586,382.83 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 10,586,382.83 N/A N/A N/A
Class PT2-II-10A (6) $ 10,277,169.77 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 10,277,169.77 N/A N/A N/A
Class PT2-II-11A (6) $ 9,979,292.10 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 9,979,292.10 N/A N/A N/A
Class PT2-II-12A (6) $ 9,690,291.69 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 9,690,291.69 N/A N/A N/A
Class PT2-II-13A (6) $ 9,404,837.06 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 9,404,837.06 N/A N/A N/A
Class PT2-II-14A (6) $ 9,048,159.50 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 9,048,159.50 N/A N/A N/A
Class PT2-II-15A (6) $ 8,663,313.22 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 8,663,313.22 N/A N/A N/A
Class PT2-II-16A (6) $ 8,305,980.68 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 8,305,980.68 N/A N/A N/A
Class PT2-II-17A (6) $ 7,940,965.41 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 7,940,965.41 N/A N/A N/A
Class PT2-II-18A (6) $ 7,628,450.08 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 7,628,450.08 N/A N/A N/A
Class PT2-II-19A (6) $ 7,356,514.32 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 7,356,514.32 N/A N/A N/A
Class PT2-II-20A (6) $ 7,471,352.35 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 7,471,352.35 N/A N/A N/A
Class PT2-II-21A (6) $ 33,738,555.74 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 33,738,555.74 N/A N/A N/A
Class PT2-II-22A (6) $ 9,671,950.70 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 9,671,950.70 N/A N/A N/A
Class PT2-II-23A (6) $ 4,774,926.92 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 4,774,926.92 N/A N/A N/A
Class PT2-II-24A (6) $ 4,554,464.36 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 4,554,464.36 N/A N/A N/A
Class PT2-II-25A (6) $ 4,417,618.48 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 4,417,618.48 N/A N/A N/A
Class PT2-II-26A (6) $ 4,667,494.68 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 4,667,494.68 N/A N/A N/A
Class PT2-II-27A (6) $ 31,422,685.59 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 31,422,685.59 N/A N/A N/A
Class PT2-II-28A (6) $ 7,154,680.76 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 7,154,680.76 N/A N/A N/A
Class PT2-II-29A (6) $ 2,312,952.62 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 2,312,952.62 N/A N/A N/A
Class PT2-II-30A (6) $ 2,243,940.13 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 2,243,940.13 N/A N/A N/A
Class PT2-II-31A (6) $ 3,118,728.01 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 3,118,728.01 N/A N/A N/A
Class PT2-II-32A (6) $ 2,760,774.98 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 2,760,774.98 N/A N/A N/A
Class PT2-II-33A (6) $ 18,519,523.21 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 18,519,523.21 N/A N/A N/A
Class PT2-II-34A (6) $ 3,660,607.98 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 3,660,607.98 N/A N/A N/A
Class PT2-II-35A (6) $ 1,058,735.36 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 1,058,735.36 N/A N/A N/A
Class PT2-II-36A (6) $ 893,169.56 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 893,169.56 N/A N/A N/A
Class PT2-II-37A (6) $ 1,803,343.50 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 1,803,343.50 N/A N/A N/A
Class PT2-II-38A (6) $ 1,246,973.55 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 1,246,973.55 N/A N/A N/A
Class PT2-II-39A (6) $ 1,704,320.35 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 1,704,320.35 N/A N/A N/A
Class PT2-II-40A (6) $ 632,205.50 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 632,205.50 N/A N/A N/A
Class PT2-II-41A (6) $ 751,449.08 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 751,449.08 N/A N/A N/A
Class PT2-II-42A (6) $ 598,235.64 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 598,235.64 N/A N/A N/A
Class PT2-II-43A (6) $ 1,113,130.68 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 1,113,130.68 N/A N/A N/A
Class PT2-II-44A (6) $ 793,540.53 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 793,540.53 N/A N/A N/A
Class PT2-II-45A (6) $ 1,052,108.71 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 1,052,108.71 N/A N/A N/A
Class PT2-II-46A (6) $ 439,629.75 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 439,629.75 N/A N/A N/A
Class PT2-II-47A (6) $ 503,793.91 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 503,793.91 N/A N/A N/A
Class PT2-II-48A (6) $ 396,085.67 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 396,085.67 N/A N/A N/A
Class PT2-II-49A (6) $ 380,688.51 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 380,688.51 N/A N/A N/A
Class PT2-II-50A (6) $ 374,097.63 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 374,097.63 N/A N/A N/A
Class PT2-II-51A (6) $ 357,401.41 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 357,401.41 N/A N/A N/A
Class PT2-II-52A (6) $ 346,375.48 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 346,375.48 N/A N/A N/A
Class PT2-II-53A (6) $ 340,452.65 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 340,452.65 N/A N/A N/A
Class PT2-II-54A (6) $ 325,065.52 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 325,065.52 N/A N/A N/A
Class PT2-II-55A (6) $ 322,109.82 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 322,109.82 N/A N/A N/A
Class PT2-II-56A (6) $ 425,728.86 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $ 425,728.86 N/A N/A N/A
Class PT2-II-57A (6) $ 346,440.39 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $ 346,440.39 N/A N/A N/A
Class PT2-II-58A (6) $ 280,752.20 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $ 280,752.20 N/A N/A N/A
Class PT2-II-59A (6) $ 275,199.00 Class PT2-II-IO-59 N/A N/A
Class PT2-II-59B (7) $ 275,199.00 N/A N/A N/A
Class PT2-II-60A (6) $ 261,743.28 Class PT2-II-IO-60 N/A N/A
Class PT2-II-60B (7) $ 261,743.28 N/A N/A N/A
Class PT2-II-61A (6) $ 260,860.42 Class PT2-II-IO-61 N/A N/A
Class PT2-II-61B (7) $ 260,860.42 N/A N/A N/A
Class PT2-II-62A (6) $ 365,817.06 Class PT2-II-IO-62 N/A N/A
Class PT2-II-62B (7) $ 365,817.06 N/A N/A N/A
Class PT2-II-63A (6) $ 289,064.23 Class PT2-II-IO-63 N/A N/A
Class PT2-II-63B (7) $ 289,064.23 N/A N/A N/A
Class PT2-II-64A (6) $ 224,393.64 Class PT2-II-IO-64 N/A N/A
Class PT2-II-64B (7) $ 224,393.64 N/A N/A N/A
Class PT2-II-65A (6) $ 218,493.72 Class PT2-II-IO-65 N/A N/A
Class PT2-II-65B (7) $ 218,493.72 N/A N/A N/A
Class PT2-II-66A (6) $ 208,933.07 Class PT2-II-IO-66 N/A N/A
Class PT2-II-66B (7) $ 208,933.07 N/A N/A N/A
Class PT2-II-67A (6) $ 206,606.78 Class PT2-II-IO-67 N/A N/A
Class PT2-II-67B (7) $ 206,606.78 N/A N/A N/A
Class PT2-II-68A (6) $ 263,085.08 Class PT2-II-IO-68 N/A N/A
Class PT2-II-68B (7) $ 263,085.08 N/A N/A N/A
Class PT2-II-69A (6) $ 219,179.48 Class PT2-II-IO-69 N/A N/A
Class PT2-II-69B (7) $ 219,179.48 N/A N/A N/A
Class PT2-II-70A (6) $ 180,698.40 Class PT2-II-IO-70 N/A N/A
Class PT2-II-70B (7) $ 180,698.40 N/A N/A N/A
Class PT2-II-71A (6) $ 174,120.45 Class PT2-II-IO-71 N/A N/A
Class PT2-II-71B (7) $ 174,120.45 N/A N/A N/A
Class PT2-II-72A (6) $ 5,214,232.52 Class PT2-II-IO-72 N/A N/A
Class PT2-II-72B (7) $ 5,214,232.52 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A June 2007
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A July 2007
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A August 2007
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A September 2007
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A October 2007
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A November 2007
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A December 2007
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A January 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A February 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A March 2008
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A April 2008
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A May 2008
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A June 2008
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A July 2008
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A August 2008
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A September 2008
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A October 2008
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A November 2008
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A December 2008
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A January 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A February 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A March 2009
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A April 2009
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A May 2009
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A June 2009
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A July 2009
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A August 2009
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A September 2009
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A October 2009
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A November 2009
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A December 2009
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A January 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A February 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A March 2010
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A April 2010
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A May 2010
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A June 2010
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A July 2010
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A August 2010
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A September 2010
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A October 2010
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A November 2010
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A December 2010
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A January 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A February 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A March 2011
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A April 2011
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A May 2011
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A June 2011
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A July 2011
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A August 2011
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A September 2011
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A October 2011
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A November 2011
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A December 2011
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A January 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A February 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A March 2012
Class PT2-II-IO-60 (4) (4) N/A Class PT1-II-60A April 2012
Class PT2-II-IO-61 (4) (4) N/A Class PT1-II-61A May 2012
Class PT2-II-IO-62 (4) (4) N/A Class PT1-II-62A June 2012
Class PT2-II-IO-63 (4) (4) N/A Class PT1-I-63A July 2012
Class PT2-II-IO-64 (4) (4) N/A Class PT1-I-64A August 2012
Class PT2-II-IO-65 (4) (4) N/A Class PT1-I-65A September 2012
Class PT2-II-IO-66 (4) (4) N/A Class PT1-I-66A October 2012
Class PT2-II-IO-67 (4) (4) N/A Class PT1-I-67A November 2012
Class PT2-II-IO-68 (4) (4) N/A Class PT1-I-68A December 2012
Class PT2-II-IO-69 (4) (4) N/A Class PT1-I-69A January 2013
Class PT2-II-IO-70 (4) (4) N/A Class PT1-I-70A February 2013
Class PT2-II-IO-71 (4) (4) N/A Class PT1-I-71A March 2013
Class PT2-II-IO-72 (4) (4) N/A Class PT1-I-72A April 2013
Class PT2-R (8) (8) N/A N/A N/A
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest
at a per annum rate equal to Swap LIBOR subject to a maximum rate equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I and having
an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in
their class designation.
(4) This Pooling-Tier REMIC-2 IO Interest is an interest-only interest and
does not have a principal balance but has a notional balance
("Pooling-Tier REMIC-2 IO Notional Balance") equal to the Pooling-Tier
REMIC-2 Principal Amount of the Corresponding Pooling-Tier REMIC-1 Regular
Interest. From the Closing Date through and including the Corresponding
Actual Crossover Distribution Date, this Pooling-Tier REMIC-2 IO Interest
shall be entitled to receive interest that accrues on the Corresponding
Pooling-Tier REMIC-1 Regular Interest at a rate equal to the excess, if
any, of (i) the Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier REMIC-1 Regular Interest over (ii) Swap LIBOR. After the
Corresponding Actual Crossover Distribution Date, this Pooling-Tier
REMIC-2 IO Interest shall not accrue interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling-Tier REMIC-2 IO Interest, this Pooling-Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the
Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier REMIC-1 Regular
Interests relating to Loan Group II and having an "A" in their class
designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans from the related Loan Group for such Distribution Date shall
be distributed to the Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier
REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to the Group I Mortgage Loans with the lowest
numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of such
interest is reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular
Interests relating to the Group I Mortgage Loans with the same numerical
denomination, such Realized Losses, Subsequent Recoveries and payments of
principal shall be allocated pro rata between such Pooling-Tier REMIC-2 Regular
Interests, until the Pooling-Tier REMIC-2 Principal Amount of such interests is
reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to Loan Group II with the lowest numerical
denomination until the Pooling-Tier REMIC-2 Principal Amount of such interest is
reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular Interests
relating to the Group II Mortgage Loans with the same numerical denomination,
such Realized Losses and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-2 Regular Interests, until the Pooling-Tier
REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and each
such interest, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Lower-Tier Lower-Tier Initial Lower-Tier Upper-Tier REMIC
REMIC Interest Interest Rate Principal Amount Regular Interest
-----------------------------------------------------------------------------------------------------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier Regular
Interest
Class LT-A-2a (1) 1/2 initial Class Certificate Balance of A-2a
Corresponding Upper-Tier Regular
Interest
Class LT-A-2b (1) 1/2 initial Class Certificate Balance of A-2b
Corresponding Upper-Tier Regular
Interest
Class LT-A-2c (1) 1/2 initial Class Certificate Balance of A-2c
Corresponding Upper-Tier Regular
Interest
Class LT-A-2d (1) 1/2 initial Class Certificate Balance of A-2d
Corresponding Upper-Tier Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate Balance of B-4
Corresponding Upper-Tier Regular
Interest
Class LT-B-5 (1) 1/2 initial Class Certificate Balance of B-5
Corresponding Upper-Tier Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 N/A
Subordinated Amount, less the
aggregate initial Lower-Tier Principal
Amount of Class LT-Group I and Class
LT Group II
Class LT-Group I (2) 0.001% aggregate Stated Principal N/A
Balance of Group I Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal N/A
Balance of Group II Mortgage Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
-----------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the weighted average of
the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class LT-M-2, Class LT-B-1,
Class LT-B-2, Class LT-B-3, Class LT-B-4 and Class LT-B-5 Interests are hereby
designated the LT-Accretion Directed Classes (the "LT-Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
shall be accrued and added to the Lower-Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans (including, for the first Distribution Date only, the Closing
Date Deposit Amount) or paid under the Certificate Insurance Policy and all
Subsequent Recoveries allocable to principal shall be allocated (i) 50% to the
Class LT-Accrual Interest, the Class LT-Group I Interest and Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) and (ii) 50% to the LT-Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such
LT-Accretion Directed Classes in an amount equal to 50% of the principal amounts
and Subsequent Recoveries allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Interest that result in the reduction in the Subordinated Amount
shall be allocated to the Class LT-Accrual Interest (until paid in full).
Realized Losses shall be applied so that after all distributions have been made
on each Distribution Date (i) the Lower-Tier Principal Amount of each of the
LT-Accretion Directed Classes is equal to 50% of the Class Certificate Balance
of their Corresponding Class, and (ii) the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (and further allocated
among these Lower-Tier Regular Interests in the manner described below) is equal
to 50% of the aggregate Stated Principal Balance of the Mortgage Loans plus 50%
of the Subordinated Amount. Any increase in the Class Certificate Balance of a
Class of LIBOR Certificates as a result of a Subsequent Recovery shall increase
the Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular Interest
by 50% of such increase, and the remaining 50% of such increase shall increase
the Lower-Tier Principal Amount of the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (such increase shall be
further allocated among such Lower-Tier Regular Interests in the manner
described below). As among the Class LT-Accrual Interest, the Class LT-Group I
Interest and the Class LT-Group II Interest, all payments of scheduled principal
and prepayments of principal generated by the Mortgage Loans (including, for the
first Distribution Date only, the Closing Date Deposit Amount), all Subsequent
Recoveries and all Realized Losses, allocable to such Lower-Tier Regular
Interests and all increases in the Lower-Tier Principal Amount of such
Lower-Tier Regular Interests as a result of Subsequent Recoveries shall be
allocated (i) to the Class LT-Group I Interest and the Class LT-Group II
Interest, each from the related Loan Group so that their respective Lower-Tier
Principal Amounts (computed to at least eight decimal places) are equal to
0.001% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group and (ii) the remainder to the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and each
such interest, other than the Class UT-R Interest, is hereby designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier Initial Principal Corresponding Class of
Upper-Tier REMIC Interest Interest Rate Upper-Tier Amount Certificates
----------------------------------------------------------------------------------------------------------
Class A-1 (1) $208,600,000 Class A-1
Class A-2a (2) $337,200,000 Class A-2a
Class A-2b (2) $68,250,000 Class A-2b
Class A-2c (2) $165,000,000 Class A-2c
Class A-2d (2) $96,775,000 Class A-2d
Class M-1 (3) $12,609,000 Class M-1
Class M-2 (3) $19,965,000 Class M-2
Class B-1 (3) $18,389,000 Class B-1
Class B-2 (3) $9,457,000 Class B-2
Class B-3 (3) $21,016,000 Class B-3
Class B-4 (3) $13,135,000 Class B-4
Class B-5 (3) $19,965,000 Class B-5
Class UT-IO (4) (4) N/A
Class UT-X (5) (5) N/A
Class UT-R (6) (6) Class R
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest and solely with respect to the Upper-Tier
Regular Interests corresponding to the Class A Certificate, less the
Certificate Insurer Premium Rate (the "Upper-Tier REMIC Loan Group I
Rate") and (ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO
Interest. This interest shall be beneficially owned by the holders of the
Class X Certificates and shall be held as an asset of the Swap Account.
(5) The Class UT-X Interest has an initial principal balance of $60,420,456.07
but will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class UT-X
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period. With respect to any Interest Accrual Period, the
Class X Interest shall bear interest at a rate equal to the excess, if
any, of the Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii)
the weighted average of the Lower-Tier Interest Rates of the Lower-Tier
REMIC Interests (other than the Class LT-IO Interest), where the
Lower-Tier Interest Rate on each of the Class LT-Accrual Interest, Class
LT-Group I Interest and Class LT-Group II Interest is subject to a cap
equal to zero and each LT-Accretion Directed Class is subject to a cap
equal to the Upper-Tier Interest Rate on its Corresponding Class of
Upper-Tier Regular Interest; provided, however, if the Upper-Tier Interest
Rate of the Class A-1, Class A-2a , Class A-2b, Class A-2c, Class A-2d,
Class M-1, Class M-2, Class B-1, Class B-2 ,Class B-3, Class B-4 or Class
B-5 Interest is calculated by reference to clause (i) of its Upper-Tier
Interest Rate, the cap with respect which the Corresponding Class of Lower
Tier Regular Interest is subjected shall be increased by the lesser of the
Premium Rate and the amount by which the amount in clause (ii) of the
Upper-Tier Interest of such Upper-Tier Regular Interest exceeds the amount
in clause (i) thereof for purposes of the calculation. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class UT-X Interest shall be deferred in an amount equal to
any increase in the Subordinated Amount on such Distribution Date. Such
deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of the
Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Class X REMIC
The Class X REMIC shall issue the following classes of interests.
The Class X Interest and the Class IO Interest shall each represent a regular
interest in the Class X REMIC and the Class RX Certificates shall represent the
sole class of residual interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
------------------------- ------------- ----------------
Class X Interest (1) (1)
Class IO Interest (2) (2)
Class RX Certificates (3) (3)
-----------------
(1) The Class X Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to 100% of
the interest and principal on the Class UT-X Interest on each Distribution
Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class RX Certificates do not have a principal balance or an interest
rate.
The Certificates
Class Designation Class Pass-Through Rate Class Certificate Balance
----------------- ----------------------- -------------------------
Class A-1(11) (1) $ 208,600,000
Class A-2a(11) (2) $ 337,200,000
Class A-2b(11) (3) $ 68,250,000
Class A-2c(11) (4) $ 165,000,000
Class A-2d(11) (5) $ 96,775,000
Class M-1(11) (6) $ 12,609,000
Class M-2(11) (6) $ 19,965,000
Class B-1(11) (6) $ 18,389,000
Class B-2(11) (6) $ 9,457,000
Class B-3(11) (6) $ 21,016,000
Class B-4(11) (6) $ 13,135,000
Class B-5(11) (6) $ 19,965,000
Class X (7) $ 0(8)
Class R (8) $ 0(9)
Class RX (9) (10)
-----------------
(1) The Class A-1 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the
WAC Cap.
(2) The Class A-2a Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) The Class A-2b Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-2c Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(5) The Class A-2d Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus
the applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(6) The Class M-1, Class M-2, Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) LIBOR plus the
applicable Pass-Through Margin and (ii) the WAC Cap.
(7) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
right to receive Class IO Shortfalls and amounts in the Excess Reserve
Fund Account and the Swap Account, subject to the obligation to make
payments from the Excess Reserve Fund Account in respect of Basis Risk
CarryForward Amounts and amounts in the Swap Account subject to the
obligation to make Net Swap Payments, Swap Termination Payments and Basis
Risk CarryForward Amounts and, without duplication, Upper Tier
CarryForward Amounts. For federal income tax purposes, the Securities
Administrator will treat a Class X Certificateholder's obligation to make
payments from the Excess Reserve Fund Account or the Swap Account as
payments made under a notional principal contract between the Class X
Certificateholders and the holder of each Class of LIBOR Certificates.
Such rights of the Class X Certificateholders and LIBOR Certificateholders
shall be treated as held in the Grantor Trust.
(8) The Class R Certificates do not have an interest rate or a principal
balance.
(9) The Class RX Certificates do not have an interest rate or a principal
balance.
(10) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without
duplication, Upper Tier CarryForward Amounts. Each of these Certificates
will also be subject to the obligation to pay Class IO Shortfalls as
described in Section 8.13. For federal income tax purposes, any amount
distributed on the LIBOR Certificates on any such Distribution Date in
excess of the amount distributable on their Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date shall be treated as
having been paid from the Excess Reserve Fund Account or the Swap Account,
as applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the LIBOR Certificates on such Distribution Date
shall be treated as having been paid to the Swap Account, all pursuant to,
and as further provided in, Section 8.13. For federal income tax purposes,
the Securities Administrator will treat a LIBOR Certificateholder's right
to receive payments from the Excess Reserve Fund Account or the Swap
Account, subject to the obligation to pay Class IO Shortfalls, as rights
and obligations under a notional principal contract between the Class X
Certificateholders and the LIBOR Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R, Class RX and the Class X Certificates, will be $25,000
with integral multiples of $1 in excess thereof. The minimum denomination for
the Class P and the Class X Certificates will each be a 1% Percentage Interest
in such Class. The Class R Certificate and the Class RX Certificate will each
represent a 100% Percentage Interest in the related Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates........... All Classes of Certificates other than
the Physical Certificates.
Class A Certificates.............. Class A-1, Class A-2a, Class A-2b, Class
A-2c and Class A-2d Certificates.
Class B Certificates.............. Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 Certificates.
Class M Certificates.............. Class M-1 and Class M-2 Certificates.
Delay Certificates................ None.
ERISA-Restricted Certificates..... Residual, Class P and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the Underwriters
Exemption.
Non-Delay Certificates............ Class A, Class X and Subordinated
Certificates.
LIBOR Certificates................ Class A and Subordinated Certificates.
Offered Certificates.............. LIBOR Certificates other than the Class
A-1 Certificates.
Physical Certificates............. Class P, Class X and Residual
Certificates.
Private Certificates.............. Class A-1, Class P, Class X and
Residual Certificates.
Rating Agencies................... Xxxxx'x, Standard & Poor's and Fitch.
Regular Certificates.............. All Classes of Certificates other than
the Class P and Residual Certificates.
Residual Certificates............. Class R and Class RX Certificates.
Subordinated Certificates......... Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
the Policy Payment Account, any Escrow Account, the Excess Reserve Fund Account
or the Swap Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest or Accrued Certificate Interest
Distribution 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 Pass-Through 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.
Additional Disclosure Notification: A notification in the form of
Exhibit X.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 12.07.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 12.07.
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.
Agent: With respect to the Sponsor, the Depositor or any Affiliate
of either of them, a Person that acts for and on behalf of such Person.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
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.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Securities Administrator by the
Depositor.
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 after distributions of principal 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 Securities Administrator (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 Servicer on or prior to the related Determination
Date, together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicer
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 Servicer during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 11.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicer, the Depositor, the Master Servicer, the Securities Administrator
or the Trustee are entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass- Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date on such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of LIBOR Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for 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 CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk CarryForward Amount or (y) any Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
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
California, Delaware, Maryland, Minnesota, New York, North Carolina or Texas,
(b) a State in which the Servicer's servicing operations are located, or (c) the
State in which the Securities Administrator's operations are located, are
authorized or obligated by law or executive order to be closed.
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 Class of Certificates,
other than the Class X, Class P, Class R or Class RX Certificates, 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 Subordinated 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 Subordinated Certificates that have been previously reduced by
Applied Realized Loss Amounts will be increased, in order of seniority, by the
amount of the Subsequent Recovery distributed on such Distribution Date (up to
the amount of the Unpaid Realized Loss Amount for such Class or Classes for such
Distribution Date). The Class X, Class P, Class R and Class RX Certificates have
no Certificate Balance.
Certificate Insurance Policy: The Financial Guaranty Insurance
Company Financial Guaranty Insurance Policy No. 07030039, issued by the
Certificate Insurer for the benefit of the Class A Certificateholders, (a copy
of which is attached hereto as Exhibit Z).
Certificate Insurer: Financial Guaranty Insurance Company, a New
York stock insurance company organized and created under the laws of the State
of New York, and its successors in interest.
Certificate Insurer Default: The existence and continuance of any of
the following:
(a) the Certificate Insurer shall have failed to make a required
payment when due under the Certificate Insurance Policy in accordance with its
terms;
(b) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization, (ii) made a general assignment for the benefit
of its creditors or (iii) had an order for relief entered against it under the
United States Bankruptcy Code, the New York State Insurance Law or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a final
and nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent, or receiver for the Certificate Insurer or for all or any material
portion of its property or (ii) authorizing the taking of possession by a
custodian, trustee, agent, or receiver of the Certificate Insurer (or the taking
of possession of all or any material portion of property of the Certificate
Insurer).
Certificate Insurer Optional Parity Deficit Draw: The amount, if
any, calculated in accordance with clause (b) of the definition of "Deficiency
Amount".
Certificate Insurer Premium Rate: With respect to each Mortgage
Loan, a per annum rate payable in advance equal to 0.16%.
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 Sponsor, the Depositor or any Affiliate or Agent of any of them
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 the Sponsor (together with its Affiliates
and Agents) or the Depositor (together with its Affiliates and Agents) owns 100%
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
Sponsor, the Depositor or any such Agent or Affiliate in determining which
Certificates are registered in the name of an Agent or Affiliate of the Sponsor
or the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or the
Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (x) 66.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $5,253,907.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class A-2d Certificates: All Certificates bearing the class
designation of "Class A-2d".
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), and (D) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 76.40% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,253,907.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 78.20% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,253,907.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 82.20% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,253,907.
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4".
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class B-3 Certificates (after taking into account the
distribution of the Class B-3 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class B-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 84.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,253,907.
Class B-5 Certificates: All Certificates bearing the class
designation of "Class B-5".
Class B-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class B-3 Certificates Distribution Date (after
taking into account the distribution of the Class B-3 Principal Distribution
Amount for such Distribution Date), (G) the Class Certificate Balance of the
Class B-4 Certificates Distribution Date (after taking into account the
distribution of the Class B-4 Principal Distribution Amount for such
Distribution Date) and (H) the Class Certificate Balance of the Class B-5
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 88.50% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,253,907.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the Swap
Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Defaulted Swap Termination Payments) from
Available Funds on such Distribution Date, all as further provided in Section
8.13.
Class LT-R Interest: The residual interest in the Lower-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 69.10%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $5,253,907.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 72.90% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$5,253,907.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier REMIC-1
as described in the Preliminary Statement and the related footnote thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier REMIC-2
as described in the Preliminary Statement and the related footnote thereto.
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class RX Certificates: All Certificates bearing the class
designation of "Class RX".
Class UT-IO Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class UT-X Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class UT-X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class UT-X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay Basis Risk CarryForward Amounts, and any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider.
Class X Interest: The regular interest in the Class X REMIC
represented by the Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Class X REMIC Regular Interest: Each of the Class X Interest and
Class IO Interest issued by the Class X REMIC.
Closing Date: June 20, 2007.
Closing Date Deposit Amount: $538.26 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $255.24 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $283.02 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value of the related Mortgaged Property of the related Mortgaged Property as of
the origination of the Second Lien Mortgage Loan.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and the Servicer,
the lesser of (a) the amount by which the Prepayment Interest Shortfall
resulting from Principal Prepayments in Full (excluding any Principal
Prepayments in Full made upon liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such Distribution Date on the Mortgage Loans
serviced by the Servicer and (b) the amount of the aggregate Servicing Fee paid
to or retained by the 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.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator at 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Manager MSAC
2007-NC4 (or, for the purposes of the registration of transfers or exchanges of
Certificates, as set forth in Section 5.06), or such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders. The designated office of the Trustee in the State of
California at which at 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 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attn: Trust Administration-MS07C4, facsimile no. (714)
247-6483, and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier, if applicable) of the Interest Rate Swap Agreement
applicable for such Distribution Date, in which case the Corresponding Actual
Crossover Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be
the first Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier REMIC
or Upper-Tier REMIC that corresponds to the class of interests in the other such
REMIC or to a Class of Certificates in the manner set out below:
Corresponding Corresponding Upper-Tier Corresponding
Lower-Tier Class Designation Regular Interest Class of Certificates
---------------------------- ---------------- ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-A-2d Class A-2d Class A-2d
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Class LT-B-4 Class B-4 Class B-4
Class LT-B-5 Class B-5 Class B-5
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
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 through the last day of
the related Prepayment Period and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the Cumulative Loss Percentage
exceeds the applicable Cumulative Loss Percentages set forth below with respect
to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------ --------------------------
June 2009 through May 2010 1.900% for the first month, plus an additional 1/12th of 2.350% for
each month thereafter (e.g., 3.075% in December 2009)
June 2010 through May 2011 4.250% for the first month, plus an additional 1/12th of 2.350% for
each month thereafter (e.g., 5.425% in December 2010)
June 2011 through May 2012 6.600% for the first month, plus an additional 1/12th of 1.900% for
each month thereafter (e.g., 7.550% in December 2011)
June 2012 through May 2013 8.500% for the first month, plus an additional 1/12th of 1.000% for
each month thereafter (e.g., 9.000% in December 2012)
June 2013 and thereafter 9.500%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee, consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: May 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate of the Cut-off
Date Principal Balances of all Mortgage Loans, plus the portion of the Closing
Date Deposit Amount allocable to principal.
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 (after
giving effect to payments of principal due on or prior to that date, whether or
not received).
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.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
Defaulting Party (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement) (other than
Illegality or a Tax Event that is not a Tax Event Upon Merger (each as defined
in the Interest Rate Swap Agreement )) with respect to which the Swap Provider
is the sole Affected Party (as defined in the Interest Rate Swap Agreement).
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.
Deficiency Amount: With respect to each Class of Class A
Certificates, an amount, if any, equal to (a) for any Distribution Date prior to
the Final Scheduled Distribution Date, the excess, if any, of the Accrued
Certificate Interest for such Class of Class A Certificates on such Distribution
Date over all amounts available (including, without limitation, from Available
Funds and any Net Swap Receipts received under the Interest Rate Swap Agreement)
to pay Accrued Certificate Interest for such Class of Class A Certificates on
such Distribution Date in accordance with the priority of payments set forth in
Sections 4.02 and 4.06, (b) on any Distribution Date after the date that the
Class Certificate Balance of each Class of Subordinated Certificates has been
reduced to zero, at the sole option and discretion of the Certificate Insurer,
an amount equal to the excess, if any, of (i) the aggregate Class Certificate
Balances of the Class A Certificates on that Distribution Date (after giving
effect to all payments of principal on that Distribution Date) over (ii) the
aggregate Stated Principal Balance of the Mortgage Loans on that Distribution
Date and (c) on the Final Scheduled Distribution Date, the sum of (i) the amount
set forth in clause (a) above and (ii) the amount equal to the outstanding Class
Certificate Balance of such Class of Class A Certificates on the Final Scheduled
Distribution Date, after giving effect to the payment of all amounts actually
available to be paid on the Class A Certificates on the Final Scheduled
Distribution Date from all sources other than the Certificate Insurance Policy.
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).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is removed from the
Trust pursuant to the terms of this Agreement or the Representation and
Warranties Agreement.
Delinquency Loss Trigger Event: With respect to any Distribution
Date, the circumstances in which the quotient (expressed as a percentage) of (x)
the rolling three month average of the aggregate unpaid principal balance of 60+
Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate unpaid principal balance of the Mortgage Loans, as of the last day of
the related Due Period, equals or exceeds 48.00% of the prior period's Senior
Enhancement Percentage.
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: Xxxxxx Xxxxxxx ABS Capital I Inc., 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 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 (to the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 15th
day (or if such day is not a Business Day, the immediately preceding Business
Day) of the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.07(d) in the
name of the Securities Administrator for the benefit of the Certificateholders
and the Certificate Insurer and designated "Xxxxx Fargo Bank, National
Association in trust for registered Holders of Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-NC4 Mortgage Pass-Through Certificates, Series 2007-NC4." Funds in
the Distribution Account shall be held in trust for the Certificateholders and
the Certificate Insurer 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 second Business Day immediately preceding
such Distribution Date.
Distribution Date: With the exception of the first Distribution
Date, the 25th day of each calendar month, or if such day is not a Business Day,
the next succeeding Business Day. The first Distribution Date will be June 29,
2007.
Document Certification and Exception Report: The 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.
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 (provided, however, that following a
downgrade, withdrawal, or suspension of such Eligible Institution's Standard &
Poor's rating below the levels set forth in definition of "Eligible Institution"
with respect to any Eligible Account, the applicable Eligible Institution shall
either (x) obtain a guaranty from a guarantor which satisfies the S&P
requirements set forth in such definition, or (y) transfer any such Eligible
Account to one or more segregated trust accounts in the trust department of an
institution which satisfies the definition of "Eligible Institution", in either
case, as promptly as practicable (and in any case within not more than 60
calendar days with respect to the Excess Reserve Fund Account or the Swap
Account, or 30 calendar days with respect to each other Account)) (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 and the Certificate Insurer. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Securities Administrator. Each Eligible
Account shall be a separate account.
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 "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" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which 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, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "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 the Servicer and the Securities Administrator) (in each case, to the extent
they are designated as Rating Agencies in the Preliminary Statement).
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") 2007-5, 72 Fed. Reg. 13130 (2007) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator for the benefit of the
Regular Certificateholders and designated "Xxxxx Fargo Bank, National
Association, in trust for registered Holders of Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-NC4, Mortgage Pass-Through Certificates, Series 2007-NC4." Funds
in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate and the Master Servicer Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Master Servicer Fee and any lender-paid primary mortgage insurance fee,
if applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than any Mortgage Loan or REO Property purchased
by the Sponsor or the Depositor, as applicable, as contemplated by this
Agreement), a determination made by the 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. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in May 2037.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 12.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2007-NC4, or such other address as Fitch may
hereafter furnish to the Depositor, the Securities Administrator, the Trustee
and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Xxxxxxx 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 1972, as amended, or any successor thereto.
Grantor Trust: As described in the Preliminary Statement.
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 applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates, the Class A-2c Certificates and the Class A-2d
Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as
of the Closing Date, among the Sponsor, the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Servicer and the
Certificate Insurer, a copy of which is attached hereto as Exhibit AA.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Amount: With respect to any Distribution Date and the Class
A Certificates, means (1) any Deficiency Amount, and (2) any Preference Amount.
Insured Certificateholder: With respect to a particular Class A
Certificate, the Person, other than the Depositor, the Sponsor, the Swap
Provider, the Master Servicer, the Securities Administrator, the Trustee, the
Servicer, or any Subservicer retained by the Servicer or any Affiliate of any
such Person, who, on the applicable Distribution Date, is entitled under the
terms of such Class A Certificate to a distribution on such Class A Certificate.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular Interests 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 (or,
in the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date) and ending on the
day immediately preceding the current Distribution Date. With respect to the
Class LT-Accrual, Class LT Group-I, Class LT-Group II, Class LT-IO, Class UT-X,
Class UT-IO, Class X and Class IO Interests and each Pooling-Tier REMIC-1
Regular Interest and Pooling-Tier REMIC-2 Regular Interest and any Distribution
Date, the calendar month preceding such Distribution Date. For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between the Swap Provider and the Securities
Administrator (a copy of which is attached hereto as Exhibit T).
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, the portion of Available Funds
attributable to interest received or advanced on such Mortgage Loans, net of the
fees payable to the Servicer, the Trustee and the Master Servicer, and net of
any Net Swap Payments and any Swap Termination Payments, other than Defaulted
Swap Termination Payments, payable to the Swap Provider from Available Funds
attributable to such Loan Group with respect to that Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
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 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.
Late Payment Rate: The lesser of (a) the greater of (i) the per
annum rate of interest publicly announced from time to time by Citibank, N.A. as
its prime or base lending rate (any change in such rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2.00%,
and (ii) the then applicable highest rate of interest on the Class A
Certificates and (b) the maximum rate permissible under applicable usury or
similar laws limiting interest rates as determined by the Certificate Insurer,
in any case computed on the basis of the actual number of days elapsed over a
year consisting of 360 days.
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 Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Reuters Page LIBOR01, 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 and the Certificate Insurer (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 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 either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the 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, or (b) is a Second Lien Mortgage Loan (1) that is delinquent 180 days
or longer, (2) for which the related first lien mortgage loan is not a Mortgage
Loan, and (3) as to which the Servicer has certified to the Master Servicer that
it does not believe there is a reasonable likelihood that any further net
proceeds will be received or recovered with respect to such Second Lien Mortgage
Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate and, solely with respect to the Class
A Certificates, the Certificate Insurer Premium Rate, adjusted in each case to
accrue on the basis of a 360-day year and the actual number of days in the
related Interest Accrual Period. With respect to the first Due Period and the
first Distribution Date, the Loan Group I Cap shall be reduced by a fraction,
the numerator of which is the portion of the Closing Date Deposit Amount
allocable to the Group I Mortgage Loans and the denominator of which is the
portion of the Cut-off Date Pool Principal Balance relating to the Group I
Mortgage Loans.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate and, solely with respect to the Class
A Certificates, the Certificate Insurer Premium Rate, adjusted in each case to
accrue on the basis of a 360-day year and the actual number of days in the
related Interest Accrual Period. With respect to the first Due Period and the
first Distribution Date, the Loan Group II Cap shall be reduced by a fraction,
the numerator of which is the portion of the Closing Date Deposit Amount
allocable to the Group II Mortgage Loans and the denominator of which is the
portion of the Cut-off Date Pool Principal Balance relating to the Group II
Mortgage Loans.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class
LT-M-2, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-B-4, Class LT-B-5,
Class LT-IO, Class LT-Group I, Class LT-Group II and Class LT-Accrual Interests
as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Master Servicer: Xxxxx Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the related Master Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the close
of business on the day immediately preceding the first day of the related Due
Period (or as of the Closing Date in the case of the first Distribution Date)
or, in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.012%.
Master Servicer Float Period: With respect to the Distribution Date
and the related amounts in the Distribution Account, the period commencing on
the Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Master Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and master servicing of the
Mortgage Loans.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Mortgage Loan Schedule and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan the terms of which have
been modified pursuant to Section 3.01(c).
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Original Loan Seller has designated or will designate MERS as, and has taken or
will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Original Loan Seller, in accordance with MERS
Procedure Manual and (b) the Original Loan Seller has designated or will
designate the Trustee as the Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Mortgage Loan Schedule and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(b), the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Securities Administrator,
the Trustee and the Servicer.
Xxxxxx Xxxxxxx: Xxxxxx Xxxxxxx, a Delaware corporation.
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 which 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, 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 Schedule: A schedule of Mortgage Loans delivered to
the Master Servicer and referred to on Schedule I, such schedule setting forth
information with respect to each Mortgage Loan, including: (1) the Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut off Date
after deduction of payments of principal due on or before the Cut off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the date such Mortgage Loan was acquired from the Original Loan
Seller by the Sponsor, (17) whether such Mortgage Loan provides for a Prepayment
Charge as well as the term and amount of such Prepayment Charge, if any; (18)
with respect to each First Lien Mortgage Loan, the LTV at origination, and with
respect to each Second Lien Mortgage Loan, the CLTV at origination; (19) the
applicable Servicer's name; and (20) the date on which servicing of the Mortgage
Loan was transferred to the applicable Servicer. The Master Servicer, upon
request, shall provide a copy of the Mortgage Loan Schedule, and any amendments,
supplements or modifications thereto, to the Trustee promptly upon receipt of
such request.
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 in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
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 Monthly Excess Cash Flow: For any Distribution Date the portion
of Available Funds 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 (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
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 one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, three months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, and
(ii) each REO Property.
NMWHFIT: A "Non-Mortgage Widely Held Fixed Investment Trust" as that
term is defined in Treasury Regulations Section 1.671-5(b)(12) or successor
provisions.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation Proceeds 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 Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided 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.
Officer's Certificate: A certificate signed by an officer of the
Servicer or Subservicer with responsibility for the servicing of the Mortgage
Loans required to be serviced by the Servicer or Subservicer and listed on a
list delivered to the Master Servicer and the Certificate Insurer pursuant to
this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or a Subservicer, reasonably acceptable to the
Trustee, the Certificate Insurer and/or the Securities Administrator, as
applicable (and/or such other Persons as may be set forth herein), provided that
any Opinion of Counsel relating to (a) qualification of any Trust REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
Affiliate thereof and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 5% or less of the Cut-off Date Pool
Principal Balance.
Original Loan Seller: Collectively, New Century Mortgage Corporation
and its affiliates, NC Capital Corporation, New Century Credit Corporation,
Home123 Corporation and NC Asset Holding, L.P. and their successors in interest.
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.
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 the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the 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 Section 4.01.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.1700%; Class A-2a Certificates, 0.0800%;
Class A-2b Certificates, 0.1200%; Class A-2c Certificates, 0.1700%; Class A-2d
Certificates, 0.2500%; Class M-1 Certificates, 0.7000%; Class M-2 Certificates,
1.0000%; Class B-1 Certificates, 1.7500%; Class B-2 Certificates, 2.0000%; Class
B-3 Certificates, 2.0000%; Class B-4 Certificates 2.0000% and Class B-5
Certificates 2.0000%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.3400%; Class A-2a Certificates, 0.1600%; Class A-2b
Certificates, 0.2400%; Class A-2c Certificates, 0.3400%; Class A-2d
Certificates, 0.5000%; Class M-1 Certificates, 1.0500%; Class M-2 Certificates,
1.5000%; Class B-1 Certificates, 2.6250%; Class B-2 Certificates, 3.0000%; Class
B-3 Certificates, 3.0000%; Class B-4 Certificates, 3.0000% and Class B-5
Certificates 3.0000%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular Interest,
and each Class X REMIC Regular Interest, the per annum rate set forth or
calculated in the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
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.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
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 Servicer, the Securities Administrator 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
"P-1" by Moody's, "F1+" by Fitch and "A-1+" by Standard & Poor's (to
the extent they are Rating Agencies hereunder and are so rated by
such Rating Agency);
(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
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or an
Affiliate thereof, that have been rated "Aaa" by Moody's, "AAAm" by
Standard & Poor's and at least "AA" by Fitch (to the extent they are
Rating Agencies hereunder and such funds are so rated by such Rating
Agency); 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 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% 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 not a 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, or a U.S. Person treated as a partnership for U.S. federal income tax
purposes, any direct or indirect beneficial owner of which (other than through a
U.S. corporation) is (or is permitted to be under the related partnership
agreement) not a 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 Trust REMIC 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 7721 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 Xxxxxxx 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.
Policy Payment Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 4.07(c) in the
name of the Securities Administrator for the benefit of the Class A
Certificateholders and the Certificate Insurer and designated "Xxxxx Fargo Bank,
National Association in trust for Financial Guaranty Insurance Company and the
registered holders of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4, Mortgage
Pass Through Certificates, Series 2007-NC4, Class A Certificates".
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.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group I WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group II WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Preference Amount: Any portion or all of any amount that is insured
under the Certificate Insurance Policy that was previously paid to a Class A
Certificateholder which is recovered from such Class A Certificateholder as a
voidable preference by the trustee in bankruptcy pursuant to the United States
Bankruptcy Code, pursuant to a final non-appealable order of a court exercising
proper jurisdiction in an insolvency proceeding.
Premium: With respect to each Distribution Date, the premium payable
in accordance with the Certificate Insurance Policy, in an amount equal to
one-twelfth of the product of (i) the Certificate Insurer Premium Rate and (ii)
the aggregate Class Certificate Balance of the Class A Certificates (prior to
giving effect to any distribution of principal to be made on such Distribution
Date), calculated on the basis of a 360-day year and the number of days elapsed
in the applicable Interest Accrual Period.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by the Servicer with respect to any Mortgage Loan
serviced by the Servicer as to which a Principal Prepayment in Full 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 any Distribution
Date, the sum of, for each Mortgage Loan that was during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the Servicer to reduce the outstanding principal balance of such Mortgage Loan
on a date preceding such Due Date an amount equal to the product of (a) the
Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the
amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the
number of days commencing on the date on which such Principal Prepayment was
applied and ending on the last day of the calendar month in which the related
Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and the
Servicer, the period commencing on the 16th day of the month preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, from and including the Cut-off Date) to and including the
15th day of the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution 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)
which is received by the Servicer in advance of its scheduled Due Date,
excluding any Prepayment Charge thereon.
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 Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, and all Principal Prepayments received during the
related Prepayment Period; (ii) all Liquidation Proceeds, Condemnation Proceeds
and Insurance Proceeds on the Mortgage Loans allocable to principal actually
collected by the Servicer during the related Prepayment Period; (iii) the
portion of the Repurchase Price allocable to principal with respect to each
Mortgage Loan repurchased with respect to such Distribution Date; (iv) all
Substitution Adjustment Amounts allocable to principal received in connection
with the substitutions of Mortgage Loans with respect to such Distribution Date;
(v) with respect to the Distribution Date in June 2007 only, the portion of the
Closing Date Deposit Amount allocable to principal; 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.
Prospectus Supplement: The Prospectus Supplement, dated June 19,
2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
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 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(b), 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, the Securities
Administrator, the Trustee and the Servicer.
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 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, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Definitive Certificate, the Record Date shall be
the close of business on the last Business Day of the month preceding the month
in which the applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.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, 72 Fed. Reg. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Reimbursement Amount: As of any Distribution Date, the sum of (i)
all Insured Amounts previously received by the Securities Administrator
previously paid by the Certificate Insurer and in each case not previously
repaid to the Certificate Insurer pursuant to Sections 4.02 or 4.06 plus (ii)
interest accrued on each such Insured Amount not previously repaid calculated at
the Late Payment Rate from the date the Securities Administrator received the
related Insured Amounts paid by the Certificate Insurer to the date of repayment
to the Certificate Insurer.
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 similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the 21st day
(or if such day is a Saturday, then the first Business Day immediately preceding
that day, or if such day is a Sunday or otherwise not a Business Day, then the
immediately following Business Day) of the month of each related Distribution
Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
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.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement.
Reportable Event: As defined in Section 8.12(f).
Representations and Warranties Agreement: The Representations and
Warranties Agreement, dated as of the Closing Date, between the Depositor and
the Sponsor, a copy of which is attached hereto as Exhibit Y.
Repurchase Price: With respect to any Mortgage Loan repurchased by
the Depositor or the Sponsor, 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 and distributed to
the Securities Administrator to the date of repurchase, (iii) all unreimbursed
Servicing Advances, (iv) all costs and expenses incurred by the Master Servicer
or the Trustee, as the case may be, arising out of or based upon a breach or
defect, including without limitation, costs and expenses relating to the Master
Servicer's or the Trustee's enforcement of the repurchase obligation of the
Depositor or the Sponsor hereunder or under the Representations and Warranties
Agreement, and (v) any costs and damages incurred by the Trust in connection
with any violation by such Mortgage Loan of any predatory lending law or abusive
lending law.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Reuters Page LIBOR01: The display page currently so designated on
the Reuters 3000 Xtra Service (or such other page as may replace that page on
that service or any successor service for the purpose of displaying comparable
rates or prices).
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator, the Master Servicer, any managing director, 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.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation, and its
successors in interest.
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.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association,
and its successors in interest, if any, and, if a successor securities
administrator is appointed hereunder, such successor.
Securities Administrator Information: As defined in Section 8.12(d).
Senior 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 Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount, including any principal payments on those Classes of
Certificates from the Swap Account, on that Distribution Date, by (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 33.30%.
Servicer: Saxon, and if a successor Servicer to any is appointed
hereunder, such successor. When the term "Servicer" is used in this Agreement in
connection with the administration of servicing obligations with respect to any
Mortgage Loan, Mortgaged Property, REO Property or Mortgage File, "Servicer"
shall mean the Person identified as the Servicer of such Mortgage Loan on the
Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management and liquidation of any REO Property (including, reasonable fees paid
to any independent contractor in connection therewith) and (iv) the performance
of its obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing
Advances shall also include any reasonable "out-of-pocket" costs and expenses
(including legal fees) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage in connection with any foreclosure in respect of any Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. No Servicer shall be required to make any Nonrecoverable Servicing
Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit P
hereto. .
Servicing Fee: With respect to each Mortgage Loan serviced by the
Servicer and for any calendar month, an amount equal to one month's interest at
the Servicing Fee Rate on the applicable Stated Principal Balance of such
Mortgage Loan as of the close of business on the day immediately preceding the
first day of the related Due Period. Such fee shall be payable monthly, solely
from the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds and proceeds
received with respect to REO Properties, to the extent permitted by Section
3.11) of such Scheduled Payment collected by the Servicer, or as otherwise
provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of the 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 by the Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan, the
date on which servicing of such Mortgage Loan was transferred to the Servicer
(as set forth in the Mortgage Loan Schedule).
Significant Change to a Permitted Activity: With respect to any
amendment or other instrument entered into pursuant to Section 12.01, a change
to the activities of the Trust that would significantly change its permitted
activities and thus cause the Trust to cease to be a "qualifying special purpose
entity" under accounting principles generally accepted in the United States.
This definition shall be interpreted in a manner consistent with the
requirements of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or any successor to that accounting standard, and any other
relevant authoritative accounting literature, as such requirements are
applicable from time to time.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) 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 delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, (ii)
each Mortgage Loan in foreclosure and (iii) each REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 5.75% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 11.50% of the aggregated Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then aggregate Stated Principal Balance of the Mortgage Loans
but will instead remain the same as the prior period's Specified Subordinated
Amount until the Distribution Date on which a Trigger Event is no longer in
effect. When the Class Certificate Balance of each Class of LIBOR Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC, a New York
limited liability company, as seller of the Mortgage Loans to the Depositor.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 12.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-NC4, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Securities Administrator, the Trustee and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: As defined in Section 2.05.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Securities Administrator with respect to the related Mortgage Loan
representing payments or recoveries of principal including advances in respect
of scheduled payments of principal. For purposes of any Distribution Date, the
Stated Principal Balance of any Mortgage Loan will give effect to any scheduled
payments of principal received by the Servicer on or prior to the related
Determination Date or advanced by the Servicer for the related Remittance Date
and any unscheduled principal payments and other unscheduled principal
collections received during the related Prepayment Period, and the Stated
Principal Balance of any Mortgage Loan that has prepaid in full or has become a
Liquidated Mortgage Loan during the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in June 2010 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balances of the Mortgage Loans for the applicable
Distribution Date but prior to any allocation of the Principal Distribution
Amount and principal payments from the Swap Account to the Certificates on such
Distribution Date) is greater than or equal to the Senior Specified Enhancement
Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by the Servicer, a Subservicer, the Securities
Administrator or the Trustee, as applicable, that is not responsible for the
overall servicing (as "servicing" is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans.
Subordinated Amount: With respect to 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 as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Depositor or the Sponsor for a Deleted Mortgage Loan, which must, on the date of
such substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit J, (a) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (b) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (c)
have a Loan-to-Value Ratio or a Combined Loan-to-Value Ratio, as applicable, no
higher than that of the Deleted Mortgage Loan; (d) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (e) comply with each applicable representation and
warranty set forth in Section 2.03 and in the Representations and Warranties
Agreement.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate Swap
Agreement, the Class IO Interest and the right to receive Class IO Shortfalls,
subject to the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the LIBOR Certificates divided
by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment (other
than a Defaulted Swap Termination Payment) payable from Available Funds to the
Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement); provided
that a Swap Termination Payment shall not be paid from Available Funds to the
extent already paid by a replacement swap provider as a Replacement Swap
Provider Payment.
Tax Matters Person: The Holder of the (i) Class R and (ii) Class RX
Certificates designated as "tax matters person" of (i) Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC, and (ii)
the Class X REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicer on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates and any premium payable to the Certificate Insurer
pursuant to Section 4.02(a)(i) on such Distribution Date, (B) any Net Swap
Payments to the Swap Provider, (C) any Swap Termination Payment (other than a
Defaulted Swap Termination Payment) payable to the Swap Provider from Available
Funds and (D) any other amounts then payable or reimbursable to the Certificate
Insurer.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all principal outstanding as the close of business on
the Cut-off Date (after giving effect to payments of principal due on or prior
to the Cut-off Date, whether or not received) and interest due and accrued on
the Mortgage Loan after the Cut-off Date (or, if the Due Date for any Mortgage
Loan is other than on the first day of the month, after the Due Date immediately
preceding the Cut-off Date); (ii) the Collection Accounts, the Excess Reserve
Fund Account, the Distribution Account, and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; (iv) the Closing Date Deposit Amount; (v) the Swap
Assets; (vi) the Depositor's rights under the Representations and Warranties
Agreement; and (vii) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC, the Upper-Tier REMIC, or the Class X REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Upper-Tier Regular Interest on such
Distribution Date taking into account the Upper-Tier REMIC Loan Group I Rate or
Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier
REMIC WAC Rate and (B) the Upper-Tier CarryForward Amount for such Class of
Certificates for all previous Distribution Dates not previously paid, together
with interest thereon at a rate equal to the applicable Upper-Tier Interest Rate
for such Class of Certificates for such Distribution Date, without giving effect
to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II
Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular Interests
(other than the Class LT-IO Interest) as of the first day of the related
Interest Accrual Period and, solely for the purposes of determining the
Pass-Through Rates on the Class A Certificates, the Certificate Insurer Premium
Rate, weighted on the basis of the Lower-Tier Principal Amounts of such
Lower-Tier Regular Interests as of the first day of the related Interest Accrual
Period.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then in effect on
the beginning of the related Due Period on the Mortgage Loans minus the Swap
Payment Rate and, solely for the purposes of determining the Pass-Through Rates
on the Class A Certificates, the Certificate Insurer Premium Rate, adjusted in
each case to accrue on the basis of a 360-day year and the actual number of days
in the related Interest Accrual Period. With respect to the first Due Period and
the first Distribution Date only, the WAC Cap shall be reduced by a fraction,
the numerator of which is the Closing Date Deposit Amount and the denominator of
which is the Cut-off Date Pool Principal Balance.
Xxxxx Fargo: Xxxxx Fargo Bank, National Association, a national
banking association, and its successors in interest.
WHFIT: A "Widely Held Fixed Investment Trust" as that term is
defined in Treasury Regulations Section 1.671-5(b)(22) or successor provisions.
WHFIT Regulations: Treasury Regulations Section 1.671-5, as amended.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer, without recourse, all the right,
title and interest of the Depositor in and to the Trust Fund, and the Trustee,
on behalf of the Trust, hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders and the Certificate Insurer the following
documents or instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Note for endorsements, the endorsement may be contained on an
allonge, unless the Trustee is advised in writing by the Depositor that
state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note, if any;
(iii) the original Mortgage, or photocopy where an original is not
required, with evidence of recording thereon or a certified true copy of
such Mortgage submitted for recording. If, in connection with any Mortgage
Loan, the original Mortgage cannot be delivered with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Depositor
shall deliver or cause to be delivered to the Trustee a photocopy of such
Mortgage certified by the Original Loan Seller or the Depositor, title
company, escrow company or attorney, as applicable, to be a true and
complete copy of such Mortgage and shall forward or cause to be forwarded
to the Trustee such original recorded Mortgage within 14 days following
the Depositor's receipt of such Mortgage from the applicable public
recording office; or in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a certified
true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, which may be included in a blanket assignment or
assignments (except with respect to MERS Designated Mortgage Loans);
(vi) the original, or photocopy where an original is not required,
of all intervening assignments of Mortgage (if any) evidencing a complete
chain of assignment from the applicable originator (or MERS with respect
to each MERS Designated Mortgage Loan) to the last endorsee with evidence
of recording thereon or a certified true copy of such intervening
assignments of Mortgage submitted for recording, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of Mortgage, the Depositor shall deliver or
cause to be delivered a photocopy of such intervening assignment,
certified by the Original Loan Seller or the Depositor, title company,
escrow company or attorney, as applicable, to be a true and complete copy
of such intervening assignment and shall forward or cause to be forwarded
to the Trustee such original recorded intervening assignment within 14
days following the Depositor's receipt of such from the applicable public
recording office; or in the case of an intervening assignment where a
public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy, a photocopy of
the mortgage title insurance policy, or attorney's opinion of title and
abstract of title, or, in the event such title policy is unavailable, a
copy of the related policy binder or commitment for title from the title
insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor shall cause to be delivered to the Trustee the
applicable recorded document promptly upon receipt from the respective recording
office.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the Depositor to cause the Trust to be shown as the owner of the related
Mortgage Loan on the records of MERS for the purpose of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
From time to time, the Depositor or the Servicer, as applicable,
shall forward to the Trustee additional original documents, additional documents
evidencing an assumption, modification, consolidation or extension of a Mortgage
Loan in accordance with the terms of this Agreement upon receipt of such
documents. All such mortgage documents held by the Trustee as to each Mortgage
Loan shall constitute the "Custodial File".
On or prior to the Closing Date, the Depositor shall deliver or
cause the Sponsor to deliver to the Trustee Assignments of Mortgages, in blank,
for each Mortgage Loan. The Depositor shall cause the Assignments of Mortgages
and complete recording information to be provided to the Servicer in a
reasonably acceptable manner. No later than thirty (30) Business Days following
the later of the Closing Date and the date of receipt by the Servicer of the
complete recording information for a Mortgage, the Servicer shall promptly
submit or cause to be submitted for recording, at the expense of the Depositor
and at no expense to the Trust Fund, the Trustee, the Servicer or the
Certificate Insurer in the appropriate public office for real property records,
each Assignment of Mortgage referred to in Section 2.01(b)(v). Notwithstanding
the foregoing, however, for administrative convenience and facilitation of
servicing and to reduce closing costs, the Assignments of Mortgage shall not be
required to be completed and submitted for recording with respect to any
Mortgage Loan (i) if the Trustee, each Rating Agency and the Certificate Insurer
have received an Opinion of Counsel, satisfactory in form and substance to the
Trustee, each Rating Agency and the Certificate Insurer to the effect that the
recordation of such Assignments of Mortgage in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note, (ii)
if such Mortgage Loan is a MERS Designated Mortgage Loan or (iii) if the Rating
Agencies have each notified the Depositor in writing that not recording any such
Assignments of Mortgage would not cause the initial ratings on any LIBOR
Certificates to be downgraded or withdrawn (without giving effect to the
Certificate Insurance Policy); provided, however, that no Servicer shall be held
responsible or liable for any loss that occurs because an Assignment of Mortgage
was not recorded, but only to the extent the Servicer does not have prior
knowledge of the act or omission that causes such loss. Unless the Depositor
gives the Servicer notice to the contrary, the Depositor is deemed to have given
the Servicer notice that the condition set forth in clause (iii) above is
applicable. However, with respect to the Assignments of Mortgage referred to in
clauses (i) and (ii) above, if foreclosure proceedings occur against a Mortgaged
Property, the Servicer shall record such Assignment of Mortgage at the expense
of the Depositor (and at no expense to the Servicer). If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to "Deutsche Bank
National Trust Company, as trustee under the Pooling and Servicing Agreement
dated as of May 1, 2007, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4." In
the event that any such Assignment of Mortgage is lost or returned unrecorded
because of a defect therein, the Depositor shall promptly cause to be delivered
a substitute Assignment of Mortgage to cure such defect and thereafter cause
each such assignment to be duly recorded.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within one year following the date such Mortgage Loan was
acquired by the Sponsor, and in the event that the Sponsor does not cure such
failure within 30 days of discovery or receipt of written notification of such
failure from the Depositor, the related Mortgage Loan shall, upon the request of
the Depositor, be repurchased by the Sponsor pursuant to the Representations and
Warranties Agreement at the price and in the manner specified in Representations
and Warranties Agreement. The foregoing repurchase obligation shall not apply in
the event that the Sponsor cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that the Sponsor shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Sponsor, confirming that such
document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Sponsor shall be deemed to have been satisfied upon delivery by the Sponsor
to the Trustee prior to the Closing Date of a copy of such Mortgage or
assignment, as the case may be, certified (such certification to be an original
thereof) by the public recording office to be a true and complete copy of the
recorded original thereof.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and the Certificate Insurer a copy of the Mortgage Loan Schedule in an
electronic, machine readable medium in a form acceptable to the Trustee and the
Certificate Insurer.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX ABS CAPITAL
I INC. TRUST 2007-NC4" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the requirement that no Mortgage Loan
be a High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 be governed by the
Georgia Fair Lending Act. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans and the Representations and
Warranties Agreement) pursuant to Section 2.01(a). The Securities Administrator
on behalf of the Trust is hereby directed to enter into the Interest Rate Swap
Agreement.
(e) The Depositor shall use reasonable efforts to assist the Trustee
in enforcing the obligations of the Sponsor under the Representations and
Warranties Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee shall acknowledge, on the Closing Date, receipt by the Trustee of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders and the
Certificate Insurer. The Trustee shall maintain possession of the related
Mortgage Notes in the State of California unless otherwise permitted by the
Rating Agencies. Furthermore, the Trustee solely in its capacity as trustee
hereunder, and on behalf of the Trust, hereby assumes the obligations of the
Depositor under the Representations and Warranties Agreement from and after the
Closing Date and solely insofar as they relate to the Mortgage Loans.
As provided above, in connection with the Closing Date, the Trustee
shall be required to deliver via facsimile or electronically in .pdf format
(with original to follow the next Business Day) to the Depositor, the Servicer
and the Certificate Insurer an Initial Certification on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
applicable Mortgage Loan. The Trustee shall not be responsible to verify the
validity, sufficiency, genuineness, perfection or priority of any document in
any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for the
benefit of the Holders of the Certificates, ascertain that all documents
identified in the Document Certification and Exception Report in the form
attached hereto as Exhibit F, are in its possession, and shall deliver to the
Depositor, the Servicer and the Certificate Insurer a Document Certification and
Exception Report, in the form annexed hereto as Exhibit F, to the effect that,
as to each applicable Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan paid in full or any Mortgage Loan specifically identified
in such certification as an exception and not covered by such certification):
(i) all documents identified in the Document Certification and Exception Report
and required to be reviewed by it are in its possession; (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan; (iii) based on its examination and only as to the foregoing
documents, the information set forth in items (1), (2), (7) and (9) of the
Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the
information set forth in the Custodial File; and (iv) each Mortgage Note has
been endorsed as provided in Section 2.01 of this Agreement. The Trustee shall
not be responsible to verify the validity, sufficiency or genuineness of any
document in any Custodial File.
Within 90 days after the Closing Date, the Servicer (for the benefit
of the Holders of the Certificates, based solely on the list of MERS Designated
Mortgage Loans and screen printouts from the MERS(R) System provided to the
Servicer by the Original Loan Seller or the Depositor no later than 45 days
after the Closing Date) shall confirm, on behalf of the Trust, that the Trustee
is shown as the Investor with respect to each MERS Designated Mortgage Loan on
such screen printouts. If the Trustee is not shown as the Investor with respect
to any MERS Designated Mortgage Loans on such screen printouts, the Servicer
shall promptly notify the Depositor of such fact, and the Depositor shall then
either cure such defect or repurchase such Mortgage Loan in accordance with
Section 2.03.
The Trustee shall retain possession and custody of the Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Depositor shall use reasonable efforts to cause the Sponsor to
deliver to the Servicer copies of all trailing documents required to be included
in the Custodial File at the same time the original or certified copies thereof
are delivered to the Trustee, including but not limited to such documents as the
title insurance policy and any other Mortgage Loan Documents upon return from
the public recording office. The Depositor shall use reasonable efforts to cause
the Sponsor to deliver such documents, at the Sponsor's expense, to the Servicer
and in no event shall the Servicer be responsible for any expenses relating to
such delivery obligation.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a) Saxon
hereby makes the representations and warranties set forth in Schedules II and
II-A hereto to the Depositor, the Master Servicer, the Securities Administrator,
the Certificate Insurer and the Trustee as of the dates set forth in such
Schedules.
(b) [Reserved]
(c) [Reserved]
(d) The Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to the Master Servicer, the Securities
Administrator, the Certificate Insurer and the Trustee as of the dates set forth
in such Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the parties to this Agreement or the
Certificate Insurer of a breach of any of the foregoing representations and
warranties that materially and adversely affect the value of any Mortgage Loan
or the interest of the Trustee, the Certificate Insurer or the
Certificateholders therein, the party discovering such breach shall give prompt
written notice to the other parties hereto.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor under this Agreement that
materially and adversely affects the value of any Mortgage Loan or the interests
of the Trustee, the Certificate Insurer or the Certificateholders therein, the
party discovering such breach shall give prompt written notice thereof to the
other applicable parties (including, without limitation, the Depositor, the
Securities Administrator and the Trustee).
(g) Within 60 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth on
Schedule III hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee, the Certificate Insurer or the
Certificateholders therein, the Depositor shall use its best efforts to promptly
cure such breach in all material respects and, if such defect or breach cannot
be remedied, the Depositor shall purchase such Mortgage Loan at the Repurchase
Price or, if permitted hereunder, substitute a Substitute Mortgage Loan for such
Mortgage Loan.
(h) [Reserved]
(i) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial
File, the Trustee shall notify the Certificate Insurer, the Servicer and the
Depositor by delivery of the certification of the Trustee required by Section
2.02 to such parties, which shall be a request that the Depositor correct or
cure, or cause to be corrected or cured such defect. If such defect cannot be
cured, the Depositor shall cause the Sponsor to repurchase the Mortgage Loan (a
"Deleted Mortgage Loan") at the Repurchase Price or, if permitted hereunder,
substitute a Substitute Mortgage Loan for such Mortgage Loan.
(j) [Reserved]
(k) [Reserved]
(l) Based upon information provided by the Depositor or the Original
Loan Seller, as applicable, the Servicer shall include information regarding the
removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans in its Servicer Remittance Report delivered to the Master
Servicer pursuant to Section 4.03(e) (with copies to the Trustee) for the
Determination Date immediately following the receipt of such information, to the
extent such information is required to be included in the Servicer Remittance
Report. Upon such substitution, the Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement in all respects, and, if the substitution
is made by the Sponsor or the Depositor, as applicable, the Sponsor or the
Depositor, as applicable, shall be deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to the Representations and
Warranties Agreement with respect to such Substitute Mortgage Loan. Upon receipt
of a Request for Release in connection with any such substitution and
certification by the Servicer to the Trustee that the deposit into the
applicable Collection Account of the amount required to be deposited therein in
connection with such substitution as described in Section 2.03(l), the Trustee
shall release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Depositor or the Sponsor, as
applicable, and the Trustee shall execute and deliver at the direction of the
Depositor, such instruments of transfer or assignment prepared by the Sponsor or
the Depositor, as applicable, in each case without recourse, representation or
warranty, as shall be necessary to vest title in the Sponsor or the Depositor,
as applicable, of the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
(m) For any month in which the Depositor or the Sponsor substitutes
one or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate unpaid principal balance of all such
Deleted Mortgage Loans. The amount of such shortage, plus an amount equal to the
sum of (i) any accrued and unpaid interest on the Deleted Mortgage Loans and
(ii) all unreimbursed Servicing Advances with respect to such Deleted Mortgage
Loans, or the amount of any similar shortage with respect to a Substitute
Mortgage Loan substituted by the Depositor under this Agreement or the Sponsor
under the Representations and Warranties Agreement (collectively, the
"Substitution Adjustment Amount"), shall be deposited into the applicable
Collection Account of the Servicer by the Sponsor or the Depositor, as
applicable, on or before the Distribution Account Deposit Date for the
Distribution Date following the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
(n) Any Mortgage Loan repurchased pursuant to this Section 2.03 or
the Representations and Warranties Agreement, as applicable, will be removed
from the Trust Fund. The Servicer shall include information regarding such
repurchase in its Servicer Remittance Report delivered to the Master Servicer
pursuant to Section 4.03(e) (with copies to the Trustee) for the Determination
Date immediately following the receipt of information regarding such repurchase,
to the extent such information is required to be included in the Servicer
Remittance Report. For purposes of determining the applicable Repurchase Price,
any such repurchase shall occur or shall be deemed to occur as of the last day
of the applicable Prepayment Period.
(o) In the event that any Mortgage Loan shall have been repurchased
pursuant to this Agreement or the Representations and Warranties Agreement, the
Repurchase Price therefor shall be deposited by the Servicer in the applicable
Collection Account of the Servicer pursuant to Section 3.10 on or before the
Distribution Account Deposit Date for the Distribution Date following the
Prepayment Period during which such Mortgage Loan was repurchased and upon such
deposit of the Repurchase Price and receipt of a Request for Release in the form
of Exhibit J hereto, indicating such deposit, the Trustee shall release the
related Custodial File held for the benefit of the Certificateholders to such
Person as directed by the Servicer, and the Trustee shall execute and deliver at
such Person's direction such instruments of transfer or assignment prepared by
such Person, in each case without recourse, representation or warranty, as shall
be necessary to transfer title from the Trustee.
(p) [Reserved]
(q) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement or of the Sponsor under the
Representations and Warranties Agreement to cure, repurchase or substitute any
Mortgage Loan as to which a breach of a representation and warranty has occurred
and is continuing, shall constitute the sole remedies against such Persons
respecting such breach available to Certificateholders, the Depositor (if
applicable), or the Securities Administrator, Certificate Insurer or the Trustee
on their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized Denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates and for the benefit of the Certificate Insurer (and
all references in this Agreement for the benefit of or actions on behalf of the
Class A Certificateholders shall be deemed to include the Certificate Insurer).
The Trustee shall cooperate with all reasonable requests by the Certificate
Insurer to preserve or pursue legal remedies to enforce the Certificate
Insurer's rights or interests under this Agreement and the Class A Certificates,
if the Trustee has received written notice from the Certificate Insurer to take
any such action.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular
interests in each Trust REMIC is the Distribution Date occurring in May 2037,
which is the Distribution Date in the month following the month in which the
latest maturity date of any Mortgage Loan occurs. Amounts distributable to the
Class X Certificates (prior to any reduction for any Basis Risk Payment,
Upper-Tier CarryForward Amount, Net Swap Payment or Swap Termination Payment),
exclusive of any amounts received from the Swap Provider, shall be deemed paid
from the Upper-Tier REMIC to the Class X REMIC in respect of the Class UT-X
Interest and the Class UT-IO Interest and then from the Class X REMIC in respect
of the Class X Interest and the Class IO Interest to the Holders of the Class X
Certificates prior to distribution of any Basis Risk Payments or Upper-Tier
CarryForward Amounts to the LIBOR Certificates and Net Swap Payments or Swap
Termination Payments to the Swap Provider. For federal income tax purposes, any
amount distributed on the LIBOR Certificates on any Distribution Date in excess
of the amount distributable on their Corresponding Class of Upper-Tier Regular
Interest on such Distribution Date shall be treated as having been paid from the
Excess Reserve Fund Account or the Swap Account, as applicable, and any amount
distributable on such Corresponding Class of Upper-Tier Regular Interest on such
Distribution Date in excess of the amount distributable on the Corresponding
Class of LIBOR Certificates on such Distribution Date shall be treated as having
been paid to the Swap Account, all pursuant to and as further provided in
Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Master
Servicer, the Securities Administrator, the Certificate Insurer and the Servicer
that as of the date of this Agreement or as of such date specifically provided
herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders and
for the benefit of the Certificate Insurer, all right, title, and interest of
the Depositor thereto as note holder and mortgagee or (ii) to grant to the
Trustee, for the benefit of the Certificateholders, the security interest
referred to in Section 12.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee and shall inure to the benefit of the
Trustee.
Section 2.07 Enforcement of Obligations for Breach of Mortgage Loan
Representations. Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Sponsor pursuant to the Representations
and Warranties Agreement, the party discovering such breach shall give prompt
written notice thereof to the other parties to this Agreement and the Sponsor.
The Trustee shall pursue such legal remedies available to the Trustee with
respect to such breach under the Representations and Warranties Agreement, as
may be necessary or appropriate to enforce the rights of the Trust with respect
thereto, in accordance with customary industry practices or if such asset were
its own property.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders and for the benefit of the Certificate Insurer
(and all references in this Agreement for the benefit of actions on behalf of
the Class A Certificateholders shall be deemed to include the Certificate
Insurer), the Servicer shall service and administer the Mortgage Loans for which
it is acting as Servicer in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek to maximize
the timely and complete recovery of principal and interest on the Mortgage
Notes. Subject only to the above-described servicing standards and the terms of
this Agreement and of the respective Mortgage Loans, the Servicer shall have
full power and authority, acting alone or through Subservicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
covenants that its computer and other systems used in servicing the Mortgage
Loans operate in a manner such that the Servicer can service the Mortgage Loans
in accordance with the terms of this Pooling and Servicing Agreement. The
Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents provided to the Trustee as are necessary or appropriate to enable
the Servicer or any Subservicer to carry out its servicing and administrative
duties hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such duties,
including a power of attorney in the form of Exhibit O hereto to take title to
Mortgaged Properties after foreclosure in the name of and on behalf of the
Trustee. The Trustee shall execute a separate power of attorney in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicer under such powers of
attorney. Notwithstanding anything contained herein to the contrary, no Servicer
or Subservicer shall without the Trustee's consent: (i) initiate any action,
suit or proceeding solely under the Trustee's name without indicating the
Servicer's or Subservicer's, as applicable, representative capacity, or (ii)
take any action with the intent to, or which actually does cause, the Trustee to
be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01 and except for Servicing Advances) and the
Servicer shall not (i) permit any modification with respect to any Mortgage Loan
that would change the Mortgage Rate, reduce or increase the principal balance
(except for reductions resulting from actual payments of principal) or change
the final maturity date on such Mortgage Loan (except for a reduction of
interest payments resulting from the application of the Servicemembers Civil
Relief Act or any similar state statutes) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any Trust REMIC to fail to qualify as a REMIC under the Code or
the imposition of any tax on "prohibited transactions" or "contributions after
the startup date" under the REMIC Provisions, (iii) except as provided in
Section 3.07(a), waive any Prepayment Charges, or (iv) accept payment from the
related Mortgagor of an amount less than the unpaid principal balance of such
Mortgage Loan in final satisfaction thereof; provided, however, that the
Servicer may take any action set forth in clauses (i) through (iv) with respect
to any Mortgage Loan in default or, which in the judgment of the Servicer, a
default is reasonably foreseeable, and only to the extent the Servicer
determines that such action is not materially adverse to the interests of the
Certificateholders and the Certificate Insurer (taking into account any
estimated Realized Loss that might result absent such action).
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the Servicer shall be entitled to waive any such provisions on behalf of the
Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). The Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The Servicer shall give notice to the
Depositor, the Certificate Insurer and the Master Servicer of any such
Subservicer and Subservicing Agreement, which notice shall contain all
information (including without limitation a copy of the Subservicing Agreement)
reasonably necessary to enable the Securities Administrator, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act). No Subservicing Agreement shall be
effective until 30 days after such written notice is received by both the
Depositor and the Master Servicer. The Master Servicer shall not be required to
review or consent to such Subservicing Agreements and shall have no liability in
connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement to which it is a party and
will be familiar with the terms thereof. The terms of any Subservicing Agreement
will not be inconsistent with any of the provisions of this Agreement. The
Servicer and the respective Subservicers may enter into and make amendments to
the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee or
the Certificate Insurer, without the consent of the Trustee or the Certificate
Insurer, respectively. Any variation without the consent of the Trustee or the
Certificate Insurer from the provisions set forth in Section 3.08 relating to
insurance or priority requirements of Subservicing Accounts, or credits and
charges to the Subservicing Accounts or the timing and amount of remittances by
the Subservicers to the Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee, the Certificate Insurer, the Master Servicer and the Depositor copies
of all Subservicing Agreements, and any amendments or modifications thereof,
promptly upon the Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which the Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such
enforcement is directed.
(d) The Servicer shall cause any Subservicer engaged by the Servicer
(or by any Subservicer) for the benefit of the Depositor, the Master Servicer
and the Trustee to comply with the provisions of this Section 3.02 and with
Sections 3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if
such Subservicer were the Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. The Servicer
shall be responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section 3.02(e), the
Servicer and any Subservicer engaged by the Servicer is permitted to utilize one
or more Subcontractors to perform certain of its obligations hereunder. The
Servicer shall promptly upon request provide to the Depositor or the Master
Servicer a written description (in form and substance satisfactory to the
Depositor) of the role and function of each Subcontractor utilized by the
Servicer or any such Subservicer, specifying no later than the date specified
for delivery of the annual report on assessment of compliance set forth in
Section 3.23(b) (i) the identity of each such Subcontractor, if any, that is
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (ii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (i) of this paragraph. As a condition to the utilization by
the Servicer or any such Subservicer of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any such Subservicer) for the benefit of the Depositor, the
Master Servicer and the Trustee to comply with the provisions of Section 3.23 of
this Agreement to the same extent as if such Subcontractor were the Servicer.
The Servicer shall be responsible for obtaining from each such Subcontractor and
delivering to the applicable Persons any assessment of compliance report and
related accountant's attestation required to be delivered by such Subcontractor
under Section 3.23, in each case as and when required to be delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If the Servicer determines,
pursuant to the preceding sentence, that such Subcontractor is a "servicer"
within the meaning of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the engagement of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.02(a) and the Servicer shall comply with Section 3.02(d)
with respect thereto.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement to which the Servicer is a party and the
rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement; provided, however, that the termination, resignation or removal of a
Subservicer shall not be effective until 30 days after written notice is
received by the Depositor, the Master Servicer, the Securities Administrator and
the Certificate Insurer that contains all information reasonably necessary to
enable the Securities Administrator, pursuant to Section 8.12(g), to accurately
and timely report the event under Item 6.02 of Form 8-K pursuant to the Exchange
Act (if such reports under the Exchange Act are required to be filed under the
Exchange Act). In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
party to the related Subservicing Agreement without any act or deed on the part
of such Subservicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Subservicing Agreement
with a successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Master Servicer
without fee, in accordance with the terms of this Agreement, in the event that
the Servicer who is party to the related Subservicing Agreement shall, for any
reason, no longer be the Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering such Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers, the
Master Servicer and the Trustee. Any Subservicing Agreement that may be entered
into and any transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be between the
Subservicer and the Servicer alone, and neither the Trustee nor the Master
Servicer (or any other successor to the Servicer) shall be deemed a party
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Subservicer except as set forth in Section 3.06. The
Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Master Servicer. In the event the Servicer at any time shall for any reason no
longer be the Servicer (including by reason of the occurrence of an Event of
Default), the Master Servicer, or its designee, or another successor Servicer if
the successor is not the Master Servicer, shall thereupon assume all of the
rights and obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, with copies thereof provided to the Master
Servicer, or another successor Servicer if the successor is not the Master
Servicer, prior to the Master Servicer, or such other successor Servicer if the
successor is not the Master Servicer, assuming such rights and obligations,
unless the Master Servicer elects to terminate any Subservicing Agreement in
accordance with its terms as provided in Section 3.03.
Upon such assumption, the Master Servicer shall be deemed, subject
to Section 3.03, to have assumed all of the Servicer's interest therein and to
have replaced the Servicer as a party to each Subservicing Agreement to which
the predecessor servicer was a party to the same extent as if each Subservicing
Agreement had been assigned to the assuming party, except that (i) the Servicer
shall not thereby be relieved of any liability or obligations under any such
Subservicing Agreement that arose before it ceased to be the Servicer and (ii)
none of the Depositor, the Master Servicer, the Trustee, their designees or any
successor to the Servicer shall be deemed to have assumed any liability or
obligation of the Servicer that arose before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Master
Servicer, deliver to the assuming party all documents and records relating to
each Subservicing Agreement to which it is a party and the Mortgage Loans then
being serviced by it and an accounting of amounts collected and held by or on
behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the Due Dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding anything in this Agreement to the contrary, the Servicer may
waive, or permit a Subservicer to waive, in whole or in part, a Prepayment
Charge only under the following circumstances: (i) such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of the Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan;
provided, however, that the Servicer or Subservicer may (and with respect to any
Group I Mortgage Loan shall) waive such Prepayment Charge if the Mortgage Loan
is accelerated or paid-off in connection with the workout of a delinquent
Mortgage Loan or due to the related Mortgagor's default, notwithstanding that
the terms of the Mortgage Loan or federal or state law might permit the
imposition of such Prepayment Charge, (ii) such Prepayment Charge is not
permitted to be collected by applicable federal, state or local law or
regulation or (iii) the collection of such Prepayment Charge would be considered
"predatory" pursuant to written guidance published or issued by any applicable
federal, state or local regulatory authority acting in its official capacity and
having jurisdiction over such matters. If a Prepayment Charge is waived other
than as permitted by the prior sentence, then the Servicer is required to pay
the amount of such waived Prepayment Charge, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the related Collection
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the related Collection Account;
provided, however, that the Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Charge if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and to secure their limited recourse obligation
to pay to the LIBOR Certificateholders Basis Risk CarryForward Amounts (prior to
using any Net Swap Receipts). For the avoidance of doubt, any Basis Risk
CarryForward Amounts shall be paid to the LIBOR Certificates first from the
Excess Reserve Fund Account and then from the Swap Account.
(ii) On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment made for the benefit of the
LIBOR Certificates for such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Securities Administrator
shall (1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(P), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in clause
(iii) in the definition thereof) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(O)) and (y) the aggregate
Basis Risk CarryForward Amounts for such Distribution Date and (2) withdraw from
the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments, along
with payments from the Swap Account, shall be allocated to those Classes on a
pro rata basis based upon the amount of Basis Risk CarryForward Amount owed to
each such Class and shall be paid in the priority set forth in Sections
4.02(a)(iii)(Q).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of the Grantor Trust and not an asset of
any Trust REMIC. The beneficial owners of the Excess Reserve Fund Account
are the Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper-Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Securities Administrator to the
Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Securities
Administrator to the LIBOR Certificateholders shall be accounted for by
the Securities Administrator as amounts paid first to the Holders of the
Class X Certificates and then to the respective Class or Classes of LIBOR
Certificates. In addition, the Securities Administrator shall account for
the LIBOR Certificateholders" rights to receive payments of Basis Risk
CarryForward Amounts (along with payments of Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts from the
Swap Account) and the obligation to pay Class IO Shortfalls as rights and
obligations under a notional principal contract between the Class X
Certificateholders and the Holders of the LIBOR Certificates.
(iv) Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any payments from
the Excess Reserve Fund Account except as expressly set forth in this
Section 3.07(c) and Sections 4.02(a)(iii)(Q) and (S).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders and the Certificate
Insurer. The Depositor shall cause to be deposited into the Distribution Account
on the Closing Date the Closing Date Deposit Amount. The Master Servicer shall,
promptly upon receipt, deposit in the Distribution Account and the Securities
Administrator shall retain therein the following:
(i) the aggregate amounts remitted by the Servicer to the Master
Servicer pursuant to Section 3.11;
(ii) any amounts deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Master Servicer in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Master Servicer which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account shall
be held by the Securities Administrator in trust for the Certificateholders
until disbursed in accordance with this Agreement or withdrawn in accordance
with Section 4.02.
In order to comply with its duties under the USA Patriot Act of
2001, the Securities Administrator shall obtain and verify certain information
and documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
(e) The Securities Administrator may invest the funds in the
Distribution Account, in one or more Permitted Investments, in accordance with
Section 3.12. The Servicer shall direct the Master Servicer to instruct the
Securities Administrator to withdraw from the Distribution Account and to remit
to the Servicer no less than monthly, all income and gain realized from the
investment of the portion of funds deposited in the Distribution Account by the
Servicer (except during the Master Servicer Float Period). The Securities
Administrator may withdraw from the Distribution Account any income or gain
earned from the investment of funds deposited therein during the Master Servicer
Float Period for its own benefit.
(f) The Servicer shall give notice to the Master Servicer, and the
Master Servicer shall give notice to each Rating Agency, the Certificate Insurer
and the Depositor of any proposed change of the location of the related
Collection Account within a reasonable period of time prior to any change
thereof.
(g) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, the Trustee is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Trustee. Accordingly, each of the parties agrees
to provide to the Trustee upon its request from time to time such party's
complete name, address, tax identification number and such other identifying
information together with copies of such party's constituting documentation,
securities disclosure documentation and such other identifying documentation as
may be available for such party.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the related Collection Account of the Servicer or remit
such proceeds to the Servicer for deposit in the related Collection Account of
the Servicer not later than two Business Days after the deposit of such amounts
in the Subservicing Account. For purposes of this Agreement, the Servicer shall
be deemed to have received payments on the Mortgage Loans when the Subservicer
receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by the
Servicer. Each Tax Service Contract shall be assigned to the Master Servicer, or
a successor Servicer at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, the Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by the Servicer. To the extent the
related Mortgage provides for Escrow Payments, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more segregated
accounts (the "Escrow Accounts"), which shall be Eligible Accounts. The Servicer
shall deposit in the clearing account (which account must be an Eligible
Account) in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day (two Business Days in the case
of Saxon) after the Servicer's receipt thereof, all collections from the
Mortgagors (or related advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums and comparable items for the account of
the Mortgagors ("Escrow Payments") collected on account of the Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Escrow Accounts, in no
event more than two Business Days (one Business Day in the case of Saxon) after
the deposit of such funds in the clearing account, for the purpose of effecting
the payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from an Escrow Account may be made only to (i) effect
payment of taxes, assessments, hazard insurance premiums, and comparable items;
(ii) reimburse the Servicer (or a Subservicer to the extent provided in the
related Subservicing Agreement) out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as
may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; or (vii) recover amounts deposited in error. As part of its
servicing duties, the Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine whether any such payments are made by the Mortgagor
in a manner and at a time that avoids the loss of the Mortgaged Property due to
a tax sale or the foreclosure of a tax lien. The Servicer assumes full
responsibility for the payment of all such bills within such time and shall
effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, the Servicer shall deposit or cause to be deposited in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day (two Business Days in the case of Saxon) after the
Servicer's receipt thereof, and shall thereafter deposit in the related
Collection Account, in no event more than two Business Days (one Business Day in
the case of Saxon) after the deposit of such funds into the clearing account, as
and when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the related Collection Account and shall,
upon collection, belong to the Servicer as additional compensation for its
servicing activities. In the event the Servicer shall deposit in the related
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from its Collection Account, any provision herein
to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Master Servicer of the location of the related
Collection Account maintained by it when established and prior to any change
thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) The
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Master
Servicer all Available Funds (without reduction for amounts owed to the
Depositor, the Securities Administrator, the Master Servicer or the
Trustee as provided for in the definition of "Available Funds") in respect
of the related Distribution Date together with all amounts representing
Prepayment Charges from the Mortgage Loans received by the Servicer during
the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (the Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay the Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by the Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by the
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (the Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in its Collection Account and to withdraw
any net Prepayment Interest Excesses in accordance with Section 3.21(b);
(v) to pay to the Sponsor or the Depositor, as applicable, with
respect to each Mortgage Loan that has previously been repurchased or
replaced pursuant to this Agreement or the Representations and Warranties
Agreement, as applicable, all amounts received thereon subsequent to the
date of purchase or substitution, as further described herein;
(vi) to reimburse the Servicer for (A) any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (the Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan serviced by the
Servicer pursuant to Section 3.15 (the Servicer's right for recovery or
reimbursement has priority over the Trust);
(viii) to reimburse the Master Servicer, the Servicer or the
Depositor for expenses incurred by or reimbursable to the Master Servicer,
the Servicer or the Depositor, as the case may be, pursuant to Section
6.03 (the Servicer's right for recovery or reimbursement has priority over
the Trust as stated in the definition of "Available Funds");
(ix) to reimburse the Master Servicer, the Servicer or the Trustee,
as the case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the repurchase obligation of the Sponsor
or the Depositor, as applicable, that were included in the Repurchase
Price of the Mortgage Loan, including any expenses arising out of the
enforcement of the repurchase obligation, to the extent not otherwise paid
pursuant to the terms of this Agreement or the Representations and
Warranties Agreement, as applicable (the Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Master Servicer on the Remittance
Date occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse the Servicer for xxxxxxxxxxxx X&X
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement.
To the extent that the Servicer does not timely make the remittance
referred to in clause (i) above, the Servicer shall pay the Master Servicer for
the account of the Master Servicer interest on any amount not timely remitted at
the Prime Rate, from and including the applicable Remittance Date to but
excluding the date such remittance is actually made.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. The Servicer shall provide written notification (as set forth in
Section 4.01(d)) to the Master Servicer, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) The Servicer shall be responsible for reviewing and reconciling
the applicable Collection Account in accordance with Accepted Servicing
Practices. The Servicer shall act promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) The Servicer may invest the funds in the related
Collection Account and the related Escrow Account (to the extent permitted by
law and the related Mortgage Loan documents) and the Securities Administrator
may (but is not obligated to) invest funds in the Distribution Account during
the Master Servicer Float Period, and, with respect to the portion of funds in
the Distribution Account deposited by the Servicer, shall (except during the
Master Servicer Float Period) invest such funds in the Distribution Account at
the direction of the Servicer in the Xxxxx Fargo Advantage Prime Investments
Money Market Fund (for purposes of this Section 3.12, such Accounts are referred
to as an "Investment Account"), in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand no later
than the Business Day immediately preceding the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement; provided,
however, that the Securities Administrator shall have no obligation to invest
funds deposited into the Distribution Account by the Servicer on the Remittance
Date later than 10:00 a.m. (Pacific Standard Time). If no investment instruction
is given in a timely manner, the Securities Administrator shall hold the funds
in the Distribution Account uninvested. All such Permitted Investments shall be
held to maturity, unless payable on demand. Any investment of funds in an
Investment Account (other than investments made during the Master Servicer Float
Period) shall be made in the name of the Securities Administrator in Permitted
Investments selected by the Servicer. The Servicer shall be entitled to the
income from such related investment (except with respect to investment direction
of funds and any income and gain realized on any investment in the Distribution
Account during the Master Servicer Float Period, which shall be for the sole
benefit of the Securities Administrator) and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Servicer, or
with respect to investments during the Master Servicer Float Period, the
Securities Administrator or its agent (with a copy to the Securities
Administrator or its agent if related to investment of funds in the Distribution
Account not during the Master Servicer Float Period), together with any document
of transfer necessary to transfer title to such investment to the Servicer, or
with respect to investments during the Master Servicer Float Period, the
Securities Administrator or its agent. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Servicer, or with respect to investments during the Master Servicer
Float Period, the Securities Administrator may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in the manner set forth in Section 3.11. The Servicer
shall deposit in its Collection Account or Escrow Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(c) All income and gain realized from the investment of the portion
of funds deposited in the Distribution Account by the Servicer and held by the
Securities Administrator, shall be for the benefit of the Servicer (except for
any income or gain realized from the investment of funds on deposit in the
Distribution Account during the Master Servicer Float Period, which shall be for
the benefit of the Securities Administrator) and shall be subject to the
Securities Administrator's withdrawal in the manner set forth in Section
3.07(e). The Servicer shall deposit in the Distribution Account (except with
respect to losses incurred during the Master Servicer Float Period) the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Securities Administrator shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator shall not be liable for the amount
of any loss incurred with respect of any investment or lack of investment of
funds held in any Investment Account or the Distribution Account (except that if
any losses are incurred from the investment of funds deposited in the
Distribution Account during the Master Servicer Float Period, the Securities
Administrator shall be responsible for reimbursing the Trust for such loss
immediately upon realization of such loss) if made in accordance with this
Section 3.12.
(f) The Securities Administrator or its Affiliates shall be
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator's economic self-interest for (i) serving as investment
adviser, administrator, shareholder, servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan serviced by the Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by the
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Master Servicer, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to the applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to Xxxxxx Mae or Xxxxxxx Mac or
(ii) having a General Policy Rating of B:III or better from Best's (or such
other rating that is comparable to such rating) insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of itself and the Trustee claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Master Servicer and the
Certificate Insurer, upon request, with copies of any such insurance policies
and fidelity bond. The Servicer shall be deemed to have complied with this
provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days" prior written notice to the Trustee and the Master
Servicer. The Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note; provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and such substitution is in
the best interest of the Certificateholders and the Certificate Insurer as
determined by the Servicer. In connection with any assumption, modification or
substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. No Servicer shall take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Servicer
in respect of an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation. In connection
with any such assumption, no material term of the Mortgage Note (including but
not limited to the related Mortgage Rate and the amount of the Scheduled
Payment) may be amended or modified, except as otherwise required pursuant to
the terms thereof. The Servicer shall notify the Trustee that any such
substitution, modification or assumption agreement has been completed and shall
forward to the Trustee, the executed original of such substitution or assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Securities Administrator, taking into account,
among other things, the timing of foreclosure proceedings; provided, however,
with respect to any Second Lien Mortgage Loan for which the related first lien
mortgage loan is not included in the Trust Fund, if, after such Mortgage Loan
becomes 180 days or more delinquent, the Servicer determines that a significant
net recovery is not possible through foreclosure, such Mortgage Loan may be
charged off and the Mortgage Loan will be treated as a Liquidated Mortgage Loan
giving rise to a Realized Loss. The foregoing is subject to the provisions that,
in any case in which Mortgaged Property shall have suffered damage from an
uninsured cause, the Servicer shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its sole
discretion (i) that such restoration will increase the net proceeds of
liquidation of the related Mortgage Loan to the Securities Administrator, after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Servicer through Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 3.11. The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related property, as contemplated in
Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicer or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to reimburse the Servicer for any related
xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; third, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a liquidation or REO Disposition; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Securities
Administrator in accordance with the provisions of Section 4.02, subject to
Section 3.17(f) with respect to certain excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee or the Master Servicer otherwise requests,
the Servicer shall cause an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector. Upon completion of the
inspection, the Servicer shall promptly provide the Trustee, the Master
Servicer, the Depositor and the Certificate Insurer with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices how the Servicer
shall proceed with respect to the Mortgaged Property. In the event (a) the
environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the Servicer
determines, consistent with Accepted Servicing Practices, to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.11. In the event the Servicer
determines not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged Property from the
related Collection Account pursuant to Section 3.11. The Trustee shall not be
responsible for any determination made by the Servicer pursuant to this
paragraph or otherwise.
In the event Saxon elects to charge-off a Second Lien Mortgage Loan
180 days or more delinquent pursuant to this Section 3.15, no Second Lien
Mortgage Loan shall be characterized as a Liquidated Mortgage Loan, unless the
Depositor consents in writing to such characterization after Saxon has provided
the Depositor with a combined equity analysis of such Second Lien Mortgage Loan
and the related first lien mortgage loan; provided, that if the Depositor has
failed to notify Saxon within 3 Business Days of receipt of such combined equity
analysis, then the Depositor shall be deemed to have consented to such
characterization. In the event Saxon elects to charge off a Second Lien Mortgage
Loan 180 days or more delinquent pursuant to this Section 3.15, Saxon shall
notify the Master Servicer of such election, which notice may be provided in the
Servicer Remittance Report delivered pursuant to Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, the Servicer will deposit all amounts received in
connection with such payment which are required to be deposited in the related
Collection Account pursuant to Section 3.10 and shall request delivery to it of
the Custodial File by submitting a Request for Release (in writing or an
electronic format acceptable to the Trustee) to the Trustee. Upon receipt of
such Request for Release, the Trustee shall promptly release the related
Custodial File to the Servicer within five (5) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Collection Account or to the
Trustee.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release in
written or electronic form, release the related Custodial File to the Servicer,
and the Trustee shall, at the direction of the Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings and the
Servicer shall retain the Mortgage File in trust for the benefit of the Trustee.
Such Request for Release shall obligate the Servicer to return each and every
document previously requested from the Custodial File to the Trustee when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan has
been charged off or liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the related Collection Account or the
Mortgage File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non- judicially, and the Servicer has
delivered to the Trustee a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was charged
off or liquidated and that all amounts received or to be received in connection
with such liquidation that are required to be deposited into the related
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee to the Servicer or its designee upon request therefor. Upon receipt of a
Request for Release under this Section 3.16, the Trustee shall deliver the
related Custodial File to the requesting Servicer; provided, however, that in
the event the Servicer has not previously received copies of the relevant
Mortgage Loan Documents necessary to service the related Mortgage Loan in
accordance with Accepted Servicing Practices, the Depositor shall reimburse the
Trustee for any overnight courier charges incurred for the requested Custodial
Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
Servicer shall cause the deed or certificate of sale to be issued in the name of
the Trustee, on behalf of the Certificateholders. Upon written request by the
Servicer, the Trustee shall provide the Servicer with a power of attorney
prepared by the Servicer with respect to such REO Property in the form of
Exhibit O.
(b) The Servicer shall manage, conserve, protect and operate each
related REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. The Servicer, either itself or through an agent selected
by the Servicer, shall manage, conserve, protect and operate the REO Property in
the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. The Servicer shall
attempt to sell the same (and may temporarily rent the same for a period not
greater than one year, except as otherwise provided below) on such terms and
conditions as the Servicer deems to be in the best interest of the Trustee. An
independent contractor, as the agent of Saxon, may be retained by Saxon to
perform functions relating to the title, management and disposition of REO
Property. Saxon shall be responsible for such independent contractor's fees and
expenses relating to a REO Property and shall be entitled to reimbursement
thereof from the Liquidation Proceeds with respect to the related Mortgaged
Property, as Servicing Advances or, if applicable, as Nonrecoverable Servicing
Advances. The Trustee shall have no obligations with respect to any REO
Dispositions.
(c) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, in no event more than two
(2) Business Days following the Servicer's receipt thereof, in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan, plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the Servicer as additional servicing compensation.
(g) The Servicer shall use its reasonable best efforts, to sell, or
cause its Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property serviced by the Servicer or Subservicer as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by Pooling-Tier REMIC-1 unless (i) the
Servicer applies for and receives an extension of such period from the Internal
Revenue Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in
which event such REO Property shall be sold within the applicable extension
period, or (ii) the Servicer obtains an Opinion of Counsel, addressed to the
Depositor, the Trustee, the Master Servicer and the Servicer, to the effect that
the holding by Pooling-Tier REMIC-1 of such REO Property subsequent to such
period will not result in the imposition of taxes on "prohibited transactions"
as defined in Section 860F of the Code or cause any Trust REMIC to fail to
qualify as a REMIC under the REMIC Provisions or comparable provisions of
relevant state laws at any time. The Servicer shall manage, conserve, protect
and operate each REO Property serviced by the Servicer for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by Pooling-Tier REMIC-1
of any "income from non permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, the Servicer shall either itself or through
an agent selected by the Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Interest Rate Adjustment Date and shall adjust the Scheduled Payment
on the related mortgage payment adjustment date, if applicable, in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. In the event that an Index becomes unavailable or otherwise unpublished,
the Servicer shall select a comparable alternative index over which it has no
direct control and which is readily verifiable. The Servicer shall execute and
deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Master Servicer such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Master Servicer that the Servicer has failed to adjust a
Mortgage Rate or Scheduled Payment in accordance with the terms of the related
Mortgage Note, the Servicer shall deposit in the related Collection Account from
its own funds the amount of any interest loss caused as such interest loss
occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide, or cause any
Subservicer to provide, to the Depositor, the Certificate Insurer and the
Trustee, and at the request of the OTS or the FDIC and the examiners and
supervisory agents thereof, access to the documentation regarding the Mortgage
Loans in its possession required by applicable regulations of the OTS. Such
access shall be afforded without charge, but only upon five (5) Business Days
prior written request and during normal business hours at the offices of the
Servicer or any Subservicer. Nothing in this Section shall derogate from the
obligation of any such party to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of any such
party to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Master Servicer for any funds received by the Servicer or which otherwise are
collected by the Servicer as Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan serviced by the Servicer. All
Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including, but not
limited to, any funds on deposit in its Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in any Collection Account, the
Distribution Account or any Escrow Account, or any funds that otherwise are or
may become due or payable to the Securities Administrator for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, the Servicer shall be entitled to recover unpaid Servicing Fees out of
related late collections to the extent permitted in Section 3.11. The right to
receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Servicer's responsibilities and
obligations under this Agreement; provided, however, that the Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the related Collection Account, and pursuant to Section 3.07(e),
to direct the Master Servicer to instruct the Securities Administrator to
withdraw from the Distribution Account and remit to the Servicer (except for
monies invested during the Master Servicer Float Period), as additional
servicing compensation, interest or other income earned on the related portions
of deposits therein. The Servicer shall also be entitled, as additional
servicing compensation, to interest or other income earned on deposits in the
related Escrow Account (to the extent permitted by law and the related Mortgage
Loan documents) in accordance with Section 3.12. The Servicer shall also be
entitled to retain net Prepayment Interest Excesses (to the extent not required
to offset Prepayment Interest Shortfalls), but only to the extent such amounts
are received by the Servicer.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer, the
Securities Administrator and the Master Servicer shall deliver or cause to be
delivered, and shall cause each Subservicer engaged by the Servicer to deliver
or cause to be delivered to the Master Servicer (and the Master Servicer shall
deliver or otherwise make available to the Depositor, the Securities
Administrator, the Rating Agencies, the Certificate Insurer and the Trustee) on
or before March 5th (March 15th with respect to Saxon) of each calendar year,
commencing in 2008, an Officer's Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Securities Administrator,
the Master Servicer, the Servicer or Subservicer, as applicable, during the
preceding calendar year and of its performance under this Agreement or the
applicable Subservicing Agreement, as the case may be, has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Securities Administrator, the Master Servicer, the Servicer
or Subservicer, as applicable, has fulfilled all of its obligations under this
Agreement or the applicable Subservicing Agreement, as the case may be, in all
material respects, throughout such year, or, if there has been a default in the
fulfillment of any such obligation in any material respect, specifying each such
default known to such officers and the nature and status thereof. Promptly after
receipt of each such Officer's Certificate, the Depositor shall review each such
Officer's Certificate and, if applicable, consult with the Securities
Administrator, the Master Servicer, the Servicer or Subservicer as to the nature
of any defaults by the Securities Administrator, the Master Servicer, the
Servicer or any related Subservicer in the fulfillment of any of the Securities
Administrator's, the Master Servicer's, the Servicer's or any related
Subservicer's obligations. The obligations of the Securities Administrator, the
Master Servicer, the Servicer and each Subservicer under this Section 3.22 apply
to the Securities Administrator, the Master Servicer, the Servicer and each
Subservicer that serviced a Mortgage Loan during the applicable period, whether
or not the Securities Administrator, the Master Servicer, the Servicer or such
Subservicer is acting as Securities Administrator, Master Servicer, the Servicer
or a Subservicer at the time such Officer's Certificate is required to be
delivered. None of the Servicer or Subservicers, the Master Servicer, the
Securities Administrator or any Servicing Function Participant shall be required
to cause the delivery of any Officer's Certificate required by this Section
until March 10th (March 15th with respect to Saxon) in any given year so long as
it has received written confirmation from the Depositor that a Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants Attestation Report.
(a) Not later than March 5th (March 15th with respect to Saxon) of
each calendar year commencing in 2008, the Servicer shall deliver, and shall
cause each Subservicer engaged by the Servicer to deliver, and the Securities
Administrator, the Master Servicer and the Trustee, as applicable, shall deliver
or otherwise make available, and the Servicer, the Securities Administrator, the
Master Servicer and the Trustee, as applicable, shall cause each Subcontractor
utilized by the Servicer (or by any such Subservicer), the Securities
Administrator, the Master Servicer or the Trustee, as applicable, and determined
by the Servicer, the Securities Administrator, the Master Servicer or the
Trustee, as applicable, pursuant to Section 3.02(e) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB (in each
case, a "Servicing Function Participant"), to deliver, each at its own expense,
to the Master Servicer (and the Master Servicer shall make available to the
Securities Administrator, the Depositor and the Certificate Insurer as part of
the filing package forwarded to the Depositor for review and verification) a
report on an assessment of compliance with the Servicing Criteria applicable to
it that contains (A) a statement by such party of its responsibility for
assessing compliance with the Servicing Criteria applicable to it, (B) a
statement that such party used the Servicing Criteria to assess compliance with
the applicable Servicing Criteria, (C) such party's assessment of compliance
with the applicable Servicing Criteria as of and for the period ending the end
of the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 8.12, including, if there has been any material instance of
noncompliance with the applicable Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a statement that a registered
public accounting firm has issued an attestation report on such Person's
assessment of compliance with the applicable Servicing Criteria as of and for
such period. Each such assessment of compliance report shall be addressed to the
Depositor and signed by an authorized officer of the applicable company, and
shall address each of the applicable Servicing Criteria set forth on Exhibit P
hereto, or as set forth in the notification furnished to the Depositor and the
Securities Administrator pursuant to Section 3.23(c). The Servicer, the
Securities Administrator, the Master Servicer and the Trustee hereby acknowledge
and agree that their respective assessments of compliance will cover the items
identified on Exhibit P hereto as being covered by such party. The parties to
this Agreement acknowledge that where a particular Servicing Criteria has
multiple components, each party's assessment of compliance (and related
attestation of compliance) will relate only to those components that are
applicable to such party. Promptly after receipt of each such report on
assessment of compliance, (i) the Depositor shall review each such report and,
if applicable, consult with the Servicer, the Securities Administrator, the
Master Servicer or the Trustee, as applicable, as to the nature of any material
instance of noncompliance with the Servicing Criteria applicable to it (and each
Subservicer or Servicing Function Participant engaged or utilized by the
Servicer, such Subservicer, the Securities Administrator, the Master Servicer or
the Trustee, as applicable), as the case may be. None of the Servicer, the
Securities Administrator, the Master Servicer, the Trustee, any Subservicer or
any Servicing Function Participant shall be required to cause the delivery of
any such assessments until March 10th (March 15th with respect to Saxon) in any
given year, and the Trustee shall not be required to deliver any such
assessment, so long as it has received written confirmation from the Depositor
that a Form 10-K is not required to be filed in respect of the Trust for the
preceding calendar year.
(b) Not later than March 5th (March 15th with respect to Saxon) of
each calendar year commencing in 2008, the Servicer, the Securities
Administrator, the Master Servicer and the Trustee, as applicable, shall cause,
and the Servicer shall cause each Subservicer engaged by the Servicer, and the
Servicer, the Securities Administrator, the Master Servicer and the Trustee
shall cause each Servicing Function Participant utilized by the Securities
Administrator, the Master Servicer, the Trustee or the Servicer, as applicable
(or by any Subservicer engaged by the Servicer) to cause, each at its own
expense, a registered public accounting firm (which may also render other
services to such party) and that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Master Servicer (and the
Master Servicer shall make available to the Securities Administrator and the
Depositor as part of the filing package forwarded to the Depositor for review
and verification, with a copy to the Rating Agencies), to the effect that (i) it
has obtained a representation regarding certain matters from the management of
such Person, which includes an assertion that such Person has complied with the
Servicing Criteria applicable to it pursuant to Section 3.23(a) and (ii) on the
basis of an examination conducted by such firm in accordance with standards for
attestation engagements issued or adopted by the PCAOB, that attests to and
reports on such Person's assessment of compliance with the Servicing Criteria
applicable to it. In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it was unable
to express such an opinion. Each such related accountant's attestation report
shall be made in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act. Such report must be available for
general use and not contain restricted use language. Promptly after receipt of
each such accountants' attestation report, the Depositor shall review the report
and, if applicable, consult with the Servicer, the Master Servicer, the
Securities Administrator or the Trustee, as applicable, as to the nature of any
defaults by the Servicer, the Securities Administrator, the Master Servicer or
the Trustee (and each Subservicer or Servicing Function Participant engaged or
utilized by the Servicer, the Securities Administrator, the Master Servicer or
the Trustee, as applicable, or by any Subservicer engaged by the Servicer), as
the case may be, in the fulfillment of any of the Servicer's, the Securities
Administrator's, the Master Servicer's, the Trustee's, the applicable
Subservicer's or Servicing Function Participant's obligations hereunder or under
any applicable sub-servicing agreement. None of the Securities Administrator,
the Master Servicer, the Servicer, the Trustee or any Servicing Function
Participant shall be required to cause the delivery of any such attestation
required by this paragraph until March 10th (March 15th with respect to Saxon)
in any given year, and the Trustee shall not be required to deliver any such
assessment, so long as each of them has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
(c) Promptly upon written request from the Depositor, the Servicer
shall notify the Securities Administrator and the Depositor as to the name of
each Subservicer engaged by the Servicer and each Servicing Function Participant
utilized by the Servicer and by each Subservicer engaged by the Servicer, but
only to the extent there has been a change in the information in such
notification from notices previously delivered and the Securities Administrator
and the Master Servicer shall notify the Depositor and the Securities
Administrator as to the name of each Servicing Function Participant utilized by
it, and each such notice will specify what specific Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Subservicer
and Servicing Function Participant in each case, to the extent of any change
from the prior year's notice, if any. When the Servicer, the Securities
Administrator or the Master Servicer submits its assessment pursuant to Section
3.23(a), the Servicer, the Securities Administrator or the Master Servicer, as
applicable, will also at such time include the assessment (and related
attestation pursuant to Section 3.23(b)) of each Servicing Function Participant
utilized by it and by each Subservicer engaged by it.
(d) The obligations of the Securities Administrator, the Master
Servicer, the Trustee, the Servicer or Subservicer under this Section 3.23 apply
to the Securities Administrator, the Master Servicer, the Trustee and the
Servicer and Subservicer that serviced a Mortgage Loan during the applicable
period, whether or not the Securities Administrator, the Master Servicer, the
Trustee, the Servicer or Subservicer is acting as Securities Administrator,
Master Servicer, Trustee, the Servicer or Subservicer, as applicable, at the
time such assessment of compliance with Servicing Criteria and related
accountant's attestation is required to be delivered.
Section 3.24 Master Servicer to Act as Servicer. (a) Subject to
Section 7.02, in the event that the Servicer shall for any reason no longer be
the Servicer hereunder (including by reason of an Event of Default), the Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the Master
Servicer shall not be (i) liable for losses of such predecessor servicer
pursuant to Section 3.10 or any acts or omissions of such predecessor servicer
hereunder), (ii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.03, (iii) responsible for expenses of such
predecessor servicer pursuant to Section 2.03 or (iv) deemed to have made any
representations and warranties of the Servicer hereunder. Any such assumption
shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Master Servicer (or any other successor Servicer)
shall not incur any liability or have any obligations in its capacity as
successor Servicer under a Subservicing Agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the Subservicing Agreement
arising prior to the date of such succession.
(d) The Servicer shall, upon request of the Master Servicer, but at
the expense of the Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement (if any) to which it is party
and the Mortgage Loans then being serviced thereunder and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of such Subservicing Agreement to the
assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Master Servicer on each Remittance Date for deposit in the Distribution Account
an amount from the Servicer's own funds equal to the Compensating Interest
payable by the Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans required to be serviced by it and the related borrowers and
shall provide all required notices thereunder.
Section 3.27 Optional Purchase of Delinquent Mortgage Loans. Either
(i) The Servicer (or its assignee) or (ii) the Holders of a majority (by
Percentage Interest) of the Class X Certificates (or, if the Class X
Certificates have been pledged to secure any NIM Securities, the holders of a
majority of the equity interests in the related NIM Issuer) may, at its or their
option, purchase any 90+ Delinquent Mortgage Loans from the Trust by payment to
the Trust of a purchase price equal to 100% of the unpaid principal balance of
such Mortgage Loan plus accrued and unpaid interest on the related Mortgage Loan
at the applicable Mortgage Interest Rate, plus the amount of any unreimbursed
Servicing Advances made by the Servicer; provided, however, that neither the
Depositor nor any Affiliate of the Depositor may exercise the foregoing option,
or have the power to direct either the Holders of the majority (by Percentage
Interest) of the Class X Certificates or of the equity interests in the related
NIM Issuer, as the case may be, to exercise the foregoing option, under this
Section 3.27).
Upon receipt of such purchase price, the Servicer shall provide to
the Trustee a Request for Release (with a copy to the Trustee) and the Trustee
shall promptly release to the Servicer (or its assignee) or such Class X
Certificateholders (or their designee), as applicable, the Mortgage File
relating to the Mortgage Loan being repurchased.
No Person holding the foregoing option under this Section 3.27 shall
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders or the Certificate
Insurer.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans
serviced by the Servicer, which Scheduled Payments were not received as of the
close of business on the related Determination Date (provided, however, that
with respect to any Balloon Loan that is delinquent on its maturity date, the
Servicer will not be required to advance the principal portion of the related
balloon payment but will be required to continue to make P&I Advances in
accordance with this Section 4.01(a) with respect to such Balloon Loan in an
amount equal to the assumed scheduled interest that would otherwise be due based
on the original amortization schedule for such Balloon Loan (with interest at
the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO Property
serviced by the Servicer, which REO Property was acquired during or prior to the
related Prepayment Period and as to which such REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the Scheduled Payments (with each interest portion thereof
net of the related Servicing Fee) that would have been due on the related Due
Date in respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the related Collection Account for distribution on such
Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in immediately
available funds to the Master Servicer an amount equal to the aggregate amount
of P&I Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties serviced by the Servicer for the related Remittance Date either (i)
from its own funds or (ii) from the related Collection Account, to the extent of
funds held therein for future distribution (in which case, the Servicer will
cause to be made an appropriate entry in the records of the related Collection
Account that Amounts Held for Future Distribution have been, as permitted by
this Section 4.01, used by the Servicer in discharge of any such P&I Advance) or
(iii) in the form of any combination of (i) and (ii) aggregating the total
amount of P&I Advances to be made by the Servicer with respect to such Mortgage
Loans and REO Properties. Any Amounts Held for Future Distribution and so used
shall be appropriately reflected in the Servicer's records and replaced by the
Servicer by deposit in the related Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Master Servicer.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
(f) On each Remittance Date, the Master Servicer shall deposit in
the Distribution Account all funds remitted to it by the Servicer pursuant to
Sections 3.11(a)(i) and 3.25 and this Section 4.01. The Securities Administrator
may retain or withdraw from the Distribution Account (i) the Master Servicing
Fee, (ii) amounts necessary to reimburse the Master Servicer or the Servicer for
any previously unreimbursed Advances and any Advances the Master Servicer deems
to be nonrecoverable from the related Mortgage Loan proceeds, (iii) an amount
necessary to indemnify the Master Servicer, the Trustee or the Servicer for
amounts due in accordance with this Agreement, and (iv) any other amounts that
each of the Master Servicer, the Trustee and the Securities Administrator is
entitled to receive under this Agreement for reimbursement, indemnification or
otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall allocate from amounts then on deposit
in the Distribution Account in the following order of priority and to the extent
of the Available Funds and, on such Distribution Date, shall make distributions
on the Certificates in accordance with such allocation:
(i) to the holders of each Class of LIBOR Certificates, the
Certificate Insurer and to the Swap Account in the following order of
priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments,
and (y) any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, owed to the Swap Provider with respect to such
Distribution Date (to the extent a Replacement Swap Provider Payment
has not been made to the Swap Account);
(B) from the Interest Remittance Amount, to the Certificate
Insurer, the Certificate Insurer's Premium for that Distribution
Date;
(C) from the Interest Remittance Amounts for both the Loan
Groups, to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amounts and any related Unpaid Interest
Amounts for such Distribution Date, pursuant to the allocation set
forth in clauses (iv) and (v) of this Section 4.02(a);
(D) payable from any remaining Interest Remittance Amounts, to
the Certificate Insurer, any Reimbursement Amount then owing to the
Certificate Insurer;
(E) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class B-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amounts, to the
Class B-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or (2)
with respect to which a Trigger Event is in effect, to the holders of the
related Class or Classes of LIBOR Certificates then entitled to distributions of
principal as set forth below, and to the Certificate Insurer, from amounts
remaining on deposit in the Distribution Account after making distributions
pursuant to clause (i) above, an amount equal to the Principal Distribution
Amount in the following order of priority:
(1) to the Certificate Insurer, the amount of any remaining
Reimbursement Amount, then owing to the Certificate Insurer;
(2) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero; and
(3) sequentially to the Class M-1, Class M-2, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5 Certificates, in that order,
until the respective Class Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown Date and
(2) as long as a Trigger Event is not in effect, to the holders of the
related Class or Classes of LIBOR Certificates then entitled to
distribution of principal and to the Certificate Insurer, from amounts
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to, in the
aggregate, the Principal Distribution Amount in the following amounts and
order of priority:
(1) to the Certificate Insurer, the amount of any remaining
Reimbursement Amount then owing to the Certificate Insurer;
(2) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(3) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above and (y) the Class M-1 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to zero;
(4) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above and to the Class M-1 Certificates in clause (ii)(B)(3) above
and (y) the Class M-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(5) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above, to the Class M-1 Certificates in clause (ii)(B)(3) above and
to the Class M-2 Certificates in clause (ii)(B)(4) above, and (y)
the Class B-1 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(6) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above, to the Class M-1 Certificates in clause (ii)(B)(3) above, to
the Class M-2 Certificates in clause (ii)(B)(4) above and to the
Class B-1 Certificates in clause (ii)(B)(5) above and (y) the Class
B-2 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero; and
(7) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above, to the Class M-1 Certificates in clause (ii)(B)(3) above, to
the Class M-2 Certificates in clause (ii)(B)(4) above, to the Class
B-1 Certificates in clause (ii)(B)(5) above and to the Class B-2
Certificates in clause (ii)(B)(6) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(8) to the Class B-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above, to the Class M-1 Certificates in clause (ii)(B)(3) above, to
the Class M-2 Certificates in clause (ii)(B)(4) above, to the Class
B-1 Certificates in clause (ii)(B)(5) above, to the Class B-2
Certificates in clause (ii)(B)(6) above and to the Class B-3
Certificates in clause (ii)(B)(7) above and (y) the Class B-4
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(9) to the Class B-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(2)
above, to the Class M-1 Certificates in clause (ii)(B)(3) above, to
the Class M-2 Certificates in clause (ii)(B)(4) above, to the Class
B-1 Certificates in clause (ii)(B)(5) above, to the Class B-2
Certificates in clause (ii)(B)(6) above, to the Class B-3
Certificates in clause (ii)(B)(7) above and to the Class B-4
Certificates in clause (ii)(B)(8) above and (y) the Class B-5
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Certificate Insurer, to the extent of any remaining
Reimbursement Amount, as well as any other amounts owed to the
Certificate Insurer hereunder and under the Insurance Agreement,
then owing to the Certificate Insurer;
(B) to the Class M-1 Certificates, any Unpaid Interest Amount
for such Class;
(C) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(D) to the Class M-2 Certificates, any Unpaid Interest Amount
for such Class;
(E) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(F) to the Class B-1 Certificates, any Unpaid Interest Amount
for such Class;
(G) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(H) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(I) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(J) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(K) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(L) to the Class B-4 Certificates, any Unpaid Interest Amount
for such Class;
(M) to the Class B-4 Certificates, any Unpaid Realized Loss
Amount for such Class;
(N) to the Class B-5 Certificates, any Unpaid Interest Amount
for such Class;
(O) to the Class B-5 Certificates, any Unpaid Realized Loss
Amount for such Class;
(P) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(Q) from funds on deposit in the Excess Reserve Fund Account,
an amount equal to any remaining Basis Risk CarryForward Amount with
respect to the LIBOR Certificates for such Distribution Date,
allocated to the LIBOR Certificates in the same order and priority
in which the Accrued Certificate Interest Distribution Amount is
allocated among such Classes of Certificates, with the allocation to
the Class A Certificates being (a) first, among the Class A
Certificates, pro rata, based on their respective Class Certificate
Balances and (b) second, any remaining amounts to the Class A
Certificates, pro rata, based on any Basis Risk CarryForward Amounts
remaining unpaid, in order to reimburse such unpaid amounts;
(R) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(S) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(R);
(T) to the Class R Certificates, any remaining amount in the
Trust REMICs, in respect of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC; and
(U) to the Class RX Certificates, any remaining amount, in
respect of the Class X REMIC.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b, Class
A-2c and Class A-2d Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(C) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively, to the
extent not otherwise previously paid from the Interest Remittance
Amount attributable to Group II Mortgage Loans; and
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b, Class
A-2c and Class A-2d Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(C) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates, to the extent not otherwise
previously paid from the Interest Remittance Amount attributable to
Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Securities Administrator to the holders of the Class P
Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
(d) Any principal distributions allocated to the Group II Class A
Certificates shall be allocated sequentially, to the Class A-2a Certificates,
until their Class Certificate Balance has been reduced to zero, then to the
Class A-2b Certificates, until their Class Certificate Balance has been reduced
to zero, then to the Class A-2c Certificates, until their Class Certificate
Balance has been reduced to zero, and then to the Class A-2d Certificates, until
their Class Certificate Balance has been reduced to zero. Notwithstanding the
foregoing, on and after the Distribution Date on which the aggregate Class
Certificate Balances of the Subordinated Certificates and the principal balance
of the Class X Certificates have been reduced to zero, any principal
distributions allocated to the Group II Class A Certificates shall be allocated
pro rata among the Classes of Group II Class A Certificates, based on their
respective Class Certificate Balances, until their respective Class Certificate
Balances have been reduced to zero.
(e) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) first, to the portion of the Class X Distributable Amount
allocable to interest; and
(2) second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and Class B
Certificates, based on the amount of interest to which such Classes would
otherwise be entitled.
(f) Notwithstanding any other provision of this Agreement, the
Securities Administrator shall comply with all federal withholding requirements
respecting payments made or received under the Interest Rate Swap Agreement and
payments to Certificateholders of interest or original issue discount that the
Securities Administrator reasonably believes are applicable under the Code. The
consent of Certificateholders shall not be required for such withholding. If the
Securities Administrator does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Securities Administrator shall indicate
the amount withheld to such Certificateholders. Such amounts shall be deemed to
have been distributed to such Certificateholders for all purposes of this
Agreement.
(g) For purposes of this Agreement, any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) shall be
allocated by the Trustee between Loan Groups based on the respective aggregate
Stated Principal Balance of the Mortgage Loans in each Loan Group.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Servicer, the Depositor, the Master Servicer, the
Certificate Insurer and each Rating Agency a statement setting forth with
respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date for
such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (separately identifying the
components thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class included
in such distribution and any remaining Unpaid Interest Amounts after
giving effect to such distribution, any Basis Risk CarryForward Amount for
each Class and the amount of such Basis Risk CarryForward Amount covered
by withdrawals from the Excess Reserve Fund Account on such Distribution
Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation of the shortfall as between principal
and interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicer and the Securities Administrator and the Master Servicer or paid
to the Certificate Insurer (stated separately and in the aggregate) with
respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(xi) the amount of P&I Advances included in the distribution on such
Distribution Date reported by the Servicer (and the Master Servicer as
successor Servicer and any other successor Servicer, if applicable) as of
the close of business on the Determination Date immediately preceding such
Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(xiii) with respect to any Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such Mortgage
Loans and the aggregate Stated Principal Balance of such Mortgage Loans as
of the close of business on the last Business Day of the immediately
preceding month;
(xiv) the total number and outstanding principal balance of any REO
Properties (and market value, if available) as of the close of business on
the last Business Day of the immediately preceding month;
(xv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xvi) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xvii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xviii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders with
respect to Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis
Risk CarryForward Amounts;
(xix) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xx) LIBOR and Swap LIBOR;
(xxi) the Subordinated Amount and Specified Subordinated Amount;
(xxii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer;
(xxiii) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxiv) the amount distributed on the Class X Certificates;
(xxv) the amount of any Subsequent Recoveries for such Distribution
Date;
(xxvi) the number of Mortgage Loans at the end of the applicable
reporting period, the pool factor (being the Stated Principal Balance of
the Mortgage Loans for the related Distribution Date divided by the
Cut-off Date Principal Balance), and the weighted average interest rate,
and weighted average remaining term; and
(xxvii) the amount of any payment of principal or interest on the
Class A Certificates to be paid from funds transferred from the Policy
Payment Account.
In addition, each Form 10-D prepared and filed by the Securities
Administrator pursuant to Section 8.12 shall include the following information
with respect to the related distribution (including to the extent such
information is provided by the Trustee to the Securities Administrator):
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Securities Administrator has
actual knowledge or has received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Securities Administrator has actual knowledge or received
written notice;
provided that, if the Securities Administrator receives written notice of the
events described in (i) and/or (ii) above from the Servicer, the Servicer shall
be responsible for providing information to the Securities Administrator for
inclusion in the applicable Form 10-D.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, the Certificate Insurer, each Rating
Agency, the Master Servicer and the Depositor is limited, if applicable, to the
availability, timeliness and accuracy of the information derived from the
Servicer, the Master Servicer and the Swap Provider. The Securities
Administrator shall make available the above statement via the Securities
Administrator's internet website. The Securities Administrator's website will
initially be located at xxxx://xxx.xxxxxxx.xxx and assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at 1-866-846-4526. Parties that are unable to use the website are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator may
change the way the monthly statements to Certificateholders are distributed in
order to make such distribution more convenient and/or more accessible to the
above parties and the Securities Administrator shall provide timely and adequate
notification to all above parties regarding any such changes. The Securities
Administrator will not be liable for the dissemination of information in
accordance with this Agreement.
The Securities Administrator shall make available to each Analytics
Company, either electronically or via the Securities Administrator's internet
website, each statement to Certificateholders prepared pursuant to Section
4.03(a). The Securities Administrator (and the Servicer, if such discrepancy
results from or arises out of any information provided by the Servicer pursuant
to this Agreement) shall cooperate in good faith with the Depositor to reconcile
any discrepancies in such statements, and the Securities Administrator shall
provide any corrections to such statements to each Analytics Company as soon as
reasonably practicable after the related Distribution Date.
The Securities Administrator will also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the monthly statement to
Certificateholders and may affix thereto any disclaimer it deems appropriate in
its reasonable discretion (without suggesting liability on the part of any other
party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
(d) The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
(e) No later than the 18th day of each month, or if such date is not
a Business Day, the next succeeding Business Day (but in no event later than the
20th day of each month), the Servicer shall furnish to the Master Servicer, a
monthly remittance advice statement (the "Servicer Remittance Report") in a
format and containing the data fields set forth on Exhibit U attached hereto, or
in such other format or containing such other data fields mutually agreed upon
by the Servicer and the Master Servicer, and such information as shall be
reasonably requested (i) by the Depositor to enable the Depositor to disclose
"static pool information", as required by Item 1105 of Regulation AB, with
respect to the Mortgage Loans, and (ii) by the Master Servicer to enable the
Securities Administrator to provide the reports required by Section 4.03(a) as
to the accompanying remittance and applicable Due Period and Prepayment Period
to which such remittance relates. In addition, the Servicer shall furnish to the
Depositor and the Certificate Insurer concurrently with the delivery of the
Servicer Remittance Report to the Master Servicer, a supplemental report
indicating (i) the number and aggregate Stated Principal Balance of all Modified
Mortgage Loans, and (ii) with respect to each Modified Mortgage Loan, whether
the modification related to (1) a change in the Mortgage Rate on such Modified
Mortgage Loan, (2) a conversion of such Modified Mortgage Loan to a Fixed Rate
Mortgage Loan, (3) an extension of the term of such Mortgage Loan, (4) an
extension of the amortization of such Mortgage Loan, or (5) the capitalization
of delinquent principal or interest on such Mortgage Loan. The Servicer shall
give written notice to the Depositor and the Certificate Insurer when the
aggregate Stated Principal Balance of all Modified Mortgage Loans exceeds 5% of
the Cut-off Date Pool Principal Balance.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Servicer
during the current distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to the Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days and 91 or more
days; (b) as to which foreclosure or bankruptcy proceedings of the related
mortgagor have commenced; and (c) as to which REO Property has been
acquired.
The Master Servicer shall promptly make available the Servicer
Remittance Report and the related supplemental statement to the Depositor and
the Securities Administrator.
(f) [Reserved].
(g) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined by the Securities Administrator from
information provided by the Servicer and reported by the Securities
Administrator based on the "OTS" methodology for determining delinquencies on
mortgage loans similar to the Mortgage Loans. By way of example, a Mortgage Loan
would be delinquent with respect to a Scheduled Payment due on a Due Date if
such Scheduled Payment is not made by the close of business on the Mortgage
Loan's next succeeding Due Date, and a Mortgage Loan would be more than 30-days
Delinquent with respect to such Scheduled Payment if such Scheduled Payment were
not made by the close of business on the Mortgage Loan's second succeeding Due
Date. The Servicer hereby represents and warrants to the Depositor that the
Servicer is not subject to any delinquency recognition policy established by the
primary safety and soundness regulator, if any, of the Servicer, that is more
restrictive than the foregoing delinquency recognition policy.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Securities Administrator shall at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference Banks
(after consultation with the Depositor). Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are Outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Subordinated Certificates then Outstanding in
reduction of the Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Securities
Administrator shall establish and maintain in its name, a separate non-interest
bearing trust account for the benefit of the holders of the Certificates and the
Certificate Insurer (the "Swap Account") as a part of the Trust Fund. The Swap
Account shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including, without limitation, other moneys of the Securities Administrator held
pursuant to this Agreement.
On the Business Day immediately preceding each Distribution Date,
Swap Termination Payments (including, without duplication, Replacement Swap
Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap
Receipts and, without duplication, amounts distributable on the Class IO
Interest for that Distribution Date will be deposited into the Swap Account.
Funds in the Swap Account will be distributed in the following order of
priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the
Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than
a Defaulted Swap Termination Payment, owed to the Swap Provider for that
Distribution Date;
(iii) to the Certificate Insurer, the Certificate Insurer's Premium
for that Distribution Date, to the extent unpaid from Available Funds;
(iv) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(v) to the Certificate Insurer, the amount of any Reimbursement
Amount, as well as any other amounts owed to the Certificate Insurer under
this Agreement and under the Insurance Agreement, then owing to the
Certificate Insurer, and to the extent unpaid from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class B-1, Class
B-2, Class B-3 , Class B-4 and Class B-5 Certificates, in that order, to
pay Accrued Certificate Interest Distribution Amounts and, if applicable,
any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section
4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the LIBOR Certificates, to pay principal as described and,
in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount for prior or current Realized Losses that have not yet
been reimbursed, after giving effect to payments and distributions from
Available Funds;
(viii) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro
rata, based on their Class Certificate Balances for such Distribution
Date, up to the Swap Payment Allocation for each Class of Class A
Certificates and to the extent unpaid from Available Funds (including
Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(ix) sequentially, to the Class M-1, Class M-2, Class B-1, Class
B-2, Class B-3 , Class B-4 and Class B-5 Certificates, to pay Basis Risk
CarryForward Amounts, and, without duplication, Upper-Tier CarryForward
Amounts, up to the Swap Payment Allocation for each Class of Class M and
Class B Certificates and to the extent unpaid from Available Funds
(including Basis Risk Payments on deposit in the Excess Reserve Fund
Account);
(x) to the LIBOR Certificates, any remaining unpaid Basis Risk
CarryForward Amounts, and, without duplication, Upper-Tier CarryForward
Amounts, pro rata, based on their respective remaining unpaid Basis Risk
CarryForward Amounts or, without duplication, Upper-Tier CarryForward
Amounts after the allocation of payments as set forth in clauses (vi) and
(vii) above;
(xi) sequentially, to the Class M-1, Class M-2, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5 Certificates, to pay any Unpaid
Realized Loss Amount, to the extent unpaid from Available Funds;
(xii) to the Swap Provider, any remaining Defaulted Swap Termination
Payment owed to the Swap Provider for that Distribution Date; and
(xiii) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust receives
a Swap Termination Payment, the Securities Administrator shall use the Swap
Termination Payment to enter into a replacement interest rate swap agreement as
directed by the Depositor with a successor swap provider (or its guarantor)
meeting the ratings requirements set forth in the Interest Rate Swap Agreement
being terminated on the same remaining terms as those in the Interest Rate Swap
Agreement being terminated, so long as the Swap Termination Payment is
sufficient to obtain such replacement interest rate swap agreement. In the event
that the Trust receives a Swap Termination Payment and a successor swap provider
cannot be obtained (or, if the Trust chooses (with the consent of the
Certificate Insurer), not to enter into a replacement Interest Rate Swap
Agreement), then the Securities Administrator shall deposit the Swap Termination
Payment into the reserve account that is a sub-account of the Swap Account. On
each subsequent Distribution Date (so long as funds are available in the reserve
account), the Securities Administrator shall withdraw from the reserve account
and deposit into the Swap Account an amount equal to the amount of any Net Swap
Receipt due the Trust (calculated in accordance with the terms of the original
Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for
purposes of determining the distributions from the Swap Account. The remaining
amount in the reserve account will remain in that account and will not be
treated as a Swap Termination Payment for purposes of determining the
distributions from the Swap Account until the final Distribution Date. In no
event shall the Securities Administrator be responsible for the selection of any
successor or replacement Swap Provider or any shortfalls caused by a failure to
enter into a replacement interest rate swap agreement.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that the Trust enters into a replacement interest rate
swap agreement and the Trust is entitled to receive a Replacement Swap Provider
Payment from a replacement swap provider, the Securities Administrator shall
direct the replacement swap provider (or its guarantor) to make such Replacement
Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any
Replacement Swap Provider Payment shall be made from the Swap Account to the
Swap Provider immediately upon receipt of such payment, regardless of whether
the date of receipt thereof is a Distribution Date. To the extent that any
Replacement Swap Provider Payment is made to an account other than the Swap
Account, then, notwithstanding anything to the contrary contained in this
Agreement, any Replacement Swap Provider Payment shall be paid to the Swap
Provider immediately upon receipt of such Replacement Swap Provider Payment by
the Trust, regardless of whether the date of receipt thereof is a Distribution
Date and without regard to anything to the contrary contained in this Agreement.
For the avoidance of doubt, the parties agree that the Swap Provider shall have
first priority to any Replacement Swap Provider Payment over the payment by the
Trust to Certificateholders, the Servicer, the Master Servicer, the Securities
Administrator, the Trustee or any other Person. However, to the extent any
Replacement Swap Provider Payment received from a replacement swap provider and
paid to the Swap Provider being replaced is less than the full amount of a Swap
Termination Payment owed to the Swap Provider, any remaining amount of the Swap
Termination Payment shall be paid to the Swap Provider on subsequent
Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless
the Replacement Swap Provider Payment is paid to the Swap Provider on a
Distribution Date, in which case such remaining amounts will be paid on such
Distribution Date).
The Securities Administrator shall account for the Swap Account as
an asset of the Grantor Trust and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Swap Account are the
Class X Certificateholders. For federal income tax purposes, Net Swap Payments
and Swap Termination Payments (without duplication of previously paid
Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed
to be paid to the Swap Account from the Class X REMIC, first, by the Holder of
the Class X Certificates (in respect of the Class IO Interest and, if
applicable, the Class X Interest) and second, other than any Defaulted Swap
Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable
Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as
and to the extent provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Securities Administrator to
the LIBOR Certificateholders shall be accounted for by the Securities
Administrator, for federal income tax purposes, as amounts paid first to the
Holders of the Class X Certificates in respect of the Class X Interest and (to
the extent remaining after payments to the Swap Provider) the Class IO Interest,
and then to the respective Class or Classes of LIBOR Certificates. In addition,
the Securities Administrator shall account for the rights of Holders of each
Class of LIBOR Certificates to receive payments of Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap
Account (along with Basis Risk CarryForward Amounts payable from the Excess
Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as
rights and obligations under a separate limited recourse notional principal
contract between the Class X Certificateholders and Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
With respect to the failure of the Swap Provider to perform any of
its obligations under the Interest Rate Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Schedule to the Interest
Rate Swap Agreement, the Securities Administrator shall send any notices and
make any demands, on behalf of the Trust as are required under the Interest Rate
Swap Agreement. To the extent that the Swap Provider fails to make any payment
required under the terms of the Schedule to the Interest Rate Swap Agreement,
the Securities Administrator shall immediately demand that Xxxxxx Xxxxxxx, the
guarantor of the Swap Provider's obligations under the guarantee of Xxxxxx
Xxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments
then required to be made by Xxxxxx Xxxxxxx pursuant to such guarantee. In
addition, in the event a "Delivery Amount" (as defined in the Interest Rate Swap
Agreement) payable but not delivered by the Swap Provider as required by the
Interest Rate Swap Agreement, the Securities Administrator shall deliver a
notice of failure to transfer collateral on the next Business Day following such
failure, in accordance with the terms of the Schedule to the Interest Rate Swap
Agreement. The Securities Administrator shall cause any replacement swap
provider to provide a copy of the related replacement interest rate swap
agreement to the Securities Administrator and the Depositor.
If a Responsible Officer of the Securities Administrator receives
written notice that the Swap Provider or its guarantor has been downgraded below
the levels set forth in Part 5(f) of the Interest Rate Swap Agreement and the
posting of collateral is required in accordance with the terms of Part 5(f) of
the Interest Rate Swap Agreement, the Securities Administrator shall demand that
the Swap Provider or its guarantor post collateral in accordance with the terms
of Part 5(f) of the Interest Rate Swap Agreement.
Section 4.07 The Certificate Insurance Policy. (a) Not later than
two (2) Business Days prior to each Distribution Date, the Securities
Administrator shall determine with respect to such Distribution Date, (i) the
amount to be on deposit in the Distribution Account on such Distribution Date to
the extent of Available Funds, excluding the amount of any Insured Amount and
any Preference Amount, and (ii) on any Distribution Date after the Class
Certificate Balance of each Class of Subordinated Certificates has been reduced
to zero, the positive difference between (A) the aggregate Class Certificate
Balances of the Class A Certificates (after giving effect to all payments of
principal to be made on the next Distribution Date) over (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of such date.
(b) If the amount described in Section 4.07(a)(ii) is a positive
number, the Securities Administrator shall provide the Certificate Insurer
written notice. The Certificate Insurer is permitted, at its sole option and
discretion, to provide the Securities Administrator notice if it will make a
payment in the amount described in clause (ii) of the definition of Deficiency
Amount in this Agreement. If on any Distribution Date there is an Insured
Amount, the Securities Administrator shall complete a notice in the form of
Exhibit A to the Certificate Insurance Policy and submit such notice to the
Certificate Insurer in accordance with the terms of the Certificate Insurance
Policy no later than 12:00 noon New York City time on the second Business Day
preceding such Distribution Date as a claim for such Insured Amount.
(c) The Securities Administrator shall establish a separate Eligible
Account for the benefit of Holders of the Class A Certificates and the
Certificate Insurer referred to herein as the "Policy Payment Account" over
which the Securities Administrator shall have exclusive control and sole right
of withdrawal. The Securities Administrator shall deposit upon receipt any
amount paid under the Certificate Insurance Policy in the Policy Payment Account
and distribute such amount only for purposes of payment to the Class A
Certificateholders of an Insured Amount or a Preference Amount for which a claim
was made and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Depositor, the Trustee, the Securities
Administrator or the Trust Fund or to pay any other Class of Certificates.
Amounts paid under the Certificate Insurance Policy, to the extent needed to pay
any Insured Amount or any Preference Amount, shall be transferred to the
Distribution Account on the related Distribution Date and disbursed by the
Securities Administrator to the Class A Certificateholders in accordance with
Section 4.02. It shall not be necessary for such payments to be made by checks
or wire transfers separate from the checks or wire transfers used to pay other
distributions to the Class A Certificateholders with other funds available to
make such payment. However, the amount of any payment of principal or of
interest on the Class A Certificates to be paid from funds transferred from the
Policy Payment Account shall be noted as provided in paragraph (d) below and in
the statement to be furnished to Holders of the Class A Certificates pursuant to
Section 4.03(a). Funds held in the Policy Payment Account shall not be invested.
Any funds remaining in the Policy Payment Account on the first Business Day
following a Distribution Date shall be returned to the Certificate Insurer
pursuant to the written instructions of the Certificate Insurer by the end of
such Business Day.
(d) The Securities Administrator shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Class A
Certificates from moneys received under the Certificate Insurance Policy. The
Certificate Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon one Business Day's prior notice to the
Securities Administrator.
(e) In the event that the Securities Administrator has received a
certified copy of an order of the appropriate court that any distribution on the
Class A Certificates has been voided in whole or in part as a preference payment
under applicable bankruptcy law, the Securities Administrator shall so notify
the Certificate Insurer, shall comply with the provisions of the Certificate
Insurance Policy to obtain payment by the Certificate Insurer of the amount of
such voided distribution constituting a Preference Amount, and shall, at the
time it provides notice to the Certificate Insurer, notify, by mail to the Class
A Certificateholders of the affected Certificates that, in the event any Class A
Certificateholder's distribution is so recovered as a preference payment, such
Class A Certificateholder will be entitled to payment of an amount constituting
a Preference Amount pursuant to the Certificate Insurance Policy, a copy of
which shall be made available through the Securities Administrator, the
Certificate Insurer or the Certificate Insurer's fiscal agent, if any, and the
Securities Administrator shall furnish to the Certificate Insurer or its fiscal
agent, if any, its records evidencing the payments which have been made by the
Securities Administrator and subsequently recovered from the Class A
Certificateholders, and dates on which such payments were made.
(f) The Securities Administrator shall promptly notify the
Certificate Insurer and its fiscal agent of any proceeding or the institution of
any action, of which a Responsible Officer of the Securities Administrator has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class A Certificates. Each
Class A Certificateholder, by its purchase of Class A Certificates, the Servicer
and the Securities Administrator agree that, the Certificate Insurer (so long as
no Certificate Insurer Default exists) may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedes or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Certificate Insurer shall be
subrogated to, and each Class A Certificateholder and the Securities
Administrator hereby delegates and assigns to the Certificate Insurer, to the
fullest extent permitted by law, the rights of the Securities Administrator and
each Class A Certificateholder in the conduct of any such Preference Claim,
including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with
any such Preference Claim.
(g) The Securities Administrator shall, upon retirement of the Class
A Certificates, furnish to the Certificate Insurer a notice of such retirement,
and, upon retirement of the Class A Certificates and the expiration of the term
of the Certificate Insurance Policy, surrender the Certificate Insurance Policy
to the Certificate Insurer for cancellation.
(h) The Securities Administrator will hold the Certificate Insurance
Policy in trust as agent for the Holders of the Class A Certificates for the
purpose of making claims thereon and distributing the proceeds thereof. Neither
the Certificate Insurance Policy nor the amounts paid on the Certificate
Insurance Policy will constitute part of the Trust Fund created by this
Agreement. Each Holder of Class A Certificates, by accepting its Class A
Certificates, appoints the Securities Administrator as attorney in fact for the
purpose of making claims on the Certificate Insurance Policy.
Section 4.08 Effect of Payments by the Certificate Insurer;
Subrogation. Notwithstanding any other provision of this Agreement to the
contrary, any payment with respect to principal of or interest on the Class A
Certificates which is made with moneys received pursuant to the terms of the
Certificate Insurance Policy shall not be considered payment of the Class A
Certificates from the Trust Fund. The Depositor, the Servicer, and the
Securities Administrator acknowledge, and each Holder, by its acceptance of a
Class A Certificate agrees, that without the need for any further action on the
part of the Certificate Insurer, the Depositor, the Servicer, the Securities
Administrator or the Certificate Registrar (a) to the extent the Certificate
Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Class A Certificates to the Holders of such Class A
Certificates, the Certificate Insurer will be fully subrogated to, and each
Class A Certificateholder, the Servicer and the Securities Administrator hereby
delegate and assign to the Certificate Insurer, to the fullest extent permitted
by law, the rights of such Holders to receive such principal and interest from
the Trust Fund, including, without limitation, any amounts due to the Class A
Certificateholders in respect of securities law violations arising from the
offer and sale of the Class A Certificates, and (b) the Certificate Insurer
shall be paid such amounts from the sources and in the manner provided herein
for the payment of such amounts and as provided in this Agreement. The
Securities Administrator and the Servicer shall cooperate in all respects with
any reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement
without limiting the rights or affecting the interests of the Holders as
otherwise set forth in this Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and Class
P Certificates in the name of the NIM Trustee, or such other name or names as
the Depositor shall request, and to deliver the Class X and Class P Certificates
to the NIM Trustee or to such other Person or Persons as the Depositor shall
request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such Holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the related Record Date or (y) by check mailed by first class mail
to such Certificateholder at the address of such Holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of this Section 5.02, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Except with
respect to (i) the transfer of the Class X, Class P or Residual Certificates to
the Depositor or an Affiliate of the Depositor or, in the case of the Class RX
Certificates, the initial transfer by an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, in
the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Securities Administrator in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit H (the "Transferor Certificate") and
either (i) there shall be delivered to the Securities Administrator a letter in
substantially the form of Exhibit I (the "Rule 144A Letter") or (ii) there shall
be delivered to the Securities Administrator at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Securities Administrator, the Master Servicer and the Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Securities Administrator, the Master Servicer and the Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
Except with respect to (i) the transfer of Class X or Class P
Certificates or the Residual Certificates to the Depositor or an Affiliate of
the Depositor or, in the case of the Class RX Certificates, the initial transfer
by an Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the Securities Administrator shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Securities
Administrator (in the event such Certificate is a Private Certificate or a
Residual Certificate, such requirement is satisfied only by the Securities
Administrator's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law ("Similar Law") materially similar to the foregoing provisions of
ERISA or the Code, nor a Person acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such transfer, or
(ii) in the case of an ERISA-Restricted Certificate other than a Residual
Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Servicer, the Depositor, the Securities Administrator or the Trust Fund,
addressed to the Securities Administrator, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Depositor, the Securities
Administrator, the Master Servicer or the Servicer to any obligation in addition
to those expressly undertaken in this Agreement or to any liability. For
purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Physical Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Securities Administrator
by the transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Securities Administrator of an Opinion of Counsel satisfactory
to the Securities Administrator as described above shall be void and of no
effect and (b) any purported transfer of a Class P Certificate or Residual
Certificate to a transferee that does not make the representation in clause (i)
above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Securities Administrator in accordance with the
foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) Other than in the case of the Depositor or an Affiliate of the
Depositor that is a Permitted Transferee, no Ownership Interest in a
Residual Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the
Transfer of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator
under subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
not have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund or
the Securities Administrator, to the effect that the elimination of such
restrictions will not cause any Trust REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are Outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is a Non-Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
a Non-Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository, and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicer, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) No transfer of any Private Certificate presented or surrendered
for registration of transfer or exchange shall be made unless the transfer or
exchange is accompanied by a written instrument of transfer and accompanied by
IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments) or W-9 in form
satisfactory to the Securities Administrator, duly executed by the
Certificateholder or its representative or nominee duly authorized in writing.
The Securities Administrator shall promptly forward any such IRS Form (other
than with respect to the Residual Certificates) received to the Swap Provider
located at 0000 Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000, Attention: NY ISD SPV Team,
Fax: (000) 000-0000. Each such Private Certificateholder by its purchase of such
Private Certificate is deemed to consent to any IRS Form being so forwarded. The
Securities Administrator shall not be liable for the completeness, accuracy,
content or truthfulness of any such tax certification provided to it.
(g) Each Certificate presented or surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Securities Administrator in accordance with its customary practice. No service
charge shall be made for any registration of transfer or exchange of Private
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicer, the Master Servicer, the Certificate Insurer and the
Securities Administrator such security or indemnity as may be required by them
to hold each of them harmless, then, in the absence of notice to the Securities
Administrator that such Certificate has been acquired by a bona fide purchaser,
the Securities Administrator shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Securities Administrator may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Securities
Administrator) connected therewith. Any replacement Certificate issued pursuant
to this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Master
Servicer, the Securities Administrator, the Trustee, the Depositor, the
Certificate Insurer and any agent of the Servicer, the Master Servicer, the
Securities Administrator, the Depositor, the Certificate Insurer or the Trustee
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the Servicer, the
Master Servicer, the Securities Administrator, the Trustee, the Depositor, the
Certificate Insurer or any agent of the Servicer, the Master Servicer, the
Securities Administrator, the Depositor, the Certificate Insurer or the Trustee
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor, the Trustee or the Servicer shall request such
information in writing from the Securities Administrator, then the Securities
Administrator shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Trustee, the Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Securities Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator initially designates its Corporate Trust Office for registration
of transfer or exchange purposes located at Xxxxx Fargo Center, Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust
Services - MSAC 2007-NC4. The Securities Administrator shall give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
Section 5.07 Voting Rights of the Certificate Insurer. Unless a
Certificate Insurer Default exists, each Class A Certificateholder, by its
acceptance of its Certificate, agrees that the Certificate Insurer shall have
the right to exercise all rights, including Voting Rights, which the Holders of
the Class A Certificates are entitled to exercise under this Agreement.
Once the Class A Certificates have been paid in full, and all
amounts owing to the Certificate Insurer have been paid in full, the Voting
Rights of the Certificate Insurer described in the preceding paragraph shall
terminate.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and each of the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. The Depositor and each of the Servicer will each keep in full effect
its existence, rights and franchises as a corporation or federally chartered
savings bank, as the case may be, under the laws of the United States or under
the laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer, shall be a party, or any person succeeding to the
business of the Depositor or the Servicer (including through the acquisition of
substantially all of the assets of the Servicer), shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except that any person
succeeding to the business of the Servicer shall be required to assume all of
the Servicer's future obligations under this Agreement and satisfy all of the
requirements of this Agreement to be a successor servicer); provided, however,
that the successor or surviving Person to the Servicer shall be qualified to
service mortgage loans on behalf of, Xxxxxx Mae or Xxxxxxx Mac, and provided,
further, however, such successor servicer upon such merger, consolidation or
succession shall not have a servicer rating from any Rating Agency that is lower
than the Servicer's servicer rating from such Rating Agency immediately prior to
the merger. As a condition to the succession to the Servicer under this
Agreement by any Person (i) into which the Servicer may be merged or
consolidated or whom succeeds to the business of the Servicer, or (ii) which may
be appointed as a successor to the Servicer, the Servicer shall provide to the
Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) in writing to the Depositor and in form and
substance reasonably satisfactory to the Depositor and the Master Servicer, all
information reasonably necessary to enable the Securities Administrator,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are then required to be filed under the Exchange Act). The
Depositor shall forward to the Master Servicer promptly upon receipt thereof
copies of any notices received by it pursuant to this Section 6.02.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor and its
Affiliates, the Sponsor, the Servicer and any director, officer, employee or
agent of the Depositor, the Sponsor or the Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and the Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor out of
the applicable Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Sections 7.01 and 10.07, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the Servicer, the Depositor, the Securities Administrator, the Master Servicer,
the Certificate Insurer and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer without the incurrence of
unreasonable expense. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Depositor, the Master Servicer, the Securities Administrator, the
Certificate Insurer and the Trustee which Opinion of Counsel shall be in form
and substance acceptable to the Depositor, the Master Servicer, the Securities
Administrator, the Certificate Insurer and the Trustee. No such resignation
shall become effective until a successor shall have assumed the Servicer's
responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that the Servicer determines that it will no longer
engage in the business of servicing mortgage loans, the Servicer may assign its
rights under this Agreement, provided that, (i) the Depositor in its sole
discretion has consented, which consent shall not be unreasonably withheld, (ii)
the Rating Agencies' ratings of the Certificates (without giving effect to the
Certificate Insurance Policy) in effect immediately prior to such action will
not be qualified, reduced or withdrawn as a result thereof (as evidenced by a
letter to such effect from the Rating Agencies) and (iii) the Servicer shall be
liable for all costs and expenses associated with the transfer of servicing,
provided, further, that the Servicer shall indemnify and hold each of the Trust
Fund, the Master Servicer, the Securities Administrator, the Trustee, the
Depositor, the Certificate Insurer, any sub-servicer, the successor Servicer and
each Certificateholder harmless against any and all claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that such party may sustain in any way related to
such assignment except with respect to a successor Servicer's failure to comply
with the terms of this Agreement. No assignment by the Servicer shall become
effective until a successor Servicer acceptable to the Depositor, the
Certificate Insurer and the Master Servicer shall have assumed in writing the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement. Any such assignment shall not relieve the Servicer of responsibility
for any of the obligations specified herein except to the extent that such
responsibilities have been expressly assumed by the successor Servicer.
Section 6.05 Additional Indemnification by the Servicer; Third-Party
Claims. (a) The Servicer shall indemnify the Depositor, the Master Servicer, the
Securities Administrator, the Sponsor, the Certificate Insurer, the Trustee and
any director, officer, employee or agent of the Depositor, the Master Servicer,
the Securities Administrator, the Sponsor, the Certificate Insurer or the
Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to (i) any breach by the Servicer of any of its
representations and warranties referred to in Section 2.03(a), (ii) any error in
any tax or information return prepared by the Servicer or (iii) the failure of
the Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement (including, without limitation, the failure to
deliver accurate and complete information on a timely basis pursuant to Section
4.03(e)). The Servicer immediately shall notify the Master Servicer, the
Securities Administrator, the Depositor, the Certificate Insurer and the Trustee
if such claim is made by a third-party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Depositor, the
Master Servicer, the Securities Administrator, the Certificate Insurer and the
Trustee) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Depositor,
the Master Servicer, the Securities Administrator, the Sponsor, the Certificate
Insurer or the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall indemnify the Depositor, the Master Servicer, the
Securities Administrator, the Sponsor, the Certificate Insurer, the Trustee and
any director, officer, employee or agent of the Depositor, the Master Servicer,
the Securities Administrator, the Sponsor, the Certificate Insurer or the
Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any failure by the Servicer or any Subservicer
engaged by the Servicer or any Subcontractor utilized by the Servicer to deliver
any information, report, certification or accountants" letter when and as
required under Sections 3.22, 3.23, 6.02 or 8.12, including without limitation
any failure by the Servicer to identify pursuant to Section 3.02(e) any
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then the Servicer shall contribute to the amount
paid or payable to the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and the
Servicer, on the other, in connection with the Servicer's obligations pursuant
to this Section 6.05. This Section 6.05 shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means, with respect to the Servicer individually, any one of the
following events:
(a) any failure by the Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor, the Securities Administrator, the Master
Servicer, the Certificate Insurer or to the Servicer, the Depositor, the
Securities Administrator, the Master Servicer and the Trustee by the Certificate
Insurer or Certificateholders entitled to at least 25% of the Voting Rights
represented by the Certificates; or
(b) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen (15) in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement and (y) zero (0) in the
case of a failure to observe or perform any of the obligations set forth in
Sections 3.02, 3.22, 3.23, 6.02 or 8.12 and such number of days shall be after
the earlier of (i) the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Depositor,
the Securities Administrator, the Master Servicer or the Certificate Insurer, or
to the Servicer, the Securities Administrator, the Master Servicer, the
Depositor, and the Trustee by the Certificate Insurer or the Certificateholders
entitled to at least 25% of the Voting Rights represented by the Certificates
and (ii) actual knowledge of such failure by a Servicing Officer of the
Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders or the Certificate Insurer and which
continues unremedied for a period of thirty days after the date upon which
written notice of such breach is given to the Servicer by the Securities
Administrator, the Master Servicer, the Depositor or the Certificate Insurer, or
to the Servicer, the Securities Administrator, the Master Servicer, the Trustee
and the Depositor by the Certificate Insurer or the Certificateholders entitled
to at least 25% of the Voting Rights represented by the Certificates; or
(g) with respect to Saxon, any withdrawal or downgrade of two or
more levels (i.e., from "Above Average" to "Below Average" or the equivalent) of
Saxon's rating, as of the Closing Date which results in a downgrade,
qualification or withdrawal of the rating assigned to any Class of Certificates
by any Rating Agency (without giving effect to the Certificate Insurance
Policy).
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Master Servicer may, and at
the direction of the Certificate Insurer (or, if a Certificate Insurer Default
has occurred and is continuing, at the direction of the a majority of the Voting
Rights represented by the Certificates), the Master Servicer shall, by notice in
writing to the Servicer (with a copy to the Securities Administrator and each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans serviced by the Servicer
and the proceeds thereof, other than its rights as a Certificateholder
hereunder; provided, however, that the Master Servicer shall not be required to
give written notice to the Servicer of the occurrence of an Event of Default
described in clauses (b) through (g) of this Section 7.01 unless and until a
Responsible Officer of the Master Servicer has actual knowledge of the
occurrence of such an event. In the event that a Responsible Officer of the
Master Servicer has actual knowledge of the occurrence of an Event of Default
described in clause (a) of this Section 7.01, the Master Servicer shall give
written notice to the Servicer of the occurrence of such an event within one
Business Day of the first day on which such Responsible Officer obtains actual
knowledge of such occurrence; provided, that if such failure is the failure to
make a P&I Advance, the Master Servicer shall send such notice prior to 12:00
noon New York time on the Distribution Date and, if the Event of Default of the
Servicer was the failure to make a P&I Advance, the Master Servicer, as
successor Servicer, shall make such P&I Advance on the Distribution Date that
such notice was delivered. On and after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Master Servicer. Subject to Section 7.02, the Master Servicer is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Master Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Master Servicer of
all cash amounts which shall at the time be credited to the related Collection
Account of such predecessor Servicer, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Master Servicer to Act; Appointment of Successor. On
and after the time the Servicer receives a notice of termination pursuant to
Section 3.24 or Section 7.01, the Master Servicer shall, subject to a transition
period not to exceed 90 days for the transfer of actual servicing to the
successor servicer, and subject to and to the extent provided in Section 3.05,
be the successor to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances, whether or not this 90 day
transition period has elapsed, and after such transition period, if any, the
obligation to make Servicing Advances pursuant to Section 3.24 or Section 7.01.
As compensation therefor, the Master Servicer shall be entitled to all funds
relating to the Mortgage Loans that the Servicer would have been entitled to
charge to its Collection Account if the Servicer had continued to act hereunder
including, if the Servicer was receiving the Servicing Fee, the Servicing Fee
and the income on investments or gain related to its Collection Account and the
Distribution Account which the Servicer would be entitled to receive.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to the Servicer in accordance with Section 7.01, (a) the Master Servicer shall
have a period not to exceed 90 days to complete the transfer of servicing and
all data and to correct or manipulate such servicing data as may be required by
the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise enable the Master Servicer or other successor Servicer to
service the Mortgage Loans in accordance with Accepted Servicing Practices and
(b) the Master Servicer may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making P&I Advances and Servicing Advances
pursuant to Section 4.01, if it is otherwise unable to so act or at the written
request of Certificateholders entitled to at least a majority of the Voting
Rights represented by the Certificates (with the consent of the Certificate
Insurer) or if the Certificate Insurer so requests, be required to appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution the appointment of which does not adversely affect
then current rating of the Certificates by each Rating Agency and acceptable to
the Certificate Insurer, as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. Any successor to the Servicer shall be an institution
which is a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good standing, which
has a net worth of at least $30,000,000, which is willing to service the
Mortgage Loans and which executes and delivers to the Depositor and the Master
Servicer an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such terminated servicer (other than liabilities
of such terminated servicer under Section 6.03 incurred prior to termination of
the Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates (without giving effect to the Certificate Insurance
Policy) in effect immediately prior to such assignment and delegation will not
be qualified or reduced, as a result of such assignment and delegation. Pending
appointment of a successor to the Servicer hereunder, the Master Servicer,
unless the Master Servicer is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Master Servicer may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee Rate and amounts paid to
the predecessor servicer from investments. The Master Servicer and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Master Servicer nor any
other successor Servicer shall be deemed to be in default hereunder by reason of
any failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the predecessor servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Master Servicer is the predecessor Servicer (except in the
case where the Master Servicer in its role as successor Servicer is being
terminated pursuant to Section 7.01 by reason of an Event of Default caused
solely by the Master Servicer as the successor Servicer and not by the
predecessor Servicer's actions or omissions), such costs shall be paid by the
prior terminated Servicer promptly upon presentation of reasonable documentation
of such costs.
Any successor to the Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that the Servicer
is required to maintain pursuant to Section 3.13.
Notwithstanding the foregoing, if the Servicer is terminated, no
Certificate Insurer Default has occurred and is continuing, and the Master
Servicer does not act as successor servicer or appoint a successor servicer
pursuant to this Section, the Certificate Insurer may appoint, in accordance
with the provisions of this Agreement, any established mortgage loan servicing
institution acceptable to the Rating Agencies as the successor Servicer in the
assumption of the responsibilities, duties or liabilities of the predecessor
Servicer.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders, to
the Certificate Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders, to
the Certificate Insurer and each Rating Agency notice of each such Event of
Default hereunder known to the Securities Administrator, unless such event shall
have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of a Master Servicer Event of Default and after the curing of all
Master Servicer Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless a Master Servicer Event of Default known to the Trustee has
occurred and is continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights represented by the Certificates relating to the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
The Trustee shall not be permitted to utilize Subcontractors for the
performance of certain of its obligations under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default, the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default, until a
Responsible Officer of the Trustee shall have received written notice thereof;
and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Securities Administrator
or the Servicer of any funds paid to the Depositor, the Master Servicer, the
Securities Administrator or the Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any Collection Account or the Distribution
Account by the Depositor, the Master Servicer, the Securities Administrator or
the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid its fee by the Master
Servicer from the Master Servicer's own funds pursuant to a separate agreement.
The Trustee and any director, officer, employee, or agent of the Trustee shall
be indemnified by the Trust Fund against any loss, liability, or expense
(including reasonable attorney's fees) resulting from any error in any tax or
information return prepared by the Master Servicer or incurred in connection
with any claim or legal action relating to (a) this Agreement, (b) the
Certificates or the Interest Rate Swap Agreement, or (c) the performance of any
of the Trustee's duties under this Agreement (including any unreimbursed
out-of-pocket costs resulting from a servicing transfer), the Certificates or
the Interest Rate Swap Agreement, other than any loss, liability, or expense (i)
resulting from any breach of the Servicer's obligations in connection with this
Agreement for which the Servicer has performed its obligation to indemnify the
Trustee pursuant to Section 6.05, or (ii) incurred because of willful
misconduct, bad faith, or negligence in the performance of any of the Trustee's
duties under this Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee under this
Agreement. Without limiting the foregoing, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the
Certificates, and
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform
services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicer and their Affiliates; provided,
however, that such entity cannot be an Affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Master Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Securities Administrator,
the Master Servicer, the Servicer, the Certificate Insurer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Certificate Insurer or the Holders of Certificates entitled to a
majority of the Voting Rights may with the consent of the Certificate Insurer
(which consent shall not be unreasonably withheld), at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which shall be delivered by the successor Trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. The successor trustee shall notify each Rating Agency of
any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect then
current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, such person shall notify the Depositor
and the Securities Administrator of such succession or appointment and shall
furnish to the Depositor and the Securities Administrator in writing and in form
and substance reasonably satisfactory to the Depositor and the Securities
Administrator, all information reasonably necessary for the Depositor to
accurately and timely report, pursuant to Section 8.12(g), the event under Item
6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by the Servicer
of a request to do so or in the case an Event of Default shall have occurred and
be continuing, the Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee as successor Master
Servicer under this Agreement to advance funds, if as successor Master Servicer,
it becomes successor Servicer, shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each Trust REMIC and that in such capacity it shall:
(a) prepare for the Trustee to sign, and the Trustee shall sign, and
the Securities Administrator shall file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare for the
Trustee to sign, and the Trustee shall sign, and the Securities Administrator
shall file with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each Trust REMIC containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;
(b) apply for an employer identification number from the Internal
Revenue Service via Form SS-4 or any other acceptable method for all tax
entities (i.e., the Trust REMICs and the Grantor Trust), furnish to the
Depositor, not later than the Closing Date in the case of the Grantor Trust (the
corpus of which includes the Interest Rate Swap Agreement) and within thirty
days of the Closing Date in the case of the Trust REMICs, copies of such Form
SS-4 requesting the employer identification numbers, use its best efforts to
obtain, as promptly as practicable, employer identification numbers for any
other Trust REMICs or Grantor Trusts created pursuant to this Agreement (and
provide such employer identification numbers to the Depositor promptly upon
receipt thereof), furnish to the Internal Revenue Service, on Form 8811 or as
otherwise may be required by the Code, the name, title, address, and telephone
number of the person that the Holders of the Certificates may contact for tax
information relating thereto, together with such additional information as may
be required by such Form, and update such information at the time or times in
the manner required by the Code;
(c) deliver or cause to be delivered the federal taxpayer
identification number of the Grantor Trust on a correct, complete and duly
executed IRS Form W-9 of the Grantor Trust to the Swap Provider and promptly
upon receipt of such number after applying for it pursuant to 8.11(b) above and,
in any event, no later than the first Payment Date under the Interest Rate Swap
Agreement, and, if requested by the Swap Provider, an applicable IRS Form
W-8IMY;
(d) make an election that each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC be
treated as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(e) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(f) provide information necessary for the computation of tax imposed
on the Transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(g) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(h) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(i) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Securities Administrator, or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall not prevent the Securities Administrator from withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings);
(j) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other Person as may be required to sign such
returns by the Code or state or local laws, regulations or rules; and
(k) maintain records relating to each Trust REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information.
The Holder of the largest Percentage Interest of the Class RX
Certificates shall act as Tax Matters Person for the Class X REMIC, and the
holder of the largest Percentage Interest of the Class R Certificates shall act
as Tax Matters Person for Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC, in each case, within the meaning of
Treasury Regulations Section 1.860F-4(d), and the Securities Administrator is
hereby designated as agent of such Certificateholder for such purpose (or if the
Securities Administrator is not so permitted, such Holder shall be the Tax
Matters Person in accordance with the REMIC Provisions). In such capacity, the
Securities Administrator shall, as and when necessary and appropriate, represent
each Trust REMIC created hereunder in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of each Trust REMIC
created hereunder, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of each Trust
REMIC created hereunder, and otherwise act on behalf of each Trust REMIC in
relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts) and the rights of the
LIBOR Certificateholders to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts as the beneficial ownership of
interests in the Grantor Trust, and not as obligations of any Trust REMIC
created hereunder, for federal income tax purposes. The Securities Administrator
shall file or cause to be filed with the Internal Revenue Service Form 1041 or
such other form as may be applicable and, as described above, shall apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for the Grantor Trust and shall furnish or cause
to be furnished, to the Class P Certificateholders, Class X Certificateholders
and LIBOR Certificateholders, the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk CarryForward
Amounts from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor any additional information or data that the
Securities Administrator may, from time to time, reasonably request to enable
the Securities Administrator to perform its duties under this Agreement;
provided, however, that the Depositor shall not be required to provide any
information regarding the Mortgage Loans that the Servicer is required to
provide to the Securities Administrator pursuant to this Agreement. The
Depositor hereby indemnifies the Securities Administrator for any losses,
liabilities, damages, claims, or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide pursuant to this paragraph
accurate information or data to the Securities Administrator on a timely basis.
None of the Servicer, the Trustee, the Master Servicer or the
Securities Administrator shall (i) permit the creation of any interests in any
Trust REMIC other than the regular and residual interests set forth in the
Preliminary Statement, (ii) receive any amount representing a fee or other
compensation for services (except as otherwise permitted by this Agreement or
the related Mortgage Loan documents) or (iii) otherwise knowingly or
intentionally take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of any Trust REMIC as a REMIC or (ii) result in the imposition of a
tax upon any Trust REMIC or the Trust Fund (including but not limited to the tax
on "prohibited transactions" as defined in Section 860F(a)(2) of the Code and
the tax on contributions to a REMIC set forth in Section 860G(d) of the Code, or
the tax on "net income from foreclosure property") unless the Trustee and the
Securities Administrator receive an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and the Securities Administrator determines that taking such action is in the
best interest of the Trust Fund and the Certificateholders, at the expense of
the Trust Fund, but in no event at the expense of the Trustee or the Securities
Administrator) to the effect that the contemplated action will not, with respect
to the Trust Fund, any Trust REMIC created hereunder, endanger such status or,
unless the Trustee determines in its sole discretion to indemnify the Trust Fund
against such tax, result in the imposition of such a tax)
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24878 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee, the
Master Servicer or the Securities Administrator, respectively, if such tax
arises out of or results from negligence of the Trustee, the Master Servicer or
the Securities Administrator, as applicable, in the performance of any of its
obligations under this Agreement, (ii) the Servicer and the Depositor, jointly,
in the case of any such minimum tax, and the Servicer if such tax arises out of
or results from a breach by the Servicer of any of its obligations under this
Agreement, (iii) the Depositor if such tax arises out of or results from the
Depositor's obligation to repurchase a Mortgage Loan pursuant to Section 2.03,
(iv) the Sponsor if such tax arises out of or results from the Sponsor's
obligation to repurchase a Mortgage Loan pursuant to the Representations and
Warranties Agreement, or (v) in all other cases, or if the Trustee, the
Securities Administrator, the Master Servicer, the Servicer, the Depositor or
the Sponsor fails to honor its obligations under the preceding clause (i), (ii),
(iii) or (iv), any such tax will be paid with amounts otherwise to be
distributed to the Certificateholders, as provided in Section 4.02(a).
The Grantor Trust shall be treated as a WHFIT that is a NMWHFIT. The
Securities Administrator shall report as required under the WHFIT Regulations to
the extent such information as is reasonably necessary to enable the Securities
Administrator to do so, and is not in its possession, is provided to the
Securities Administrator on a timely basis. The Securities Administrator is
hereby directed to assume that DTC is the only "middleman" (as such term is
defined in the WHFIT Regulations) unless the Depositor provides the Securities
Administrator with the identities of other "middlemen" that are
Certificateholders. The Securities Administrator shall be entitled to rely on
the first sentence of this subparagraph (a) and shall be entitled to
indemnification in accordance with the terms of this Agreement in the event that
the Internal Revenue Service makes a determination that the first sentence of
this subparagraph (a) is incorrect.
The Securities Administrator, in its discretion, shall report
required WHFIT information using either the cash or accrual method, except to
the extent the WHFIT Regulations specifically require a different method. The
Securities Administrator shall be under no obligation to determine whether any
Certificateholder or other beneficial owner of a Certificate, to the extent the
Securities Administrator knows of any other beneficial owner of a Certificate,
uses the cash or accrual method. The Securities Administrator shall make
available information as required by the WHFIT Regulations to Certificateholders
annually. In addition, the Securities Administrator shall not be responsible or
liable for providing subsequently amended, revised or updated information to any
Certificateholder, unless requested by the Certificateholder.
The Securities Administrator shall not be liable for failure to meet
the reporting requirements of the WHFIT Regulations nor for any penalties
thereunder if such failure is due to: (i) the lack of reasonably necessary
information being provided to the Securities Administrator, (ii) incomplete,
inaccurate or untimely information being provided to the Securities
Administrator or (iii) the inability of the Securities Administrator, after good
faith efforts, to alter its existing information reporting systems to capture
information necessary to fully comply with the WHFIT Regulations for the 2007
calendar year. Absent receipt of information regarding any sale of Certificates,
including the price, amount of proceeds and date of sale from the beneficial
owner thereof or the Depositor, the Securities Administrator may assume there is
no secondary market trading of WHFIT interests.
To the extent required by the WHFIT Regulations, the Securities
Administrator shall use reasonable efforts to publish on an appropriate website
the CUSIP Numbers for the Certificates that represent ownership of a WHFIT. The
CUSIP Numbers so published will represent the Rule 144A CUSIP Numbers. The
Securities Administrator shall make reasonable good faith efforts to keep the
website accurate and updated to the extent CUSIP Numbers have been received. The
Securities Administrator shall not be liable for investor reporting delays that
result from the receipt of inaccurate or untimely CUSIP Number information.
The Securities Administrator shall be entitled to additional
reasonable compensation for changes in reporting required in respect of the
WHFIT Regulations that arise as a result of a change in the WHFIT Regulations or
a change in interpretation of the WHFIT Regulations by the IRS, if such change
requires, in the Securities Administrator's sole discretion, a material increase
in the Securities Administrator's reporting obligations in respect of the
related Grantor Trust.
Section 8.12 Periodic Filings. (a) The Securities Administrator, the
Master Servicer and the Servicer shall reasonably cooperate with the Depositor
in connection with the reporting requirements of the Trust under the Exchange
Act. The Securities Administrator shall prepare for execution by the Master
Servicer any Forms 8-K (other than the initial Form 8-K relating to this
Agreement, which shall be the responsibility of the Depositor to prepare and
file), 10-D and 10-K required by the Exchange Act and the rules and regulations
of the Commission thereunder, in order to permit the timely filing thereof,
pursuant to the terms of this Section 8.12, and the Securities Administrator
shall file (via the Commission's Electronic Data Gathering and Retrieval System,
or XXXXX) such Forms executed by the Master Servicer. Each of Form 10-D and Form
10-K requires the Depositor to indicate (by checking "yes" or "no") that it "(1)
has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." A "yes" shall be indicated on each
Form 10-D and 10-K unless the Depositor shall notify the Securities
Administration in writing, no later than the fifth calendar day after the
related Distribution Date with respect to the filing of a report on Form 10-D
and no later than March 15th with respect to the filing of a report on Form
10-K, that a "no" should be indicated. The Securities Administrator and the
Master Servicer shall be entitled to rely on such notice (or lack thereof) in
preparing, executing and/or filing any such report.
(b) The Securities Administrator shall prepare and file on behalf of
the Trust any Form 10-D required by the Exchange Act, in form and substance as
required by the Exchange Act. The Securities Administrator will utilize
reasonable best efforts to file such Form 10-D on or by the 14th calendar day
after each Distribution Date, but in no event later than the filing deadline for
such Form 10-D (subject to permitted extensions under the Exchange Act). The
Securities Administrator shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the Monthly
Statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth in Exhibit Q hereto and the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except as
set forth in the next paragraph.
As set forth on Exhibit Q hereto, within 5 calendar days after the
related Distribution Date, certain parties to this Agreement shall be required
to provide to the Securities Administrator and the Depositor, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, to the extent known by such applicable
parties, any Additional Form 10-D Disclosure, if applicable, together with an
Additional Disclosure Notification in the form of Exhibit X hereto ("Additional
Disclosure Notification"). The Depositor will approve as to form and substance,
or disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph, including converting any such disclosure to an XXXXX-compatible
format
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-D to the Depositor sufficiently far
in advance of, but in no event later than the 11th calendar day after the
related Distribution Date, for the Depositor to review and verify such Form
10-D. In the absence of receipt of any written changes or approval, the
Securities Administrator shall be entitled to assume that such Form 10-D is in
final form and the Securities Administrator may proceed with procuring the
execution of and filing the Form 10-D. No later than 2 Business Days prior to
the 15th calendar day after the related Distribution Date, a duly authorized
representative of the Master Servicer shall sign the Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
8.12(e)(ii). Promptly (but in any case within one Business Day) after filing
with the Commission, the Securities Administrator will make available on its
internet website a final executed copy of each Form 10-D prepared and filed by
the Securities Administrator. The Depositor can be contacted at the Depositor's
address for notices set forth in Section 12.05(b)(ii)(a) or such other address
as to which the Depositor has provided prior written notice to the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their duties under this Section 8.12(b)
related to the timely preparation, execution and filing of Form 10-D is
contingent, in part, upon the Servicer, the Depositor and any other Person
obligated to provide Additional Form 10-D Disclosure as set forth on Exhibit Q
hereto, observing all applicable deadlines in the performance of their duties
under this Section 8.12(b). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 10-D, where such failure results from the
Securities Administrator's or the Master Servicer's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator, the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 10-D, not resulting from their own
negligence, bad faith or willful misconduct.
(c) On any date within 90 days (including the 90th day) after the
end of each fiscal year of the Trust or such earlier date as may be required by
the Exchange Act (the "10-K Filing Deadline"), commencing in March 2008, the
Securities Administrator shall prepare and file on behalf of the Trust a Form
10-K, in form and substance as required by the Exchange Act. Each such Form 10-K
shall include the following items, in each case to the extent they have been
delivered to the Securities Administrator within the applicable time frames set
forth in this Agreement, (i) an annual compliance statement for the Securities
Administrator, the Master Servicer, the Servicer and each Subservicer engaged by
the Servicer, as described under Section 3.22, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for the Securities
Administrator, the Master Servicer, the Trustee, the Servicer, each Subservicer
engaged by the Servicer and each Servicing Function Participant utilized by the
Servicer, the Master Servicer, the Securities Administrator or the Trustee, as
described under Section 3.23, and (B) if any such report on assessment of
compliance with servicing criteria described under Section 3.23 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or such report on assessment of compliance with servicing
criteria described under Section 3.23 is not included as an exhibit to such Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, (iii)(A) the registered public accounting firm
attestation report for the Securities Administrator, the Master Servicer, the
Servicer, the Trustee, each Subservicer engaged by the Servicer and each
Servicing Function Participant utilized by the Servicer, the Master Servicer or
the Securities Administrator, the Trustee, if applicable, as described under
Section 3.23, and (B) if any registered public accounting firm attestation
report described under Section 3.23 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
such registered public accounting firm attestation report is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, and (iv) a certification
substantially in the form attached hereto as Exhibit L, with such changes as may
be necessary or appropriate as a result of changes promulgated by the Commission
(the "Sarbanes Certification"), which shall be signed by the senior officer of
the Master Servicer in charge of securitization. Any disclosure or information
in addition to (i) through (iv) above that is required to be included on Form
10-K ("Additional Form 10-K Disclosure") shall be prepared by the party
responsible for preparing such disclosure as set forth on Exhibit R hereto, and
the Securities Administrator shall compile such disclosure pursuant to the
following paragraph. The Securities Administrator will have no duty or liability
for any failure hereunder to determine or prepare any Additional Form 10-K
Disclosure, except as set forth in the next paragraph.
As set forth on Exhibit R hereto, no later than March 1st of each
year (or, in the case of the Servicer, March 15th of each year) that the Trust
is subject to the Exchange Act reporting requirements, commencing in 2008, the
parties to this Agreement shall be required to provide to the Securities
Administrator and the Depositor, in XXXXX-compatible format, or in such other
form as otherwise agreed upon by the Securities Administrator and such party, to
the extent known by such applicable parties, any Additional Form 10-K
Disclosure, if applicable, together with an Additional Disclosure Notification.
The Depositor will approve as to form and substance, or disapprove, as the case
may be, the inclusion of the Additional Form 10-K Disclosure. The Depositor will
be responsible for all reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Form 10-K
Disclosure on Form 10-K pursuant to this paragraph, including converting any
such disclosure to an XXXXX-compatible format. The Securities Administrator
shall compile all such information provided to it in a Form 10-K prepared by it.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-K to the Depositor sufficiently far
in advance of, but in no event less than three (3) Business Days prior to, when
the Master Servicer is required to execute such Form 10-K to permit the
Depositor to review and verify such Form 10-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 10-K is in final form and the Securities Administrator may
proceed with procuring the execution of and filing the Form 10-K. No later than
5:00 p.m. Eastern Standard Time on the 4th Business Day prior to the 10-K Filing
Deadline, the senior officer in charge of the servicing function of the Master
Servicer shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 8.12(e)(ii). Promptly (but in
any case within one Business Day) after filing with the Commission, the
Securities Administrator will make available on its internet website a final
executed copy of each Form 10-K prepared and filed by the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their duties under this Section 8.12(c)
related to the timely preparation and filing of Form 10-K is contingent, in
part, upon the Servicer (and any Subservicer or Servicing Function Participant
engaged by the Servicer) and the Depositor and any other Person obligated to
provide Additional Form 10-K Disclosure as set forth on Exhibit R hereto,
observing all applicable deadlines in the performance of their duties under this
Section 8.12(c), Section 8.12(d), Section 3.22 and Section 3.23. Neither the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage or claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's or the Master Servicer's
inability or failure to obtain or receive, on a timely basis, any information
from any party hereto (other than the Securities Administrator, the Master
Servicer or any Subcontractor utilized by the Securities Administrator or the
Master Servicer) needed to prepare, execute or file such Form 10-K, not
resulting from their own negligence, bad faith or willful misconduct.
(d) Each of the Securities Administrator, the Master Servicer and
the Servicer shall provide, and each such party shall cause any Servicing
Function Participant engaged by it to provide, to the Person who signs the
Sarbanes Certification (the "Certifying Person"), by March 10th (March 15th with
respect to Saxon) (or if such day is not a Business Day, the immediately
preceding Business Day) of each year in which the Trust is subject to the
reporting requirements of the Exchange Act and otherwise within a reasonable
period of time upon request, a certification (each, a "Back-Up Certification"),
substantially in the form attached hereto as Exhibit M (with such changes as may
be necessary or appropriate as a result of changes promulgated by the
Commission, or with respect to any Servicing Function Participant, in form and
substance reasonably satisfactory to the Certifying Person) upon which the
Certifying Person, the entity for which the Certifying Person acts as an
officer, and such entity's officers, directors and Affiliates (collectively with
the Certifying Person, "Certification Parties") can reasonably rely. The senior
officer of the Master Servicer in charge of the master servicing function shall
serve as the Certifying Person on behalf of the Trust. Such officer of the
Certifying Person can be contacted by e-mail at cts.sec.notifications@
xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the event any such party or
any Servicing Function Participant engaged by such party is terminated or
resigns pursuant to the terms of this Agreement, or any applicable sub-servicing
agreement, as the case may be, such part shall provide a Back-Up Certification
to the Certifying Person pursuant to this Section 8.12(d) with respect to the
period of time it was subject to this Agreement or any applicable sub-servicing
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Sarbanes Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this Section 8.12(d). In the event that prior to the filing date of the Form
10-K in March of each year, the Servicer, the Master Servicer or the Securities
Administrator has actual knowledge of information material to the Sarbanes
Certification, that party shall promptly notify the Depositor and each of the
other parties signing the certifications. In addition, (i) the Securities
Administrator shall indemnify and hold harmless the Depositor and the Sponsor
and their officers, directors, employees, agents and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Securities Administrator's obligations under
this Section 8.12(d) or any material misstatement or material omission in (w)
any compliance certificate delivered by the Securities Administrator or any
Subcontractor of the Securities Administrator pursuant to Section 3.22 of this
Agreement, (x) any assessment or attestation delivered by or on behalf of the
Securities Administrator or any Subcontractor of the Securities Administrator
pursuant to Section 3.23 of this Agreement, (y) any Back-Up Certification in the
form of Exhibit M delivered by the Securities Administrator pursuant to Section
8.12(d) of this Agreement or (z) any information about the Securities
Administrator provided by it pursuant to Item 2 (Legal Proceedings) of Exhibit
Q, Item 1117 and Item 1119 of Exhibit R or Item 6.02 (Change of Securities
Administrator) of Exhibit S (collectively, the "Securities Administrator
Information"), or the Securities Administrator's negligence, bad faith or
willful misconduct in connection therewith, (ii) the Servicer, severally and not
jointly, shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator, the Master Servicer and their respective officers,
directors, employees, agents and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any breach of the Servicer's obligations under this Section 8.12(d) or any
material misstatement or material omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith, and (iii) the Master
Servicer shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Master Servicer's obligations under this Section 8.12(d) or any material
misstatement or material omission, negligence, bad faith or willful misconduct
of the Master Servicer in connection therewith. If the indemnification provided
for herein is unavailable or insufficient to hold harmless any indemnified
party, then (i) the Securities Administrator agrees in connection with a breach
of the Securities Administrator's obligations under this Section 8.12(d) or any
material misstatement or material omission contained in any Securities
Administrator Information, or any negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor and the Sponsor as a result of the losses, claims, damages or
liabilities of the Depositor and the Sponsor in such proportion as is
appropriate to reflect the relative fault of the Depositor and the Sponsor on
the one hand and the Securities Administrator on the other and (ii) the
Servicer, several and not jointly, agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and the Servicer, on the other hand, in connection with a breach of the
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of the
Servicer in connection therewith.
The obligations of the Securities Administrator, the Master
Servicer, the Servicer and each Servicing Function Participant and Servicing
under this Section 8.12(d) shall apply to the Securities Administrator, the
Master Servicer, the Servicer and each Servicing Function Participant that
serviced a Mortgage Loan during the applicable period, whether or not such
Securities Administrator, the Master Servicer, the Servicer or such Servicing
Function Participant is acting as Securities Administrator, Master Servicer, the
Servicer or a Servicing Function Participant, as applicable, at the time such
certification is required to be delivered. The indemnification and contribution
obligations set forth in this Section 8.12(d) shall survive the termination of
this Agreement or the earlier resignation or removal of the Securities
Administrator, the Master Servicer or the Servicer, as applicable.
(e) (i) The obligations set forth in paragraphs (a) through (d) of
this Section 8.12 shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. Prior to
January 30 of the first year in which the Securities Administrator is able to do
so under applicable law, the Securities Administrator shall prepare and file a
Form 15 Suspension Notification with respect to the Trust, with a copy to the
Depositor. At the beginning of the immediately succeeding calendar year after
the filing of a Form 15 Suspension Notification, if the number of Holders of the
Offered Certificates of record exceeds the number set forth in Section 15(d) of
the Exchange Act or the regulations promulgated pursuant thereto which would
cause the Trust to again become subject to the reporting requirements of the
Exchange Act, the Securities Administrator shall recommence preparing and
filing, and the Master Servicer shall recommence executing, reports on Form
10-K, 10-D and 8-K as required pursuant to this Section 8.12 and the parties
hereto shall again have the obligations set forth in this Section.
(ii) In the event that the Securities Administrator is unable to
timely file with the Commission all or any required portion of any Form 8-K
(other than the initial Form 8-K filed by the Depositor with respect to this
Agreement), 10-D or 10-K required to be filed pursuant to this Agreement because
required disclosure information was either not delivered to it or delivered to
it after the delivery deadlines (and the expiration of the applicable grace
period with respect to such deadline prior to such failure to deliver resulting
in an Event of Default) set forth in this Agreement, the Securities
Administrator will promptly electronically notify the Depositor and if
necessary, the Servicer. In the case of Form 10-D and 10-K, the Depositor, the
Servicer and the Securities Administrator will thereupon cooperate to prepare
and timely file a Form 12b-25 and a 10-D/A and 10-K/A as applicable, pursuant to
Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Securities
Administrator will, upon receipt of all disclosure information required to be
included on Form 8-K and as directed by the Depositor, include such disclosure
information on the next Form 10-D. In the event that any previously filed Form
8-K, 10-D or 10-K needs to be amended, the party to this Agreement deciding that
an amendment to such Form 8-K, 10-D or 10-K is required will notify the
Depositor, the Securities Administrator and the Servicer, and such parties will
cooperate to prepare any necessary Form 8-K/A, 10-D/A or 10-K/A. Any Form 15,
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed a duly
authorized representative or a senior officer in charge of master servicing, as
applicable, of the Master Servicer. The parties to this Agreement acknowledge
that the performance by the Master Servicer and the Securities Administrator of
their duties under this Section 8.12(e) related to the timely preparation and
filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is
contingent, in part, upon the Servicer and the Depositor observing all
applicable deadlines (and the related grace periods thereto) in the performance
of their duties under this Section 8.12 and Sections 3.22 and 3.23. Neither the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator's inability or failure to obtain or receive, on a
timely basis, any information from any party hereto (other than the Securities
Administrator, the Master Servicer or any Subcontractor utilized by the
Securities Administrator or the Master Servicer) needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D
or 10-K, not resulting from its own negligence, bad faith or willful misconduct.
(f) On any date within four (4) Business Days after the occurrence
of an event requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and also if requested by the Depositor, the Securities Administrator
shall prepare and file on behalf of the Trust any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall file the initial Form 8-K in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be reported and prepared by
the party responsible for preparing such disclosure as set forth on Exhibit S
hereto and compiled by the Securities Administrator pursuant to the following
paragraph. The Securities Administrator will have no duty or liability for any
failure hereunder to determine or prepare any Form 8-K Disclosure Information or
any Form 8-K, except as set forth in the next paragraph.
As set forth on Exhibit S hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon (Eastern
Standard Time) on the 2nd Business Day after the occurrence of a Reportable
Event, certain parties to this Agreement shall be required to provide to the
Depositor and the Securities Administrator, in XXXXX-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and
such party, to the extent known by such applicable parties, any Form 8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph, including the conversion of any such disclosure into an
XXXXX-compatible format. The Depositor will approve as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 8-K to the Depositor sufficiently far in
advance of, but in no event later than noon (Eastern Standard Time) on the 3rd
Business Day after a Reportable Event, to permit the Depositor to review and
verify such Form 8-K. Promptly, but no later than the close of business on the
3rd Business Day after the Reportable Event, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 8-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 8-K is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 8-K. A duly authorized
representative of the Master Servicer shall sign each Form 8-K and return an
electronic or fax copy of such signed Form 8-K (with an original executed hard
copy to follow by overnight mail) to the Securities Administrator. If a Form 8-K
cannot be filed on time or if a previously filed Form 8-K needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
8.12(e). Promptly (but in any case within one Business Day) after filing with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The Depositor acknowledges that the performance by the
Securities Administrator and the Master Servicer of their duties under this
Section 8.12(g) related to the timely preparation and filing of Form 8-K is
contingent, in part, upon the Servicer, the Depositor and any other Person
obligated to provide Form 8-K Disclosure Information as set forth on Exhibit S
hereto, observing all applicable deadlines in the performance of their duties
under this Section 8.12(f). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's or the Master Servicer's inability or failure to obtain or
receive, on a timely basis, any information or signature from any party hereto
(other than the Securities Administrator or the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(g) Neither the Master Servicer nor the Securities Administrator
shall have any liability for any loss, expense, damage or claim arising out of
or resulting from (i) the accuracy or inaccuracy of any Additional Form 10-D
Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure Information
(excluding any information therein provided by the Securities Administrator or
any Subcontractor utilized by the Securities Administrator) provided to the
Securities Administrator in connection with the preparation of Forms 10-D, 10-K
and 8-K pursuant to this Section 8.12, or (ii) the failure of the Depositor to
timely execute and return for filing any Forms 10-D, 10-K and 8-K required to be
filed by the Securities Administrator pursuant to this Section 8.12, in either
case, not resulting from the Securities Administrator's own negligence, bad
faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of the
Excess Reserve Fund Account, Swap Account and the Interest Rate Swap Agreement.
For federal income tax purposes, the Securities Administrator shall treat the
Excess Reserve Fund Account and the Swap Account as beneficially owned by the
holders of the Class X Certificates and shall treat such portion of the Trust
Fund as a grantor trust, within the meaning of subpart E, Part I of subchapter J
of the Code. The Securities Administrator shall treat the rights that each Class
of LIBOR Certificates has to receive payments of Basis Risk CarryForward
Amounts, and to the extent not paid from the Excess Reserve Fund Account, Basis
Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward
Amounts from the Swap Account (together with Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account), subject to the obligation to pay Class IO
Shortfalls, as rights and obligations under a notional principal contract
between the Class X Certificateholder and each such Class and beneficially owned
by each such Class through the Grantor Trust. Accordingly, each Class of
Certificates (excluding the Class X, Class P, the Class R and the Class RX
Certificates) will be comprised of two components - an Upper-Tier Regular
Interest and an interest in a notional principal contract, and the Class X
Certificates will be comprised of the following components: two Class X REMIC
Regular Interests (the Class X Interest and the Class IO Interest), an interest
in the Excess Reserve Fund Account, subject to obligation to pay Basis Risk
CarryForward Amounts, ownership of the Swap Account and the Interest Rate Swap
Agreement, subject to the obligation to pay Basis Risk CarryForward Amounts and,
without duplication, Upper-Tier CarryForward Amounts, and the right to receive
Class IO Shortfalls. The Securities Administrator shall allocate the issue price
for a Class of Certificates among the respective components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of each
Holder of a LIBOR Certificate to receive the related Basis Risk CarryForward
Amounts and, without duplication, the related Upper-Tier CarryForward Amounts
for purposes of allocating the purchase price of a LIBOR Certificate acquired by
an initial Holder thereof between such right and the related Upper-Tier Regular
Interest.
Holders of LIBOR Certificates shall also be treated as having agreed
to pay, on each Distribution Date, to the Holders of the Class X Certificates an
aggregate amount equal to the excess, if any, of (i) Net Swap Payments and Swap
Termination Payments (other than Defaulted Swap Termination Payments) over (ii)
the sum of amounts payable on the Class X Interest available for such payments
and amounts payable on the Class IO Interest (such excess, a "Class IO
Shortfall"), first from interest and then from principal distributable on the
LIBOR Certificates. A Class IO Shortfall payable from interest collections shall
be allocated pro rata among such LIBOR Certificates based on the amount of
interest otherwise payable to such Class of LIBOR Certificates, and a Class IO
Shortfall payable from principal collections shall be allocated in reverse
sequential order beginning with the most subordinate Class of LIBOR Certificates
then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of LIBOR Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment or otherwise, such excess shall be deemed first paid to the
related Upper-Tier Regular Interest and then paid to the Class X Certificates in
a manner analogous to Class IO Shortfalls.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor, the Certificate Insurer and the
Certificateholders, shall monitor the performance of the Servicer's obligations
under this Agreement, and (except as set forth below) shall use its reasonable
good faith efforts to cause the Servicer to duly and punctually perform its
duties and obligations hereunder. Upon the occurrence of an Event of Default of
which a Responsible Officer of the Master Servicer has actual knowledge, the
Master Servicer shall promptly notify the Securities Administrator and the
Trustee and shall specify in such notice the action, if any, the Master Servicer
plans to take in respect of such default. So long as an Event of Default shall
occur and be continuing, the Master Servicer shall take the actions specified in
Article VII.
If (i) the Servicer reports a delinquency on a monthly report and
(ii) the Servicer, by 4 p.m. (Eastern Standard Time) on the related Remittance
Date, neither makes an Advance nor provides the Securities Administrator and the
Master Servicer with an Officer's Certificate certifying that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, then
the Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date an Advance in
an amount equal to the difference between (x) with respect to each Monthly
Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the Servicer was required to make an Advance
pursuant to this Agreement and (y) amounts deposited in the Collection Account
to be used for Advances with respect to such Mortgage Loan, except to the extent
the Master Servicer determines any such Advance to be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance. Subject to the foregoing and
Section 7.02, the Master Servicer shall continue to make such Advances for so
long as the Servicer is required to do so under this Agreement. If applicable,
on the Business Day immediately preceding the Distribution Date, the Master
Servicer shall deliver an Officer's Certificate to the Trustee and the
Securities Administrator stating that the Master Servicer elects not to make an
Advance in a stated amount and detailing the reason(s) it deems the Advance to
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. Any amounts
deposited by the Master Servicer pursuant to this Section 9.01 shall be net of
the Servicing Fee for the related Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicer as required hereunder (including costs associated with (i) termination
of the Servicer, (ii) the appointment of a successor Servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted hereunder, seek reimbursement therefor initially from
the terminated Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Master Servicer are not paid for
by the predecessor or successor Servicer (provided such successor Servicer is
not the Master Servicer), the Master Servicer may be reimbursed therefor by the
Trust for out of pocket costs incurred by the Master Servicer associated with
any such transfer of servicing duties from the Servicer to the Master Servicer
or any other successor Servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations and
warranties of the Servicer it replaces or for any errors or omissions of the
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by the Servicer, rights and obligations under this
Agreement without the prior written consent of the Master Servicer, which
consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master Servicer or
trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Servicer, the
Depositor, the Securities Administrator, the Certificate Insurer and the
Trustee, for the benefit of the Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) [Reserved]
(c) It is understood and agreed that the representations and
warranties set forth in this Section 9.03 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Servicer,
the Depositor, the Securities Administrator, the Trustee, the Certificate
Insurer and the Trust and hold them harmless against any loss, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and other reasonable costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
material breach of the Master Servicer's representations and warranties
contained in Section 9.03(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer set forth in this Section
9.03 to indemnify the Servicer, the Depositor, the Securities Administrator, the
Trustee, the Certificate Insurer and the Trust constitutes the sole remedy of
the Servicer, the Depositor, the Securities Administrator, the Trustee, the
Certificate Insurer and the Trust, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Servicer,
Depositor, the Master Servicer, Securities Administrator, the Trustee or the
Certificate Insurer or notice thereof by any one of such parties to the other
parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to cause to be deposited in
the Distribution Account any payment received by it from the Servicer or
required to be made by the Master Servicer under the terms of this Agreement
which continues unremedied for a period of two (2) Business Days after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
provided that the thirty (30) day cure period shall not apply so long as the
Depositor is required to file any Forms 8-K, 10-D and 10-K required by the
Exchange Act with respect to the Trust Fund, the failure to comply with the
requirements set forth in Section 8.12, for which the grace period shall not
exceed the lesser of ten (10) calendar days or such period in which any
applicable Form 8-K, 10-D and 10-K required by the Exchange Act can be timely
filed (without taking into account any extensions);
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations for
three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator, the Trustee and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, in each case, where such indictment materially
and adversely affects the ability of the Master Servicer to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least a majority
of the Voting Rights shall, terminate with cause all the rights and obligations
of the Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
All reasonable out-of-pocket costs and expenses incurred by the
Trustee in connection with the transfer of servicing from a terminated Master
Servicer, including, without limitation, any such costs or expenses associated
with the complete transfer of all servicing data and the completion, correction
or manipulation of such servicing data as may be required by the Trustee to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee (or any other successor Master Servicer appointed pursuant to
Section 9.06) to master service shall be paid by the terminated Master Servicer;
provided, however, that to the extent not previously reimbursed by the
terminated Master Servicer, such fees and expenses shall be payable to the
Trustee pursuant to Section 8.05.
Upon the occurrence of a Master Servicer Event of Default, the
Trustee shall provide the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a successor master servicer in the event the
Trustee should succeed to the duties of the Master Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the Trustee
may, with the consent of the Certificate Insurer (which consent shall not be
unreasonably withheld) and shall at the direction of the Certificate Insurer,
waive any default by the Master Servicer in the performance of its obligations
hereunder and its consequences. Upon any waiver of a past default, such default
shall cease to exist, and any Master Servicer Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good standing and
acceptable to the Depositor, the Certificate Insurer and the Rating Agencies. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that in no event
shall the Master Servicing Fee paid to such successor master servicer exceed
that paid to the Master Servicer hereunder. In the event that the Master
Servicer's duties, responsibilities and liabilities under this Agreement are
terminated, the Master Servicer shall continue to discharge its duties and
responsibilities hereunder until the effective date of such termination with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement and shall take no action whatsoever that might impair or
prejudice the rights of its successor. The termination of the Master Servicer
shall not become effective until a successor shall be appointed pursuant hereto
and shall in no event (i) relieve the Master Servicer of responsibility for the
representations and warranties made pursuant to Section 9.03(a) hereof and the
remedies available to the Trustee under Section 9.03(b) hereof, it being
understood and agreed that the provisions of Section 9.03 hereof shall be
applicable to the Master Servicer notwithstanding any such sale, assignment,
resignation or termination of the Master Servicer or the termination of this
Agreement; or (ii) affect the right of the Master Servicer to receive payment
and/or reimbursement of any amounts accruing to it hereunder prior to the date
of termination (or during any transition period in which the Master Servicer
continues to perform its duties hereunder prior to the date the successor master
servicer fully assumes its duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances as successor Servicer; provided, however, that any
failure to perform any duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee's capacity as
such successor, the Trustee shall have the same limitations on liability herein
granted to the Master Servicer. As compensation therefor, the Trustee shall be
entitled to receive the compensation, reimbursement and indemnities otherwise
payable to the Master Servicer, including the fees and other amounts payable
pursuant to Section 9.07 hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption as
successor master servicer of such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable Xxxxxx
Mae and Xxxxxxx Mac guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or
another successor master servicer satisfactory to the Trustee, and the Depositor
shall have assumed, the Master Servicer's responsibilities and obligations under
this Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, Xxxxx Fargo Bank, National Association, as Master
Servicer, resigns under this Section 9.09, or is removed as Master Servicer
pursuant to Section 9.04, then at such time Xxxxx Fargo Bank, National
Association shall also resign (and shall be entitled to resign) as Securities
Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor and the
Certificate Insurer (which shall not be unreasonably withheld or delayed), and
upon delivery to the Trustee, the Certificate Insurer and the Depositor of a
letter from each Rating Agency to the effect that such action shall not result
in a downgrade of the ratings assigned to any of the Certificates (without
giving effect to the Certificate Insurance Policy), to delegate or assign to or
subcontract with or authorize or appoint any qualified Person to perform and
carry out any duties, covenants or obligations to be performed and carried out
by the Master Servicer hereunder. Notice of such permitted assignment shall be
given promptly by the Master Servicer to the Depositor and the Trustee. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire compensation payable to
the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer but in no event shall the fee payable to the successor
master servicer exceed that payable to the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, the Securities
Administrator, the Servicer or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such person against any liability
that would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Master Servicer with respect to the Mortgage Loans
under this Agreement and that in its opinion may involve it in any expenses or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom, shall
be liabilities of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Distribution Account in accordance with the
provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions of
the Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the performance of the obligations of the Servicer as required under this
Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Servicer, Depositor, the Sponsor, the
Securities Administrator, the Trustee, the Certificate Insurer and the Trust,
and hold them harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses that the Servicer, Depositor, the Sponsor, the
Securities Administrator, the Trustee, the Certificate Insurer or the Trust may
sustain as a result of the Master Servicer's willful malfeasance, bad faith or
negligence in the performance of its duties hereunder or by reason of its
reckless disregard for its obligations and duties under this Agreement,
including any failure by the Master Servicer or any Subcontractor utilized by
the Master Servicer to deliver any information, report, certification or
accountants' letter when and as required under Sections 3.22, 3.23 or 8.12,
including without limitation any failure by the Master Servicer to identify any
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB. The Depositor, the Securities Administrator,
Sponsor, the Servicer, the Trustee and the Certificate Insurer shall immediately
notify the Master Servicer if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans which would entitle the Depositor, the
Securities Administrator, the Servicer, the Trustee, the Certificate Insurer or
the Trust to indemnification under this Section 9.12, whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under this
Agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this
Agreement, (ii) resulting from any breach of the Servicer's obligations in
connection with this Agreement for which the Servicer has performed its
obligation to indemnify the Trustee pursuant to Section 6.05, or (iii) the
Master Servicer's willful malfeasance, bad faith or negligence or by reason of
its reckless disregard of its duties and obligations under this Agreement;
provided that any such loss, liability or expense constitutes an "unanticipated
expense incurred by the REMIC" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non-conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights represented by the
Certificates relating to the time, method and place of conducting any
proceeding for any remedy available to the Securities Administrator, or
exercising or omitting to exercise any trust or power conferred upon the
Securities Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Servicer or the Trustee.
The Securities Administrator shall be permitted to utilize one or
more Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Securities Administrator complies with Section
3.02(e) as if the Securities Administrator were a "Servicer" pursuant to that
Section. The Securities Administrator shall indemnify the Depositor, such
Sponsor and any director, officer, employee or agent of the Depositor or such
Sponsor and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to the failure of the Securities Administrator to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Securities Administrator to identify
pursuant to Section 3.02(e) any Subcontractor that is a Servicing Function
Participant. This indemnity shall survive the termination of this Agreement or
the earlier resignation or removal of the Securities Administrator.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Securities Administrator to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Sponsor, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement, the Interest Rate Swap Agreement, or
of the Certificates or of any Mortgage Loan or related document other than with
respect to the Securities Administrator's execution and authentication of the
Certificates. The Securities Administrator shall not be accountable for the use
or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Securities Administrator executes the Interest Rate Swap
Agreement and the Certificates not in its individual capacity but solely as
Securities Administrator of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Securities Administrator on behalf of the Trust Fund in the Interest Rate Swap
Agreement and the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the purpose
of binding only the Trust Fund.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Master Servicer Float Period. The
Securities Administrator and any director, officer, employee, agent or "control
person" within the meaning of the Securities Act of 1933, as amended, and the
Securities Exchange of 1934, as amended ("Control Person"), of the Securities
Administrator shall be indemnified by the Trust and held harmless against any
loss, liability or expense (including reasonable attorney's fees) (i) incurred
in connection with any claim or legal action relating to (a) this Agreement, the
Interest Rate Swap Agreement, (b) the Mortgage Loans or (c) the Certificates,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Securities
Administrator's duties hereunder, (ii) incurred in connection with the
performance of any of the Securities Administrator's duties hereunder or under
such other agreements, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of any
of the Securities Administrator's duties hereunder or (iii) incurred by reason
of any action of the Securities Administrator taken at the direction of the
Certificateholders, provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the
Securities Administrator hereunder. Without limiting the foregoing, and except
for any such expense, disbursement or advance as may arise from the Securities
Administrator's negligence, bad faith or willful misconduct, or which would not
be an "unanticipated expense" within the meaning of the second preceding
sentence, the Securities Administrator shall be reimbursed by the Trust for all
reasonable expenses, disbursements and advances incurred or made by the
Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator functions are operated through an institutional trust
department of the Securities Administrator, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization, and
(iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency and
rates such successor, or the equivalent rating by S&P or Xxxxx'x. If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 10.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the Swap Provider, the Certificate Insurer, the
Trustee and each Rating Agency not less than 60 days before the date specified
in such notice when, subject to Section 10.08, such resignation is to take
effect, and acceptance by a successor Securities Administrator in accordance
with Section 10.08 meeting the qualifications set forth in Section 10.06. If no
successor Securities Administrator meeting such qualifications shall have been
so appointed by the Depositor and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Securities Administrator
may petition any court of competent jurisdiction for the appointment of a
successor Securities Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Certificate Insurer or the Holders of Certificates entitled to a
majority of the Voting Rights may, with the consent of the Certificate Insurer
(which consent shall not be unreasonably withheld), at any time remove the
Securities Administrator and appoint a successor Securities Administrator by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which instruments
shall be delivered by the successor Securities Administrator to the Trustee, one
complete set to the Securities Administrator so removed and one complete set to
the successor so appointed. Notice of any removal of the Securities
Administrator shall be given to each Rating Agency by the successor Securities
Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Swap Provider
and the Depositor and to its predecessor Securities Administrator and the
Trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor Securities Administrator shall become
effective and such successor Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the Trustee,
the Master Servicer and the predecessor Securities Administrator shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Securities Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect then current
rating of the Certificates, as confirmed in writing by each Rating Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor and the Certificate Insurer (which consent shall not be
unreasonably withheld or delayed), and upon delivery to the Trustee, the
Certificate Insurer and the Depositor of a letter from each Rating Agency to the
effect that such action shall not result in a downgrade of the ratings assigned
to any of the Certificates (without giving effect to the Certificate Insurance
Policy), to delegate or assign to or subcontract with or authorize or appoint
any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Securities Administrator
hereunder. Notice of such permitted assignment shall be given promptly by the
Securities Administrator to the Depositor, the Certificate Insurer, the Swap
Provider and the Trustee. If, pursuant to any provision hereof, the duties of
the Securities Administrator are transferred to a successor securities
administrator, the entire compensation payable to the Securities Administrator
pursuant hereto shall thereafter be payable to such successor securities
administrator but in no event shall the fee payable to the successor Securities
Administrator exceed that payable to the predecessor Securities Administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Sections 11.02 and 11.03, the obligations and
responsibilities of the Depositor, the Servicer, the Master Servicer, the
Securities Administrator and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by Saxon, of all Mortgage Loans (and REO Properties)
at the price equal to the sum of (i) 100% of the unpaid principal balance of
each Mortgage Loan (other than in respect of REO Property) plus accrued and
unpaid interest thereon at the applicable Mortgage Rate, (ii) the lesser of (x)
the appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by Saxon, at the
expense of Saxon, plus accrued and unpaid interest on each Mortgage Loan at the
applicable Mortgage Rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Rate, and (iii) any Swap Termination Payment
owed to the Swap Provider pursuant to the Interest Rate Swap Agreement, and (b)
the later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 11.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
No purchase of the Mortgage Loans pursuant to this Section 11.01
shall be permitted without the Certificate Insurer's consent if the resulting
amount available for distribution on the Class A Certificates would result in a
draw under the Certificate Insurance Policy, or if any Reimbursed Amount or any
amounts owed or reimbursable to the Certificate Insurer under this Agreement or
under the Insurance Agreement would remain unpaid to the Certificate Insurer.
Section 11.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, Saxon shall direct the Securities Administrator promptly to
send a Notice of Final Distribution to each Certificateholder and the Swap
Provider. If Saxon elects to terminate the Trust Fund pursuant to clause (a) of
Section 11.01, by the 25th day of the month preceding the month of the final
distribution, Saxon shall notify the Depositor, the Master Servicer and the
Securities Administrator of the date Saxon intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Securities Administrator for deposit in the Distribution Account on the Business
Day prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Servicer the
Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicer, the Master
Servicer, the Securities Administrator, the Depositor, the Certificate Insurer
and the Trustee hereunder), in each case on the final Distribution Date and in
the order set forth in Section 4.02, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, up
to an amount equal to (i) as to each Class of Regular Certificates (except the
Class X Certificates), the Certificate Balance thereof plus for each such Class
and the Class X Certificates accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.02 and (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other than
the amounts retained to meet claims) after application pursuant to clause (i)
above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event
Saxon exercises its purchase option with respect to the Mortgage Loans as
provided in Section 11.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of Saxon, to the effect that the failure
to comply with the requirements of this Section 11.03 will not (i) result in the
imposition of taxes on "prohibited transactions" on any Trust REMIC as defined
in Section 860F of the Code, or (ii) cause any Trust REMIC to fail to qualify as
a REMIC at any time that any Certificates are Outstanding:
(a) The Securities Administrator shall sell all of the assets of the
Trust Fund to Saxon and, no later than the next Distribution Date after such
sale, shall distribute to the Certificateholders the proceeds of such sale in
complete liquidation of each Trust REMIC; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each Trust REMIC stating that pursuant to
Treasury Regulations Section 1.860F-1, the first day of the 90-day liquidation
period for each such Trust REMIC was the date on which the Securities
Administrator sold the assets of the Trust Fund to Saxon.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer, the Master Servicer, the Securities
Administrator and the Trustee, with the consent of the Certificate Insurer,
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or to supplement any
provision herein which may be inconsistent with any other provision herein,
(iii) to add to the duties of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or the Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any amendment pursuant to clauses (iv) or (v) above
shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall
not be an expense of the Trustee, the Securities Administrator or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder; and provided, further, that any such amendment pursuant to
clause (iv) or (v) above shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination by such Rating Agency
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor, the Master Servicer, the Securities Administrator and the Servicer,
with the consent of the Certificate Insurer, also may at any time and from time
to time amend this Agreement, but without the consent of the Certificateholders
to modify, eliminate or add to any of its provisions to such extent as shall be
necessary or helpful to (i) maintain the qualification of each Trust REMIC and
Grantor Trust under the Code, (ii) avoid or minimize the risk of the imposition
of any tax on any Trust REMIC or Grantor Trust pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates or
(iii) comply with any other requirements of the Code or to facilitate the
administration and reporting of each Trust REMIC or Grantor Trust; provided that
the Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code; provided, however, that any amendment that
would otherwise require the consent of Holders pursuant to the next paragraph
shall be made only pursuant to the terms of the next paragraph.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Certificate Insurer and the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66(2)/3%
of each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66(2)/3%, or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then Outstanding; provided, further, that,
without the consent of the Holders of a majority of the Certificates then
Outstanding, no such amendment shall result in a Significant Change to a
Permitted Activity.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies and the Swap Provider (with a copy of such
notice to the Trustee) of such amendment, stating the provisions of the
Agreement to be amended.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Master
Servicer or the Securities Administrator to enter into an amendment without
receiving an Opinion of Counsel (which Opinion shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
satisfactory to the Trustee, the Master Servicer or the Securities Administrator
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with
(including the obtaining of any required consents); and (ii) either (A) the
amendment does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 12.01.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Servicer, the Master
Servicer, the Securities Administrator or the Trustee and the appointment
of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly furnish
to each Rating Agency copies (which may be provided electronically via the
Securities Administrator's website) of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor, Xxxxxx
Xxxxxxx ABS Capital I Inc. (1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance,
0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (2) Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000; (3) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan Operations, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (4) Xxxxx Xxxxxx, Xxxxxx Xxxxxxx - RFPG, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (5) in the case of a
direction or demand, notification to the following email addresses:
Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx, Xxxxxx.Xxxxxxx@xxxxxxxxxxxxx.xxx,
Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Saxon, to Saxon Mortgage Services,
Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx 00000 Attention: Xxxxx Xxxx,
President, with a copy to Saxon Capital, Inc., 0000 Xxx Xxxx, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxxx 00000, Attention: Legal Department, or such other address as may
be hereafter furnished to the parties in writing; (c) in the case of Xxxxx Fargo
in its capacity as Securities Administrator and Master Servicer, 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, or such other address as may be
hereafter furnished to the other parties hereto and the Swap Provider by Xxxxx
Fargo in writing or, in the case of Mortgage Loan document release requests and
other document inquiries to 00 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000, Attention: MSAC 2007-NC4 or such other address as the
Securities Administrator may hereafter furnish to the other parties hereto and
the Swap Provider by the Securities Administrator in writing; provided, however,
all reports, statements, certifications and information required to be provided
to the Securities Administrator pursuant to Section 8.12 for filing shall be
electronically forwarded to xxx.xxx.xxxxxxxxxxxx@xxxxxxxxxx.xxx; (d) in the case
of the Trustee, to Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration-MS07C4 or
such other address as the Trustee may hereafter furnish to the other parties
hereto and the Swap Provider by the Trustee in writing; (e) in the case of the
Swap Provider, Xxxxxx Xxxxxxx Capital Services Inc., Transaction Management
Group, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Chief Legal
Officer, Facsimile No. (000) 000-0000, or such other address as may be hereafter
furnished to the other parties hereto by the Swap Provider in writing; (f) in
the case of the Certificate Insurer, Financial Guaranty Insurance Company, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Surveillance, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 and (g) in the
case of each of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.04,
this Agreement may not be assigned by the Servicer without the prior written
consent of the Trustee, the Certificate Insurer and the Depositor; provided,
however, the Servicer is hereby authorized to enter into an Advance Facility
under which (l) the Servicer sells, assigns or pledges to an Advancing Person
the Servicer's rights under this Agreement to be reimbursed for any P&I Advances
or Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
P&I Advances or Servicing Advances required to be made by the Servicer pursuant
to this Agreement. No consent of the Trustee, Certificateholders or any other
party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
P&I Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related P&I Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding xxxxxxxxxxxx X&X Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each applicable Mortgage Loan. The Servicer
shall remain entitled to be reimbursed by the Advancing Person or Advance
Facility trustee for all P&I Advances and Servicing Advances funded by the
Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 12.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 12.07, including
amendments to add provisions relating to a successor Servicer, with the consent
of the Certificate Insurer, may be entered into by the Trustee, the Depositor,
the Master Servicer, the Securities Administrator and the Servicer without the
consent of any Certificateholder, notwithstanding anything to the contrary in
this Agreement, upon receipt by the Trustee of an Opinion of Counsel that such
amendment has no material adverse effect on the Certificateholders or written
confirmation from the Rating Agencies that such amendment will not adversely
affect the ratings on the Certificates (without giving effect to the Certificate
Insurance Policy). Prior to entering into an Advance Facility, the Servicer
shall notify the lender under such facility in writing that: (a) the Advances
financed by and/or pledged to the lender are obligations owed to the Servicer on
a non-recourse basis payable only from the cash flows and proceeds received
under this Agreement for reimbursement of Advances only to the extent provided
herein, and none of the Trustee, the Securities Administrator and the Trust are
otherwise obligated or liable to repay any Advances financed by the lender; (b)
the Servicer will be responsible for remitting to the lender the applicable
amounts collected by it as reimbursement for Advances funded by the lender,
subject to the restrictions and priorities created in this Agreement; and (c)
none of the Securities Administrator, the Master Servicer or the Trustee shall
have any responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
Section 12.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third-party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights. The Servicer agrees that,
on 5 Business Days prior notice, it will permit any representative of the
Depositor, the Master Servicer, the Certificate Insurer or the Trustee during
such Person's normal business hours, to examine all the books of account,
records, reports and other papers of such Person relating to the Mortgage Loans,
to make copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants selected by the Depositor, the Master
Servicer or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of the Servicer incident to the exercise by
the Depositor, the Master Servicer, the Certificate Insurer or the Trustee of
any right under this Section 12.09 shall be borne by the Servicer.
Section 12.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 12.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 12.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.13 Rights of the Third Parties. The Swap Provider, the
Certificate Insurer and each Person entitled to indemnification hereunder who is
not a party hereto, shall be deemed a third-party beneficiary of this Agreement
to the same extent as if it were a party hereto and shall have the right to
enforce its rights under this Agreement.
Section 12.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with all reasonable requests made by the Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, the Servicer,
the Securities Administrator, the Master Servicer and the Trustee shall
cooperate fully with the Depositor to deliver to the Depositor (including its
assignees or designees), any and all statements, reports, certifications,
records and any other information available to such party and reasonably
necessary in the good faith determination of the Depositor to permit the
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Servicer, the Securities Administrator, the Master
Servicer and the Trustee, as applicable, reasonably believed by the Depositor to
be necessary in order to effect such compliance.
Section 12.15 The Certificate Insurer Default. Any right conferred
to the Certificate Insurer under this Agreement shall be suspended during any
period in which a Certificate Insurer Default exists or if and to the extent the
Certificate Insurer has delivered its written renunciation of all of its rights
under this Agreement. At such time as the Class A Certificates are no longer
outstanding under this Agreement, and no amounts owed to the Certificate Insurer
under this Agreement, under the Certificate Insurance Policy and under the
Insurance Agreement remain unpaid, the Certificate Insurer's rights under this
Agreement shall terminate.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer and
President
XXXXX FARGO BANK NATIONAL ASSOCIATION,
as Master Servicer and Securities
Administrator
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signer
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Securities Administrator and the Trustee
and not attached to the Pooling and Servicing Agreement)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates,
Series 2007-NC4
Representations and Warranties of Saxon
---------------------------------------
Saxon hereby makes with respect to the Mortgage Loans the following
representations and warranties to the Depositor, the Master Servicer, the
Securities Administrator, the Certificate Insurer and the Trustee as of the
Closing Date. Capitalized terms used but not otherwise defined shall have the
meaning ascribed thereto in the Agreement to which this Schedule II is attached.
(a) The Servicer is duly organized as a corporation and is validly
existing and in good standing under the laws of the State of Texas and is
licensed and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by the Servicer in
any state in which a Mortgaged Property securing a Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(b) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(c) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect,
(x) the ability of the Servicer to perform its obligations under this
Pooling and Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Servicer taken as a whole;
(d) The Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac;
(e) No action, suit, proceeding or investigation is pending or, to
the best of the Servicer's knowledge, threatened against the Servicer,
before any court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may reasonably be expected to result in a material adverse
change in business, operations, financial conditions, properties or assets
of the Servicer, or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted, or
in any material liability on the part of the Servicer, or which would draw
into question the validity of this Pooling and Servicing Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with
the obligations of the Servicer contemplated herein, or which would be
likely to impair materially the ability of the Servicer to perform under
the terms of this Pooling and Servicing Agreement;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(g) The Servicer represents that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement; and
a. With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer
provided monthly reports to the three credit repositories, the
Servicer has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulation, accurate
and complete information i.e., favorable and unfavorable) on
its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the national credit
repositories), on a monthly basis.
SCHEDULE II-A
Further Representations and Warranties of Saxon
-----------------------------------------------
(h) Mortgage Loan Schedule. With respect to each Mortgage Loan, as
of the applicable Cut-off Date, each of (1) the last Due Date on which a payment
was actually applied to the outstanding principal balance of each Mortgage Loan;
(2) the Stated Principal Balance of each Mortgage Loan, after deduction of
payments of principal due and collected on or before the applicable Cut-off
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in each case,
as listed on the Mortgage Loan Schedule, is true and correct;
(i) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled Payment
is 30 days or more Delinquent as of the Cut-off Date nor has any Payment been 30
days or more Delinquent at any time from and after the Servicing Transfer Date
through the Cut-off Date;
(j) Original Terms Unmodified. With respect to each Mortgage Loan,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified by or on behalf of the Servicer from and after the Servicing
Transfer Date;
(k) No Satisfaction of Mortgage. With respect to each Mortgage Loan,
since the related Servicing Transfer Date and except for prepayments in full,
the Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. From
and after the Servicing Transfer Date, the Servicer has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Servicer waived any default resulting from any action or inaction by the
Mortgagor;
(l) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note;
(m) Escrow Payments/Interest Rate Adjustments. With respect to each
Mortgage Loan, since the Servicing Transfer Date, the servicing and collection
practices used by the Servicer with respect to such Mortgage Loan have been in
all material respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all material respects legal
and proper. With respect to escrow deposits and Escrow Payments, if any, all
such deposits and payments received by the Servicer are in the possession of, or
under the control of, the Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage (to the
extent not otherwise prohibited by law). From and after the Servicing Transfer
Date, all Mortgage Rate adjustments (if any) have been made in strict compliance
with state and federal law and the terms of the related Mortgage Note;
(n) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage and
coverage for such other hazards as are customary in the area where the Mortgaged
Property is located; and
(o) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has notified the
Servicer, and the Servicer has no knowledge, of any relief requested and allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
or local law.
SCHEDULE III
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates,
Series 2007-NC4
Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to the Mortgage Loans
---------------------------------------
The Depositor hereby makes with respect to the Mortgage Loans the
following representations and warranties to the Master Servicer, the Securities
Administrator, the Certificate Insurer and the Trustee as of the Closing Date.
Capitalized terms used but not otherwise defined shall have the meaning ascribed
thereto in the Agreement to which this Schedule III is attached.
(1) Immediately prior to the transfer of the Mortgage Loans by the Depositor
to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or
encumbrances whatsoever.
EXHIBIT A
[To be added to any Class A-1 Certificate while it remains a Private
Certificate:
IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO
THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN
THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE
FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 00-00, XXXX 00-0, XXXX 00-00, XXXX 00-00 XX XXXX 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
A-2d-[ ]
M-1-[ ]
M-2- [ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
B-4-[ ]
B-5-[ ]
Cut-off Date : May 1, 2007
First Distribution Date : June 29, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $[ ]
Initial Certificate Balances of all
Certificates of this Class :
[A-1] $208,600,000
[A-2a] $337,200,000
[A-2b] $ 68,250,000
[A-2c] $165,000,000
[A-2d] $ 96,775,000
[M-1] $ 12,609,000
[M-2] $ 19,965,000
[B-1] $ 18,389,000
[B-2] $ 9,457,000
[B-3] $ 21,016,000
[B-4] $ 13,135,000
[B-5] $ 19,965,000
CUSIP : [A-1] 61755E AA6
[A-2a] 61755E XX0
[X-0x] 61755E AC2
[A-2c] 61755E AD0
[A-2d] 61755E AE8
[M-1] 61755E AF5
[M-2] 61755E AG3
[B-1] 61755E AH1
[B-2] 61755E AJ7
[B-3] 61755E AK4
[B-4] 61755E XX0
[X-0] 61755E AM0
ISIN : [A-1] US61755EAA64
[A-2a] US61755EAB48
[A-2b] US61755EAC21
[A-2c] US61755EAD04
[A-2d] US61755EAE86
[M-1] US61755EAF51
[M-2] XX00000XXX00
[X-0] US61755EAH18
[B-2] US61755EAJ73
[B-3] US61755EAK47
[B-4] US61755EAL20
[B-5] US61755EAM03
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator, the Trustee or any
other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as servicer, and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:____________________________________
Authenticated:
By _________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:________________________________________
_____________________________________________________________________________.
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or __________________________________ , as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
NO TRANSFER OF ANY CLASS P CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS P CERTIFICATE PROVIDES TO THE SECURITIES ADMINISTRATOR
THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN,
W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND
AGREES TO UPDATE SUCH FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS
REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON
LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH
TRANSFER. UNDER THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM
FROM A TRANSFEREE OF ANY CLASS P CERTIFICATE, THE SECURITIES ADMINISTRATOR SHALL
FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE SWAP PROVIDER. EACH
HOLDER OF A CLASS P CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE SECURITIES ADMINISTRATOR FORWARDING TO THE SWAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS P
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : P-1
Cut-off Date : May 1, 2007
First Distribution Date : June 29, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4
Class P
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator, the Trustee or any other party to the
Agreement referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as servicer, and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purposes, or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Securities Administrator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act or is being made
pursuant to the Securities Act, which Opinion of Counsel shall be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:____________________________________
Authenticated:
By _________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee, nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or __________________________________ , as its agent.
EXHIBIT C-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : May 1, 2007
First Distribution Date : June 29, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4
Class R
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Securities Administrator,
the Trustee or any other party to the Agreement referred to below or any of
their respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National
Association, as master servicer (the "Master Servicer") and as securities
administrator (the "Securities Administrator"), Saxon Mortgage Services, Inc.,
as servicer, and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Servicer, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
(i) Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By ____________________________________
Authenticated:
By _________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_____________________________________________________________________________.
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or __________________________________ , as its agent.
EXHIBIT C-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : RX-1
Cut-off Date : May 1, 2007
First Distribution Date : June 29, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4
Class RX
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class RX Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any other party to the Agreement referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class RX Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National
Association, as master servicer (the "Master Servicer") and as securities
administrator (the "Securities Administrator"), Saxon Mortgage Services, Inc.,
as servicer, and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class RX
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class RX Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Servicer, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class RX Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class RX Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class RX Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class RX Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class RX Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class RX Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class RX Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class RX Certificate, (C) not to cause income with respect to the Class RX
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class RX Certificate or to cause the Transfer of the Ownership Interest in this
Class RX Certificate to any other Person if it has actual knowledge that such
Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class RX Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
(i) Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By ____________________________________
Authenticated:
By _________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or __________________________________ , as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN
INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE DEPOSITOR OR THE SERVICER
TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS X CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS X CERTIFICATE PROVIDES TO THE SECURITIES ADMINISTRATOR
THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN,
W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND
AGREES TO UPDATE SUCH FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS
REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON
LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH
TRANSFER. UNDER THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM
FROM A TRANSFEREE OF ANY CLASS X CERTIFICATE, THE SECURITIES ADMINISTRATOR SHALL
FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE SWAP PROVIDER. EACH
HOLDER OF A CLASS X CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE SECURITIES ADMINISTRATOR FORWARDING TO THE SWAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS X
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : X-1
Cut-off Date : May 1, 2007
First Distribution Date : June 29, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4
Class X
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator, the Trustee or any other party to the
Agreement referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as servicer, and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Securities Administrator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act or is being made
pursuant to the Securities Act, which Opinion of Counsel shall be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or Section 4975
of the Code or any materially similar provisions of applicable Federal, state or
local law ("Similar Law") or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator, or (ii) if the transferee is an insurance company,
a representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60, or (iii) in the case of a
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Securities Administrator,
the Servicer or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Depositor,
the Securities Administrator or the Servicer to any obligation in addition to
those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
(i) Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:____________________________________
Authenticated:
By _________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee not the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, the Trustee and their
respective agents may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Securities Administrator, the Trustee nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to ______________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or __________________________________ , as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
June 20, 2007
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: MSAC 2007-NC4
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Communications Department
Re: Pooling and Servicing Agreement, dated as of May 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule for which the undersigned is acting as
Trustee (other than any Mortgage Loan listed in the attached schedule), it has
received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness, suitability, perfection or priority of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF TRUSTEE
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: MSAC 2007-NC4
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Communications Department
Re: Pooling and Servicing Agreement, dated as of May 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original or county certified recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage endorsed in blank, which may be
included in a blanket assignment or assignments in the form provided in
Section 2.01 of the Pooling and Servicing Agreement; or, if the Original
Loan Seller or the Depositor has certified that the related Mortgage has
not been returned from the applicable recording office, a copy of the
assignment of the Mortgage (excluding information to be provided by the
recording office).
(iv) Except with respect to MERS Designated Mortgage Loans, the
original or county certified recorded assignment or assignments of the
Mortgage showing a complete chain of assignment from the originator to the
last endorsee.
(v) The original or copy of lender's title policy, and all riders
thereto or any one of an original title binder, an original preliminary
title report or an original title commitment;
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7) and (9)
of the Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, effectiveness, suitability, perfection or
priority of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the Trustee has made no determination and makes no representations as
to whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as Noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-NC4,
Mortgage Pass-Through Certificates,
Series 2007-NC4
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
a. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class
[R][RX] Certificate (the "Residual Certificate") issued
pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx
Fargo Bank, National Association ("Xxxxx Fargo"), as
Securities Administrator and as Master Servicer, Saxon
Mortgage Services, Inc., as Servicer, and Deutsche Bank
National Trust Company, as Trustee (the "Trustee").
Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee for the benefit of the
Depositor and the Trustee.
b. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The
Transferee is acquiring its Ownership Interest in the Residual
Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
c. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Residual Certificate
to Persons that are Non-Permitted Transferees; (ii) such tax
will be imposed on the transferor, or, if such Transfer is
through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on
the agent; and (iii) the Person otherwise liable for the tax
shall be relieved of liability for the tax if the subsequent
Transferee furnished to such Person an affidavit that such
subsequent Transferee is a Permitted Transferee and, at the
time of Transfer, such Person does not have actual knowledge
that the affidavit is false.
d. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the
Residual Certificate if at any time during the taxable year of
the pass-through entity a Person that is a Non-Permitted
Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed
for any period with respect to which the record holder
furnishes to the pass-through entity an affidavit that such
record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)
e. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Residual
Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees
to be bound by and to abide by the provisions of Section
5.02(c) of the Agreement and the restrictions noted on the
face of the Residual Certificate. The Transferee understands
and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
f. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its
Ownership Interest in the Residual Certificate, and in
connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause
any Ownership Interest to be Transferred to any Person that
the Transferee knows is a Non-Permitted Transferee. In
connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate
substantially in the form set forth as Exhibit H to the
Agreement (a "Transferor Certificate") to the effect that,
among other things, such Transferee has no actual knowledge
that the Person to which the Transfer is to be made is a
Non-Permitted Transferee.
g. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be
paid with respect to the Residual Certificate. The Transferee
has historically paid its debts as they have come due and
intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the
Residual Certificate as they become due.
h. The Transferee's taxpayer identification number is __________.
i. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
j. The Transferee is aware that the Residual Certificate may be a
"noneconomic residual interest" within the meaning of proposed
Treasury regulations promulgated pursuant to the Code and that
the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such
residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
k. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an
applicable income tax treaty, of the Transferee or any other
U.S. Person.
l. Check the applicable paragraph:
/ / The present value of the anticipated tax liabilities
associated with holding the Residual Certificate, as
applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Residual Certificate;
(ii) the present value of the expected future distributions on such
Residual Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Residual Certificate as the related REMIC
generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
/ / The transfer of the Residual Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Residual Certificate will only be taxed
in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Residual Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Residual Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
None of the above.
m. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975
of the Code or a plan subject to any Federal, state or local
law that is substantially similar to Title I of ERISA or
Section 4975 of the Code, and the Transferee is not acting on
behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 20__.
________________________________
Print Name of Transferee
By:________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 20__.
____________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [__]
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: MSAC 2007-NC4
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-NC4,
Mortgage Pass-Through Certificates, Series 2007-NC4, Class
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
________________________________
Print Name of Transferor
By:______________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.,
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [______]
Xxxxxx Xxxxxxx Capital Services Inc.,
as Swap Provider
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: NY ISD SPV Team
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: MSAC 2007-NC4
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-NC4,
Mortgage Pass-Through Certificates, Series 2007-NC4, Class
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class X-0, Xxxxx X-0x,
Xxxxx X-0x, Class A-2c, Class A-2d, Class M-1, Class M-2, Class B-1, Class B-2,
Class B-3, Class B-4 or Class B-5 Certificate or we are not an employee benefit
plan that is subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or a plan or arrangement that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, or a plan subject
to materially similar provisions of applicable federal, state or local law, nor
are we acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such acquisition or, with respect to a
Class X Certificate, the purchaser is an insurance company that is purchasing
this certificate with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
In connection with our purchase of the Certificates, we acknowledge
and agree that (i) none of you nor any of your affiliates is acting as a
fiduciary or financial or investment adviser for us; (ii) we are not relying
(for purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of any of you or your
affiliates with respect to the Certificates; (iii) none of you nor any of your
affiliates has given to us (directly or indirectly through any other person) any
assurance, guarantee or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2007-NC4 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2007-NC4 and the other material transaction documents related
thereto.
The Transferee's taxpayer identification number is __________. The Transferee
attaches hereto Forms W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments)
or W-9. The Transferee hereby consents to the attached Forms being provided to
the Swap Provider.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $ (1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution,
which is supervised and examined by a State or Federal
authority having supervision over any such institutions
or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
____ Broker dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the
District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
____ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940.
3. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
________________________________
Print Name of Transferee
By:_______________________________
Name:
Title:
Date:______________________________
-------------------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $ in securities (other than
the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "Securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
IF AN ADVISER:
______________________________________
Print Name of Buyer
Date:__________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: Trustee
Re: In connection with the administration of the Mortgage Loans
held by you as the Trustee on behalf of the
Certificateholders, pursuant to the Pooling and Servicing
Agreement, dated as of May 1, 2007, among Xxxxxx Xxxxxxx ABS
Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to its
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to its
Collection Account pursuant to the Pooling and Servicing
Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other
(explain).____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the Trustee, please acknowledge your receipt by signing in the space
indicated below, and returning this form if requested by us.
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By:____________________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Sponsor and which shall be retained by the Servicer or delivered to and retained
by the Trustee:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and
signed (which may be by facsimile signature) in the name of the last
endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, unless the Trustee is
advised in writing by the Depositor that state law does not so
allow;
(b) the original of any guaranty executed in connection with the
Mortgage Note, if any;
(c) the original Mortgage, or photocopy where an original is not
required, with evidence of recording thereon or a certified true
copy of such Mortgage submitted for recording. If, in connection
with any Mortgage Loan, the original Mortgage cannot be delivered
with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the
original recorded Mortgage, the Depositor shall deliver or cause to
be delivered to the Trustee a photocopy of such Mortgage certified
by the Original Loan Seller or the Depositor, title company, escrow
company or attorney, as applicable, to be a true and complete copy
of such Mortgage and shall forward or cause to be forwarded to the
Trustee such original recorded Mortgage within 14 days following the
Depositor's receipt of such Mortgage from the applicable public
recording office; or in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording;
(e) the original Assignment of Mortgage for each Mortgage Loan endorsed
in blank, which may be included in a blanket assignment or
assignments (except with respect to MERS Designated Mortgage Loans);
(f) the original, or photocopy where an original is not required, of all
intervening assignments of Mortgage (if any) evidencing a complete
chain of assignment from the applicable originator (or MERS with
respect to each MERS Designated Mortgage Loan) to the last endorsee
with evidence of recording thereon or a certified true copy of such
intervening assignments of Mortgage submitted for recording, or if
any such intervening assignment has not been returned from the
applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of
Mortgage, the Depositor shall deliver or cause to be delivered a
photocopy of such intervening assignment, certified by the Original
Loan Seller or the Depositor, title company, escrow company or
attorney, as applicable, to be a true and complete copy of such
intervening assignment and shall forward or cause to be forwarded to
the Trustee such original recorded intervening assignment within 14
days following the Depositor's receipt of such from the applicable
public recording office; or in the case of an intervening assignment
where a public recording office retains the original recorded
intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment;
(g) the original mortgagee title insurance policy, a photocopy of the
mortgage title insurance policy, or attorney's opinion of title and
abstract of title, or, in the event such title policy is
unavailable, a copy of the related policy binder or commitment for
title from the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of down
payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural engineer's
report, water potability and septic certification.
(t) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
-----------------------
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC4, issued pursuant
to the Pooling and Servicing Agreement, dated as of May 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------------
I, [identify the certifying individual], certify that:
a. I have reviewed this annual report on Form 10-K ("Annual Report"),
and all reports on Form 10-D (collectively with this Annual Report,
the "Reports") required to be filed in respect of period covered by
this Annual Report, of the Trust;
b. Based on my knowledge, the Reports, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this Annual Report;
c. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period
covered by this Annual Report is included in the Reports;
d. Based on my knowledge and the compliance statements required in this
Annual Report under Item 1123 of Regulation AB, and except as
disclosed in the Reports, the Servicer have fulfilled their
obligations under the Pooling and Servicing Agreement in all
material respects; and
e. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria required
to be included in this Annual Report in accordance with Item 1122 of
Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been
included as an exhibit to this Annual Report, except as otherwise
disclosed in this Annual Report. Any material instances of
non-compliance described in such reports have been disclosed in this
Annual Report.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee, the
Master Servicer, the Securities Administrator and the Servicer.
Date: ________________________________
____________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF ANNUAL CERTIFICATION TO BE
PROVIDED TO THE MASTER SERVICER
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC4, issued pursuant
to the Pooling and Servicing Agreement, dated as of May 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------------
I, ________________________________, the _______________________ of [NAME
OF COMPANY], certify to [the Purchaser], [the Depositor], and the Master
Servicer [,Trustee], and their officers, with the knowledge and intent
that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[ ] that were delivered by the
Company to Xxxxx Fargo pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Company Servicing
Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to Xxxxx Fargo;
(4) I am responsible for reviewing the activities performed by the Company
as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer and
Subcontractor pursuant to the Agreement, have been provided to Xxxxx
Fargo. Any material instances of noncompliance described in such reports
have been disclosed to Xxxxx Fargo. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date: _________________________
By:
Name: ________________________________
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY SAXON TO DEPOSITOR
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC4, issued pursuant
to the Pooling and Servicing Agreement, dated as of May 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer and as Securities
Administrator, Saxon Mortgage Services, Inc., as Servicer, and
Deutsche Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust, Series 2007-NC4
--------------------------------------------------------------------
Saxon certifies to the Depositor and the Trustee, and their
respective officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
x. Xxxxx has reviewed the servicer compliance statement of Saxon and
the compliance statements of each Subservicer, if any, engaged by Saxon
provided to the Depositor and the Trustee for the Trust's fiscal year
[___] in accordance with Item 1123 of Regulation AB (each a "Compliance
Statement"), the report on assessment of Saxon's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria") and reports on assessment of compliance with
servicing criteria for asset-backed securities of Saxon and of each
Subservicer or Subcontractor, if any, engaged or utilized by Saxon
provided to the Depositor and the Trustee for the Trust's fiscal year
[___] in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation
AB (each a "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and
15d-18 under the Exchange Act and Section 1122(b) of Regulation AB related
to each Servicing Assessment (each an "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by Saxon during 200[ ] that were
delivered or caused to be delivered by Saxon pursuant to the Agreement
(collectively, the "Servicing Information");
b. Based on Saxon's knowledge, the Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicing Information;
c. Based on Saxon's knowledge, the servicing information required to
be provided to the Trustee by Saxon pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;
d. Based on Saxon's knowledge and the compliance review conducted in
preparing Compliance Statement of Saxon and, if applicable, reviewing each
Compliance Statement of each Subservicer, if any, engaged by Saxon, and
except as disclosed in such Compliance Statement[(s)], Saxon [(directly
and through its Subservicer, if any)] has fulfilled its obligations under
the Pooling and Servicing Agreement in all material respects.
e. Each Servicing Assessment of Saxon and of each Subservicer or
Subcontractor, if any, engaged or utilized by Saxon and its related
Attestation Report required to be included in the Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and 15d-18 has been provided to the Depositor and the Trustee. Any
material instances of non-compliance are described in any such Servicing
Assessment or Attestation Report.
Date: ______________________________
By: ______________________________
Name: ______________________________
Title: ______________________________
EXHIBIT O
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company,
a national banking association organized and existing under the laws of the
United States, and having its principal place of business at 0000 Xxxx Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration MSAC
2007-NC4, as Trustee (the "Trustee"), pursuant to that Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-NC4 Pooling and Servicing Agreement, dated as of May
1, 2007, among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor"), Xxxxx Fargo Bank, National Association ("Xxxxx Fargo"), as master
servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as Servicer
("Saxon"), and the Trustee, hereby constitutes and appoints Saxon by and through
Saxon's officers, the Trustee's true and lawful Attorney in fact, in the
Trustee's name, place and stead and for the Trustee's benefit, in connection
with all mortgage loans serviced by Saxon pursuant to the Agreement solely for
the purpose of performing such acts and executing such documents in the name of
the Trustee necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust" respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which Saxon
is acting as servicer. This Appointment shall apply only to the following
enumerated transactions and nothing herein or in the Agreement shall be
construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose of
correcting the Mortgage or Deed of Trust to conform same to the
original intent of the parties thereto or to correct title errors
discovered after such title insurance was issued; provided that (i)
said modification or re-recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as
insured and (ii) otherwise conforms to the provisions of the
Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain or any other subordination
permissible under the Pooling and Servicing Agreement; this section
shall include, without limitation, the execution of partial
satisfactions/releases, partial reconveyances or the execution or
requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of
Trust, in accordance with state law and the Deed of
Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents
and performance of such other actions as may be
necessary under the terms of the Mortgage, Deed of Trust
or state law to expeditiously complete said transactions
in paragraphs 8.a. through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
11. Actions to preserve or enforce the lien created by the Mortgage or
Deed of Trust, including but not limited to assertion of claims
under title insurance policies and through judicial or
administration action.
The undersigned gives said Attorney-in-fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-fact shall
be effective as of June 20, 2007.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by Saxon to the Trustee under the Agreement, or (ii) be
construed to xxxxx Xxxxx the power to initiate or defend any suit, litigation or
proceeding in the name of the Trustee except as specifically provided for
herein. If Saxon receives any notice of suit, litigation or proceeding in the
name of the Trustee, then Saxon shall promptly forward a copy of same to the
Trustee.
This limited power of attorney is not intended to extend the powers
granted to Saxon under the Agreement or to allow Saxon to take any action with
respect to Mortgages, Deeds of Trust or Mortgage Notes not authorized by the
Agreement.
Saxon hereby agrees to indemnify and hold the Trustee and its
directors, officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by Saxon of the powers
granted to it hereunder. The foregoing indemnity shall survive the termination
of this Limited Power of Attorney and the Agreement or the earlier resignation
or removal of the Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as
Trustee has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by a duly elected and
authorized signatory this ___________ day of ____________.
Deutsche Bank National Trust Company,
as Trustee
By:____________________________________
Name:
Title:
Acknowledged and Agreed
Saxon Mortgage Services, Inc.
By:____________________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of Deutsche Bank National Trust Company, as
Trustee for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4, personally known
to me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
______________________________________
Notary Public, State of California
EXHIBIT P
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Securities
Administrator], [the Master Servicer], [the Servicer], [each Subservicer] and
[each Subcontractor] shall address, at a minimum, the criteria identified as
below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
------------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the transaction Securities
1122(d)(1)(i) agreements. Administrator/Servicer
If any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party's Securities
1122(d)(1)(ii) performance and compliance with such servicing activities. Administrator/Servicer
Any requirements in the transaction agreements to maintain a back-up
1122(d)(1)(iii) servicer for the mortgage loans are maintained. N/A
A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period
in the amount of coverage required by and otherwise in accordance with
1122(d)(1)(iv) the terms of the transaction agreements. Servicer/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate custodial
bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified
1122(d)(2)(i) in the transaction agreements. Servicer/Master Servicer
Disbursements made via wire transfer on behalf of an obligor or to an Servicer/Securities
1122(d)(2)(ii) investor are made only by authorized personnel. Administrator/Master Servicer
Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances,
are made, reviewed and approved as specified in the transaction
1122(d)(2)(iii) agreements. Servicer/Master Servicer
The related accounts for the transaction, such as cash reserve accounts
or accounts established as a form of overcollateralization, are Servicer/Securities
separately maintained (e.g., with respect to commingling of cash) as set Administrator/Master Servicer
1122(d)(2)(iv) forth in the transaction agreements.
Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of
this criterion, "federally insured depository institution" with respect
to a foreign financial institution means a foreign financial institution Servicer/Securities
that meets the requirements of Rule 13k-1(b)(1) of the Securities Administrator/Master Servicer
1122(d)(2)(v) Exchange Act.
Servicer/Securities
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. Administrator/Master Servicer
Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain explanations Servicer/Securities
for reconciling items. These reconciling items are resolved within 90 Administrator/Master Servicer
calendar days of their original identification, or such other number of
1122(d)(2)(vii) days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
------------------------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the Commission,
are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and regulations; and (D) Servicer/Securities
agree with investors' or the trustee's records as to the total unpaid Administrator/Master Servicer
1122(d)(3)(i) principal balance and number of mortgage loans serviced by the Servicer.
Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the Servicer/Securities
1122(d)(3)(ii) transaction agreements. Administrator/Master Servicer
Disbursements made to an investor are posted within two business days to
the Servicer's investor records, or such other number of days specified Servicer/Securities
1122(d)(3)(iii) in the transaction agreements. Administrator/Master Servicer
Amounts remitted to investors per the investor reports agree with Servicer/Securities
1122(d)(3)(iv) cancelled checks, or other form of payment, or custodial bank statements. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
------------------------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required by
1122(d)(4)(i) the transaction agreements or related mortgage loan documents. Trustee/Servicer/
Mortgage loan and related documents are safeguarded as required by the
1122(d)(4)(ii) transaction agreements. Trustee/Servicer/
Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or requirements Securities
1122(d)(4)(iii) in the transaction agreements. Administrator/Servicer
Payments on mortgage loans, including any payoffs, made in accordance
with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt,
or such other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in Servicer
1122(d)(4)(iv) accordance with the related mortgage loan documents.
The Servicer's records regarding the mortgage loans agree with the
1122(d)(4)(v) Servicer's records with respect to an obligor's unpaid principal balance. Servicer
Changes with respect to the terms or status of an obligor's mortgage
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
1122(d)(4)(vi) agreements and related pool asset documents. Servicer
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the Servicer
1122(d)(4)(vii) transaction agreements.
Records documenting collection efforts are maintained during the period a
mortgage loan is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or
such other period specified in the transaction agreements, and describe
the entity's activities in monitoring delinquent mortgage loans
including, for example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary (e.g., illness or Servicer
1122(d)(4)(viii) unemployment).
Adjustments to interest rates or rates of return for mortgage loans with
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents. Servicer
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual basis, or such other
period specified in the transaction agreements; (B) interest on such
funds is paid, or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds are returned
to the obligor within 30 calendar days of full repayment of the related Servicer
mortgage loans, or such other number of days specified in the transaction
1122(d)(4)(x) agreements.
Payments made on behalf of an obligor (such as tax or insurance payments)
are made on or before the related penalty or expiration dates, as
indicated on the appropriate bills or notices for such payments, provided
that such support has been received by the servicer at least 30 calendar
days prior to these dates, or such other number of days specified in the Servicer
1122(d)(4)(xi) transaction agreements.
Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error or
1122(d)(4)(xii) omission. Servicer
Disbursements made on behalf of an obligor are posted within two business
days to the obligor's records maintained by the servicer, or such other Servicer
1122(d)(4)(xiii) number of days specified in the transaction agreements.
Delinquencies, charge-offs and uncollectible accounts are recognized and Servicer/Securities
1122(d)(4)(xiv) recorded in accordance with the transaction agreements. Administrator
Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in Securities Administrator
1122(d)(4)(xv) the transaction agreements.
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EXHIBIT Q
Additional Form 10-D Disclosure
---------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
---------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------------------------------------------------------
Item 1: Distribution and Pool Performance
Information
---------------------------------------------------------------------------------------------------------
Information included in the Monthly Statement Servicer/
Master Servicer/
Securities Administrator
---------------------------------------------------------------------------------------------------------
Any information required by Item 1121 of Regulation Depositor
AB which is NOT included on the Monthly Statement
---------------------------------------------------------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------------------------------------------------------
o Issuing Entity Master Servicer/Securities Administrator/Servicer
---------------------------------------------------------------------------------------------------------
o Sponsor Sponsor (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Original Loan Seller Depositor
---------------------------------------------------------------------------------------------------------
o Any Item 1110(b) of Regulation AB Originator Depositor
(other than the Original Loan Seller)
---------------------------------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation Servicer (other Servicer
than the Master Servicer or Securities
Administrator)
---------------------------------------------------------------------------------------------------------
o Any other party contemplated by Item 1100(d)(1) Depositor
of Regulation AB
---------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Depositor
---------------------------------------------------------------------------------------------------------
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the
same asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales
and use of proceeds information in Item 701 of
Regulation S-K. Pricing information can be omitted if
securities were not registered.
---------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default
(after expiration of any grace period and provision
of any required notice)
---------------------------------------------------------------------------------------------------------
Item 5: Submission of Matters to a Vote of Depositor/Securities Administrator
Security Holders
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool Assets N/A
Item 1112(b) of Regulation AB - Significant Obligor
Financial Information*
---------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Item.
---------------------------------------------------------------------------------------------------------
Item 7: Significant Enhancement Provider
Information
Item 1114(b)(2) of Regulation AB - Credit
Enhancement Provider Financial Information*
---------------------------------------------------------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof)
or effecting incorporation by reference
---------------------------------------------------------------------------------------------------------
Item 1115(b) of Regulation AB - Derivative
Counterparty Financial Information*
---------------------------------------------------------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof)
or effecting incorporation by reference
---------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
---------------------------------------------------------------------------------------------------------
Item 8: Other Information Any party to this Agreement responsible for the
applicable Form 8-K Disclosure item
Disclose any information required to be reported on
Form 8-K during the period covered by the Form 10-D but
not reported
---------------------------------------------------------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
---------------------------------------------------------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, Depositor
such as material agreements
---------------------------------------------------------------------------------------------------------
EXHIBIT R
Additional Form 10-K Disclosure
---------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------------------------------------------------------
Item 9B: Other Information Any party to this Agreement responsible for
disclosure items on Form 8-K
Disclose any information required to be reported on
Form 8-K during the fourth quarter covered by the Form
10-K but not reported
---------------------------------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules Securities Administrator
Depositor
---------------------------------------------------------------------------------------------------------
Item 1115(b) of Regulation AB: Derivative
Counterparty Financial Information*
---------------------------------------------------------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof)
or effecting incorporation by reference
---------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
---------------------------------------------------------------------------------------------------------
Item 1117 of Regulation AB: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------------------------------------------------------
o Issuing Entity Master Servicer/Securities Administrator/Servicer
and Depositor
---------------------------------------------------------------------------------------------------------
o Sponsor Sponsor (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------------------------------------------------------
Custodian Custodian
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Original Loan Seller Depositor
---------------------------------------------------------------------------------------------------------
o Any Item 1110(b) of Regulation AB Originator Depositor
(other than the Original Loan Seller)
---------------------------------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation AB Servicer Servicer
(other than the Master Servicer or Securities
Administrator)
---------------------------------------------------------------------------------------------------------
o Any other party contemplated by Item 1100(d)(1) Depositor
of Regulation AB
---------------------------------------------------------------------------------------------------------
Item 1119 of Regulation AB: Affiliations and
Relationships
---------------------------------------------------------------------------------------------------------
Whether (a) the Sponsor, Depositor or Issuing Depositor Depositor as to (a) Sponsor
as to (a) Entity is an affiliate of the following (if a party to this Agreement) as to (a)
parties, and (b) to the extent known and material, any
of the following parties are affiliated with one
another:
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Regulation AB Servicer
servicer
---------------------------------------------------------------------------------------------------------
Any Item 1114 or Item 1115 of Regulation AB Depositor/Sponsor (if a party to this Agreement)
Enhancement or Support Provider
---------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Depositor/Sponsor (if a party to this Agreement)
Counterparty Provider
---------------------------------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor (if a party to this Agreement)
---------------------------------------------------------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a) Sponsor as to (a)
business arrangements" other than would be obtained in (if a party to this Agreement)
an arm's length transaction between (a) the Sponsor,
Depositor or Issuing Entity on the one hand, and (b)
any of the following parties (or their affiliates) on
the other hand, that exist currently or within the past
two years and that are material to a
Certificateholder's understanding of the Certificates:
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Trustee Depositor
---------------------------------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Regulation AB Servicer
servicer
---------------------------------------------------------------------------------------------------------
o Original Loan Seller Depositor
---------------------------------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Originator (other Depositor/Sponsor (if a party to this Agreement)
than the Original Loan Seller)
---------------------------------------------------------------------------------------------------------
Any Item 1114 or Item 1115 of Regulation AB Depositor/Sponsor (if a party to this Agreement)
Enhancement or Support Provider
---------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Depositor/Sponsor (if a party to this Agreement)
Counterparty Provider
---------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB Depositor/Sponsor (if a party to this Agreement)
material party
---------------------------------------------------------------------------------------------------------
Whether there are any specific relationships Depositor as to (a) Sponsor as to (a)
involving the transaction or the pool assets (if a party to this Agreement)
between (a) the Sponsor, Depositor or Issuing
Entity on the one hand, and (b) any of the
following parties (or their affiliates) on
the other hand, that exist currently or within
the past two years and that are material:
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Trustee Depositor
---------------------------------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Regulation AB Servicer
servicer
---------------------------------------------------------------------------------------------------------
o Original Loan Seller Depositor
---------------------------------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Originator (other than Depositor/Sponsor
the Original Loan Seller) (if a party to this Agreement)
---------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Depositor/Sponsor (if a party to this Agreement)
Counterparty Provider
---------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB Depositor/Sponsor (if a party to this Agreement)
material party
---------------------------------------------------------------------------------------------------------
EXHIBIT S
Form 8-K Disclosure Information
---------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------------------------------------------------------
Item 1.01- Entry into a Material Definitive The party to this Agreement entering into such
Agreement material definitive agreement
---------------------------------------------------------------------------------------------------------
Disclosure is required regarding entry into
or amendment of any definitive agreement that
is material to the securitization, even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
---------------------------------------------------------------------------------------------------------
Item 1.02- Termination of a Material The party to this Agreement requesting
Definitive Agreement. termination of a material definitive
agreement
Disclosure is required regarding termination
of any definitive agreement that is material
to the securitization (other than expiration
in accordance with its terms), even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
---------------------------------------------------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership Depositor
Disclosure is required regarding the
bankruptcy or receivership, with respect to
any of the following:
---------------------------------------------------------------------------------------------------------
o Issuing Entity Securities Administrator/Servicer
---------------------------------------------------------------------------------------------------------
o Sponsor Depositor/Sponsor (if a party to this Agreement)
---------------------------------------------------------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------------------------------------------------------
o Any affiliated Servicer The Servicer
---------------------------------------------------------------------------------------------------------
o Other Servicer servicing 20% or more of the pool The Servicer
assets at the time of the report
---------------------------------------------------------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------------------------------------------------------
o Derivative Counterparty Depositor/Sponsor (if a party to this Agreement)
---------------------------------------------------------------------------------------------------------
Item 2.04- Triggering Events that Accelerate Master Servicer/Securities
or Increase a Direct Financial Obligation or Administrator/Depositor
an Obligation under an Off-Balance Sheet
Arrangement
Includes an early amortization, performance
trigger or other event, including event of
default, that would materially alter the
payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
---------------------------------------------------------------------------------------------------------
Item 3.03- Material Modification to Rights of Securities Administrator/Depositor
Security Holders
Disclosure is required of any material
modification to documents defining the rights
of Certificateholders, including the Pooling
and Servicing Agreement.
---------------------------------------------------------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation Depositor
or Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to
the governing documents of the issuing
entity".
---------------------------------------------------------------------------------------------------------
Item 6.01- ABS Informational and Computational Depositor
Material
---------------------------------------------------------------------------------------------------------
Item 6.02- Change of Servicer or Securities Master Servicer/Securities Administrator/Depositor/
Administrator applicable successor Servicer/applicable successor
Trustee
Requires disclosure of any removal,
replacement, substitution or addition of any
master servicer, affiliated servicer, other
servicer servicing 10% or more of pool assets
at time of report, other material servicers
or trustee.
---------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new applicable successor Servicer/applicable successor
servicer or master servicer is also required. Master Servicer/Depositor
---------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new
Trustee is also required. applicable successor Trustee
---------------------------------------------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor/Securities Administrator
Support
Covers termination of any enhancement in
manner other than by its terms, the addition
of an enhancement, or a material change in
the enhancement provided. Applies to external
credit enhancements as well as derivatives.
---------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new enhancement Depositor
provider is also required.
---------------------------------------------------------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
---------------------------------------------------------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs
by 5% or more at the time of issuance of the
securities from the description in the final
prospectus, provide updated Regulation AB
disclosure about the actual asset pool.
---------------------------------------------------------------------------------------------------------
If there are any new servicers or originators
Depositor required to be disclosed under
Regulation AB as a result of the foregoing,
provide the information called for in Items
1108 and 1110 respectively.
---------------------------------------------------------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties to this Agreement (excluding the
Trustee)
---------------------------------------------------------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the
registrant deems of importance to
certificateholders.
---------------------------------------------------------------------------------------------------------
Item 9.01- Financial Statements and Exhibits The party to this Agreement responsible for
reporting/disclosing the financial statement or
exhibit.
---------------------------------------------------------------------------------------------------------
EXHIBIT T
INTEREST RATE SWAP AGREEMENT
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of June 20, 2007
XXXXXX XXXXXXX CAPITAL and XXXXX FARGO BANK, NATIONAL
SERVICES INC. ASSOCIATION, not individually, but
solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-NC34 Mortgage
Pass-Through Certificates, Series
2007-NC4
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value on
that date in the place of the account specified in the relevant Confirmation
or otherwise pursuant to this Agreement, in freely transferable funds and in
the manner customary for payments in the required currency. Where settlement
is by delivery (that is, other than by payment), such delivery will be made
for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or
elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be deducted
or withheld from any additional amount paid by X to Y under this Section
2(d)) promptly upon the earlier of determining that such deduction or
withholding is required or receiving notice that such amount has been
assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or
other documentation reasonably acceptable to Y, evidencing such payment
to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had no
such deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that it would
not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, to make any deduction or
withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency
of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to have
been obtained by it with respect to this Agreement or any Credit Support
Document to which it is a party have been obtained and are in full force and
effect and all conditions of any such consents have been complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless
of whether enforcement is sought in a proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the legal
or commercial position of the party in receipt of such demand), with any
such form or document to be accurate and completed in a manner reasonably
satisfactory to such other party and to be executed and to be delivered with
any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform any
agreement or obligation (other than an obligation to make any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice
of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before
the thirtieth day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party to
comply with or perform any agreement or obligation to be complied with
or performed by it in accordance with any Credit Support Document if
such failure is continuing after any applicable grace period has
elapsed;
(2) the expiration or termination of such Credit Support Document or the
failing or ceasing of such Credit Support Document to be in full force
and effect for the purpose of this Agreement (in either case other than
in accordance with its terms) prior to the satisfaction of all
obligations of such party under each Transaction to which such Credit
Support Document relates without the written consent of the other party;
or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due on
the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice requirement
or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of not less than the applicable
Threshold Amount (as specified in the Schedule) which has resulted in such
Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party,
such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any applicable notice
requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or fails
or admits in writing its inability generally to pay its debts as they
become due; (3) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or
other similar law affecting creditors' rights, or a petition is
presented for its winding-up or liquidation, and, in the case of any
such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order
for its winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to
the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for
it or for all or substantially all its assets; (7) has a secured party
take possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any such process
is not dismissed, discharged, stayed or restrained, in each case within
30 days thereafter; (8) causes or is subject to any event with respect
to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the foregoing
acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under this
Agreement or any Credit Support Document to which it or its predecessor
was a party by operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without
the consent of the other party) to the performance by such resulting,
surviving or transferee entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable law
after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal
or regulatory authority with competent jurisdiction of any applicable law
after such date, it becomes unlawful (other than as a result of a breach by
the party of Section 4(b)) for such party (which will be the Affected
Party): --
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document relating
to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (y) a Change in Tax
Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect
of such Tax under Section 2(d)(i)(4) (other than by reason of Section
2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in
the Schedule as applying to the party, such party ("X"), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially
all its assets to, another entity and such action does not constitute an
event described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker than that of
X, such Credit Support Provider or such Specified Entity, as the case may
be, immediately prior to such action (and, in such event, X or its successor
or transferee, as appropriate, will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall
be as specified for such Additional Termination Event in the Schedule or
such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that Termination Event and each Affected Transaction and will also give such
other information about that Termination Event as the other party may
reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to all
Affected Transactions within 30 days after an Affected Party gives
notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
or an Additional Termination Event occurs, or a Tax Event Upon Merger
occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case of
a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or
the party which is not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one Affected
Party may, by not more than 20 days notice to the other party and provided
that the relevant Termination Event is then continuing, designate a day not
earlier than the day such notice is effective as an Early Termination Date
in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any Early
Termination Date under Section 6(e) will be payable on the day that notice
of the amount payable is effective (in the case of an Early Termination Date
which is designated or occurs as a result of an Event of Default) and on the
day which is two Local Business Days after the day on which notice of the
amount payable is effective (in the case of an Early Termination Date which
is designated as a result of a Termination Event). Such amount will be paid
together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding) the
date such amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect of
the Terminated Transactions and the Termination Currency Equivalent of
the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the Defaulting
Party will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except
that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected
Party and the party which is not the Affected Party, respectively, and,
if Loss applies and fewer than all the Transactions are being
terminated, Loss shall be calculated in respect of all Terminated
Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and an
amount will be payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement Amount of the
party with the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y;
and
(B) if Loss applies, each party will determine its Loss in respect
of this Agreement (or, if fewer than all the Transactions are being
terminated, in respect of all Terminated Transactions) and an amount
will be payable equal to one-half of the difference between the Loss
of the party with the higher Loss ("X") and the Loss of the party
with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination
Date occurs because "Automatic Early Termination" applies in respect of a
party, the amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments
or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise provided
in this Agreement neither party will be entitled to recover any additional
damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable and
may he executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to this
Agreement. The parties will specify therein or through another effective
means that any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's facsimile
machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered or
its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if this
Agreement is expressed to be governed by the laws of the State of New York;
and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
XXXXXX XXXXXXX CAPITAL SERVICES INC. XXXXX FARGO BANK, NATIONAL ASSOCIATION, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-NC4, Mortgage
Pass-Through Certificates, Series 2007-NC4
By: /s/ Xxxx X. Simmons_______________________ By:/s/ Xxxxx X. Waler_______________________
Name: Xxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory Title: Vice President
Date: Date:
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of June 20, 2007
between
XXXXXX XXXXXXX CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
a national banking association, not individually,
but solely as Securities Administrator for Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-NC4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC4
("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose
of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) Events of Default. Notwithstanding anything in this Agreement to
the contrary, the following Events of Default shall apply to the
specified party:
Party A Party B
-------------- --------------
(i) Section 5(a)(i), Failure to Pay or Deliver Applicable Applicable
(ii) Section 5(a)(ii), Breach of Agreement Applicable Not Applicable
(iii) Section 5(a)(iii), Credit Support Default Applicable Applicable
(iv) Section 5(a)(iv), Misrepresentation Applicable Not Applicable
(v) Section 5(a)(v), Default Under Specified Not Applicable Not Applicable
Transaction
(vi) Section 5(a)(vi), Cross Default Applicable Not Applicable
(vii) Section 5(a)(vii), Bankruptcy Applicable Applicable
(viii) Section 5(a)(viii), Merger Without Applicable Applicable
Assumption
provided, however, that with respect to:
(i) Section 5(a)(i) (Failure to Pay or Deliver), an Event of
Default shall be deemed not to have occurred if at such
time (i) the failure to pay referred to in
Section 5(a)(i) is caused solely by an error or omission
of an administrative or operational nature, (ii) the
Defaulting Party has provided the other party with
satisfactory evidence that funds were available to such
party to enable it at the required time to make the
relevant payment when due and (iii) the payment is made
within three Business Days of notice of such failure to
pay.
(ii) Section 5(a)(iii)(1) (Credit Support Default), as it
applies to Party B only, shall be deleted in its
entirety and replaced with the following: "Failure by
Party B to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with Paragraph 3(b) of the Credit Support
Annex if such failure is continuing after any applicable
grace period has elapsed."
(iii) Section 5(a)(vi) (Cross Default), "Threshold Amount"
means, with respect to Party A, 3% of its Credit Support
Provider's (or the applicable Relevant Entity's)
shareholder's equity (as detailed in its Credit Support
Provider's or the Relevant Entity's most recent
financial statements).
(iv) Section 5(a)(vii) (Bankruptcy), (i) clause (2) and (9)
shall not be applicable to Party B; (ii) clause (4)
shall not be applicable to Party B if the proceeding or
petition is instituted or presented by Party A or any of
its Affiliates and is in breach of Party A's agreement
set forth in Part 5(j) of this Schedule; (iii) the
appointment of a trustee or other secured party by Party
B or the Certificateholders for the purpose of holding
all or a substantial portion of the assets of Party B
for the benefit of the Certificateholders or Party A
does not qualify as the appointment of a trustee,
custodian or similar official under clause (6); (iv) a
security interest granted by Party B to a trustee,
collateral agent, custodian or other secured party, as
applicable (the "Secured Party"), pursuant to an
indenture, trust agreement, pooling and servicing
agreement or other customary securitization transaction
document (the "Security Agreement"), in property of
Party B (the "Securitization Collateral") supporting a
rated securitization transaction (the "Securitization"),
and the rights of the Secured Party in and to the
Securitization Collateral for the benefit of the
investors in the Securitization and/or Party A, is not
intended to constitute and shall not be treated as a
secured party taking possession of the assets of Party B
for purposes of clause (7); (v) the words "seeks or"
shall be deleted from clause (6); and (vi) clause (8)
shall not apply to Party B to the extent that clause (8)
relates to clauses of Section 5(a)(vii) that are not
applicable to Party B as a result of the modifications
set forth herein. Notwithstanding the foregoing, for the
avoidance of doubt, the deletion of clause (9) is not
intended to render clauses (1) through (8) inapplicable
on the basis that Party B did not actively contest or
oppose any of the acts referred to in such clauses or,
in the case of clause (4), if a proceeding or petition
referred to therein is instituted or presented against
Party B, on the basis that Party B consented to or
acquiesced in a judgment of bankruptcy or insolvency or
the entry of an order for relief or the making of an
order for its winding up or liquidation as a result of
such proceeding or petition.
(c) Termination Events. Notwithstanding anything in this Agreement
to the contrary, the following Termination Events shall apply to
the specified party:
Party A Party B
-------------- --------------
(i) Section 5(b)(i), Illegality Applicable Applicable
(ii) Section 5(b)(ii), Tax Event Applicable Applicable
(iii) Section 5(b)(iii), Tax Event Upon Merger Applicable Applicable
(iv) Section 5(b)(iv), Credit Event Upon Merger Not Applicable Not Applicable
(v) Section 5(b)(v), Additional Termination Event Applicable (as Applicable (as set
set forth in forth in Part 1(h)
Part 1(h) below) below)
provided, however, that with respect to Section 5(b)(iii), Party A shall
not be entitled to designate an Early Termination Date by reason of a
Tax Event Upon Merger in respect of which it is the Affected Party.
(d) The "Automatic Early Termination" provisions of Section 6(a)
will not apply to Party A and will not apply to Party B.
(e) The "Transfer to Avoid Termination Event" provisions of 6(b)(ii)
will apply, provided that the words "or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party,"
shall be deleted.
(f) Payments on Early Termination.
(i) For the purpose of Section 6(e), "Market Quotation" and
"Second Method" will apply.
(ii) Where an Early Termination Date is designated as a
result of an Event of Default with respect to which
Party A is the Defaulting Party or a Termination Event
under Section 5(b)(iii), Section 5(b)(iv) or Section
5(b)(v) with respect to which Party A is the sole
Affected Party, paragraphs (1) through (8) below shall
apply:
(1) The definition of "Market Quotation" shall be
deleted in its entirety and replaced with the
following:
"'Market Quotation' means, with respect to one
or more Terminated Transactions, a Firm Offer
which is (1) made by an Eligible Replacement,
(2) for an amount, if any, that would be paid to
Party B (expressed as a negative number) or by
Party B (expressed as a positive number) in
consideration of an agreement between Party B
and an Eligible Replacement to enter into a
transaction (the "Replacement Transaction") that
would have the effect of preserving for such
party the economic equivalent of any payment or
delivery (whether the underlying obligation was
absolute or contingent and assuming the
satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or
group of Terminated Transactions that would, but
for the occurrence of the relevant Early
Termination Date, have been required after that
date, (3) made on the basis that Unpaid Amounts
in respect of the Terminated Transaction or
group of Transactions are to be excluded but,
without limitation, any payment or delivery that
would, but for the relevant Early Termination
Date, have been required (assuming satisfaction
of each applicable condition precedent) after
that Early Termination Date is to be included
and (4) made in respect of a Replacement
Transaction with terms substantially the same as
those of this Agreement (save for the exclusion
of provisions relating to Transactions that are
not Terminated Transactions). Party A and Party
B will request each Eligible Replacement to
provide a Firm Offer to the extent reasonably
practicable as of the same day and time (without
regard to different time zones). If no Firm
Offers are provided, it will be deemed that the
Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions
cannot be determined.
(2) The definition of "Settlement Amount" shall be
deleted in its entirety and replaced with the
following:
"Settlement Amount" means, with respect to any
Early Termination Date, an amount (as determined
by Party B in accordance with clauses (a) and
(b) below; provided, however, if Party B fails
to make such determination promptly, Party A
shall have the right to make such determination)
equal to:
(a) the Termination Currency Equivalent
of the amount (whether positive or negative) for
each Terminated Transaction or group of
Terminated Transactions for which a Market
Quotation is determined. If more than one Market
Quotation is capable of becoming legally binding
upon acceptance, Party B shall accept the Market
Quotation that constitutes (1) the highest
Market Quotation in the case of a payment by an
Eligible Replacement to Party B or (2) the
lowest Market Quotation in the case of a payment
by Party B to an Eligible Replacement; provided,
however, if Party B fails to make such
determination promptly, Party A shall have the
right to make such determination. If only one
Market Quotation is provided, Party B shall
accept the single Market Quotation. Party B
shall be obligated to accept the Market
Quotation immediately upon determination so as
to become legally binding; or
(b) Party B's Loss (whether positive or
negative and without reference to any Unpaid
Amounts) for each Terminated Transaction or
group of Terminated Transactions for which a
Market Quotation cannot be determined.
(3) For the purpose of paragraph (4) of the
definition of Market Quotation, Party B shall
make reasonable efforts to determine, acting in
a commercially reasonable manner, whether a Firm
Offer is made in respect of a Replacement
Transaction with terms substantially the same as
those of this Agreement (save for the exclusion
of provisions relating to Transactions that are
not Terminated Transactions); provided, however,
if Party B fails to make such determination
promptly, Party A shall have the right to make
such determination.
(4) Party B undertakes to use its reasonable efforts
to obtain at least one Market Quotation on or
before the later of (a) the Early Termination
Date or (b) 10 Business Days following the
designation of the Early Termination Date (the
"Latest Settlement Amount Determination Day").
(5) Party B will be deemed to have discharged its
obligations under (4) above if it requests Party
A to obtain Market Quotations, where such
request is made in writing within two Business
Days after the day on which the Early
Termination Date is designated.
(6) If Party B requests Party A in writing to obtain
Market Quotations, Party A shall use its
reasonable efforts to do so before the Latest
Settlement Amount Determination Day.
(7) Party A shall have the right to obtain Market
Quotations, without prior request by Party B,
before the Latest Settlement Amount
Determination Day.
(8) If the Settlement Amount is a negative number,
Section 6(e)(i)(3) of this Agreement shall be
deleted in its entirety and replaced with the
following:
"Second Method and Market Quotation. If Second Method
and Market Quotation apply, (1) Party B shall pay to
Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated
Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B, provided that, (i) the
amounts payable under (2) and (3) shall be subject to
netting in accordance with Section 2(c) of this
Agreement and (ii) notwithstanding any other
provision of this Agreement, any amount payable by
Party A under (3) due to a failure by Party A to
make, when due, any payment under this Agreement,
shall not be netted against any amount payable by
Party B under (1)."
(g) "Termination Currency" means U.S. Dollars.
(h) Additional Termination Event.
(A) The following Additional Termination Event will apply to
Party A, with Party A as the sole Affected Party and all
Transaction as Affected Transactions.
(i) Party A fails to comply with the Rating Agency
Downgrade provisions as set forth in Part 5(f)
below; or
(ii) A Firm Offer is accepted by Party B pursuant to
Part 5(f)(ii)(2)(B) following a Moody's Second
Tier Downgrade Event.
(B) The following Additional Termination Events will apply
to Party B, with Party B as the sole Affected Party and
all Transaction as Affected Transactions.
(i) Upon any amendment, supplement, modification or
waiver of any provision of the PSA (as defined
below) without the consent of Party A that
materially and adversely affects the rights or
interests of Party A.
(ii) The Servicer exercises its option to purchase the
Mortgage Loans pursuant to Section 11.01 of the
PSA.
(iii) Upon the irrevocable direction to dissolve or
otherwise terminate the Trust following which all
assets of the Trust will be liquidated and the
proceeds of such liquidation distributed to the
Certificateholders.
Part 2. Tax Representations.
Party A and Party B Payer Tax Representations.
(i) For the purpose of Section 3(e), each of Party A and Party B
makes the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for
or on account of any Tax from any payment (other than interest
under Section 2(e), 6(d)(ii), or 6(e) of this Agreement) to be
made by it to the other party under this Agreement. In making
this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f)
of this Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement, and
the accuracy and effectiveness of any document provided by the
other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement, and (iii) the satisfaction of the agreement of the
other party contained in Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does
not deliver a form or document under Section 4(a)(iii) by reason
of material prejudice to its legal or commercial position.
(ii) For the purposes of Section 3(f), Party A makes the
following representation:
Party A is a U.S. corporation organized under the laws of
Delaware.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver
the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party required
to deliver
document Form/Document/Certificate Date by which to be delivered
--------------- ------------------------------------- --------------------------------------------
Party A A correct, complete and duly executed (i) Upon entering into this Agreement, (ii)
IRS Form W-9. promptly upon reasonable demand by Party B,
and (iii) promptly upon learning that any
such Form previously provided by Party A has
become obsolete or incorrect.
Party B (i) A correct, complete and duly (a) With respect to clause (i) of the
executed IRS Form W-9 (or any adjacent column, the Securities
successor thereto) that eliminates Administrator shall apply for the employer
U.S. federal withholding and backup identification number of the Trust promptly
withholding tax on payments under upon entering into this Agreement and
this Agreement, (ii) if requested by deliver the related correct, complete and
Party A, a correct, complete and duly duly executed IRS Form W-9 promptly upon
executed Form W-8IMY, and (iii) a receipt, and in any event, no later than the
complete and executed IRS Form W-9, first Payment Date of this Transaction; (b)
W-8BEN, W-8ECI, or W-8IMY (with in the case of a W-8ECI, W-8IMY, and W-8BEN
attachments) (as appropriate) from that does not include a U.S. taxpayer
each Certificateholder that is not an identification number in line 6, before
"exempt recipient" as that term is December 31 of each third succeeding
defined in Treasury regulations calendar year, (c) promptly upon reasonable
section 1.6049-4(c)(ii), that demand by Party A, and (d) promptly upon
eliminates U.S. federal withholding actual knowledge that any such Form
and backup withholding tax on previously provided by Party B has become
payments under this Agreement. obsolete or incorrect.
(b) Other documents to be delivered are:-
Covered by
Party required to Section 3(d)
deliver document Form/Document/Certificate Date by which to be delivered Representation
--------------- ------------------------------------- ----------------------------- --------------
Party A Either (1) a signature booklet The earlier of the fifth Yes
and containing secretary's certificate Business Day after the
Party B and resolutions ("authorizing Trade Date of the first
resolutions") authorizing the party Transaction or upon
to enter into derivatives execution of this Agreement
transactions of the type contemplated and as deemed necessary for
by the parties or (2) a secretary's any further documentation.
certificate, authorizing resolutions
and incumbency certificate, in either
case, for such party and any Credit
Support Provider of such party
reasonably satisfactory in form and
substance to the other party.
--------------- ------------------------------------- ----------------------------- --------------
Party B An executed copy of the Pooling and Upon execution of this Yes
Servicing Agreement ("PSA"), dated as Agreement.
of June 1, 2007, among, inter alia,
Morgan Stanley ABS Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer and
Securities Administrator and Deutsche
Bank National Trust Company, as
Trustee.
--------------- ------------------------------------- ----------------------------- --------------
Party A A duly executed copy of the Credit As soon as practicable No
and Support Document specified in Part 4 after the execution of this
Party B of this Schedule. Agreement.
--------------- ------------------------------------- ----------------------------- --------------
Party A and An opinion of counsel reasonably As soon as practicable No
Party B satisfactory in form and substance to after the execution of this
the other party. Agreement.
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
(i) Address for notices or communications to Party A:-
XXXXXX XXXXXXX CAPITAL SERVICES INC.
Transaction Management Group
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: CHIEF LEGAL OFFICER
Fax No: 000 000 000 0000
(ii) Address for notices or communications to Party B:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager -- MSAC 2007-NC4
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
(b) Notices. Section 12(a) is amended by adding in the third line
thereof after the phrase "messaging system" and before the ")"
the words, "; provided, however, any such notice or other
communication may be given by facsimile transmission if telex is
unavailable, no telex number is supplied to the party providing
notice, or if answer back confirmation is not received from the
party to whom the telex is sent."
(c) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(d) Offices. The provisions of Section 10(a) will not apply to Party
A and to Party B.
(e) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) "Calculation Agent" means Party A.
(g) "Credit Support Document" means (a) with respect to Party A, (1)
the Credit Support Annex between Party A and Party B dated as of
the date hereof (the "Credit Support Annex") and (2) the
guarantee of Xxxxxx Xxxxxxx and (b) with respect to Party B, the
Credit Support Annex.
(h) Credit Support Provider means in relation to Party A: Xxxxxx
Xxxxxxx, a Delaware corporation.
Credit Support Provider means in relation to Party B: None
(i) Governing Law; Jurisdiction. This Agreement, each Credit Support
Document and each Confirmation will be governed by and construed
in accordance with the laws of the State of New York without
regard to conflict of law provisions thereof other than New York
General Obligations Law Sections 5-1401 and 5-1402.
Section 13(b) is amended by: (1) deleting "non-" from the second
line of clause (i); and (2) deleting the final paragraph.
(j) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or
any Credit Support Document.
(k) Netting of Payments. Clause (ii) of Section 2(c) will apply to
any amounts payable with respect to Transactions from the date
of this Agreement.
(l) "Affiliate". Party A and Party B shall be deemed not to have any
Affiliates for purposes of this Agreement, including for
purposes of Section 6(b)(ii). For the avoidance of doubt, with
respect to Party A, such definition shall be understood to
exclude Xxxxxx Xxxxxxx Derivative Products Inc.
(m) Additional Definitions. All capitalized terms used but not
otherwise defined in this Agreement shall have the meanings
given thereto in the PSA.
Part 5. Other Provisions
(a) Additional Representations.
(i) The introductory clause of Section 3 of this Agreement
is hereby amended to read in its entirety as follows:
"Each party represents to the other party (which
representations will be deemed to be repeated by each
party on each date on which a Transaction is entered
into and, in the case of the representations in
Section 3(f) and Section 3(g)(4), at all times until the
termination of this Agreement) that:--"
(ii) Section 3 of this Agreement is hereby amended by adding
at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. It is not relying on any
statement or representation of the other party regarding
a Transaction (whether written or oral), other than the
representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) Non-Reliance. In the case of Party
A, it is acting for its own account, and in the
case of Party B, the Securities Administrator is
acting on behalf of the Trust. Party A has made
its own independent decisions to enter into each
Transaction under this Agreement and as to
whether such Transaction is appropriate or
proper for it based upon its own judgment and
upon advice from such advisers as it has deemed
necessary and, with respect to Party B, it has
entered into each Transaction under this
Agreement as directed under the PSA. It is not
relying on any communication (written or oral)
of the other party as investment advice or as a
recommendation to enter into such Transaction;
it being understood that information and
explanations related to the terms and conditions
of a Transaction shall not be considered
investment advice or a recommendation to enter
into that Transaction. No communication (written
or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the
expected results of each such Transaction.
(ii) Assessment and Understanding. It is
capable of assessing the merits of and
understanding (on its own behalf or through
independent professional advice), and
understands and accepts, the terms, conditions
and risks of that Transaction. It is also
capable of assuming, and assumes, the risks of
that Transaction.
(iii) Status of Parties. The other party
is not acting as a fiduciary for or an adviser
to it in respect of that Transaction.
(3) Purpose. It is an "eligible swap
participant" as such term is defined in
Section 35.1(b)(2) of the regulations (17 C.F.R 35)
promulgated under, and an "eligible contract
participant" as defined in Section 1a(12) of, the
Commodity Exchange Act, as amended, and it is entering
into the Transaction for the purposes of managing its
borrowings or investments, hedging its underlying assets
or liabilities or in connection with a line of business.
(4) ERISA Representation.
(i) Party A represents and warrants at
all times hereunder that it is not a pension
plan or employee benefit plan and that it is not
using assets of any such plan or assets deemed
to be assets of such a plan in connection with
any Transaction under this Agreement, and
(ii) Party B represents and warrants at
all times hereunder that (x) it is not a pension
plan or employee benefit plan, and (y) (1) that
it is not acting on behalf of any such plan or
using assets of any such plan or assets deemed
to be assets of any such plan in connection with
any Transaction under this Agreement or (2) any
pension plan or employee benefits plan subject
to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended
(the "Code"), or any person who is acting on
behalf of such a plan, or using assets of such
plan or assets deemed to be "plan assets" of
such plan for purposes of ERISA or the Code, who
purchases a certificate issued by the Trust
while this Agreement is in existence (i) shall
represent or shall be deemed to represent that
the purchase and holding of such certificate is
in reliance on at least one of the Prohibited
Transaction Class Exemptions of 00-00, 00-0,
00-00, 00-00 xx 00-00 xx (xx) shall provide an
opinion of counsel which states that such
purchase and holding is permissible under
applicable law and will not result in a
prohibited transaction under ERISA or Section
4975 of the Code."
(b) Set-off. Subject to Section 2(c), Paragraphs 8(a) and 8(b) of
the Credit Support Annex and Part 1(f)(ii)(8) hereof,
notwithstanding any other provision of this Agreement or any
other existing or future agreement, each party irrevocably
waives any and all rights it may have to set off, net, recoup or
otherwise withhold, suspend or condition payment or performance
of any obligation between it and the other party hereunder
against any obligation between it and the other party under any
other agreements. Section 6(e) is hereby amended by the deletion
of the following sentence at the end of the first paragraph
thereof: "The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be
subject to any Set-off."
(c) Confirmations. Party A will deliver to Party B a Confirmation
relating to each Transaction.
(d) Form of Agreement. The parties hereby agree that the text of the
body of this Agreement is intended to be the printed form of
1992 ISDA Master Agreement (Multicurrency--Cross Border) as
published and copyrighted by the International Swaps and
Derivatives Association, Inc.
(e) Transfer, Termination, Amendment and Assignment.
(i) This Agreement may not be amended unless prior written
notice is given to Xxxxx'x, Rating Agency Confirmation
from S&P is obtained and consent is obtained from the
Certificate Insurer.
(ii) Notwithstanding any other provision of this Agreement,
no Early Termination Date shall be effectively
designated by Party B (other than an Early Termination
Date designated under Part 5(f)(ii)(3)) unless Moody's
has been given prior written notice of such designation.
(iii) Party B may, with the prior written consent of Party A
and the Certificate Insurer and subject prior written
notice to Moody's and Rating Agency Confirmation from
S&P, assign, novate or transfer its rights and
obligations under the Agreement to a third party.
Notwithstanding Section 7 of this Agreement, Party A
may, at its own discretion and at its own expense,
subject to giving reasonable notice of transfer to
Moody's and subject to Rating Agency Confirmation with
respect to S&P, assign, novate or transfer its rights
and obligations under this Agreement (including any
Transactions hereunder) to any third party including,
without limitation, another of Party A's offices,
branches or affiliates (the "Transferee"), provided
that:
(1) such third party agrees to be bound by,
inter alia, the payment, transfer and collateral terms
of this Agreement (including any Transactions hereunder)
and substantially all other terms as the party which it
replaces;
(2) such third party is an Eligible Replacement;
(3) a Termination Event or an Event of Default
does not occur under this Agreement as a result of such
transfer;
(4) if the Transferee is domiciled in a
different jurisdiction from both Party A and Party B,
the rating of the Certificates assigned by S&P are not
adversely affected;
(5) as of the date of the transfer the
Transferee will not, as a result of such transfer, be
required to withhold or deduct on account of tax under
this Agreement; and
(6) as of the date of such transfer, neither the
Transferee nor Party B will be required to withhold or
deduct any increased amount on account of any Taxes
under this Agreement as a result of such transfer,
unless, as of the date of such transfer, (x) Party B is
entitled to additional amounts under Section 2(d)(i)(4)
on account of any such Taxes required to be deducted or
withheld by the Transferee and (y) Party B is not
required to pay Transferee additional amounts under
Section 2(d)(i)(4) on account of any such Taxes required
to be deducted or withheld by Party B.
Following such transfer, all references herein to Party
A shall be deemed to be references to the Transferee.
(f) Rating Agency Downgrade.
(i) Xxxxx'x First Tier Downgrade. In the event the Relevant
Entity is downgraded below the Xxxxx'x First Tier
Required Swap Counterparty Ratings (a "Xxxxx'x First
Tier Downgrade Event") then, within 30 Business Days
after the occurrence of such Xxxxx'x First Tier
Downgrade Event, Party A shall, at its option and at its
own expense, either:
(A) cause an Eligible Replacement to replace Party A
as party to this Agreement; provided that if
such Eligible Replacement or its Credit Support
Provider, as applicable, is rated below the
Xxxxx'x First Tier Required Swap Counterparty
Rating, such Eligible Replacement shall
immediately Transfer Eligible Credit Support to
Party B pursuant to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of Party
A's obligations under this Agreement that is
provided by an entity with the Xxxxx'x First
Tier Required Swap Counterparty Rating; or
(C) Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex.
(ii) Xxxxx'x Second Tier Downgrade. (1) In the event that no
Relevant Entity has the Xxxxx'x Second Tier Required
Swap Counterparty Rating (a "Xxxxx'x Second Tier
Downgrade Event") then, Party A shall, at its option and
at its own expense, use commercially reasonable efforts
to as soon as reasonably practicable either:
(A) cause an Eligible Replacement to replace Party A
as party to this Agreement; or
(B) obtain an Eligible Guarantee in respect of Party
A's obligations under this Agreement that is
provided by an entity with the Xxxxx'x Second
Tier Required Swap Counterparty Rating.
(2) If no Eligible Replacement or Eligible Guarantee has
been effected in accordance with Part 5(f)(ii)(1)(A) or
(B) above within 30 Business Days of such Xxxxx'x Second
Tier Downgrade Event then:
(A) Party A shall Transfer Eligible Credit Support
to Party B pursuant to the Credit Support Annex
until such replacement or Eligible Guarantee
takes effect or, if sooner, no Xxxxx'x Second
Tier Downgrade Event is occurring; and
(B) without prejudice to Party A's right to continue
to seek an Eligible Replacement or an Eligible
Guarantee pursuant to Part 5(f)(ii)(1)(A) and
(B), Party B shall also have the right (but not
the obligation) on any Business Day thereafter
to obtain Firm Offers (such day a "Firm Offer
Solicitation Date") by giving Party A written
notice of its intention to seek Firm Offers no
later than 12:00 p.m., New York time, on the
Business Day prior to the Firm Offer
Solicitation Date. Such notice shall indicate
the day and time as of which each Eligible
Replacement will be requested to provide its
Firm Offer; provided that Eligible Replacements
shall not provide Firm Offers prior to 12:00
p.m. New York time, on the Firm Offer
Solicitation Date. Party B shall undertake to
use reasonable efforts to seek at least 5 Firm
Offers and Party B shall request each entity
providing a Firm Offer to do so to the extent
reasonably practicable as of the same day and
time (without regard to different time zones).
If more than one Firm Offer remains capable of
becoming legally binding upon acceptance, Party
B shall accept the Firm Offer that constitutes
(1) the highest Firm Offer in the case of a
payment by an Eligible Replacement to Party B or
(2) the lowest Firm Offer in the case of a
payment by Party B to an Eligible Replacement;
provided, however, if Party B fails to make such
determination promptly, Party A shall have the
right to make such determination. If only one
Firm Offer is provided, Party B shall accept the
single Firm Offer. Party B shall be obligated to
accept the Firm Offer upon determination;
provided however, prior to accepting such Firm
Offer, Party B shall (1) on a day that is a
Business Day, provide Party A with at least 24
hours prior written notice of its intent to
accept such Firm Offer (which acceptance, in all
cases, shall be on a Business Day) and (2)
confirm that Party A has not identified an
Eligible Replacement. If at anytime prior to
Party B's acceptance of a Firm Offer, Party A
has identified an Eligible Replacement then, in
its sole discretion, Party A may transfer its
rights and obligations under this Agreement to
such Eligible Replacement and an Early
Termination Date will not occur. If a Firm Offer
is accepted by Party B, then, notwithstanding
Section 6 of the ISDA Master Agreement, an Early
Termination Date in respect of all outstanding
Transactions will occur immediately upon such
acceptance by Party B and the Settlement Amount
will equal the Firm Offer so accepted by Party
B.
(3) Notwithstanding Part 5(f)(ii)(1) and (2) above, an
Additional Termination Event under this Part 5(f)(ii)
shall only occur with Party A as the sole Affected Party
if:
(A) a Moody's Second Tier Downgrade Event has
occurred and has been continuing for 30 or more
Business Days; and
(B) at least one Eligible Replacement has made a
Firm Offer in accordance with Part
5(f)(ii)(2)(B) above which remains capable of
becoming legally binding upon acceptance by the
offeree.
(iii) S&P First Tier Downgrade. (1) In the event the Relevant
Entity that is a Financial Institution is downgraded
below the S&P First Tier Required Swap Counterparty
Rating (an "S&P First Tier Downgrade Event") then Party
A shall, at its option and at its own expense, either:
(A) subject to Rating Agency Confirmation, within 60
calendar days after the occurrence of such S&P
First Tier Downgrade Event, cause an Eligible
Replacement to replace Party A as party to this
Agreement; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, is a Financial Institution and is
rated below the S&P First Tier Required Swap
Counterparty Rating, such Eligible Replacement
shall immediately Transfer Eligible Credit
Support to Party B pursuant to the Credit
Support Annex;
(B) subject to Rating Agency Confirmation, within 60
calendar days after the occurrence of such S&P
First Tier Downgrade Event, obtain an Eligible
Guarantee in respect of Party A's obligations
under this Agreement that is provided by an
entity with the S&P First Tier Required Swap
Counterparty Rating;
(C) within 10 Business Days after the occurrence of
such S&P First Tier Downgrade Event, transfer
Eligible Credit Support to Party B pursuant to
the Credit Support Annex; or
(D) with the approval of the Certificate Insurer and
subject to Rating Agency Confirmation, take
other steps, if any, to enable Party B to remedy
a downgrade by S&P below the S&P First Tier
Required Swap Counterparty Rating.
(2) Pending compliance with Part 5(f)(iii)(1), Party A
shall Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex within 10 Business
Days after an S&P First Tier Downgrade Event.
For the avoidance of doubt, this Part 5(f)(iii) shall only be
applicable to Financial Institutions.
(iv) S&P Second Tier Downgrade. (1) In the event that no
Relevant Entity has the S&P Second Tier Required Swap
Counterparty Rating (an "S&P Second Tier Downgrade
Event") then Party A shall, at its option and at its own
expense, use commercially reasonable efforts to either:
(A) subject to Rating Agency Confirmation, within 60
calendar days after such S&P Second Tier
Downgrade Event, cause an Eligible Replacement
to replace Party A as party to this Agreement;
provided that if such Eligible Replacement or
its Credit Support Provider, as applicable, is a
Financial Institution and is rated below the S&P
First Tier Required Swap Counterparty Rating,
such Eligible Replacement shall immediately
Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex; or
(B) subject to Rating Agency Confirmation, within 60
calendar days after such S&P Second Tier
Downgrade Event, obtain an Eligible Guarantee in
respect of Party A's obligations under this
Agreement that is provided by an entity with the
S&P First Tier Required Swap Counterparty Rating
or the S&P Second Tier Required Swap
Counterparty Rating; provided that if such
Eligible Guarantor is a Financial Institution
and is rated below the S&P First Tier Required
Swap Counterparty Rating, Party A shall
immediately Transfer Eligible Credit Support to
Party B pursuant to the Credit Support Annex;
(2) Pending compliance with Part 5(f)(iv)(1)(A) or (B)
Party A shall Transfer Eligible Credit Support to Party
B pursuant to the Credit Support Annex within 10
Business Days after an S&P Second Tier Downgrade Event.
(v) Fitch First Tier Downgrade. In the event no Relevant
Entity has the Fitch First Tier Required Swap
Counterparty Rating (a "Fitch First Tier Downgrade
Event") and such event is continuing then, within 30
Business Days after the occurrence of such Fitch First
Tier Downgrade Event, Party A shall, at its option and
at its own expense, either:
(A) cause an Eligible Replacement to replace Party A
as party to this Agreement;
(B) obtain an Eligible Guarantee in respect of Party
A's obligations under this Agreement that is
provided by an entity with the Fitch First Tier
Required Swap Counterparty Rating.
(C) Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex; or
(D) with the approval of the Certificate Insurer,
take other steps, if any, to enable Party B to
remedy a downgrade by Fitch below the Fitch
First Tier Required Swap Counterparty Rating.
(vi) Fitch Second Tier Downgrade.(1) In the event that no
Relevant Entity has the Fitch Second Tier
Required Swap Counterparty Rating (a "Fitch
Second Tier Downgrade Event") and such event is
continuing then, Party A shall, at its option
and at its own expense, use commercially
reasonable efforts to as soon as reasonably
practicable either:(A) cause an Eligible
Replacement to replace Party A as party to this
Agreement; or
(B) obtain an Eligible Guarantee in respect
of Party A's obligations under this
Agreement that is provided by an entity
with the Fitch Second Tier Required Swap
Counterparty Rating.
(2) If no Eligible Replacement or Eligible Guarantee
has been effected in accordance with Part
5(f)(vi)(1)(A) or (B) within 30 Business Days of
such Fitch Second Tier Downgrade Event, Party A
shall Transfer Eligible Credit Support to Party
B pursuant to the Credit Support Annex until
such replacement or Eligible Guarantee takes
effect or, if sooner, no Fitch Second Tier
Downgrade Event is occurring.
(vii) Failure to act in accordance with this Part 5(f),
including any failure by Party A to comply with or
perform any obligation to be complied with or performed
by Party A under the Credit Support Annex, shall
constitute an Additional Termination Event with Party A
as the sole Affected Party; provided that, failure by
Party A to Transfer Eligible Credit Support to Party B
in accordance with Part 5(f)(ii)(2) above shall
constitute an Event of Default under Section
5(a)(iii)("Credit Support Default") if such failure is
not remedied on or before the third Business Day after
notice of such failure is given to Party A.
(viii) For purposes of this Part 5(f), but subject to Part
5(f)(ii)(3), Party A shall be responsible for (1)
posting collateral in accordance with such Credit
Support Annex at its own cost; and (2) any cost incurred
by it in complying with its obligations.
(g) Rating Agency Downgrade Definitions.
(i) For purposes of this Agreement,
"Certificate Insurer" means the Financial Guaranty
Insurance Company.
"Eligible Guarantee" means an unconditional and
irrevocable guarantee, letter of credit or other
arrangement that is provided by a party as principal
obligor rather than surety and is directly enforceable
by Party B.
"Eligible Replacement" means an entity (1) with the
Moody's First Tier Required Swap Counterparty Ratings
and/or the Moody's Second Tier Required Swap
Counterparty Ratings or whose present and future
obligations owing to Party B are supported pursuant to
an Eligible Guarantee provided by a party with the
Moody's First Tier Required Swap Counterparty Ratings
and/or the Moody's Second Tier Required Swap
Counterparty Ratings, (2) with the S&P First Tier
Required Swap Counterparty Ratings and/or the S&P Second
Tier Required Swap Counterparty Ratings or whose present
and future obligations owing to Party B are supported
pursuant to an Eligible Guarantee provided by a party
with the S&P First Tier Required Swap Counterparty
Ratings and/or the S&P Second Tier Required Swap
Counterparty Ratings and (3) with the Fitch First Tier
Required Swap Counterparty Ratings and/or the Fitch
Second Tier Required Swap Counterparty Ratings or whose
present and future obligations owing to Party B are
supported pursuant to an Eligible Guarantee provided by
a party with the Fitch First Tier Required Swap
Counterparty Ratings and/or the Fitch Second Tier
Required Swap Counterparty Ratings; provided that no
entity shall be an Eligible Replacement unless (A) a
legal opinion confirms that none of such Eligible
Replacement's payments to Party B under this Agreement
will be subject to deduction or withholding for or on
account of any Tax or (B) notwithstanding the definition
of "Indemnifiable Tax" in Section 14 of this Agreement,
all Taxes in relation to payments by such Eligible
Replacement shall be Indemnifiable Taxes unless such
Taxes (x) are assessed directly against Party B and not
by deduction or withholding by such Eligible Replacement
or (y) arise as a result of a Change in Tax Law (in
which case such Tax shall be an Indemnifiable Tax only
if such Tax satisfies the definition of Indemnifiable
Tax provided in Section 14).
"Financial Institution" means (i) a bank, broker/dealer,
insurance company, structured investment company or
derivative product company or a subsidiary of any such
entity or (ii)(a) Party A or any of its affiliates, in
each case with its obligations guaranteed by Xxxxxx
Xxxxxxx and (b) any rated affiliate of Party A.
"Firm Offer" means an offer which, when made, was
capable of becoming legally binding upon acceptance.
"Fitch" means Fitch Ratings Limited and any successor to
its rating business.
"Fitch First Tier Required Swap Counterparty Rating"
means a short-term senior, unsecured debt obligation
rating, credit rating or other similar rating (as the
case may be, the "Short-Term Rating") of at least "F-1"
by Fitch and a long-term senior, unsecured debt
obligation rating, credit rating or other similar rating
(as the case may be, the "Long-Term Rating") of at least
"A" by Fitch.
"Fitch Second Tier Required Swap Counterparty Rating"
means a Short-Term Rating of at least "F-3" by Fitch and
a Long-Term Rating of at least "BBB-" by Fitch.
"Moody's" means Xxxxx'x Investor Services, Inc. and any
successor to its rating business.
"Moody's First Tier Required Swap Counterparty Rating"
means (i) if such counterparty or entity has only
Long-Term Rating by Moody's, a Long-Term Rating of at
least "A1" by Moody's or (ii) if such counterparty or
entity has both a Long-Term Rating and a Short-Term
Rating by Moody's, a Long-Term Rating of at least "A2"
by Moody's and a Short-Term Rating of at least "P-1" by
Moody's.
"Moody's Second Tier Required Swap Counterparty Rating"
means (i) if such counterparty or entity has only a
Long-Term Rating by Moody's, a Long-Term Rating of at
least "A3" by Moody's or (ii) if such counterparty or
entity has both a Long-Term Rating and a Short-Term
Rating by Moody's, a Long-Term Rating of at least "A3"
by Moody's and a Short-Term Rating of at least "P-2" by
Xxxxx'x.
"Rating Agencies" means Xxxxx'x, S&P and Fitch.
"Rating Agency Confirmation" means, with respect to any
particular proposed act or omission to act hereunder,
that the party acting or failing to act must consult
with S&P and receive from S&P a prior written
confirmation that the proposed action or inaction would
not cause a downgrade or withdrawal of the then current
rating of the Certificates; provided that S&P is then
providing a rating of the Certificates.
"Relevant Entity" means Party A, Party A's Credit
Support Provider and any principal obligor under an
Eligible Guarantee in respect of Party A's obligations
under this Agreement.
"S&P" means Standard and Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies, Inc. and any
successor to its rating business.
"S&P First Tier Required Swap Counterparty Rating"
means, if such counterparty or entity is a Financial
Institution, (i) a Short-Term Rating of at least "A-1"
by S&P or (ii) if such counterparty or entity does not
have a Short-Term Rating by S&P, a Long-Term Rating of
at least "A+" by S&P. For the avoidance of doubt, the
S&P First Tier Required Swap Counterparty Rating shall
not be applicable to entities other than Financial
Institutions.
"S&P Second Tier Required Swap Counterparty Rating"
means (A) if such counterparty or entity is a Financial
Institution, (i) a Short-Term Rating of at least "A-2"
by S&P or (ii) if such counterparty or entity does not
have a Short-Term Rating from S&P, a Long-Term Rating of
at least "BBB+" by S&P or (B) if such counterparty or
entity is not a Financial Institution, (i) a Short-Term
Rating of at least "A-1" by S&P or (ii) if such
counterparty or entity does not have a Short-Term Rating
from S&P, a Long-Term Rating of at least "A+" by S&P.
(h) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed
with the invalid or unenforceable portion eliminated, so long as
this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to
the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties; provided,
however, that nothing in this provision shall adversely affect
the rights of each party under this Agreement; and provided
further that this severability provision shall not be applicable
if any provision of Section 1, 2, 5, 6, or 13 (or any definition
or provision in Section 14 to the extent it relates to, or is
used in or connection with any such Section) shall be so held to
be invalid or unenforceable. The parties shall endeavor to
engage in good faith negotiations to replace any invalid or
unenforceable term, provision, covenant or condition with a
valid or enforceable term, provision, covenant or condition, the
economic effect of which comes as close as possible to that of
the invalid or unenforceable term, provision, covenant or
condition.
(i) Consent to Recording. Each party hereto consents to the
monitoring or recording, at any time and from time to time, by
the other party of any and all communications between trading
and marketing personnel of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
(j) Proceedings. Party A shall not institute against or cause any
other person to institute against, or join any other person in
instituting against, the Trust or Xxxxx Fargo Bank, National
Association, not individually, but solely as Securities
Administrator, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings
under any federal or state bankruptcy or similar law for a
period of one year and one day (or, if longer, the applicable
preference period) following payment in full of the
Certificates; provided, however, that this shall not restrict or
prohibit Party A from joining in any bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceedings
or other analogous proceedings under applicable laws.
(k) Regulation AB. Upon request by the Depositor, Party A may, at
its option, but is not required to, (A) (a) provide the
financial information required by Item 1115(b)(1) or (b)(2) of
Regulation AB (as specified by the Depositor to Party A) with
respect to Party A (or any guarantor of Party A if providing the
financial data of a guarantor is permitted under Regulation AB)
and any affiliated entities providing derivative instruments to
Party B (the "Company Financial Information"), in a form
appropriate for use in the Exchange Act Reports and in an
XXXXX-compatible form; (b) if applicable, cause its accountants
to issue their consent to filing or incorporation by reference
of such financial statements in the Exchange Act Reports of
Party B and (c) within 5 Business Days of the release of any
updated financial information, provide current Company Financial
Information as required under Item 1115(b) of Regulation AB to
the Depositor in an XXXXX-compatible form and, if applicable,
cause its accountants to issue their consent to filing or
incorporation by reference of such financial statements in the
Exchange Act Reports of Party B or (B) assign this Agreement at
its own cost to another entity that has agreed to take the
actions described in clause (A) of this sentence with respect to
itself (and which has the Required Swap Counterparty Rating and
the assignment to which would satisfy the Rating Agency
Condition). For the avoidance of doubt, Party A is not required
to take any action pursuant to this paragraph and the failure of
Party A to take any such action will not constitute an Event of
Default under this Agreement.
As used in this Agreement the following words shall have the
following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Depositor" shall mean Xxxxxx Xxxxxxx ABS Capital I Inc.
"XXXXX" shall mean the Commission's Electronic Data Gathering,
Analysis and Retrieval system.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and the rules and regulations promulgated thereunder
"Exchange Act Reports" shall mean all Distribution Reports on
Form 10-D, Current Reports on Form 8-K and Annual Reports on
Form 10-K that are to be filed with respect to Party B pursuant
to the Exchange Act.
"Regulation AB" shall mean the Asset Backed Securities
Regulation AB, 17 C.F.R. ss.ss.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.
(l) Securities Administrator Capacity. It is expressly understood
and agreed by the parties hereto that insofar as this Agreement
is executed by Xxxxx Fargo Bank, National Association (i) this
Agreement is executed and delivered by Xxxxx Fargo Bank,
National Association not in its individual capacity but solely
as Securities Administrator under the PSA in the exercise of the
powers and authority conferred and vested in it as securities
administrator thereunder, (ii) each of the representations,
undertakings and agreements herein made on behalf of Party B is
made and intended not as personal representations of the
Securities Administrator but is made and intended for the
purpose of binding only the Trust, and (iii) under no
circumstances shall Xxxxx Fargo Bank, National Association in
its individual capacity be personally liable for the payment of
any indebtedness or expenses or be personally liable for the
breach or failure of any obligation, representation, warranty or
covenant made or undertaken under this Agreement.
(m) "Indemnifiable Tax" Notwithstanding the definition of
"Indemnifiable Tax" in Section 14 of this Agreement, in relation
to payments by Party A, no Tax shall be an Indemnifiable Tax.
(n) If Party A consolidates or amalgamates with, merges with or
into, or transfers all or substantially all its assets to,
another entity, where such action does not constitute an event
described in Section 5(a)(viii), Party A shall either (A)
provide a legal opinion that none of Party A's payments to Party
B under this Agreement will be subject to deduction or
withholding for or on account of any Tax or (B) notwithstanding
the definition of "Indemnifiable Tax" in Section 14 of this
Agreement, all Taxes in relation to payments by Party A shall be
Indemnifiable Taxes unless such Taxes (x) are assessed directly
against Party B and not by deduction or withholding by such
Eligible Replacement or (y) arise as a result of a Change in Tax
Law (in which case such Tax shall be an Indemnifiable Tax only
if such Tax satisfies the definition of Indemnifiable Tax
provided in Section 14).
IN WITNESS WHEREOF, the parties have executed this Schedule by
their duly authorized officers as of the date hereof:
XXXXXX XXXXXXX CAPITAL SERVICES INC. XXXXX FARGO BANK, NATIONAL ASSOCIATION, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-NC4, Mortgage Pass-Through
Certificates, Series 2007-NC4
By: /s/ Xxxx X. Simmons_____________________________ By: /s/ Xxxxx X. Walker__________________________
Name: Xxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory Title: Vice President
Date: Date:
EXHIBIT A
Credit Support Annex
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations with respect to
Party A and Party B: None.
(b) Credit Support Obligations.
(i) "Delivery Amount" and "Return Amount" each has the meaning specified
in Paragraph 3; provided that, in the event that Party A elects or
is required to post collateral pursuant to a ratings downgrade by
S&P and Moody's, (1) the Delivery Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party A transferring the greater amount of Eligible
Credit Support and (2) the Return Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party B transferring the least amount of Posted
Credit Support; provided further that, for purposes of calculating
Delivery Amount and Return Amount, in the event that Party A elects
or is required to post collateral pursuant to an S&P Second Tier
Downgrade Event, the definition of Value shall be amended to insert
the words "multiplied by the applicable Valuation Percentage, if
any" after the word "thereof" and before the semicolon in clause
(i)(A) thereof.
"Credit Support Amount" has the meaning specified below:
(A) in the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iii), (v) or (vi) of the Schedule due to
a ratings downgrade or withdrawal by S&P or Fitch, as
applicable, "Credit Support Amount" shall have the meaning
specified in Paragraph 3; and
(B) in the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iv) of the Schedule due to a ratings
downgrade or withdrawal by S&P, "Credit Support Amount" shall
mean 125% of the Secured Party's Exposure; and
(C) in the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
Xxxxx'x below the Xxxxx'x First Tier Required Swap
Counterparty Rating, "Credit Support Amount" shall have the
meaning specified in Table 1A or Table 1B, as applicable,
attached hereto; and
(D) in the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by Xxxxx'x below the Xxxxx'x Second Tier Required
Swap Counterparty Rating, "Credit Support Amount" shall have
the meaning specified in Table 2A or 2B, as applicable,
attached hereto.
(ii) Eligible Collateral.
(A) In the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iii) of the Schedule due to a ratings
downgrade or withdrawal by S&P, (i) the items specified in
Table 3 attached hereto will qualify as "Eligible Collateral"
for Party A and (ii) the Valuation Percentage with respect any
item of Eligible Collateral shall equal 100% divided by the
Base Overcollateralization Rate for such item of Eligible
Collateral specified in Table 3 attached hereto.
(B) In the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iv) of the Schedule due to a ratings
downgrade or withdrawal by S&P, (i) the items specified in
Table 3 attached hereto will qualify as "Eligible Collateral"
for Party A and (ii) the Valuation Percentage with respect any
item of Eligible Collateral shall equal (1) 100% divided by
(2) the Base Overcollateralization Rate for such item of
Eligible Collateral specified in Table 3 attached hereto *
125%.
(C) In the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
Xxxxx'x below the Xxxxx'x First Tier Required Swap
Counterparty Rating, the items specified in Table 4 attached
hereto will qualify as "Eligible Collateral" for Party A.
(D) In the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by Xxxxx'x below the Xxxxx'x Second Tier Required
Swap Counterparty Rating, the items specified in Table 5
attached hereto will qualify as "Eligible Collateral" for
Party A.
(E) In the event Party A is required to post collateral pursuant
to Part 5(f)(v) or (vi) of the Schedule due to a ratings
downgrade or withdrawal by Fitch below the Fitch First Tier
Required Swap Counterparty Rating or the Fitch Second Tier
Required Swap Counterparty Rating, the items specified in
Table 6 attached hereto will qualify as "Eligible Collateral"
for Party A.
(iii) Other Eligible Support: Not applicable.
(iv) Thresholds.
(A) "Independent Amount" means, with respect to Party A, (i) not
applicable in the event Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due to a
ratings downgrade or withdrawal by S&P or Xxxxx'x and (ii) the
aggregate of any Transaction Independent Amounts in respect of
all Transactions outstanding at that time in the event Party A
elects or is required to post collateral pursuant to Part 5(f)
of the Schedule due to a ratings downgrade or withdrawal by
Fitch.
"Independent Amount" means, with respect to Party B, zero.
"Transaction Independent Amount" shall mean (unless
otherwise agreed by Fitch) 1% of the Notional Amount of
each Transaction.
(B) "Threshold" means with respect to Party A, (i) not applicable
in the event Party A elects or is required to post collateral
pursuant to Part 5(f) of the Schedule due to a ratings
downgrade or withdrawal by Xxxxx'x and (ii) zero in the event
Party A elects or is required to post collateral pursuant to
Part 5(f) of the Schedule due to a ratings downgrade or
withdrawal by S&P or Fitch.
"Threshold" means with respect to Party B: Infinite.
"Minimum Transfer Amount" means with respect to Party A: USD
50,000; and with respect to Party B: USD 50,000; provided,
however, that if such party is a Defaulting Party at the time,
"Minimum Transfer Amount" shall mean zero with respect to such
party.
(C) Rounding. The Delivery Amount will be rounded up to the
nearest multiple of $1000 and the Return Amount will be
rounded down to the nearest multiple of $1000.
(v) "Exposure" has the meaning specified in Paragraph 12, except that
after the word "Agreement" in the fourth line thereof the words
"(assuming, for this purpose only, that Part 1(f)(ii) of the
Schedule is deleted)" shall be inserted.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means (A) each and every Wednesday commencing on
the first such date following the date hereof or if any Wednesday is
not a Local Business Day, the next succeeding Local Business Day and
(B) any other Local Business Day on which notice is made before
12:00 noon, New York time on the immediately preceding Local
Business Day.
(iii) "Valuation Time" means the close of business in New York on the New
York Banking Day before the Valuation Date or date of calculation,
as applicable, or any time on the Valuation Date or date of
calculation, as applicable; provided that the calculations of Value
and Exposure will be made as of approximately the same time on the
same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
(v) The Valuation Agent's calculations pursuant to the terms hereof
shall be made in accordance with standard market practice, using
commonly accepted third party sources that comply with S&P's
criteria (e.g. Bloomberg, Bridge Information Services, Reuters and
Telerate).
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the
party specified (that party being the Affected Party of the Termination
Event occurs with respect to that party): Not Applicable.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. The Pledgor need not obtain the Secured Party's consent for
any substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support or of any Transfer of Eligible Credit Support
or Posted Credit Support, as the case may be, will be calculated by
the Valuation Agent in accordance with standard market practice
using third party sources (such as, by way of example only,
Bloomberg or Reuters) where available.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodian.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(A) Party B is not a Defaulting Party.
(B) Posted Collateral may be held only in the following
jurisdictions: the United States of America.
(C) Party B's Custodian (or its parent) shall have a Long Term
Rating by S&P of at least "A" and a Short Term Rating by S&P
of at least "A-1" by S&P.
(D) Posted Collateral may be held only in a segregated trust
account.
Initially, the Custodian for Party B is the Securities
Administrator.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will
not apply to Party B, but the provisions of Paragraph 6(c)(ii) will
apply to Party B.
(h) Distributions and Interest Amount.
(i) "Interest Rate". The "Interest Rate" shall be the rate actually
earned by Party B on Posted Collateral in the form of Cash.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the last Local Business Day of each calendar month
and on any Local Business Day that Posted Collateral in the form of
Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support. "Value" and "Transfer"
with respect to Other Eligible Support and Other Posted Support each
means: Not applicable.
(k) Demands and Notices.
(i) All demands, specifications and notices to Party A under this Annex
will be made to:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx
XXX Xxxxxxxxxxx
Xxx Xxxx, XX 00000
Attn: FID Collateral Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxxxxx.xxx
and all demands, specifications and notices to Party B under this Annex
will be to:
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager -- MSAC 2007-NC4
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
; provided that any demand, specification or notice may be made by
telephone ("Telephone Notice") between employees of each party if such
Telephone Notice is confirmed by a subsequent written instruction
(which may be delivered via facsimile or email) by the close of
business on the same day that such Telephone Notice is given.
(ii) Demand for Collateral. Without prejudice to any provision of this
Agreement, if a Delivery Amount for a Valuation Date equals or
exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor
will, without prior demand by the Secured Party, Transfer to the
Secured Party Eligible Credit Support in accordance with Paragraph
3(a).
(l) Addresses for Transfers.
Party A:
Cash: CITIBANK, New York
ABA No.: 021 000 089
Account No.: 4072 -- 4601
Treasury Securities
and Agency Notes: Bank of New York, New York/Xxxxxx Xxxxxxx & Co.
Incorporated
ABA No.: 000000000
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: Xxxxx Fargo Bank, N.A.
ABA No.: 121 000 248
Account No.: 0000000000
Account Name: SAS Clearing
FFC: FFC 53158501, MSAC 2007-NC4 (swap)
(m) Other Provisions.
(i) Notwithstanding any other provision in this Agreement to the
contrary, no full or partial failure to exercise and no delay in
exercising, on the part of Party A or Party B, any right, remedy,
power or privilege permitted hereunder shall operate in any way as a
waiver thereof by such party, including without limitation any
failure to exercise or any delay in exercising to any or to the full
extent of such party's rights with respect to transfer timing
pursuant to Paragraph 4(b), regardless of the frequency of such
failure or delay.
(ii) In all cases, in order to facilitate calculation of the Delivery
Amount and the Return Amount for a particular Valuation Date in
accordance with Paragraph 3 of this Annex:
(A) Eligible Collateral;
(B) Exposure; and
(C) Posted Collateral
shall each be expressed in US Dollars. If any of these items are
expressed in a currency other than US Dollars, then they shall
be converted into US Dollar amounts at the spot exchange rate
determined by the Valuation Agent on that Valuation Date.
(iii) Form of Annex. The parties hereby agree that the text of the body of
this Annex is intended to be the printed form of 1994 ISDA Credit
Support Annex (Bilateral Form -- ISDA Agreements Subject to New York
Law Only version) as published and copyrighted by the International
Swaps and Derivatives Association, Inc.
(n) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to
this Annex, Paragraph 1(b) or Paragraph 2 or the definitions of
Paragraph 12, (a) the term "Secured Party" as used in this Annex shall
mean only Party B, (b) the term "Pledgor" as used in this Annex shall
mean only Party A, (c) only Party A makes the pledge and grant in
Paragraph 2, the acknowledgement in the final sentence of Paragraph
8(a) and the representations in paragraph 9 and (d) only Party A will
be required to make Transfers of Eligible Credit Support hereunder.
(o) Events of Default. Paragraph 7(ii) and (iii) will not apply to Party B.
(p) Expenses. For the avoidance of doubt, Party A shall be responsible for
posting collateral in accordance with this Credit Support Annex at its
own cost and any cost incurred by it in complying with its obligations
hereunder.
(q) Additional Definitions.
"Agency Notes" means U.S. Dollar-denominated fixed rate,
non-amortising, non-mortgage-backed, senior debt securities of fixed
maturity, rated Aaa by Xxxxx'x and AAA by S&P issued by any of the
Federal Home Loan Banks (including their consolidated obligations
issued through the Office of Finance of the Federal Home Loan Bank
System), the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation or the Federal Farm Credit Bank.
"Commercial Paper" means U.S. Dollar-denominated, coupon-bearing,
commercial paper issued by a corporation, finance company, partnership
or limited liability company.
"Treasury Securities" means U.S. Dollar-denominated, coupon-bearing,
senior debt securities of the United States of America issued by the
U.S. Treasury Department and backed by the full faith and credit of the
United States of America.
(r) Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Annex is executed by
Xxxxx Fargo Bank, National Association (i) this Annex is executed and
delivered by Xxxxx Fargo Bank, National Association, not in its
individual capacity but solely as Securities Administrator under the
PSA in the exercise of the powers and authority conferred and invested
in it as Securities Administrator thereunder, (ii) each of the
representations, undertakings and agreements herein made on behalf of
the Trust is made and intended not as personal representations of the
Securities Administrator but is made and intended for the purpose of
binding only the Trust, and (iii) under no circumstances shall Xxxxx
Fargo Bank, National Association in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Annex.
IN WITNESS WHEREOF, the parties have executed this Credit Support
Annex by their duly authorized officers as of the date hereof.
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By: /s/ Xxxx X. Simmons________________
Name: Xxxx X. Xxxxxxx
Title: Authorized Signatory
Date:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-NC4, Mortgage
Pass-Through Certificates, Series
2007-NC4
By: /s/ Xxxxx X. Walker________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
Date:
TABLE 1A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY XXXXX'X BELOW XXXXX'X FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A elects to post collateral pursuant to Part 5(f)(i) of
the Schedule due to a ratings downgrade by Xxxxx'x below the Xxxxx'x First
Tier Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount
equal to either:
(A) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the lesser
of (x) 25 multiplied by DV01 and (y) 4% multiplied by the Notional Amount *
10; or
(B) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the
Notional Amount * 10 multiplied by the amount specified in Table 1B attached
hereto.
Party A shall, in its sole discretion, have the option to determine the
Credit Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith
and in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 1B
Weighted Average
Life of Hedge
in Years
---------------
1 0.25%
2 0.50%
3 0.70%
4 1.00%
5 1.20%
6 1.40%
7 1.60%
8 1.80%
9 2.00%
10 2.20%
11 2.30%
12 2.50%
13 2.70%
14 2.80%
15 3.00%
16 3.20%
17 3.30%
18 3.50%
19 3.60%
20 3.70%
21 3.90%
22 4.00%
23 4.00%
24 4.00%
25 4.00%
26 4.00%
27 4.00%
28 4.00%
29 4.00%
30 4.00%
TABLE 2A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY XXXXX'X BELOW XXXXX'X SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A is required to post collateral pursuant to Part 5(f)(ii)
of the Schedule due to a ratings downgrade by Xxxxx'x below the Xxxxx'x
Second Tier Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount
equal to either:
(A) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the lesser of (x) 60 multiplied by DV01 and (y) 9% multiplied by the
Notional Amount * 10; or
(B) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the Notional Amount * 10 multiplied by the amount specified in Table 2B
attached hereto.
Party A shall, in its sole discretion, have the option to determine the
Credit Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith
and in a commercially reasonable manner) of the change in the Secured
Party's Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 2B
Weighted Average
Life of Hedge
in Years
---------------
1 0.60%
2 1.20%
3 1.70%
4 2.30%
5 2.80%
6 3.30%
7 3.80%
8 4.30%
9 4.80%
10 5.30%
11 5.60%
12 6.00%
13 6.40%
14 6.80%
15 7.20%
16 7.60%
17 7.90%
18 8.30%
19 8.60%
20 9.00%
21 9.00%
22 9.00%
23 9.00%
24 9.00%
25 9.00%
26 9.00%
27 9.00%
28 9.00%
29 9.00%
30 9.00%
TABLE 3
ELIGIBLE COLLATERAL
S&P
Base
Eligible Collateral Overcollateralization Rate
-------------------------------------------------- --------------------------
Cash 100%
U.S. treasuries (current coupon, constant 102%
maturity), 'AAA' U.S. agencies, 'AAA' covered
bonds (floating), 'AAA' sovereign bonds
(floating), 'AAA', 'AA' credit card ABS
(floating), 'AAA', 'AA' auto ABS (floating), and
'AAA' U.S. student loan ABS (floating) with a
remaining maturity of less than 5 years
U.S. treasuries (current coupon, constant 108%
maturity), 'AAA' U.S. agencies, 'AAA' covered
bonds (floating), 'AAA' sovereign bonds
(floating), 'AAA', 'AA' credit card ABS
(floating), 'AAA', 'AA' auto ABS (floating), and
'AAA' U.S. student loan ABS (floating) with a
remaining maturity of greater than or equal to 5
years and less than or equal to 10 years
'AAA' covered bonds (fixed), 'AAA' sovereign bonds 105%
(fixed), 'A' credit card ABS (floating), 'A' auto
ABS (floating), 'AAA' CMBS (floating), 'AAA' CDO
(floating) 'AA', 'A' U.S. student loan ABS
(floating), and 'AAA', 'AA' corporate bonds (fixed
or floating) with a remaining maturity of less
than 5 years
'AAA' covered bonds (fixed), 'AAA' sovereign bonds 115%
(fixed), 'A' credit card ABS (floating), 'A' auto
ABS (floating), 'AAA' CMBS (floating), 'AAA' CDO
(floating), 'AA', 'A' U.S. student loan ABS
(floating), and 'AAA', 'AA' U.S. and European
corporate bonds (fixed or floating) with a
remaining maturity of greater than or equal to 5
years and less than or equal to 10 years
'BBB' credit card ABS (floating), 'BBB' auto ABS 125%
(floating), 'AA', 'A' CDO (floating), 'BBB' U.S.
student loan ABS (floating), and 'A' corporate
bonds (fixed or floating) with a remaining
maturity of less than 5 years
'BBB' credit card ABS (floating), 'BBB' auto ABS 140%
(floating), 'AA', 'A' CDO (floating), 'BBB' U.S.
student loan ABS (floating), and 'A' corporate
bonds (fixed or floating) with a remaining
maturity of greater than or equal to 5 years and
less than or equal to 10 years
TABLE 4
ELIGIBLE COLLATERAL
DOWNGRADE BY XXXXX'X BELOW XXXXX'X FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 97%
Sterling Cash 97%
Fixed-Rate Negotiable Treasury Debt Issued by The U.S.
Treasury Department with Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate Negotiable Treasury Debt issued by The U.S.
Treasury Department
All Maturities 100%
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate U.S. Agency Debentures -
All Maturities 100%
Fixed-Rate Euro-Zone Government Bonds Rated Aa3 or Above
with Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
All Maturities 97%
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate United Kingdom Gilts
All Maturities 97%
TABLE 5
ELIGIBLE COLLATERAL
DOWNGRADE BY XXXXX'X BELOW XXXXX'X SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 93%
Sterling Cash 94%
Fixed-Rate Negotiable Treasury Debt Issued by The U.S.
Treasury Department with Remaining Maturity
< 1 Year 100%
1 to 2 Years 99%
2 to 3 Years 98%
3 to 5 Years 97%
5 to 7 Years 95%
7 to 10 Years 94%
10 to 20 Years 89%
> 20 Years 87%
Floating-Rate Negotiable Treasury Debt issued by The U.S.
Treasury Department
All Maturities 99%
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 99%
1 to 2 Years 98%
2 to 3 Years 97%
3 to 5 Years 96%
5 to 7 Years 94%
7 to 10 Years 93%
10 to 20 Years 88%
> 20 Years 86%
Floating-Rate U.S. Agency Debentures -
All Maturities 98%
Fixed-Rate Euro-Zone Government Bonds Rated Aa3 or Above with
Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 89%
5 to 7 Years 87%
7 to 10 Years 86%
10 to 20 Years 82%
> 20 Years 80%
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
All Maturities 92%
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 90%
5 to 7 Years 89%
7 to 10 Years 88%
10 to 20 Years 84%
> 20 Years 82%
Floating-Rate United Kingdom Gilts
All Maturities 93%
TABLE 6
ELIGIBLE COLLATERAL
FITCH
Valuation
Eligible Collateral Party A Percentage
---------------------------------------------- ------- ----------
1. Cash X 100.0%
2. Treasury Securities with a remaining maturity X 98.5%
of 52 weeks or less
3. Treasury Securities with a remaining maturity X 93.6%
of more than 52 weeks but no more than 5 years
4. Treasury Securities with a remaining maturity X 89.9%
of more than 5 years but no more than 10 years
5. Treasury Securities with a remaining maturity X 83.9%
of more than 10 years but no more than 30 years
6. Agency Notes with a remaining maturity of no X 81.3%
more than 15 years
7. Agency Notes with a remaining maturity of more X 74.8%
than 15 years but no more than 30 years
8. Commercial Paper rated "A-1+" by S&P and "P-1" X 98.0%
by Moody's, with a remaining maturity of 180
days or less
9. Commercial Paper rated "A-1" by S&P and P-1 by X 97.0%
Moody's, with a remaining maturity of 180 days
or less
10. Commercial Paper rated "A-1" by S&P and "P-1" X 94.0%
by Moody's, with a remaining maturity of more
than 180 days or but no more than 360 days
Notwithstanding the above, Commercial Paper will qualify as Eligible
Collateral for Party A only if the aggregate amount of Commercial Paper
Transferred as Eligible Collateral under this Annex constitutes the
obligations of 10 or more issuers.
[XXXXXX XXXXXXX LOGO] EXECUTION COPY
------------------------------------------------------------------------------
DATE: June 20, 2007
TO: Xxxxx Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust
2007-NC4, Mortgage Pass-Through Certificates, Series
2007-NC4
ATTENTION: Client Manager -- MSAC 2007-NC4
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
FROM: New York Derivative Client Services Group
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HRGXY
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between Xxxxxx Xxxxxxx Capital Services
Inc. ("Party A") and Xxxxx Fargo Bank, National Association, not
individually, but solely as Securities Administrator (the "Securities
Administrator") under the Pooling and Servicing Agreement, dated and
effective as of May 1, 2007, among, inter alia, Morgan Stanley ABS Capital I
Inc., as Depositor, Xxxxx Fargo Bank, National Association, as Master
Servicer and Securities Administrator and Deutsche Bank National Trust
Company, as Trustee (the "PSA") for the Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-NC4, Mortgage Pass-Through Certificates, Series 2007-NC4 ("Party
B").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of
any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern. Terms capitalized but not defined in this
Confirmation (including the Definitions) have the meanings attributed to them
in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated
as of June 20, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount:................... With respect to any Calculation
Period, the notional amount set
forth for such Calculation Period
in Schedule I attached hereto.
Trade Date:........................ June 18, 2007
Effective Date:.................... June 20, 2007
Termination Date:.................. April 25, 2013, which for the
purpose of the final Fixed Rate
Payer Calculation Period is subject
to No Adjustment, and for the
purpose of the final Floating Rate
Payer Calculation Period is subject
to adjustment in accordance with
the Following Business Day
Convention.
Fixed Amounts:
Fixed Rate Payer:............ Party B
Fixed Rate Payer Early
Payment Dates: ........... On the day which is one (1) Business
Day prior to each Fixed Rate Payer
Period End Date.
Fixed Rate Payer Period
End Dates:................. (i) With respect to the initial
Calculation Period, June 29, 2007
and (ii) thereafter, the 25th
calendar day of each month during
the Term of this Transaction, in
each case subject to No Adjustment.
Fixed Rate:.................. 5.32%
Fixed Amount:................ To be determined in accordance with
the following formula:
10 * Fixed Rate * Notional Amount *
Fixed Rate Day Count Fraction.
Fixed Rate Day Count
Fraction:................. 30/360
Floating Amounts:
Floating Rate Payer:......... Party A
Floating Rate Payer
Early Payment Dates:....... On the day which is one (1)
Business Day prior to each Fixed
Rate Payer Period End Date.
Floating Rate Payer
Period End Dates:.......... (i) With respect to the initial
Calculation Period, June 29, 2007
and (ii) thereafter, the 25th
calendar day of each month during
the Term of this Transaction, in
each case subject to adjustment in
accordance with the Following
Business Day Convention.
Floating Rate Option:........ USD-LIBOR-BBA
Floating Amount:............. To be determined in accordance with
the following formula:
10 * Floating Rate * Notional
Amount * Floating Rate Day Count
Fraction.
Designated Maturity:......... One month
Floating Rate Day Count
Fraction:.................. Actual/360
Reset Dates:................. The first day of each Calculation
Period.
Compounding:................. Inapplicable
Business Days:..................... New York and Los Angeles
2. Account Details and Settlement Information:
Payments to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: Xxxxxx Xxxxxxx Capital Services Inc.
Payments to Party B:
Xxxxx Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: 0000000000
Acct Name: SAS Clearing
Ref: FFC: 53158501, MSAC 0000-XX0 (xxxx)
3. Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Confirmation is
executed by Xxxxx Fargo Bank, National Association (i) this
Confirmation is executed and delivered by Xxxxx Fargo Bank, National
Association not in its individual capacity but solely as Securities
Administrator of the Trust under the PSA in the exercise of the powers
and authority conferred and invested in it as Securities Administrator
thereunder, (ii) each of the representations, undertakings and
agreements herein made on behalf of Party B is made and intended not as
personal representations of the Securities Administrator but is made
and intended for the purpose of binding only the Trust, and (iii) under
no circumstances shall Xxxxx Fargo Bank, National Association in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
We are very pleased to have entered into this Transaction with you and we
look forward to completing other transactions with you in the near future.
Very truly yours,
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By: /s/ Xxxxx X. Moore______________________
Name: Xxxxx X. Xxxxx
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-NC4, Mortgage
Pass-Through Certificates, Series
2007-NC4
By: /s/ Xxxxx X. Walker_____________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
[XXXXXX XXXXXXX LOGO]
------------------------------------------------------------------------------
SCHEDULE I
Calculation
Line Period Notional Amount ($) Multiplier
---- ---------------------------------- ------------------- ----------
1. Effective Date 6/29/2007 91,417,986.68 10
2. 6/29/2007 7/25/2007 87,956,105.50 10
3. 7/25/2007 8/25/2007 84,606,981.49 10
4. 8/25/2007 9/25/2007 81,364,809.54 10
5. 9/25/2007 10/25/2007 78,224,234.95 10
6. 10/25/2007 11/25/2007 75,180,339.77 10
7. 11/25/2007 12/25/2007 72,228,628.45 10
8. 12/25/2007 1/25/2008 69,365,012.59 10
9. 1/25/2008 2/25/2008 66,585,794.79 10
10. 2/25/2008 3/25/2008 63,887,753.96 10
11. 3/25/2008 4/25/2008 61,267,914.24 10
12. 4/25/2008 5/25/2008 58,723,945.10 10
13. 5/25/2008 6/25/2008 56,254,915.69 10
14. 6/25/2008 7/25/2008 53,879,523.99 10
15. 7/25/2008 8/25/2008 51,605,165.06 10
16. 8/25/2008 9/25/2008 49,424,615.79 10
17. 9/25/2008 10/25/2008 47,339,893.11 10
18. 10/25/2008 11/25/2008 45,337,214.33 10
19. 11/25/2008 12/25/2008 43,405,926.20 10
20. 12/25/2008 1/25/2009 41,444,489.91 10
21. 1/25/2009 2/25/2009 32,587,187.46 10
22. 2/25/2009 3/25/2009 30,048,033.34 10
23. 3/25/2009 4/25/2009 28,794,483.18 10
24. 4/25/2009 5/25/2009 27,598,810.53 10
25. 5/25/2009 6/25/2009 26,439,063.70 10
26. 6/25/2009 7/25/2009 25,213,717.47 10
27. 7/25/2009 8/25/2009 16,964,394.88 10
28. 8/25/2009 9/25/2009 15,086,093.63 10
29. 9/25/2009 10/25/2009 14,478,879.70 10
30. 10/25/2009 11/25/2009 13,889,783.45 10
31. 11/25/2009 12/25/2009 13,071,031.24 10
32. 12/25/2009 1/25/2010 12,346,251.58 10
33. 1/25/2010 2/25/2010 7,484,365.38 10
34. 2/25/2010 3/25/2010 6,523,354.71 10
35. 3/25/2010 4/25/2010 6,245,407.45 10
36. 4/25/2010 5/25/2010 6,010,925.78 10
37. 5/25/2010 6/25/2010 5,537,498.32 10
38. 6/25/2010 7/25/2010 5,210,133.33 10
39. 7/25/2010 8/25/2010 4,762,702.18 10
40. 8/25/2010 9/25/2010 4,596,730.78 10
41. 9/25/2010 10/25/2010 4,399,454.65 10
42. 10/25/2010 11/25/2010 4,242,401.27 10
43. 11/25/2010 12/25/2010 3,950,173.73 10
44. 12/25/2010 1/25/2011 3,741,847.43 10
45. 1/25/2011 2/25/2011 3,465,639.84 10
46. 2/25/2011 3/25/2011 3,350,224.90 10
47. 3/25/2011 4/25/2011 3,217,965.08 10
48. 4/25/2011 5/25/2011 3,113,981.66 10
49. 5/25/2011 6/25/2011 3,014,040.41 10
50. 6/25/2011 7/25/2011 2,915,829.46 10
51. 7/25/2011 8/25/2011 2,822,001.72 10
52. 8/25/2011 9/25/2011 2,731,068.59 10
53. 9/25/2011 10/25/2011 2,641,690.37 10
54. 10/25/2011 11/25/2011 2,556,351.69 10
55. 11/25/2011 12/25/2011 2,471,788.97 10
56. 12/25/2011 1/25/2012 2,360,023.39 10
57. 1/25/2012 2/25/2012 2,269,073.22 10
58. 2/25/2012 3/25/2012 2,195,368.02 10
59. 3/25/2012 4/25/2012 2,123,120.68 10
60. 4/25/2012 5/25/2012 2,054,405.84 10
61. 5/25/2012 6/25/2012 1,985,922.78 10
62. 6/25/2012 7/25/2012 1,889,885.70 10
63. 7/25/2012 8/25/2012 1,813,998.36 10
64. 8/25/2012 9/25/2012 1,755,088.84 10
65. 9/25/2012 10/25/2012 1,697,728.20 10
66. 10/25/2012 11/25/2012 1,642,877.50 10
67. 11/25/2012 12/25/2012 1,588,637.52 10
68. 12/25/2012 1/25/2013 1,519,570.42 10
69. 1/25/2013 2/25/2013 1,462,029.76 10
70. 2/25/2013 3/25/2013 1,414,591.44 10
71. 3/25/2013 4/25/2013 1,368,880.01 10
72. 4/25/2013 Termination Date -- -
------------------------------------------------------------------------------
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx
Xxxx 20, 2007
Xxxxx Fargo Bank, National Association, a national banking association, not
individually, but solely as Security Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-NC4 (the "Trust"), Mortgage Pass-Through Certificates,
Series 2007-NC4 0000 Xxx Xxxxxxxxx Xxxx Xxxxxxxx, XX 00000
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
June 20, 2007 between Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation (hereinafter "MSCS") and Xxxxx Fargo Bank, National Association, a
national banking association, not individually, but solely as Security
Administrator for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-NC4 (hereinafter
"Counterparty") (such ISDA Master Agreement, together with each Confirmation
exchanged between the parties pursuant thereto, hereinafter the "Agreement"),
Xxxxxx Xxxxxxx, a Delaware corporation (hereinafter "MS"), hereby irrevocably
and unconditionally guarantees to Counterparty, with effect from the date of the
Agreement, the due and punctual payment of all amounts payable by MSCS under the
Agreement when the same shall become due and payable, whether on Scheduled
Payment Dates, upon demand, upon declaration of termination or otherwise, in
accordance with the terms of the Agreement and giving effect to any applicable
grace period. Upon failure of MSCS punctually to pay any such amounts, and upon
written demand by Counterparty to MS at its address set forth in the signature
block of this Guarantee (or to such other address as MS may specify in writing),
MS agrees to pay or cause to be paid such amounts; provided that delay by
Counterparty in giving such demand shall in no event affect MS's obligations
under this Guarantee.
MS hereby agrees that its obligations hereunder shall be
unconditional and will not be discharged except by complete payment of the
amounts payable under the Agreement, irrespective of any claim as to the
Agreement's validity, regularity or enforceability or the lack of authority of
MSCS to execute or deliver the Agreement; or any change in or amendment to the
Agreement; or any waiver or consent by Counterparty with respect to any
provisions thereof; or the absence of any action to enforce the Agreement or the
recovery of any judgment against MSCS or of any action to enforce a judgment
against MSCS under the Agreement; or any similar circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor
generally. MS hereby waives diligence, presentment, demand on MSCS for payment
or otherwise (except as provided hereinabove), filing of claims, requirement of
a prior proceeding against MSCS and protest or notice, except as provided for in
the Agreement with respect to amounts payable by MSCS. If at any time payment
under the Agreement is rescinded or must be otherwise restored or returned by
Counterparty upon the insolvency, bankruptcy or reorganization of MSCS or MS or
otherwise, MS's obligations hereunder with respect to such payment shall be
reinstated upon such restoration or return being made by Counterparty.
MS represents to Counterparty as of the date hereof, which
representations will be deemed to be repeated by MS on each date on which a
Transaction is entered into, that:
(1) it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to execute
and deliver this Guarantee and to perform the provisions of this Guarantee on
its part to be performed;
(2) its execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do not
contravene any provision of its certificate of incorporation or by-laws or any
law, regulation or contractual restriction binding on it or its assets;
(3) all consents, authorizations, approvals and clearances
(including, without limitation, any necessary exchange control approval) and
notifications, reports and registrations requisite for its due execution,
delivery and performance of this Guarantee have been obtained from or, as the
case may be, filed with the relevant governmental authorities having
jurisdiction and remain in full force and effect and all conditions thereof have
been duly complied with and no other action by, and no notice to or filing with,
any governmental authority having jurisdiction is required for such execution,
delivery or performance; and
(4) this Guarantee is its legal, valid and binding obligation
enforceable against it in accordance with its terms except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights or by general equity
principles.
By accepting this Guarantee and entering into the Agreement,
Counterparty agrees that MS shall be subrogated to all rights of Counterparty
against MSCS in respect of any amounts paid by MS pursuant to this Guarantee,
provided that MS shall be entitled to enforce or to receive any payment arising
out of or based upon such right of subrogation only to the extent that it has
paid all amounts payable by MSCS under the Agreement.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York. All capitalized terms not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.
XXXXXX XXXXXXX
By: /s/ Xxxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Authorized Signatory
Address: 0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Fax No.: 000-000-0000
Ph. No.: 212-761-4000
SECRETARY'S CERTIFICATE
-----------------------
I, Xxxxx X. Xxxxxx, a duly elected and acting Assistant Secretary of
Xxxxxx Xxxxxxx, a corporation organized and existing under the laws of the State
of Delaware (the "Corporation"), certify as follows:
(1) Xxxxx X. Xxxx is the duly elected Treasurer and Xxxxxxxxxx X.
Xxxxx, Xxxxxxx X.X. Xxx, Xxxx X. Xxxxxxx, Xxx Xxxxxxx and Xxxxxxx X. Xxxxx are
duly elected Assistant Treasurers of the Corporation; and
(2) Pursuant to Section 7.01 of the Bylaws of the Corporation and
resolutions adopted by a Unanimous Consent of Directors in Lieu of a Meeting,
dated as of May 31, 1997, both of which are attached as an exhibit, the
Treasurer and the Assistant Treasurers are authorized to enter into agreements
and other instruments on behalf of the Corporation; and
(3) Pursuant to the attached Delegation of Authority executed by the
Treasurer of the Corporation as of April 18, 2006, Xxxxxxxxx X. Xxxxxx and Xxxxx
X. Xxxxxx are each authorized to sign, on behalf of the Corporation, any and all
guarantees and loan agreements of the Corporation; and
(4) The signatures of Xxxxxxxxxx X. Xxxxx, Xxxxxxxxx X. Xxxxxx,
Xxxxxxx X.X. Xxx, Xxxxx X. Xxxxxx, Xxxx X. Xxxxxxx, Xxx Xxxxxxx, Xxxxxxx X.
Xxxxx and Xxxxx X. Xxxx appearing on the attached signatory list are copies of
their genuine signatures.
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal
of the Corporation as of the 7th day of June, 2007.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary
[SEAL]
EXHIBIT
XXXXXX XXXXXXX
--------------
Section 7.01 of the Bylaws
--------------------------
SECTION 7.01. Contracts. Except as otherwise required by law, the
Amended and Restated Certificate of Incorporation or these Amended and Restated
Bylaws, any contracts or other instruments may be executed and delivered in the
name and on the behalf of the Corporation by such officer or officers of the
Corporation as the Board of Directors may from time to time direct. Such
authority may be general or confined to specific instances as the Board may
determine. Subject to the control and direction of the Board of Directors, the
Chairman of the Board, the President, the Chief Financial Officer, the Chief
Risk Officer, the Chief Legal Officer and the Treasurer may enter into, execute,
deliver and amend bonds, promissory notes, contracts, agreements, deeds, leases,
guarantees, loans, commitments, obligations, liabilities and other instruments
to be made or executed for or on behalf of the Corporation. Subject to any
restrictions imposed by the Board of Directors, such officers of the Corporation
may delegate such powers to others under his or her jurisdiction, it being
understood, however, that any such delegation of power shall not relieve such
officer of responsibility with respect to the exercise of such delegated power.
Resolution adopted by a Unanimous Consent of
Directors in Lieu of a Meeting, dated as of May 31, 1997
--------------------------------------------------------
RESOLVED FURTHER, that the Treasurer shall have charge and custody
of, and be responsible for, all funds and securities of the Corporation
and shall be authorized to deposit all such funds in the name of the
Corporation in banks or other depositories. In addition, the Treasurer
shall perform all other necessary acts and duties in connection with the
financial affairs of the Corporation, shall generally perform all duties
appertaining to the office of treasurer of a corporation and shall perform
such other duties and have such other powers as may be prescribed by the
Board, subject to the supervision of the Chief Financial Officer; and
RESOLVED FURTHER, that the Assistant Treasurer, if any, or, if there
shall be more than one, the Assistant Treasurers, shall, under the
supervision of the Treasurer, perform the duties and exercise the powers
of an assistant treasurer and, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer. In
addition, each Assistant Treasurer is authorized to enter into, execute,
deliver and amend on behalf of the Corporation any and all letters of
credit, uncommitted short-term credit obligations and short-term
promissory notes (as defined by generally accepted accounting principles),
such authorization to cease automatically upon termination of employment
with the Corporation.
XXXXXX XXXXXXX
Delegation of Authority
-----------------------
I, Xxxxx X. Xxxx, the Treasurer of Xxxxxx Xxxxxxx (the
"Corporation"), hereby delegate to Xxxxxxxxx Xxxxxx and Xxxxx Xxxxxx, each of
whom is an officer of Xxxxxx Xxxxxxx & Co. Incorporated, the authority to sign
severally, upon approval from and under the supervision of an Assistant
Treasurer of the Corporation, any and all guarantees and loan agreements of the
Corporation. Each authorization shall cease automatically upon such individual's
termination of employment with any affiliate of the Corporation.
This Delegation supersedes all previous Delegations in connection
with the authority noted above.
IN WITNESS WHEREOF, I have hereunto set my name as of the 18th day
of April, 2006
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXX XXXXXXX
Specimen Signatures
XXXXXXXXXX X. XXXXX /s/ Xxxxxxxxxx X. Xxxxx
------------------------------
XXXXXXXXX X. XXXXXX /s/ Xxxxxxxxx X. Xxxxxx
------------------------------
XXXXXXX X.X. XXX /s/ Xxxxxxx X.X. Xxx
------------------------------
XXXXX X. XXXXXX /s/ Xxxxx X. Xxxxxx
------------------------------
XXXX X. XXXXXXX /s/ Xxxx X. Xxxxxxx
------------------------------
XXX XXXXXXX /s/ Xxx Xxxxxxx
------------------------------
XXXXXXX X. XXXXX /s/ Xxxxxxx X. Xxxxx
------------------------------
XXXXX X. XXXX /s/ Xxxxx X. Xxxx
------------------------------
EXHIBIT U
FORM OF SAXON SERVICER REPORTS
Standard Loan Level File Layout - Master Servicing
Exhibit 1: Layout
------------------------------------------------------------------------------------------------------------------
Max
Column Name Description Decimal Format Comment Size
------------------------------------------------------------------------------------------------------------------
Each file requires the following fields:
------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define Text up to 20 digits 20
a group of loans.
------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan Text up to 10 digits 10
by the investor.
------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits 10
Servicer. This may be different than the
LOAN_NBR.
------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or 11
interest payment that a borrower is dollar signs ($)
expected to pay, P&I constant.
------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the 4 Max length of 6 6
service fee rate as reported by the
Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6 6
reported by the Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or 11
reported by the Servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by 2 No commas(,) or 11
the Servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6 6
Servicer.
------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6 6
calculate a forecasted rate.
------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or 11
the beginning of the processing cycle. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or 11
the end of the processing cycle. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle MM/DD/YYYY 10
that the borrower's next payment is due to
the Servicer, as reported by Servicer.
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the MM/DD/YYYY 10
first curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the MM/DD/YYYY 10
second curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
------------------------------------------------------------------------------------------------------------------
Exhibit 1: Continued Standard Loan Level File Layout
------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the MM/DD/YYYY 10
third curtailment amount.
------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported 2 No commas(,) or 11
by the Servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY 10
Servicer.
------------------------------------------------------------------------------------------------------------------
Action Code Key: 2
15=Bankruptcy,
30=Foreclosure,
60=PIF,
63=Substitution,
ACTION_CODE The standard FNMA numeric code used to
65=Repurchase,70=REO indicate the
default/delinquent status of a particular loan.
------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or 11
reported by the Servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, 2 No commas(,) or 11
if applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or 11
applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a 2 No commas(,) or 11
loss, if applicable. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
Plus the following applicable fields:
------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,) or 11
due at the beginning of the cycle date to dollar signs ($)
be passed through to investors.
------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or 11
investors at the end of a processing cycle. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported 2 No commas(,) or 11
by the Servicer for the current cycle -- dollar signs ($)
only applicable for Scheduled/Scheduled
Loans.
------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less 2 No commas(,) or 11
the service fee amount for the current dollar signs ($)
cycle as reported by the Servicer -- only
applicable for Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by 2 No commas(,) or 11
the Servicer for the current reporting dollar signs ($)
cycle -- only applicable for Actual/Actual
Loans.
------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or 11
service fee amount for the current dollar signs ($)
reporting cycle as reported by the Servicer
-- only applicable for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or 11
prepays on his loan as reported by the dollar signs ($)
Servicer.
------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or 11
waived by the servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY 10
Modification for the loan.
------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can 30
be alpha or numeric
------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or 11
interest advances made by Servicer. dollar signs ($)
------------------------------------------------------------------------------------------------------------------
Exhibit 1: Continued Standard Loan Level File Layout
------------------------------------------------------------------------------------------------------------------
Flag to indicate if the repurchase of a Y=Breach 1
loan is due to a breach of Representations N=NO Breach
and Warranties Let blank if N/A
BREACH_FLAG
------------------------------------------------------------------------------------------------------------------
Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT
For Month Ended: mm/dd/yyyy Servicer Name _________________________________
Prepared by: _____________________________ Investor Nbr __________________________________
____________________________________________________________________________________________
Section 1. Remittances and Ending Balances - Required Data
--------------------------------------------------------------------------------------------
Beginning Ending Total Monthly Total Ending Unpaid Total Monthly Principal
Loan Count Loan Count Remittance Amount Principal Balance Balance
--------------------------------------------------------------------------------------------
0 0 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------------
Principal Calculation
---------------------
1. Monthly Principal Due + $0.00
-------------
2. Current Curtailments + $0.00
-------------
3. Liquidations + $0.00
-------------
4. Other (attach explanation) + $0.00
-------------
5. Principal Due $0.00
-------------
6. Interest (reported "gross") + $0.00
-------------
7. Interest Adjustments on Curtailments + $0.00
-------------
8. Servicing Fees - $0.00
-------------
9. Other Interest (attach explanation) + $0.00
-------------
10. Interest Due (need to subtract ser fee) $0.00
=============
Remittance Calculation
----------------------
11. Total Principal and Interest Due (lines 5+10) + $0.00
-------------
12. Reimbursement of Non-Recoverable Advances - $0.00
-------------
13. Total Realized gains + $0.00
-------------
14. Total Realized Losses - $0.00
-------------
15. Total Prepayment Penalties + $0.00
-------------
16. Total Non-Supported Compensating Interest - $0.00
-------------
17. Other (attach explanation) $0.00
-------------
18. Net Funds Due on or before Remittance Date $ $0.00
=============
-----------------------------------------------------------------------------------------------------------
Section 2. Delinquency Report: - Optional Data for Loan Accounting
-----------------------------------------------------------------------------------------------------------
Installments Delinquent
-----------------------------------------------------------------------------------------------------------
Total No. Total No. In Real Estate Total Dollar
of of 30- 60- 90 or more Foreclosure Owned Amount of
Loans Delinquencies Days Days Days (Optional) (Optional) Delinquencies
-----------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 $0.00
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Section 3. REG AB Summary Reporting - REPORT ALL APPLICABLE FIELDS
--------------------------------------------------------------------------------
REG XX XXXXXX LOAN COUNT BALANCE
--------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT 0 $0.00
--------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
--------------------------------------------------------------------------------
DELINQUENCY P&I AMOUNT 0 $0.00
--------------------------------------------------------------------------------
EXHIBIT V
Saxon Standard File Layout - Delinquency Reporting
-------------------------------------------------------------------------------------------------------------------
o Column/Header Name o Description o o Format
Decimal Comment
-------------------------------------------------------------------------------------------------------------------
o SERVICER_LOAN_NBR o A unique number assigned to a loan by the o o
Servicer. This may be different than the
LOAN_NBR
-------------------------------------------------------------------------------------------------------------------
o LOAN_NBR o A unique identifier assigned to each loan by o o
the originator.
-------------------------------------------------------------------------------------------------------------------
o CLIENT_NBR o Servicer Client Number o o
-------------------------------------------------------------------------------------------------------------------
o SERV_INVESTOR_NBR o Contains a unique number as assigned by an o o
external servicer to identify a group of
loans in their system.
-------------------------------------------------------------------------------------------------------------------
o BORROWER_FIRST_NAME o First Name of the Borrower. o o
-------------------------------------------------------------------------------------------------------------------
o BORROWER_LAST_NAME o Last name of the borrower. o o
-------------------------------------------------------------------------------------------------------------------
o PROP_ADDRESS o Street Name and Number of Property o o
-------------------------------------------------------------------------------------------------------------------
o PROP_STATE o The state where the property located. o o
-------------------------------------------------------------------------------------------------------------------
o PROP_ZIP o Zip code where the property is located. o o
-------------------------------------------------------------------------------------------------------------------
o BORR_NEXT_PAY_DUE_DATE o The date that the borrower's next payment is o o
due to the servicer at the end of processing MM/DD/YYYY
cycle, as reported by Servicer.
-------------------------------------------------------------------------------------------------------------------
o LOAN_TYPE o Loan Type (i.e. FHA, VA, Conv) o o
-------------------------------------------------------------------------------------------------------------------
o BANKRUPTCY_FILED_DATE o The date a particular bankruptcy claim was o o
filed. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o BANKRUPTCY_CHAPTER_CODE o The chapter under which the bankruptcy was o o
filed.
-------------------------------------------------------------------------------------------------------------------
o BANKRUPTCY_CASE_NBR o The case number assigned by the court to the o o
bankruptcy filing.
-------------------------------------------------------------------------------------------------------------------
o POST_PETITION_DUE_DATE o The payment due date once the bankruptcy has o o
been approved by the courts MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o BANKRUPTCY_DCHRG_DISM_DATE o The Date The Loan Is Removed From Bankruptcy. o o
Either by Dismissal, Discharged and/or a MM/DD/YYYY
Motion For Relief Was Granted.
-------------------------------------------------------------------------------------------------------------------
o LOSS_MIT_APPR_DATE o The Date The Loss Mitigation Was Approved By o o
The Servicer MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o LOSS_MIT_TYPE o The Type Of Loss Mitigation Approved For A o o
Loan Such As;
-------------------------------------------------------------------------------------------------------------------
o LOSS_MIT_EST_COMP_DATE o The Date The Loss Mitigation /Plan Is o o
Scheduled To End/Close MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o LOSS_MIT_ACT_COMP_DATE o The Date The Loss Mitigation Is Actually o o
Completed MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_APPROVED_DATE o The date DA Admin sends a letter to the o o
servicer with instructions to begin MM/DD/YYYY
foreclosure proceedings.
-------------------------------------------------------------------------------------------------------------------
o ATTORNEY_REFERRAL_DATE o Date File Was Referred To Attorney to Pursue o o
Foreclosure MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FIRST_LEGAL_DATE o Notice of 1st legal filed by an Attorney in a o o
Foreclosure Action MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_SALE_EXPECTED_DATE o The date by which a foreclosure sale is o o
expected to occur. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_SALE_DATE o The actual date of the foreclosure sale. o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_SALE_AMT o The amount a property sold for at the o 2 o No
foreclosure sale. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o EVICTION_START_DATE o The date the servicer initiates eviction of o o
the borrower. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o EVICTION_COMPLETED_DATE o The date the court revokes legal possession o o
of the property from the borrower. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o LIST_PRICE o The price at which an REO property is o 2 o No
marketed. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o LIST_DATE o The date an REO property is listed at a o o
particular price. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o OFFER_AMT o The dollar value of an offer for an REO o 2 o No
property. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o OFFER_DATE_TIME o The date an offer is received by DA Admin or o o
by the Servicer. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o REO_CLOSING_DATE o The date the REO sale of the property is o o
scheduled to close. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o REO_ACTUAL_CLOSING_DATE o Actual Date Of REO Sale o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o OCCUPANT_CODE o Classification of how the property is o o
occupied.
-------------------------------------------------------------------------------------------------------------------
o PROP_CONDITION_CODE o A code that indicates the condition of the o o
property.
-------------------------------------------------------------------------------------------------------------------
o PROP_INSPECTION_DATE o The date a property inspection is performed. o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o APPRAISAL_DATE o The date the appraisal was done. o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o CURR_PROP_VAL o The current "as is" value of the property o 2 o
based on brokers price opinion or appraisal.
-------------------------------------------------------------------------------------------------------------------
o REPAIRED_PROP_VAL o The amount the property would be worth if o 2 o
repairs are completed pursuant to a broker's
price opinion or appraisal.
-------------------------------------------------------------------------------------------------------------------
o If applicable: o o o
-------------------------------------------------------------------------------------------------------------------
o DELINQ_STATUS_CODE o FNMA Code Describing Status of Loan o o
-------------------------------------------------------------------------------------------------------------------
o DELINQ_REASON_CODE o The circumstances which caused a borrower to o o
stop paying on a loan. Code indicates the
reason why the loan is in default for this
cycle.
-------------------------------------------------------------------------------------------------------------------
o MI_CLAIM_FILED_DATE o Date Mortgage Insurance Claim Was Filed With o o
Mortgage Insurance Company. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o MI_CLAIM_AMT o Amount of Mortgage Insurance Claim Filed o o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o MI_CLAIM_PAID_DATE o Date Mortgage Insurance Company Disbursed o o
Claim Payment MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o MI_CLAIM_AMT_PAID o Amount Mortgage Insurance Company Paid On o 2 o No
Claim commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o POOL_CLAIM_FILED_DATE o Date Claim Was Filed With Pool Insurance o o
Company MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o POOL_CLAIM_AMT o Amount of Claim Filed With Pool Insurance o 2 o No
Company commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o POOL_CLAIM_PAID_DATE o Date Claim Was Settled and The Check Was o o
Issued By The Pool Insurer MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o POOL_CLAIM_AMT_PAID o Amount Paid On Claim By Pool Insurance Company o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_A_CLAIM_FILED_DATE o Date FHA Part A Claim Was Filed With HUD o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_A_CLAIM_AMT o Amount of FHA Part A Claim Filed o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_A_CLAIM_PAID_DATE o Date HUD Disbursed Part A Claim Payment o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_A_CLAIM_PAID_AMT o Amount HUD Paid on Part A Claim o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_B_CLAIM_FILED_DATE o Date FHA Part B Claim Was Filed With HUD o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_B_CLAIM_AMT o Amount of FHA Part B Claim Filed o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_B_CLAIM_PAID_DATE o Date HUD Disbursed Part B Claim Payment o o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FHA_PART_B_CLAIM_PAID_AMT o Amount HUD Paid on Part B Claim o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o VA_CLAIM_FILED_DATE o Date VA Claim Was Filed With the Veterans o o
Admin MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o VA_CLAIM_PAID_DATE o Date Veterans Admin. Disbursed VA Claim o o
Payment MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o VA_CLAIM_PAID_AMT o Amount Veterans Admin. Paid on VA Claim o 2 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o MOTION_FOR_RELIEF_DATE o The date the Motion for Relief was filed o 10 o
MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_BID_AMT o The foreclosure sale bid amount o 11 o No
commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o FRCLSR_SALE_TYPE o The foreclosure sales results: REO, Third o o
Party, Conveyance to HUD/VA
-------------------------------------------------------------------------------------------------------------------
o REO_PROCEEDS o The net proceeds from the sale of the REO o o No
property. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o BPO_DATE o The date the BPO was done. o o
-------------------------------------------------------------------------------------------------------------------
o CURRENT_FICO o The current FICO score o o
-------------------------------------------------------------------------------------------------------------------
o HAZARD_CLAIM_FILED_DATE o The date the Hazard Claim was filed with the o 10 o
Hazard Insurance Company. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o HAZARD_CLAIM_AMT o The amount of the Hazard Insurance Claim o 11 o No
filed. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o HAZARD_CLAIM_PAID_DATE o The date the Hazard Insurance Company o 10 o
disbursed the claim payment. MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o HAZARD_CLAIM_PAID_AMT o The amount the Hazard Insurance Company paid o 11 o No
on the claim. commas(,)
or
dollar
signs ($)
-------------------------------------------------------------------------------------------------------------------
o ACTION_CODE o Indicates loan status o o Number
-------------------------------------------------------------------------------------------------------------------
o o
o NOD_DATE o MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o o
o NOI_DATE o MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o o o o
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o ACTUAL_PAYMENT_ o
PLAN_END_DATE o o
-------------------------------------------------------------------------------------------------------------------
o o
o ACTUAL_REO_START_DATE o MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------
o REO_SALES_PRICE o o o Number
-------------------------------------------------------------------------------------------------------------------
o REALIZED_LOSS/GAIN o As defined in the Servicing Agreement o o Number
-------------------------------------------------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
Delinquency Code Delinquency Description
-----------------------------------------------------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
Status Code Status Description
----------------------------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance
report date. Late submissions may result in claims not being passed until
the following month. The Servicer is responsible to remit all funds
pending loss approval and /or resolution of any disputed items.
The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
-------------------------------------
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and
servicing fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing
fee that would have been earned if all delinquent payments had
been made as agreed. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal
Balance of the Mortgage Loan as calculated on a monthly basis.
For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown
required showing period of coverage, base tax, interest, penalty. Advances
prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history (to calculate advances from
last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB's
approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
Credits:
--------
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid instructions
and Escrow Agent / Attorney Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds
and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
-------------------------------------------
23. The total derived from subtracting line 22 from 13. If the
amount represents a realized gain, show the amount in
parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
------------------------------------------
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
------------------------ ------------------------- -------------------------
Servicer Loan No. Servicer Name Servicer Address
------------------------ ------------------------- -------------------------
XXXXX FARGO BANK, N.A. Loan No._____________________________
Borrower's Name: _________________________________________________________
Property Address: ________________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount __________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $______________ (1)
(2) Interest accrued at Net Rate ________________ (2)
(3) Accrued Servicing Fees ________________ (3)
(4) Attorney's Fees ________________ (4)
(5) Taxes (see page 2) ________________ (5)
(6) Property Maintenance ________________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________ (7)
(8) Utility Expenses ________________ (8)
(9) Appraisal/BPO ________________ (9)
(10) Property Inspections ________________ (10)
(11) FC Costs/Other Legal Expenses ________________ (11)
(12) Other (itemize) ________________ (12)
Cash for Keys__________________________ ________________ (12)
HOA/Condo Fees_______________________ ________________ (12)
______________________________________ ________________ (12)
Total Expenses $_______________ (13)
Credits:
(14) Escrow Balance $ _______________ (14)
(15) HIP Refund ________________ (15)
(16) Rental Receipts ________________ (16)
(17) Hazard Loss Proceeds ________________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance ________________ (18a) HUD Part A
________________ (18b) HUD Part B
(19) Pool Insurance Proceeds ________________ (19)
(20) Proceeds from Sale of Acquired Property ________________ (20)
(21) Other (itemize) ________________ (21)
_________________________________________ ________________ (21)
Total Credits $________________ (22)
Total Realized Loss (or Amount of Gain) $________________ (23)
Escrow Disbursement Detail
Type Period of
(Tax /Ins.) Date Paid Coverage Total Paid Base Amount Penalties Interest
----------- --------- -------- ---------- ----------- --------- --------
EXHIBIT W
[Reserved]
EXHIBIT X
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx AND VIA OVERNIGHT MAIL
TO THE ADDRESS IMMEDIATELY BELOW
Xxxxx Fargo Bank, National Association, as Securities Administrator
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Corporate Trust Services - MSAC 2007-NC4 - SEC REPORT PROCESSING
**Additional Form [10-D] [10-K] [8-K] Disclosure** Required
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 8.12 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of May 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I Inc.,
as depositor, Xxxxx Fargo Bank, National Association, as master servicer and as
securities administrator, Saxon Mortgage Services, Inc., as servicer, and
Deutsche Bank National Trust Company, as trustee, the undersigned, as
[_________________________] hereby notifies you that certain events have come to
our attention that we are required to report to you for disclosure on Form
[10-D] [10-K] [8-K].
Description of additional Form [10-D] [10-K] [8-K] Disclosure:
List of any attachments hereto to be included in the Additional Form [10-D]
[10-K] [8-K] Disclosure:
Each of the attachments hereto is being transmitted to the Trustee in an
XXXXX-compatible format.
Any inquiries related to this notification should be directed to
[_________________] phone number [___________________]; email address
[______________________].
[NAME OF PARTY],
As [Role]
By:___________________________________
Name:______________________________
Title: ____________________________
EXHIBIT Y
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated
as of June 20, 2007 (the "Closing Date"), is between XXXXXX XXXXXXX MORTGAGE
CAPITAL HOLDINGS LLC, successor-in-interest by merger to XXXXXX XXXXXXX MORTGAGE
CAPITAL INC. (the "Sponsor") and XXXXXX XXXXXXX ABS CAPITAL I INC. (the
"Depositor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sponsor acquired certain mortgage loans (the "Mortgage
Loans") set forth on the mortgage loan schedule attached hereto as Schedule I
(the "Mortgage Loan Schedule") at (i) a public auction of mortgage loans subject
to a financing arrangement with the Sponsor and (ii) a public auction of
mortgage loans subject to a financing arrangement with Natixis Real Estate
Capital Inc.;
WHEREAS, pursuant to that certain xxxx of sale, dated as of the
Closing Date, between the Sponsor and the Depositor, the Mortgage Loans are to
be transferred by the Sponsor to the Depositor;
WHEREAS, pursuant to that certain Pooling and Servicing Agreement,
dated as of May 1, 2007 (the "Pooling and Servicing Agreement"), among the
Depositor, Saxon Mortgage Services, Inc., as a servicer (the "Servicer"), Xxxxx
Fargo Bank, National Association ("Xxxxx Fargo"), as securities administrator
and as master servicer, and Deutsche Bank National Trust Company, as trustee
(the "Trustee"), Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 (the "Trust")
shall issue its Mortgage Pass-Through Certificates, Series 2007-NC4 (the
"Certificates"), representing beneficial ownership interest in a trust, the
assets of which include, but are not limited to, the Mortgage Loans transferred
by the Depositor to the Trust pursuant to the Pooling and Servicing Agreement;
WHEREAS, in connection with the securitization of the Mortgage Loans
and the issuance of the Certificates, the parties hereto have determined it to
be necessary and appropriate for the Sponsor to make various representations and
warranties to the Depositor regarding the Mortgage Loans;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms.
(a) Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms in the Pooling and Servicing
Agreement. In the event of a conflict between any of the defined terms contained
in this Agreement and the Pooling and Servicing Agreement, the definitions
contained in the Pooling and Servicing Agreement shall control.
(b) The following capitalized terms shall have the meanings assigned
to such terms below:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
ALTA: The American Land Title Association, or any successor thereto.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the related Mortgagor and relating to a stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to
Appendix E of Standard & Poor's Glossary.
Deleted Mortgage Loan: A Mortgage Loan that is purchased or replaced
or to be replaced with a Qualified Substitute Mortgage Loan by the Sponsor in
accordance with the terms of this Agreement.
Delinquent: With respect to any Mortgage Loan, means any Monthly
Payment due on a Due Date that is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with respect to each Group I
Mortgage Loan secured by the related Mortgagor's primary residence with an
"annual percentage rate" or total "points and fees" (as each such term is
calculated under HOEPA) payable by the related Mortgagor that exceed the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R. ss. 226.32(a)(1)(i) and (ii), (c) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
was defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004), "high risk home," "predatory" or similar loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (d) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
such Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination and
(b) if such Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the Mortgagor or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Sponsor for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid by the
Sponsor to the Depositor or its designee in the month of substitution), (ii)
have a Mortgage Rate not less than, and not more than 1% greater than, the
Mortgage Rate of the Deleted Mortgage Loan, (iii) have a remaining term to
maturity not greater than, and not more than one year less than, that of the
Deleted Mortgage Loan, (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed-rate or adjustable-rate with the same Periodic Mortgage Rate Cap
and Index) and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 2 of this Agreement.
Standard & Poor's Glossary: Version 5.7 of the Standard & Poor's
LEVELS(R) Glossary.
Section 2. Representations and Warranties of the Sponsor.
As to each Mortgage Loan, the Sponsor hereby makes the
representations and warranties set forth on Part A of Exhibit I hereto to the
Depositor as of the Closing Date (or such other date as set forth herein). As to
each Group I Mortgage Loan, the Sponsor hereby makes the representations and
warranties set forth on Part B of Exhibit I hereto to the Depositor as of the
Closing Date (or such other date as set forth herein).
Section 3. [Reserved]
Section 4. Remedies for Breach of Representations and Warranties of
the Sponsor
(a) Within sixty (60) days of the earlier of either discovery by or
notice to the Sponsor of any breach of a representation or warranty which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Depositor, the Certificateholders or the Certificate Insurer therein (or
which materially and adversely affects the value of the applicable Mortgage Loan
or the interest of the Depositor, the Certificateholders or the Certificate
Insurer therein), the Sponsor shall cure such breach in all material respects
and, if such breach cannot be cured, the Sponsor shall, at the Depositor's
option, within sixty (60) calendar days of the Sponsor's receipt of request from
the Depositor, repurchase such Mortgage Loan at the Repurchase Price. In the
event that such a breach shall involve any representation or warranty set forth
in Section 2 of this Agreement, and such breach cannot be cured within sixty
(60) days of the earlier of either discovery by or notice to the Sponsor of such
breach, all of the Mortgage Loans materially and adversely affected thereby
shall, at the Depositor's option, be repurchased by the Sponsor at the
Repurchase Price. Notwithstanding the above sentence, within sixty (60) days of
the earlier of either discovery by, or notice to, the Sponsor of any breach of
the representations or warranties set forth in clauses (e), (o) and (r) on Part
A of Exhibit I or on Part B of Exhibit I, the Sponsor shall repurchase the
affected Mortgage Loan or Mortgage Loans at the Repurchase Price, together with
all expenses incurred by the Depositor as a result of such repurchase. Any
repurchase of a Mortgage Loan or Mortgage Loans pursuant to the foregoing
provisions of this Section 4 shall be accomplished by direct remittance of the
Repurchase Price to the Depositor or its designee in accordance with the
Depositor's instructions.
However, if the breach shall involve a representation or warranty
set forth in Section 2 of this Agreement (other than the representations or
warranties set forth in clauses (e), (o) and (r) on Part A of Exhibit I or on
Part B of Exhibit I) relating to any Mortgage Loan and the Sponsor discovers or
receives notice of any such breach within two years of the Closing Date, the
Sponsor shall, at the Depositor's option and provided that the Sponsor has a
Qualified Substitute Mortgage Loan, rather than repurchase such Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Mortgage Loans,
provided that any such substitution shall be effected not later than two years
after the Closing Date. If the Sponsor has no Qualified Substitute Mortgage
Loan, the Sponsor shall repurchase the deficient Mortgage Loan. Any repurchase
of a Mortgage Loan or Mortgage Loans pursuant to the foregoing provisions of
this Section 4 shall be accomplished by direct remittance of the Repurchase
Price to the Depositor or its designee in accordance with the Depositor's
instructions.
At the time of repurchase or substitution, the Depositor and the
Sponsor shall arrange for the reassignment of the Deleted Mortgage Loan to the
Sponsor and the delivery to the Sponsor of any documents held by the Trustee
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Sponsor shall, simultaneously with such reassignment, give
written notice to the Depositor that such repurchase or substitution has taken
place, amend the applicable Mortgage Loan Schedule to reflect the withdrawal of
the Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the applicable Mortgage
Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan
to this Agreement. In connection with any such substitution, the Sponsor shall
be deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Sponsor shall effect such substitution
by delivering to the Trustee or to such other party as the Depositor may
designate in writing for such Qualified Substitute Mortgage Loan the documents
required by the Pooling and Servicing Agreement, with the Mortgage Note endorsed
as required by the Pooling and Servicing Agreement. No substitution will be made
in any calendar month after the initial Determination Date for such month. The
Sponsor shall remit directly to the Depositor, or its designee, in accordance
with the Depositor's instructions, the Monthly Payment less the Servicing Fee
due, if any, on such Qualified Substitute Mortgage Loan or Mortgage Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Sponsor. For the month of substitution, distributions to the
Depositor shall include the Monthly Payment due on any Deleted Mortgage Loan in
the month of substitution, and the Sponsor shall thereafter be entitled to
retain all amounts subsequently received by the Sponsor in respect of such
Deleted Mortgage Loan.
For any month in which the Sponsor substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the Sponsor shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall, together with one month's interest at the Mortgage
Rate on the Deleted Mortgage Loan, shall be distributed by the Sponsor directly
to the Depositor or its designee in accordance with the Depositor's instructions
within two (2) Business Days of such substitution.
Any cause of action against the Sponsor relating to or arising out
of the breach of any representations and warranties made in Section 2 shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Depositor or notice thereof by the Sponsor to the Depositor, (ii) failure by the
Sponsor to cure such breach, repurchase such Mortgage Loan or substitute a
Qualified Substitute Mortgage Loan as specified above and (iii) demand upon the
Sponsor by the Depositor for compliance with this Agreement.
(b) The Sponsor shall deliver to the Depositor all documents and
instruments required under Section 2.01 of the Pooling and Servicing Agreement
with respect to the Mortgage Loans. In the event any document or instrument
required to be delivered to the Depositor pursuant to Section 2.01 of the
Pooling and Servicing Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Depositor, and in the event that the Sponsor does not cure such
failure within sixty (60) days of discovery or receipt of written notification
of such failure from the Depositor, the Sponsor shall, at the Depositor's
option, repurchase such Mortgage Loan at the Repurchase Price, together with all
expenses incurred by the Depositor as a result of such purchase.
(c) It is understood and agreed that the obligation of the Sponsor
set forth in Section 4(a) to repurchase for a Mortgage Loan in breach of a
representation or warranty contained in Section 2 constitutes the sole remedy of
the Depositor or any other person or entity with respect to such breach.
(d) The representations and warranties of the Sponsor set forth on
Part A of Exhibit I hereto shall inure to the benefit of the Depositor and its
successors and assigns until all amounts payable to the Certificate Insurer and
the holders of the Certificates under the Pooling and Servicing Agreement have
been paid in full, and the representations and warranties of the Sponsor set
forth on Part B of Exhibit I hereto shall inure to the benefit of the Depositor
and its successors and assigns until all amounts payable to the Certificate
Insurer and the holders of the Group I Class A Certificates under the Pooling
and Servicing Agreement have been paid in full.
Section 5. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
Section 6. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICTS OF LAWS
PRINCIPLES.
Section 7. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 8. Captions.
The captions in this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 9. Successors and Assigns.
This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns. Any entity into which the Sponsor or
the Depositor may be merged or consolidated shall, without the requirement for
any further writing, be deemed the Sponsor or the Depositor, respectively,
hereunder.
Section 10. Amendments
This Agreement may be amended from time to time by the parties
hereto, with the prior written consent of the Certificate Insurer.
Section 11. Third-Party Beneficiary.
For purposes of this Agreement, the Certificate Insurer shall be
considered a third party beneficiary to this Agreement entitled to all the
rights and benefits accruing to the Certificate Insurer in this Agreement, as if
it were a direct party to this Agreement.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL
HOLDINGS LLC
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
XXXXXX XXXXXXX ABS CAPITAL I INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
EXHIBIT I
For the purposes of this exhibit, "Mortgage Loan" refers to each
Mortgage Loan, "Group I Mortgage Loan" refers to each Group I Mortgage Loan and
"Mortgage Loan Schedule" refers to the Mortgage Loan Schedule.
Part A- Representations and Warranties with respect to each Mortgage Loan
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule relating to the Mortgage Loans is complete, true and
correct as of the Cut-off Date;
(b) Payments Current. Except with respect to the Mortgage Loans
identified on Exhibit I-A, (i) all payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days Delinquent, have been made and credited, (ii) no
payment required under the Mortgage Loan has been 30 days or more Delinquent at
any time since the origination of the Mortgage Loan, and (iii) the first Monthly
Payment was made with respect to the Mortgage Loan on its related Due Date or
within the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(d) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customarily insured against in the jurisdiction
where the related Mortgaged Property is located and acceptable to the Rating
Agencies;
(e) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Charges, have been complied with, and the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations;
(f) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First-Lien Mortgage
Loan) or second lien (with respect to a Second-Lien Mortgage Loan) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) with respect to a Second-Lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (a) specifically
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien (with respect to a
First-Lien Mortgage Loan) or second lien (with respect to a Second-Lien Mortgage
Loan) and first priority (with respect to a First-Lien Mortgage Loan) or second
priority (with respect to a Second-Lien Mortgage Loan) security interest on the
property described therein and the Sponsor has full right to sell and assign the
same to the Depositor.
(g) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Charges). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Sponsor, or, to the knowledge
of the Sponsor, any other person, including without limitation, the related
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan;
(h) Title Insurance. With respect to a Mortgage Loan which is not a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title insurance
policy, or with respect to any Mortgage Loan for which the related Mortgaged
Property is located in California a CLTA lender's title insurance policy, or
other generally acceptable form of policy or insurance acceptable to Xxxxxx Xxx
or Xxxxxxx Mac and each such title insurance policy is issued by a generally
accepted title insurer and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the mortgagee, its successors and
assigns, as to the first (with respect to a First-Lien Mortgage Loan) or second
(with respect to a Second-Lien Mortgage Loan) priority lien of the Mortgage in
the original principal amount of the Mortgage Loan (or to the extent a Mortgage
Note provides for negative amortization, the maximum amount of negative
amortization in accordance with the Mortgage), subject only to the exceptions
contained in clauses (1), (2) and (3) of paragraph (f) above, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Rate and Monthly Payment;
(i) No Defaults. Except as set forth in paragraph (b) above, there
is no default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would permit
acceleration, and neither the Sponsor nor any of its Affiliates nor any of their
respective predecessors, have waived any default, breach, violation or event
which would permit acceleration;
(j) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the related Mortgagor is not entitled to any refund of
any amounts paid or due under the Mortgage Note or Mortgage;
(k) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(l) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a mortgage loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the mortgaged property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(m) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Sponsor's knowledge, such
provision is enforceable;
(n) Mortgaged Property Undamaged; No Condemnation Proceedings. There
is no proceeding pending or, to the Sponsor's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property;
(o) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(p) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable;
(q) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Depositor, and which has
been delivered to the Trustee or to such other Person as the Depositor shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the issuer of the title insurer, if any, to the extent required, and
its terms are reflected on the Mortgage Loan Schedule, if applicable;
(r) Qualified Mortgage. The Mortgage Loan would be a "qualified
mortgage," within the meaning of Section 860G(a)(3) of the Code, if transferred
to a REMIC on its startup day in exchange for the regular or residual interests
in the REMIC;
(s) Ownership. The Sponsor is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Sponsor has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Depositor free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan and
following the sale of each Mortgage Loan, the Depositor will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest;
(t) Location of Improvements; No Encroachments. All improvements
which were considered in determining the appraised value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(u) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the mortgagee, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(v) LTV. No Mortgage Loan has an LTV greater than 100%; and
(w) The acquisition of the Mortgage Loans that were subject to the
Master Repurchase Agreement, dated as of December 12, 2005, as amended from time
to time, by and among (i) NC Capital Corporation, New Century Mortgage
Corporation, NC Asset Holding, L.P., NC Residual III Corporation, NC Residual IV
Corporation, Home123 Corporation, New Century Credit Corporation, (ii) the
buyers from time to time parties thereto (the "Buyers"), including the Sponsor,
and (iii) the Sponsor, as agent for the Buyers was consummated in compliance
with the Stipulation and Order dated April 27, 2007.
Part B - Representations and Warranties with respect
to each Group I Mortgage Loan
(a) Fair Credit Reporting Act. The Sponsor has, or has caused the
applicable servicer to, fully furnished accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis and in accordance with the Fair Credit Reporting Act and its
implementing regulations;
(b) Mortgagor Selection. The related Mortgagor was not encouraged or
required to select a mortgage loan product offered by the Group I Mortgage
Loan's originator which is a higher cost product designed for less creditworthy
mortgagors, taking into account such facts as, without limitation, the Group I
Mortgage Loan's requirements and the related Mortgagor's credit history, income,
assets and liabilities. For a Mortgagor who seeks financing through a Mortgage
Loan originator's higher-priced subprime lending channel, the related Mortgagor
was directed towards or offered the Group I Mortgage Loan originator's standard
mortgage line if the related Mortgagor was able to qualify for one of the
standard products;
(c) Underwriting Methodology. The methodology used in underwriting the
extension of credit for each Group I Mortgage Loan does not rely on the extent
of the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed related
objective criteria that related such facts as, without limitation, the related
Mortgagor's income, assets, and liabilities to the proposed mortgage payment
and, based on such methodology, the Group I Mortgage Loan's originator made a
reasonable determination that at the time of origination the related Mortgagor
had the ability to make timely payments on the Group I Mortgage Loan;
(d) Group I Mortgage Loans with Prepayment Charges. With respect to any
Group I Mortgage Loan that contains a provision permitting imposition of a
prepayment charge upon a prepayment prior to maturity: (i) with respect to each
Group I Mortgage Loan secured by the related Mortgagor's primary residence, the
Group I Mortgage Loan provides some benefit to the related Mortgagor, including
but not limited to a rate or fee reduction, in exchange for accepting such
prepayment charge, (ii) with respect to each Group I Mortgage Loan secured by
the related Mortgagor's primary residence, the Group I Mortgage Loan's
originator had a written policy of offering the related Mortgagor, or requiring
third-party brokers to offer the related Mortgagor, the option of obtaining a
mortgage loan that did not require payment of such a prepayment charge, (iii)
the prepayment charge was adequately disclosed to the related Mortgagor in the
mortgage loan documents pursuant to applicable state, local and federal law, and
(iv) and no such prepayment charge may be imposed for a term in excess of five
(5) years with respect to Group I Mortgage Loans originated prior to October 1,
2002. With respect to Group I Mortgage Loans originated on or after October 1,
2002, the duration of the prepayment charge period shall not exceed three (3)
years from the date of the Mortgage Note unless the Group I Mortgage Loan was
modified to reduce the prepayment charge period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in prepayment charge period;
(e) Xxxxxxx Mac Loan Limits. The original principal balance of each Group
I Mortgage Loan was within Xxxxxxx Mac's dollar amount limits for conforming
one- to four-family mortgage loans and the original principal balance for each
Group I Mortgage Loan which is a Second-Lien Mortgage Loan was within one-half
of Xxxxxxx Mac's dollar amount limits for one-unit conforming one-to four-family
mortgage loans for first-lien mortgage loans, without regard to the number of
units in the related Mortgaged Property;
(f) Xxxxxxx Mac Loan Limits for Second-Lien Mortgage Loans. With respect
to each Group I Mortgage Loan which is a Second-Lien Mortgage Loan (A) such lien
is on a one-to four-family residence that is the principal residence of the
related Mortgagor, and (B) the original principal balance of the related
First-Lien Mortgage Loan plus the original principal balance of any subordinate
lien mortgage loans relating to the same Mortgaged Property was within Xxxxxxx
Mac's dollar amount limits for First-Lien Mortgage Loans for that property type;
(g) No Manufactured Homes or "Condotels". No Group I Mortgage Loan is
secured by a Mortgaged Property which is a Manufactured Home or a condominium
unit that is part of a condominium development that operates as, or holds itself
out to be, a condominium hotel ("condotel"), regardless of whether such unit
itself is being used as a condotel unit;
(h) Single Family Residential Housing Only. Each Group I Mortgage Loans is
exclusively secured by single-family (one-to four unit) residential housing. No
Group I Mortgage Loans may be on multifamily, commercial, industrial,
agricultural or undeveloped property, or any property located anywhere except
the continental United States, Alaska, Hawaii, Puerto Rico, the Virgin Islands
or Guam;
(i) Points and Fees. With respect to each Group I Mortgage Loan secured by
the related Mortgagor's primary residence, no Mortgagor was charged "points and
fees" in an amount greater than (i) $1,000, or (ii) 5% of the principal amount
of such Group I Mortgage Loan, whichever is greater. For purposes of this
representation, "points and fees" (x) include origination, underwriting, broker
and finder fees and charges that the mortgagee imposed as a condition of making
the Group I Mortgage Loan, whether they are paid to the mortgagee or a third
party, and (y) exclude bona fide discount points, fees paid for actual services
rendered in connection with the origination of the Group I Mortgage Loan (such
as attorneys' fees, notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and tax certifications,
and home inspections), the cost of mortgage insurance or credit-risk price
adjustments, the costs of title, hazard, and flood insurance policies, state and
local transfer taxes or fees, escrow deposits for the future payment of taxes
and insurance premiums, and other miscellaneous fees and charges which
miscellaneous fees and charges, in total, do not exceed 0.25% of the principal
amount of such Group I Mortgage Loan;
(j) Purchase of Insurance. No Mortgagor was required to purchase any
single-premium credit insurance policy (e.g. life, mortgage, disability,
property, accident unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health insurance) in
connection with the origination of the Group I Mortgage Loan. No proceeds from
any Group I Mortgage Loan were used to purchase single-premium credit insurance
policies or debt cancellation agreements as part of the origination of, or as a
condition to closing, such Mortgage Loan; and
(k) No Arbitration. No Group I Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Group I Mortgage Loan
transaction.
EXHIBIT I-A
Schedule of Delinquent Mortgage Loans
-------------------------------------
[Available upon Request]
SCHEDULE I
Mortgage Loan Schedule
----------------------
(Delivered to the Trustee and not attached to the Pooling and Servicing
Agreement)
EXHIBIT Z
CERTIFICATE INSURANCE POLICY
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
(000) 000-0000
Financial Guaranty Insurance Policy
Issuer: Xxxxxx Xxxxxxx ABS Capital I Inc. Policy Number: 07030039
Trust 2007-NC4 Control Number: 0010001
Insured Obligations:
------------------------------------------------------------
$875,825,000 in aggregate certificate principal balance of
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4 Mortgage
Pass Through Certificates, Series 2007-NC4, Class A-1
Certificates, Class A-2a Certificates, Class A-2b
Certificates, Class A-2c Certificates and Class A-2d
Certificates (the "Insured Certificates")
------------------------------------------------------------
Trustee: Deutsche Bank National Trust Company
Securities Administrator: Xxxxx Fargo Bank, National Association
Financial Guaranty Insurance Company ("Financial Guaranty"), a New York stock
insurance company, in consideration of the right of Financial Guaranty to
receive monthly premiums pursuant to the Pooling and Servicing Agreement (as
defined below) and the Insurance Agreement referred to therein, and subject to
the terms of this Financial Guaranty Insurance Policy, hereby unconditionally
and irrevocably agrees to pay each Insured Amount to the Securities
Administrator on behalf of the Trustee named above or its successor, on behalf
of the Insured Certificateholders, except as otherwise provided herein with
respect to Preference Amounts. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Pooling and
Servicing Agreement as in effect and executed on the date hereof without giving
effect to any subsequent amendments or modifications thereto unless such
amendments or modifications have been approved in writing by Financial Guaranty.
For the purposes of this Financial Guaranty Insurance Policy, the following
terms used herein shall have the meanings assigned to them below.
"Insured Amount" means, with respect to the Insured Certificates, (1) any
Deficiency Amount, and (2) any Preference Amount.
"Deficiency Amount" means , with respect to each Class of Insured Certificates,
an amount, if any, equal to (a) for any Distribution Date prior to the Final
Scheduled Distribution Date, the excess, if any, of the Accrued Certificate
Interest on such Class of Insured Certificates for such Distribution Date over
all amounts available (including, without limitation, from Available Funds and
any Net Swap Receipts received under the Interest Rate Swap Agreement) to pay
Accrued Certificate Interest on such Class of Insured Certificates on such
Distribution Date in accordance with the priority of payments set forth in the
Pooling and Servicing Agreement, (b) on any Distribution Date after the date
that the Class Certificate Balance of each Class of Subordinate Certificates has
been reduced to zero, at the sole option and discretion of Financial Guaranty,
an amount equal to the excess, if any, of (i) the aggregate Class Certificate
Balances of the Insured Certificates on that Distribution Date (after giving
effect to all payments of principal on that Distribution Date) over (ii) the
aggregate Stated Principal Balance of the Mortgage Loans on that Distribution
Date and (c) on the Final Scheduled Distribution Date, the sum of (i) the amount
set forth in clause (a) above and (ii) the amount equal to the outstanding Class
Certificate Balance of such Class of Insured Certificates on the Final Scheduled
Distribution Date, after giving effect to the payment of all amounts actually
available to be paid on the Insured Certificates on the Final Scheduled
Distribution Date from all sources other than this Financial Guaranty Insurance
Policy.
"Final Scheduled Distribution Date" means, with respect of each Class of Insured
Certificates, the Distribution Date in May 2037.
"Insured Certificateholder" means, as to a particular Insured Certificate, the
Person, other than the Depositor, the Sponsor, the Interest Rate Swap Provider,
the Master Servicer, the Securities Administrator, the Trustee, the Servicer, or
any subservicer retained by the Servicer or any affiliate of any such Person
who, on the applicable Distribution Date, is entitled under the terms of such
Insured Certificate to a distribution on such Insured Certificate.
"Insurer Optional Parity Deficit Draw" means the amount, if any, calculated in
accordance with clause (b) of the definition of "Deficiency Amount"
Financial Guaranty will pay a Deficiency Amount with respect to the Insured
Certificates by 12:00 noon (New York City time) in immediately available funds
to the Securities Administrator (which shall receive such Deficiency Amount on
behalf of the Trustee for the benefit of the Insured Certificateholders) on the
later of (i) the second Business Day following the Business Day on which
Financial Guaranty shall have received Notice that a Deficiency Amount is due in
respect of the Insured Certificates and (ii) the Distribution Date on which the
Deficiency Amount is payable to the Insured Certificateholders pursuant to the
Pooling and Servicing Agreement, for disbursement to the Insured
Certificateholders in the same manner as other payments with respect to the
Insured Certificates are required to be made. Any Notice received by Financial
Guaranty after 12:00 noon New York City time on a given Business Day or on any
day that is not a Business Day shall be deemed to have been received by
Financial Guaranty on the next succeeding Business Day. Notwithstanding the
foregoing, any Insurer Optional Parity Deficit Draw may be made at the sole
option and discretion of Financial Guaranty.
Upon the payment of any Insured Amount hereunder, Financial Guaranty shall be
fully subrogated to the rights of the Insured Certificateholders to receive the
amount so paid. Financial Guaranty's obligations with respect to the Insured
Certificates hereunder with respect to each Distribution Date shall be
discharged to the extent funds consisting of the related Insured Amount are
received by the Securities Administrator on behalf of the Trustee for the
benefit of the Insured Certificateholders for payment to such Insured
Certificateholders, as provided in the Pooling and Servicing Agreement and
herein, whether or not such funds are properly applied by the Securities
Administrator.
If any portion or all of any amount that is insured hereunder that was
previously paid to an Insured Certificateholder is recoverable and sought to be
recovered from such Insured Certificateholder as a voidable preference by a
trustee in bankruptcy pursuant to the U.S. Bankruptcy Code, pursuant to a final
non-appealable order of a court exercising proper jurisdiction in an insolvency
proceeding (a "Final Order") (such recovered amount, a "Preference Amount"),
Financial Guaranty will pay on the guarantee described in the first paragraph
hereof, an amount equal to each such Preference Amount by 12:00 noon (New York
City time) on the second Business Day following receipt by Financial Guaranty of
(w) a certified copy of the Final Order, (x) an opinion of counsel reasonably
satisfactory to Financial Guaranty that such order is final and not subject to
appeal, (y) an assignment, in form reasonably satisfactory to Financial
Guaranty, irrevocably assigning to Financial Guaranty all rights and claims of
the Trustee, the Securities Administrator and/or such Insured Certificateholders
relating to or arising under such Preference Amount and constituting an
appropriate instrument, in form satisfactory to Financial Guaranty, appointing
Financial Guaranty as the agent of the Trustee, the Securities Administrator
and/or such Insured Certificateholders in respect of such Preference Amount,
including without limitation in any legal proceeding related to the Preference
Amount, and (z) a Notice appropriately completed and executed by the Securities
Administrator for payment of such Preference Amount. Such payment shall be made
to the receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Final Order and not to the Securities Administrator, the Trustee or
the Insured Certificateholders directly (unless the Insured Certificateholders
have previously paid such amount to such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in such Final Order in which
case payment shall be made to the Securities Administrator on behalf of the
Trustee for payment to the Insured Certificateholders upon delivery of proof of
such payment reasonably satisfactory to Financial Guaranty). Notwithstanding the
foregoing, in no event shall Financial Guaranty be (i) required to make any
payment under this Financial Guaranty Insurance Policy in respect of any
Preference Amount to the extent such Preference Amount is comprised of amounts
previously paid by Financial Guaranty hereunder, or (ii) obligated to make any
payment in respect of any Preference Amount, which payment represents a payment
of the principal amount of any Insured Certificates, prior to the time Financial
Guaranty otherwise would have been required to make a payment in respect of such
principal, in which case Financial Guaranty shall pay the balance of the
Preference Amount when such amount otherwise would have been required.
Any of the documents required under clauses (w) through (z) of the preceding
paragraph that are received by Financial Guaranty after 12:00 noon (New York
City time) on a given Business Day or on any day that is not a Business Day
shall be deemed to have been received by Financial Guaranty on the next
succeeding Business Day. If any notice received by Financial Guaranty is not in
proper form or is otherwise insufficient for the purpose of making a claim under
this Financial Guaranty Insurance Policy, it will be deemed not to have been
received by Financial Guaranty, and Financial Guaranty will promptly so advise
the Securities Administrator, and the Securities Administrator may submit an
amended Notice. All payments made by Financial Guaranty hereunder in respect of
Preference Amounts will be made with Financial Guaranty's own funds.
This Financial Guaranty Insurance Policy is non-cancelable for any reason,
including nonpayment of any premium. The premium on this Financial Guaranty
Insurance Policy is not refundable for any reason, including the payment of any
Insured Certificates prior to their respective maturities. This Financial
Guaranty Insurance Policy shall expire and terminate without any action on the
part of Financial Guaranty or any other Person on the date that is the later of
(i) the date that is one year and one day following the date on which the
Insured Certificates shall have been paid in full and (ii) if any insolvency
proceeding referenced in the second preceding paragraph has been commenced on or
prior to the date specified in clause (i) above, the 30th day after the entry of
a final, non-appealable order in resolution or settlement of such proceeding.
This Financial Guaranty Insurance Policy does not cover Prepayment Interest
Shortfalls, Basis Risk Carryforward Amounts or Relief Act Shortfalls nor does
the Policy guarantee to the Insured Certificateholders any particular rate of
principal payment. In addition, this Financial Guaranty Insurance Policy does
not cover shortfalls, if any, attributable to the liability of the Depositor,
the Trust, the Insured Certificateholders, any Trust REMIC, the Securities
Administrator or the Trustee for withholding taxes or other charges imposed by
any governmental authority, if any (including interest and penalties in respect
of such liabilities). This Financial Guaranty Insurance Policy also does not
cover the failure of the Securities Administrator to make any payment required
under the Pooling and Servicing Agreement to the Insured Certificateholders.
A monthly premium shall be due and payable in advance as provided in the Pooling
and Servicing Agreement and the Insurance Agreement.
This Financial Guaranty Insurance Policy is subject to and shall be governed by
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof. The proper venue for any action or proceeding on this
Financial Guaranty Insurance Policy shall be the County of New York, State of
New York.
THE INSURANCE PROVIDED BY THIS FINANCIAL GUARANTY INSURANCE POLICY IS NOT
COVERED BY THE NEW YORK PROPERTY/CASUALTY INSURANCE SECURITY FUND (NEW YORK
INSURANCE CODE, ARTICLE 76).
"Notice" means a written notice in the form of Exhibit A to this Financial
Guaranty Insurance Policy by registered or certified mail or telephonic or
telegraphic notice, subsequently confirmed by written notice delivered via
telecopy, telex or hand delivery from the Securities Administrator to Financial
Guaranty specifying the information set forth therein. "Pooling and Servicing
Agreement" means the Pooling and Servicing Agreement, dated as of May 1, 2007,
relating to the Insured Certificates by and among Xxxxxx Xxxxxxx ABS Capital I
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association, as
master servicer and securities administrator (the "Master Servicer" or the
"Securities Administrator"), Saxon Mortgage Services, Inc., as servicer (the
"Servicer") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). "Insurance Agreement" means the Insurance and Indemnity Agreement,
among Financial Guaranty, the Sponsor, the Depositor, the Servicer, the Master
Servicer, the Securities Administrator and the Trustee, dated as of June 20,
2007.
Financial Guaranty shall be fully subrogated to the rights of each
Certificateholder to the extent of any payment by Financial Guaranty under this
Financial Guaranty Insurance Policy.
In the event that payments under the Insured Certificates are accelerated,
nothing herein contained shall obligate Financial Guaranty to make any payment
of principal or interest on the Insured Certificates on an accelerated basis,
unless such acceleration of payment by Financial Guaranty is at the sole option
of Financial Guaranty; it being understood that a payment shortfall in respect
of the redemption of any Insured Certificate by reason of the repurchase of the
Trust Fund pursuant to Section 11.01 of the Pooling and Servicing Agreement does
not constitute acceleration for the purposes hereof.
IN WITNESS WHEREOF, Financial Guaranty has caused this Financial Guaranty
Insurance Policy to be affixed with its corporate seal and to be signed by its
duly authorized officer in facsimile to become effective and binding upon
Financial Guaranty by virtue of the countersignature of its duly authorized
representative.
President Authorized Representative
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxx
-------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx Xxxx
Title: President Title: Authorized Representative
Effective Date: June 20, 2007
EXHIBIT A
NOTICE OF NONPAYMENT
AND DEMAND FOR PAYMENT OF INSURED AMOUNTS
To: Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Attention: Structured Finance Surveillance
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Re: ----------------------------------------------------------
$875,825,000 in aggregate certificate principal balance
of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass Through Certificates, Series 2007-NC4,
Class A-1 Certificates, Class A-2a Certificates, Class
A-2b Certificates, Class A-2c Certificates and Class A-2d
Certificates (the "Insured Certificates")
----------------------------------------------------------
Policy No. 07030039 (the "Policy")
Distribution Date: _______________________________
We refer to that certain Pooling and Servicing Agreement, dated as of May 1,
2007, relating to the Insured Certificates by and among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National
Association, as master servicer and securities administrator (the "Master
Servicer" or the "Securities Administrator"), Saxon Mortgage Services, Inc., as
servicer (the "Servicer") and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). All capitalized terms not otherwise defined herein or in the
Policy shall have the same respective meanings assigned to such terms in the
Pooling and Servicing Agreement.
(a) The Securities Administrator has determined under the Pooling and
Servicing Agreement that with respect to the Insured Certificates:
(1) for any Distribution Date prior to the Final Distribution Date, the
excess, if any, of the Accrued Certificate Interest on such Class
of Insured Certificates for such Distribution Date over all amounts
available (including, without limitation, from Available Funds and
any Net Swap Receipts received under the Interest Rate Swap
Agreement) to pay Accrued Certificate Interest on such Class of
Insured Certificates on such Distribution Date in accordance with
the priority of payments set forth in the Pooling and Servicing
Agreement is $______________________ and
(2) on the Final Distribution Date, the sum of (i) the amount set forth
in clause (a) above and (ii) the amount needed to pay the
outstanding Certificate Principal Balance of such Class of Insured
Certificates on the Final Distribution Date, after giving effect to
the payment of all amounts actually available to be paid on the
Insured Certificates on the Final Distribution Date from all
sources other than this Financial Guaranty Insurance Policy is
$_________________________.
(b) The amounts available to pay the items identified in items (1) and (2)
above, as reduced by any portion thereof that has been deposited in the
Collection Account or the Payment Account but may not be withdrawn
therefrom pursuant to an order of a United States bankruptcy court of
competent jurisdiction imposing a stay pursuant to Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Bankruptcy Code), is $___________.
(c) On any Distribution Date after the date that the Class Certificate
Balance of each Class of Subordinate Certificates has been reduced to
zero, the Securities Administrator has received written notice from
Financial Guaranty stating that Financial Guaranty has exercised its
option in its sole discretion to pay an amount equal to $____________
representing the excess of (i) the aggregate Class Certificate
Balances of the Insured Certificates over (ii) the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date.
Please be advised that, accordingly, a Deficiency Amount exists for the
Distribution Date identified above for the Insured Certificates in the amount of
$__________. This Deficiency Amount constitutes an Insured Amount payable by
Financial Guaranty under the Policy.
[In addition, attached hereto is a copy of the Final Order in connection with a
Preference Amount in the amount set forth therein, together with an assignment
of rights and appointment of agent and other documents required by the Policy in
respect of Preference Amounts. The amount of the Preference Amount is
$______________. This Preference Amount constitutes an Insured Amount payable by
Financial Guaranty under the Policy.]
Accordingly, pursuant to the Pooling and Servicing Agreement, this statement
constitutes a notice for payment of an Insured Amount by Financial Guaranty in
the amount of $_______________ under the Policy.
(c) No payment claimed hereunder is in excess of the amount payable under the
Policy.
The amount requested in this Notice should be paid to:
Xxxxx Fargo Bank, NA
ABA # 000000000
Account Name: SAS Clearing Account #0000000000
FFC: 53158503, MSAC 2007-NC4
Any person who knowingly and with intent to defraud any insurance company or
other person files an application for insurance or statement of claim containing
any materially false information or conceals for the purpose of misleading,
information concerning any fact material thereto, commits a fraudulent insurance
act, which is a crime, and shall also be subject to a civil penalty not to
exceed Five Thousand Dollars ($5,000.00) and the stated value of the claim for
each such violation.
IN WITNESS WHEREOF, the Securities Administrator has executed and
delivered this Notice of Nonpayment and Demand for Payment of Insured Amounts
this _____ day of ______________________.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
_______________________________________,
as Securities Administrator
By: ___________________________________
Title: ________________________________
EXHIBIT AA
INSURANCE AGREEMENT
FINANCIAL GUARANTY INSURANCE COMPANY,
as Certificate Insurer,
XXXXXX XXXXXXX MORTGAGE CAPITAL HOLDINGS LLC,
as Sponsor,
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor,
SAXON MORTGAGE SERVICES, INC.,
as Servicer,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
INSURANCE AND INDEMNITY AGREEMENT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4, Class A-1, Class
A-2a, Class A-2b, Class A-2c and Class A-2d Certificates
Dated as of June 20, 2007
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and shall not
be deemed to be part of this Insurance Agreement. All capitalized terms used in
this Insurance Agreement and not otherwise defined shall have the meanings set
forth in Article I of this Insurance Agreement.)
ARTICLE I DEFINITIONS
Section 1.01. Defined Terms.
Section 1.02. Other Definitional Provisions.
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties of the Sponsor, the Servicer
and the Depositor.
Section 2.02. Affirmative Covenants of the Sponsor, the Servicer and the
Depositor.
Section 2.03. Negative Covenants of the Servicer, the Sponsor and the
Depositor.
Section 2.04. Representations, Warranties and Covenants of the Certificate
Insurer.
Section 2.05. Representation of the Master Servicer and the Securities
Administrator.
ARTICLE III THE POLICY; REIMBURSEMENT
Section 3.01. Issuance of the Certificate Insurance Policy.
Section 3.02. Payment of Fees and Premium.
Section 3.03. Reimbursement Obligation.
Section 3.04. Indemnification.
Section 3.05. Payment Procedure.
Section 3.06. Joint and Several Liability.
Section 3.07. Subrogation.
ARTICLE IV FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of the Insurance Agreement.
Section 4.02. Further Assurances and Corrective Instruments.
Section 4.03. Obligations Absolute.
Section 4.04. Assignments; Reinsurance; Third-Party Rights.
Section 4.05. Liability of the Certificate Insurer.
ARTICLE V DEFAULTS AND REMEDIES
Section 5.01. Defaults.
Section 5.02. Remedies; No Remedy Exclusive.
Section 5.03. Waivers.
ARTICLE VI MISCELLANEOUS
Section 6.01. Amendments, Etc.
Section 6.02. Notices.
Section 6.03. Severability.
Section 6.04. Governing Law.
Section 6.05. Consent to Jurisdiction.
Section 6.06. Consent of the Certificate Insurer.
Section 6.07. Counterparts.
Section 6.08. Headings.
Section 6.09. Trial by Jury Waived.
Section 6.10. Limited Liability.
Section 6.11. Entire Agreement.
Section 6.12. Offering Documents.
This INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or
supplemented from time to time, this "Insurance Agreement"), is dated as of June
20, 2007, by and among Financial Guaranty Insurance Company, as Certificate
Insurer, Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC, as Sponsor, Xxxxxx
Xxxxxxx ABS Capital I Inc., as Depositor, Saxon Mortgage Services, Inc., as
Servicer, Xxxxx Fargo Bank, National Association, as Master Servicer and
Securities Administrator and Deutsche Bank National Trust Company, as Trustee.
PRELIMINARY STATEMENT
The Pooling and Servicing Agreement, dated as of May 1, 2007 (as may be
amended, modified or supplemented from time to time as set forth therein, the
"Pooling and Servicing Agreement"), among the Sponsor, the Depositor, the
Servicer, the Master Servicer, the Securities Administrator and the Trustee,
provides for, among other things, the issuance of the Certificates. The Sponsor
has requested that the Certificate Insurer issue and the Certificate Insurer is
willing to issue a financial guaranty insurance policy (the "Certificate
Insurance Policy") to guarantee payment of Insured Amounts (as defined in the
Certificate Insurance Policy) to the Securities Administrator for the Trustee
for the benefit of the Insured Certificateholders upon such terms and conditions
as were mutually agreed upon by the parties and subject to the terms and
conditions of the Certificate Insurance Policy. The Certificate Insurer shall be
paid a Premium as set forth herein. Each of the Sponsor, the Depositor and the
Servicer has undertaken certain obligations in consideration for the Certificate
Insurer's issuance of its Certificate Insurance Policy. The parties hereto
desire to specify the conditions precedent to the issuance of the Certificate
Insurance Policy by the Certificate Insurer and to provide for certain other
matters.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Unless the context clearly requires otherwise, all capitalized terms used
but not defined herein shall have the respective meanings assigned to them in
the Pooling and Servicing Agreement or, if not defined therein, in the
Certificate Insurance Policy described below. In the event any capitalized term
is defined both herein and in the Pooling and Servicing Agreement, the
definition in this Insurance Agreement shall supercede. For purposes of this
Insurance Agreement, the following words and phrases shall have the following
meanings:
"Aggregate Reimbursement Amount" shall mean, as to any Distribution Date,
the sum of (i) all amounts paid by the Certificate Insurer under the Certificate
Insurance Policy which have not been previously reimbursed, (ii) all unpaid
Premiums, (iii) all amounts due to the Certificate Insurer under the Pooling and
Servicing Agreement and this Insurance Agreement and (iv) interest on the
amounts described in clauses (i) through (iii) unpaid on prior Distribution
Dates at the Late Payment Rate.
"Certificates" means the Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4
Mortgage Pass-Through Certificates, Series 2007-NC4, as issued pursuant to the
Pooling and Servicing Agreement.
"Certificate Insurance Policy" means the Financial Guaranty Insurance
Policy, Policy Number 07030039, together with all endorsements thereto, issued
by the Certificate Insurer in favor of the Trustee for the benefit of the
Insured Certificateholders.
"Certificate Insurer" means Financial Guaranty Insurance Company or any
successor thereto, as issuer of the Certificate Insurance Policy.
"Certificate Insurer Financial Statements" has the meaning given such term
in Section 2.04(j) of this Insurance Agreement.
"Certificate Insurer Information" means the information in the Offering
Documents regarding the Certificate Insurer and the Certificate Insurance
Policy, which consists solely of the information set forth under the captions
"The Certificate Insurance Policy" and "The Certificate Insurer" in the
Prospectus Supplement and the Free Writing Prospectus and the consolidated
financial statements of the Certificate Insurer incorporated by reference into
the Prospectus Supplement as of December 31, 2006 and December 31, 2005, and for
each of the years in the three-year period ended December 31, 2006 and the
unaudited consolidated financial statements of the Certificate Insurer as of
March 31, 2007 and for the three month period ended March 31, 2007, as provided
to the Depositor for inclusion in the Free Writing Prospectus and the Prospectus
Supplement. The Certificate Insurer has provided the Certificate Insurer
Information in connection with its role as credit enhancer, which consists
solely of the obligation to pay claims, if any, under and in accordance with the
express terms of the Certificate Insurance Policy.
"Closing Date" means June 20, 2007.
"Commission" means the United States Securities and Exchange Commission.
"Default" means any Event of Default or any event or circumstance, which
results, or which with the giving of notice or the lapse of time or both would
result, in an Event of Default.
"Depositor" means Xxxxxx Xxxxxxx ABS Capital I Inc., in its capacity as
Depositor.
"Documents" has the meaning given such term in Section 2.01(k) of this
Insurance Agreement.
"Event of Default" means any event of default specified in Section 5.01 of
this Insurance Agreement.
"Financial Statements" means with respect to the Servicer, its audited
consolidating statements of financial condition of the Servicer, as of December
3, 2006 and December 31, 2005 and the consolidating statements of operations for
the year ended December 3, 2006 and the year ended December 31, 2005, and its
unaudited consolidating statement of financial condition and statement of
operations for the period ended February 28, 2007.
"Fitch" means Fitch, Inc. and its successors in interest.
"Free Writing Prospectus" means the Free Writing Prospectus, dated as of
June 13, 2007, in respect of the Certificates.
"Indemnification Agreement" means the indemnification agreement dated as
of June 20, 2007 by and between the Certificate Insurer and the Underwriter.
"Insurance Agreement" has the meaning given such term in the initial
paragraph hereof.
"Insured Certificateholder" has the meaning given such term in the
Certificate Insurance Policy.
"Insured Certificates" means the Class A-1, Class A-2a, Class A-2b, Class
A-2c and Class A-2d Certificates.
"Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Late Payment Rate" means the lesser of (a) the greater of (i) the per
annum rate of interest publicly announced from time to time by Citibank, N.A. as
its prime or base lending rate (any change in such rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2.00%,
and (ii) the then applicable highest rate of interest on the Insured
Certificates and (b) the maximum rate permissible under applicable usury or
similar laws limiting interest rates as determined by the Certificate Insurer.
The Late Payment Rate shall be computed on the basis of the actual number of
days elapsed over a year of 360 days.
"Lien" means, as applied to the property or assets (or the income or
profits therefrom) of any Person, in each case whether the same is consensual or
nonconsensual or arises by contract, operation of law, legal process or
otherwise: (a) any mortgage, lien, pledge, attachment, charge, lease,
conditional sale or other title retention agreement, or other security interest
or encumbrance of any kind or (b) any arrangement, express or implied, under
which such property or assets are transferred, sequestered or otherwise
identified for the purpose of subjecting or making available the same for the
payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.
"Material Adverse Change" means, (a) in respect of any Person, a material
adverse change, as determined by the Certificate Insurer, in the ability of such
Person to perform its obligations under any of the Operative Documents to which
it is a party, including any material adverse change in the business, financial
condition, results of operations or properties of such Person on a consolidated
basis with its subsidiaries which might have such effect and (b) with respect to
the Transaction, a material adverse change in (i) the Trust Fund, taken as a
whole (whether in respect of the value, marketability or enforceability thereof
or otherwise) or (ii) the ability of the Certificate Insurer to liquidate to
realize any of the benefits or security afforded under any of the Operative
Documents.
"Moody's" means Xxxxx'x Investor Services, Inc., and its successor in
interest.
"Offering Documents" means the Prospectus, dated February 22, 2007, as
supplemented by the Prospectus Supplement (the "Prospectus Supplement"), dated
June 19, 2007 relating to the offering of the Certificates, and shall be deemed
to refer to and include any documents incorporated into the related Registration
Statement by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, the Free Writing Prospectus, including all annexes and schedules
thereto, dated June 13, 2007, accompanying the Prospectus, relating to the
offering of the Certificates and any other documents or materials prepared and
distributed to investors in writing in connection with the marketing, offer and
sale of the Certificates.
"Operative Documents" means this Insurance Agreement, the Certificates,
the Pooling and Servicing Agreement, the Indemnification Agreement and the
Representations and Warranties Agreement.
"Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, real estate investment trust, business
or owner trust, partnership, limited liability company or other organization or
entity (whether governmental or private).
"Premium" means, with respect to each Distribution Date, the premium
payable in accordance with the Certificate Insurance Policy which shall be an
amount equal to 1/12th of the product of (a) the Premium Rate and (b) the
aggregate Class Certificate Balance of the Insured Certificates (prior to giving
effect to any distributions of principal to be made on such Distribution Date).
"Premium Rate" shall mean 0.16% per annum.
"Rating Agencies" means any rating agency rating the Certificates on or
after the Closing Date, including, as applicable, Xxxxx'x, S&P and Fitch.
"Registration Statement" means the Depositor's registration statement on
Form S-3 relating to the Certificates, including any information included
therein by reference.
"Regulation AB" shall mean Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.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. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
"Restrictions on Transferability" means, as applied to the property or
assets (or income or profits therefrom) of any Person, in each case whether the
same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise, any material condition to, or restriction on, the
ability of such Person or any transferee therefrom to sell, assign, transfer or
otherwise liquidate such property or assets in a commercially reasonable time
and manner or which would otherwise materially deprive such Person or any
transferee therefrom of the benefits of ownership of such property or assets.
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Securities Exchange Act Reports" means all Distribution Reports on Form
10-D, Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed by the Depositor with respect to the Trust pursuant to the Securities
Exchange Act.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and any successor thereto.
"Transaction" means the transactions contemplated by the Operative
Documents, including the transactions described in the Offering Documents.
"Trust" means Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4, a New York
common law trust created pursuant to the Pooling and Servicing Agreement.
"Trust Fund" has the meaning given such term in the Pooling and Servicing
Agreement.
"Trustee" means Deutsche Bank National Trust Company, a national trust
company, not in its individual capacity, but solely as Trustee under the Pooling
and Servicing Agreement, and any successor thereto under the Pooling and
Servicing Agreement.
"Underwriter" means Xxxxxx Xxxxxxx & Co. Incorporated.
"Underwriter Information" has the meaning given such term in the
Indemnification Agreement.
"Underwriting Agreement" means the underwriting agreement, dated as of
June 19, 2007, between the Underwriter and the Depositor.
Section 1.02. Other Definitional Provisions.
The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Insurance Agreement shall refer to this Insurance Agreement as
a whole and not to any particular provision of this Insurance Agreement and
Section, subsection, Schedule and Exhibit references are to this Insurance
Agreement unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The words "include" and "including" shall be deemed to be followed by the phrase
"without limitation."
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties of the Sponsor, the Servicer
and the Depositor.
Each of the Sponsor, the Servicer and the Depositor represents, warrants
and covenants to the Certificate Insurer as of the Closing Date as follows,
except that the Servicer makes no representation or warranty with respect to
clause (m) below:
(a) Due Organization and Qualification. Each of the Sponsor, the
Servicer and the Depositor is a corporation or limited liability company,
and each is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation. Each of
the Sponsor, the Servicer and the Depositor is duly qualified to do
business, is in good standing and has obtained all necessary consents,
licenses, permits, charters, registrations and approvals (together,
"approvals") necessary for the conduct of its business as currently
conducted and as described in the Offering Documents and the performance
of its obligations under the Operative Documents to which it is a party in
each jurisdiction in which the failure to be so qualified or to obtain
such approvals would render any Operative Documents to which it is a party
unenforceable in any material respect or would have a material adverse
effect upon the Transaction.
(b) Power and Authority. Each of the Sponsor, the Servicer and the
Depositor has all necessary power and authority to conduct its business as
currently conducted and as described in the Offering Documents, to enter
into, execute, deliver and perform its obligations under the Operative
Documents to which it is a party and to consummate the Transaction.
(c) Due Authorization. The execution, delivery and performance of
the Operative Documents to which it is a party by each of the Sponsor, the
Servicer and the Depositor has been duly authorized by all necessary
action and does not require any additional approvals or consents, or other
action by or any notice to or filing with any Person, including any
governmental entity or any of the board of directors or any of the
stockholders or beneficial owners, as applicable, of the Sponsor, the
Servicer or the Depositor, which have not previously been obtained or
given by the Sponsor, the Servicer or the Depositor.
(d) No contravention. The execution and delivery by each of the
Sponsor, the Servicer or the Depositor of the Operative Documents to which
it is a party, the consummation of the Transaction and the satisfaction of
the terms and conditions of the Operative Documents to which it is a party
do not and will not:
(i) conflict with or result in any breach or violation of any
provision of the applicable organizational documents of the Sponsor,
the Servicer or the Depositor or any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award currently
in effect having applicability to the Sponsor, the Servicer or the
Depositor or any of their respective material properties, including
regulations issued by any administrative agency or other
governmental authority having supervisory powers over the Sponsor,
the Servicer or the Depositor, which conflict, breach or violation
reasonably could be expected to result in a Material Adverse Change;
(ii) constitute a default by the Sponsor, the Servicer or the
Depositor under, result in the acceleration of any obligation under,
or breach any provision of any loan agreement, mortgage, indenture
or other agreement or instrument to which the Sponsor, the Servicer
or the Depositor is a party or by which any of their respective
properties is or may be bound or affected, which default,
acceleration or breach reasonably could be expected to result in a
Material Adverse Change; or
(iii) result in or require the creation of any Lien upon or in
respect of any assets of the Sponsor, the Servicer or the Depositor,
which Lien reasonably could be expected to result in a Material
Adverse Change.
(e) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Sponsor, the Servicer or the
Depositor or any of their respective subsidiaries, any properties or
rights of the Sponsor, the Servicer, the Depositor or any of their
respective subsidiaries or any of the Mortgage Loans pending or, to the
Sponsor's, the Servicer's or the Depositor's knowledge after reasonable
inquiry, threatened, which, in any case, if decided adversely to the
Sponsor, the Servicer or the Depositor or any such subsidiary could
reasonably be expected to result in a Material Adverse Change with respect
to the Sponsor, the Servicer, the Depositor or the Trust.
(f) No Default. None of the Sponsor, the Servicer or the Depositor,
respectively, is in default under or with respect to any of its
contractual obligations in any respect which could reasonably be expected
to have a material adverse effect on the rights, interests or remedies of
the Certificate Insurer hereunder or under the other Operative Documents
or on its ability to perform its obligations hereunder or under the other
Operative Documents to which it is a party. No Default or Event of Default
has occurred and is continuing.
(g) Valid and Binding Obligations. The Operative Documents to which
it is a party, when executed and delivered by the Sponsor, the Servicer or
the Depositor, as applicable, will constitute the legal, valid and binding
obligations of each of the Sponsor, the Servicer and the Depositor,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles and public policy considerations as to rights
of indemnification for violations of federal securities laws. The
Certificates, when executed, authenticated and delivered in accordance
with the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing
Agreement. None of the Sponsor, the Servicer or the Depositor shall at any
time in the future deny that the Transaction Documents to which it is a
party constitute the legal, valid and binding obligations of such party.
(h) Financial Statements. The Financial Statements of the Servicer,
copies of which have been furnished to the Certificate Insurer, (i) are,
as of the dates and for the periods referred to therein, complete and
correct in all material respects, (ii) present fairly the financial
condition and results of operations of the Servicer as of the dates and
for the periods indicated and (iii) have been prepared in accordance with
generally accepted accounting principles consistently applied, except as
noted therein (subject as to interim statements to normal year-end
adjustments). Since the date of the most recent Financial Statements,
there has been no Material Adverse Change in respect of the Servicer. The
Servicer is not subject to any contingent liabilities or commitments that,
individually or in the aggregate, have a material possibility of causing a
Material Adverse Change in respect of the Servicer.
(i) Compliance with Law, Etc. None of the Sponsor, the Servicer or
the Depositor has notice or any reason to believe that any practice,
procedure or policy employed, or proposed to be employed, by the Sponsor,
the Servicer or the Depositor in the conduct of its business violates any
law, regulation, judgment, agreement, order or decree applicable to the
Sponsor, the Servicer or the Depositor that, if enforced, would result in
a Material Adverse Change with respect to the Sponsor, the Servicer, the
Depositor or the Transaction. None of the Sponsor, the Servicer or the
Depositor is in breach of or in default under any applicable law or
administrative regulation of its jurisdiction of incorporation, or any
department, division, agency, instrumentality thereof or of the United
States or any applicable judgment or decree or any note, resolution,
certificate, agreement or other instrument to which the Sponsor is a party
or is otherwise subject which, if enforced, would result in a Material
Adverse Change with respect to the Sponsor, the Servicer, the Depositor or
the Transaction.
(j) Taxes. Each of the Sponsor, the Servicer and the Depositor has
filed prior to the date hereof all federal and state tax returns that are
required to be filed and has paid all taxes, including any assessments
received by it that are not being contested in good faith, to the extent
that such taxes have become due, except with respect to any failures to
file or pay that, individually or in the aggregate, would not result in a
Material Adverse Change with respect to the Sponsor, the Servicer, the
Depositor or the Transaction. Any taxes, fees and other governmental
charges payable by the Sponsor, the Servicer or the Depositor in
connection with the Transaction, the execution and delivery of the
Operative Documents to which it is a party and the issuance of the
Certificates have been paid or shall have been paid at or prior to the
Closing Date if such taxes, fees or other governmental charges were due on
or prior to the Closing Date.
(k) Accuracy of Information. None of the material information
relating to the Mortgage Loans or the operations of the Sponsor, the
Depositor or the Servicer, as amended, supplemented or superseded,
furnished to the Certificate Insurer in writing or in electronic form by
the Sponsor, the Depositor or the Servicer in connection with the
Transaction, including, without limitation, the electronic tape containing
statistical data with respect to the Mortgage Loans (collectively, the
"Documents"), contains any statement of a material fact which was untrue
or misleading in any material respect when made. None of the Sponsor, the
Depositor or the Servicer has any knowledge of any circumstances that
could reasonably be expected to cause the Documents to include a statement
of material fact which is untrue or misleading or could reasonably be
expected to cause a Material Adverse Change with respect to the Sponsor,
the Depositor or the Servicer. Since the furnishing of the Operative
Documents, there has been no change nor any development or event involving
a prospective change known to the Sponsor, the Depositor or the Servicer
that would render any of the Documents untrue or misleading in any
material respect.
(l) Other Events. Each of the Sponsor, the Servicer and the
Depositor has no knowledge of any circumstances that could reasonably be
expected to cause a Material Adverse Change with respect to the Sponsor,
the Servicer, the Depositor, the Trust Fund or the Transaction, other than
a Material Adverse Change related to changes or events in the subprime
mortgage industry generally.
(m) Compliance With Securities Laws. The offer and sale of the
Certificates complies in all material respects with all requirements of
law, including all registration requirements of applicable securities
laws. Without limiting the foregoing, the Offering Documents (excluding
the Underwriter Information and the Certificate Insurer Information) do
not contain any untrue statement of a material fact and do not omit to
state a material fact necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading as
of the date of the applicable Offering Document, as of the Closing Date
and as of any amendment or supplement to the Offering Document; provided,
however, that no representation is made with respect to the Certificate
Insurer Information and Underwriter Information. The offer and sale of the
Certificates has not been and will not be in violation of the Securities
Act or any other federal or state securities laws. The Sponsor and the
Depositor shall satisfy in all material respects any of the information
reporting requirements of the Securities Act arising out of the
Transaction to which they or the Sponsor or the Depositor are subject.
(n) Operative Documents. Each of the representations and warranties
of the Sponsor, the Servicer and the Depositor contained in the applicable
Operative Documents to which it is a party is true and correct as of the
date reflected therein and each of the Sponsor, the Servicer and the
Depositor hereby makes each such representation and warranty to, and for
the benefit of, the Certificate Insurer as if the same were set forth in
full herein.
(o) Solvency; Fraudulent Conveyance. Each of the Sponsor and the
Depositor is solvent and shall not be rendered insolvent by the
Transaction and, after giving effect to the Transaction, the Sponsor and
the Depositor shall not be left with an unreasonably small amount of
capital with which to engage in the ordinary course of its business, and
each of the Sponsor and the Depositor does not intend to incur, or believe
that it has incurred, debts beyond its respective ability to pay as they
mature. Each of the Sponsor and the Depositor does not contemplate the
commencement of insolvency, liquidation or consolidation proceedings or
the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of the Sponsor and the Depositor or any of their
respective assets. The amount of consideration being received by the
Sponsor upon the sale of the Mortgage Loans to the Depositor constitutes
reasonably equivalent value and fair consideration for the Mortgage Loans.
The amount of consideration being received by the Depositor upon the sale
of the Certificates constitutes reasonably equivalent value and fair
consideration for the Certificates. The Sponsor is not transferring the
Mortgage Loans to the Depositor, the Depositor is not transferring the
Mortgage Loans to the Trust nor is the Depositor selling the Certificates,
as provided in the Operative Documents, with any intent to hinder, delay
or defraud any of the creditors of the Sponsor, the Depositor, or their
respective creditors. The Sponsor does not have any notice of any claim or
the initiation or threat of any legal process, litigation, avoidance
action, adversary proceeding, contested matter, objection, stay,
injunction, appeal or administrative or judicial investigation, and/or
rule making or disciplinary proceeding with respect to any portion of the
Trust Fund, including without limitation the servicing rights appurtenant
to the Mortgage Loans, or in which a request has been made for
certification as a class action (or equivalent relief) that would involve
a material portion of the Trust Fund, including without limitation the
servicing rights appurtenant to the Mortgage Loans.
(p) [Reserved].
(q) Qualified Special Purpose Entity. The Sponsor has determined
that the Trust Fund is a "qualifying special purpose entity" as such term
is defined in Statement of Financial Accounting Standard No.
140--Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities, dated September 2000, published by the
Financial Accounting Standards Board of the Financial Accounting
Foundation for the purposes of FASB Interpretation No. 46--Consolidation
of Variable Interest Entities: An Interpretation of ARB No. 51, dated
January 2003.
(r) Good Title; Absence of Liens; Security Interest. Immediately
prior to the transfer to the Depositor, the Sponsor, was the owner of, and
had good and marketable title to, the Mortgage Loans free and clear of all
Liens and Restrictions on Transferability, and had full right, power and
lawful authority to assign, transfer and pledge the Mortgage Loans.
(s) [Reserved].
(t) Acquisition of Mortgage Loans. The Acquisition of the Mortgage
Loans that were subject to the Master Repurchase Agreement, dated as of
December 12, 2005 by and among (i) NC Capital Corporation ("NC Capital"),
New Century Mortgage Corporation, NC Asset Holding, L.P., NC Residual III
Corporation, NC Residual IV Corporation, Home123 Corporation, New Century
Credit Corporation, (ii) the buyers from time to time parties thereto (the
"Buyers"), including the Sponsor, and (iii) the Sponsor, as agent for the
Buyers (the "Agent") was consummated in compliance with the Stipulation
and Order dated April 27, 2007.
(u) Transfer of Servicing. The transfer of the servicing of the
Mortgage Loans to Saxon Mortgage Services, Inc. is not voidable or subject
to avoidance under or in connection with any fraudulent conveyance,
fraudulent transfer and/or other avoidance statute, rule or power,
including, but not limited to any avoidance power of NC Capital, New
Century Mortgage Corporation, NC Asset Holding, L.P., NC Residual III
Corporation, NC Residual IV Corporation, Home123 Corporation, New Century
Credit Corporation or any of their affiliates, their creditors and/or
their estates or trustees in bankruptcy.
Section 2.02. Affirmative Covenants of the Sponsor, the Servicer and the
Depositor.
Each of the Sponsor, the Servicer and the Depositor hereby agrees that
during the term of this Insurance Agreement, unless the Certificate Insurer
shall otherwise expressly consent in writing:
(a) Compliance With Agreements and Applicable Laws. Each of the
Sponsor, the Servicer, and the Depositor shall comply in all material
respects with the terms and conditions of and perform its obligations
under the Operative Documents to which it is a party in all cases in which
failure to so comply or perform would result in a default thereunder and
shall comply with all requirements of any law, rule or regulation
applicable to it in all circumstances where non-compliance reasonably
could result in a Material Adverse Change. Each of the Sponsor, the
Servicer and the Depositor will not at any time in the future deny that
the Operative Documents to which it is a party constitute the legal, valid
and binding obligations of the Sponsor, the Servicer and the Depositor, as
applicable.
(b) Corporate Existence. Each of the Sponsor, the Servicer and the
Depositor and their respective successors and permitted assigns shall
maintain its existence as a legal entity and shall at all times continue
to be duly organized under the laws of its jurisdiction of formation and
duly qualified and duly authorized (as described in subsections 2.01(a),
(b) and (c) hereof) and shall conduct its business in accordance with the
terms of its applicable organizational documents.
(c) Financial Statements; Accountants' Reports; Other Information.
Each of the Sponsor, the Servicer and the Depositor shall keep or cause to
be kept in reasonable detail books and records of account of its assets
and business, including books and records, relating to the Transaction,
and shall, as applicable, clearly reflect therein the transfer of the
Mortgage Loans by the Sponsor to the Depositor as a sale of the Sponsor's
interest in the Mortgage Loans and the transfer of the Mortgage Loans by
the Depositor to the Trust as a sale of the Depositor's interest in the
Mortgage Loans to the Trust. The Servicer shall furnish or cause to be
furnished to the Certificate Insurer, (i) promptly upon receipt thereof,
copies of all schedules, financial statements or other similar reports
required to be delivered by the Servicer pursuant to the Operative
Documents, (ii) promptly upon request, such other data as the Certificate
Insurer may reasonably request and (iii) all information required to be
furnished to the Securities Administrator, the Trustee or the Insured
Certificateholders, simultaneously with the furnishing thereof to the
Securities Administrator, the Trustee or the Insured Certificateholders,
as the case may be. The Servicer shall furnish or cause to be furnished to
the Certificate Insurer:
(i) Annual Financial Statements. As soon as available, and in
any event, within 120 days after the close of each fiscal year of
Saxon Capital, Inc., the indirect parent of the Servicer, the
audited consolidated statements of financial condition of the
indirect parent of the Servicer and its consolidated subsidiaries,
together with consolidating schedules of the Servicer, as of the end
of such fiscal year and the related audited consolidated statements
of operations, stockholders' equity and cash flows for such fiscal
year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the
preceding fiscal year, where available, prepared in accordance with
generally accepted accounting principles, consistently applied, and
accompanied by the audit opinion of the independent accountants of
Saxon Capital, Inc. (which shall be a nationally recognized
independent public accounting firm or otherwise acceptable to the
Certificate Insurer) and by the certificate specified in Section
2.02(d).
(ii) [Reserved].
(iii) [Reserved].
(iv) Certain Information. Upon the reasonable request of the
Certificate Insurer, copies of any requested proxy statements,
financial statements, reports and registration statements that the
Sponsor, the Servicer or the Depositor files with, or delivers to,
the Commission or any national securities exchange.
(v) Other Information. (A) Promptly upon receipt thereof,
copies of all schedules, financial statements or other similar
reports delivered to or by the Servicer, the Depositor, the Master
Servicer, the Securities Administrator or the Trustee pursuant to
the terms of any of the Operative Documents, including all reports
provided to the Securities Administrator, the Master Servicer, the
Trustee or any Certificateholder pursuant to the Pooling and
Servicing Agreement, (B) promptly upon request, such other data as
the Certificate Insurer may reasonably request relating to the
Mortgage Loans, the Transaction or the Sponsor's, the Servicer's,
the Depositor's or the Trust's ability to perform its obligations
under the Operative Documents, (C) all information required to be
furnished to the Master Servicer, the Trustee, the Securities
Administrator or the Certificateholders simultaneously with the
furnishing thereof to the Master Servicer, the Trustee, the
Securities Administrator or the Certificateholders, as the case may
be and (D) promptly upon their preparation and publication of
quarterly statements of condition of the Servicer and its
consolidated subsidiaries, the related consolidated statements of
operations, stockholders' equity and cash flows for the portion of
the fiscal year then ended, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date
and period in the preceding fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied
(subject to normal year-end adjustments).
All financial statements specified in clause (i) of this
subsection (c) shall be furnished in consolidated form for the
Servicer and all of its subsidiaries in the event that the Servicer
shall consolidate its financial statements with its subsidiaries. To
the extent available, the information supplied pursuant to this
Section 2.02(c) will be in Excel or Word format or another form of
an electronic data file accessible by the Certificate Insurer by
means of standard application software.
(d) Compliance Certificate. The Servicer shall deliver to the
Certificate Insurer, concurrently with delivery of the financial
statements required pursuant to Section 2.02(c) hereof, certificates of
one (or more) of its officers stating that:
(i) a review of the performance of the Servicer under the
Operative Documents to which it is a party during the prior year has
been made under such officer's supervision;
(ii) to the best of such officer's knowledge following
reasonable inquiry, no Default or Event of Default has occurred, or
if a Default or Event of Default has occurred, specifying the nature
thereof and, if the Servicer has a right to cure pursuant to Section
5.01, stating in reasonable detail (including, if applicable, any
supporting calculations) the steps, if any, being taken by the
Servicer to cure such Default or Event of Default or to otherwise
comply with the terms of the agreement to which such Default or
Event of Default relates;
(iii) the financial reports submitted in accordance with
Section 2.02(c)(i) hereof are complete and correct in all material
respects and present fairly the financial condition and results of
operations of the Servicer as of the dates and for the periods
indicated in accordance with generally accepted accounting
principles, consistently applied (subject to interim statements to
normal year-end adjustments); and
(iv) the Servicer has in full force and effect a fidelity bond
(or direct surety bond) and an errors and omissions policy in
accordance with the terms and requirements of Section 3.13 of the
Pooling and Servicing Agreement.
The annual Officer's Certificate prepared by the Servicer pursuant
to Section 3.22 of the Pooling and Servicing Agreement shall be deemed to
satisfy the Servicer's obligations as imposed by clauses (i) and (ii) of
this Section 2.02(d). The certificate required by this Section 2.02(d) may
he delivered via electronic means if it constitutes an electronic record
authenticated as the executed document of the Servicer in accordance with
applicable electronic signature laws.
(e) Access to Records; Discussions with Officers and Accountants. On
an annual basis, or if the Certificate Insurer reasonably believes that a
Material Adverse Change may have occurred, the Servicer, the Sponsor and
the Depositor shall, upon the reasonable request of the Certificate
Insurer, permit the Certificate Insurer or its authorized agents:
(i) to inspect its books and records as they may relate to the
Certificates, the obligations of the Sponsor, the Servicer, the
Depositor and the Trust under the Operative Documents to which it is
a party and the Transaction (including, without limitation, access
to information reasonably required for purposes of complying with
FASB Financial Interpretation Number 46; provided that the
Certificate Insurer will maintain confidentiality with respect to
such information in accordance with its internal policies);
(ii) to discuss the affairs, finances and accounts of the
Servicer and the Sponsor as they relate to the Mortgage Loans, the
Transaction or the ability of the Servicer or Sponsor to perform
their obligations under the Operative Documents with a Servicing
Officer; and
(iii) if the Certificate Insurer reasonably believes that a
Material Adverse Change may have occurred, to discuss the affairs,
finances and accounts of the Servicer or the Sponsor with the
Servicer's or the Sponsor's independent accountants; provided,
however, that an officer of the Servicer or the Sponsor, as
applicable, shall have the right to be present during such
discussions.
Such inspections and discussions shall be conducted during normal
business hours and shall not unreasonably disrupt the business of the
Servicer, the Sponsor, the Trust or the Depositor. The books and records
of the Servicer, the Sponsor and the Depositor shall be maintained at the
respective address of the Servicer, the Sponsor and the Depositor as
designated herein for receipt of notices, unless the such person shall
otherwise advise the parties hereto in writing. The books and records of
the Depositor shall be maintained at the Depositor's principal place of
business, respectively, unless the Depositor shall otherwise advise the
parties hereto in writing.
(f) Notice of Material Events. The Servicer, the Sponsor, the Trust
and the Depositor shall be obligated (which obligation shall be satisfied
as to each if performed by the Servicer, the Sponsor, the Trust or the
Depositor) promptly to inform the Certificate Insurer in writing of the
occurrence of any of the following:
(i) the submission of any claim or the initiation or threat of
any legal process, litigation or administrative or judicial
investigation, or rule making or disciplinary proceeding (a) with
respect to a material portion of the Trust Fund or in which a
request has been made for certification as a class action (or
equivalent relief) that would involve a material portion of the
Trust Fund, or (b) by or against the Servicer, the Sponsor, the
Trust or the Depositor that (1) would be required to be disclosed to
the Commission if the Certificates were publicly registered or the
Sponsor's shareholders, (2) could result in a Material Adverse
Change with respect to the Servicer, the Sponsor, the Trust or the
Depositor, or to the knowledge of the Servicer, the Sponsor, the
Trust or the Depositor, the initiation of any proceeding or the
promulgation of any proposed or final rule which would likely result
in a Material Adverse Change with respect to the Servicer, the
Sponsor, the Trust and the Depositor or any of their respective
subsidiaries or (3) pertaining to the Trust Fund in general;
(ii) any change in the organizational jurisdictions of the
Servicer, the Sponsor or the Depositor;
(iii) the occurrence of any Default or Event of Default or any
Material Adverse Change in respect of the Servicer, the Sponsor or
the Depositor;
(iv) the commencement of any proceedings by or against the
Servicer, the Sponsor or the Depositor under any applicable
bankruptcy, reorganization, liquidation, rehabilitation, insolvency
or other similar law now or hereafter in effect or of any proceeding
in which a receiver, liquidator, conservator, trustee or similar
official shall have been, or may be, appointed or requested for the
Servicer, the Sponsor or the Depositor or any of their respective
assets; or
(v) the receipt of notice that (A) the Servicer, the Sponsor
or the Depositor is being placed under regulatory supervision, (B)
any license, permit, charter, registration or approval materially
necessary for the conduct of the Servicer's, the Sponsor's or the
Depositor's business is to be suspended or revoked or (C) the
Servicer, the Sponsor or the Depositor is to cease and desist any
practice, procedure or policy employed by the Servicer, the Sponsor
or the Depositor in the conduct of their respective business, and
such suspension, revocation or cessation may reasonably be expected
to result in a Material Adverse Change with respect to the Servicer,
the Sponsor or the Depositor.
(g) Financing Statements and Further Assurances. The Servicer and
the Sponsor shall cause to be filed all necessary financing statements or
other instruments, and any amendments or continuation statements relating
thereto, necessary to be kept and filed in such manner and in such places
as is required by law to preserve and protect fully the interest of the
Trustee in the Trust Fund for the benefit of the Certificateholders and
the Certificate Insurer. Each of the Servicer, the Sponsor and the
Depositor shall, upon the reasonable request of the Certificate Insurer,
from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, within ten days (or, with respect to
the Servicer, fifteen Business Days) of such request, such amendments
hereto and such further instruments and take such further action as may be
reasonably necessary to effectuate the intention, performance and
provisions of the Operative Documents (including, without limitation, the
execution and filing of additional UCC financing statements, the execution
of control or other agreements and such other actions as they may be
reasonably necessary to reflect changes in the provisions of the UCC) to
which it is a party. In addition, each of the Servicer, the Sponsor and
the Depositor agrees to cooperate with the Rating Agencies in connection
with any review of the Transaction that may be undertaken by the Rating
Agencies after the date hereof.
(h) Maintenance of Licenses. Each of the Servicer, the Sponsor and
the Depositor, and any successors thereof, has and shall maintain all
licenses, permits, charters and registrations the loss or suspension of
which could reasonably be expected to result in a Material Adverse Change.
(i) Retirement of Certificates. The Depositor shall instruct the
Securities Administrator and the Trustee, upon a retirement or other
payment of all of the Insured Certificates, to furnish the Certificate
Insurer a notice of such retirement, and upon retirement of the Insured
Certificates and the expiration of the term of the Certificate Insurance
Policy to surrender the Certificate Insurance Policy to the Certificate
Insurer for cancellation.
(j) [Reserved].
(k) Third-Party Beneficiary. Each of the Servicer, the Sponsor, the
Trustee, the Master Servicer, the Securities Administrator and the
Depositor agrees that the Certificate Insurer shall have all rights
provided to the Certificate Insurer in the Operative Documents and that
the Certificate Insurer shall constitute a third-party beneficiary with
respect to such rights in respect of the Operative Documents and hereby
incorporates and restates its representations, warranties and covenants as
set forth therein for the benefit of the Certificate Insurer.
(l) Servicing of Mortgage Loans. The Servicer will service the
Mortgage Loans in all material respects in compliance with the Pooling and
Servicing Agreement.
(m) Closing Documents. The Servicer, the Sponsor and the Depositor
shall provide or cause to be provided to the Certificate Insurer an
executed copy of each document executed in connection with the Transaction
within 30 days after the Closing Date.
(n) [Reserved].
(o) Corporate Formalities. Each of the Servicer, the Sponsor and the
Depositor shall observe all material formalities necessary to preserve its
existence under the laws of the State of its formation, including, as
applicable, (i) the obligation to hold annual meetings of its beneficial
owners, shareholders, members or its board of directors, as applicable,
and (ii) the obligation to prepare and file annual income, franchise and
other tax returns.
(p) Due Diligence. The Certificate Insurer shall have the right, so
long as any of the Insured Certificates remains outstanding, to conduct an
ongoing review of the Servicer's practices as Servicer through reviews of
the Mortgage Loans, reappraisals of Mortgaged Properties and reviews of
servicing practices. Such ongoing due diligence shall be conducted at the
expense of the Certificate Insurer and in a reasonable manner convenient
to both the Servicer and the Certificate Insurer.
(q) [Reserved].
(r) Notice to Certificate Insurer. If the Depositor does not receive
any Certificate Insurer Financial Statements pursuant to Section 2.04(j)
herein at least five days prior to the date that such Certificate Insurer
Financial Statements are to be filed with the Commission, the Depositor
shall provide or shall cause the party responsible for filing the
Depositor's Form 10-Ds and Form 10-Ks to provide written notice to the
Certificate Insurer via electronic mail at XxxXX@xxxx.xxx, stating that it
has not received the Certificate Insurer Financial Statements and
requesting that such Certificate Insurer Financial Statements be emailed
in accordance with Section 2.04(j) herein. Additionally, in the event that
any Certificate Insurer Financial Statements are to be included in a Form
10-D or Form 10-K filing of the Trust which occurs prior to the
termination of the offering of the Certificates, the Depositor will
provide written notice to the Certificate Insurer via electronic mail at
least ten (10) days prior to such filing, stating that an accountant's
consent will be required for such filing. In such event the Depositor
shall be responsible for paying the Certificate Insurer's costs for
obtaining such consent. All such emails shall identify the deal name and
the policy number.
(s) [Reserved].
(t) [Reserved].
Section 2.03. Negative Covenants of the Servicer, the Sponsor and the
Depositor.
Each of the Servicer, the Sponsor and the Depositor hereby agrees that
during the term of this Insurance Agreement, unless the Certificate Insurer
shall otherwise expressly consent in writing:
(a) Impairment of Rights. None of the Servicer, the Sponsor or the
Depositor shall take any action, or fail to take any action, if such
action or failure to take action that would reasonably be expected to
result in a Material Adverse Change with respect to the Servicer, the
Sponsor or the Depositor, nor interfere in any material respect with the
enforcement of any rights of the Certificate Insurer under or with respect
to any of the Operative Documents or the Certificate Insurance Policy. The
Servicer, the Sponsor and the Depositor shall give the Certificate Insurer
written notice of any such action or any such failure to act on the
earlier of: (i) the date upon which any publicly available filing or
release is made with respect to such action or failure to act and (ii)
promptly prior to the date of consummation of such action or failure to
act. Each of the Servicer, the Sponsor and the Depositor shall furnish to
the Certificate Insurer all information reasonably requested by the
Certificate Insurer that is necessary to determine compliance with this
paragraph.
(b) Waiver, Amendments, Etc. Except as provided in and in accordance
with the Operative Documents, none of the Servicer, the Sponsor or the
Depositor shall modify, waive or amend, or consent to any modification,
waiver or amendment of, any of the terms, provisions or conditions of the
Operative Documents to which it is a party (other than any amendment to
the Offering Document required by law) without the prior written consent
of the Certificate Insurer thereto.
(c) Limitation on Mergers, Etc. None of the Servicer, the Sponsor
and the Depositor shall consolidate with or merge with or into any Person
or transfer all or substantially all of its assets to any Person or
liquidate or dissolve except as provided in the Operative Documents or as
permitted hereby. The Servicer, the Sponsor and the Depositor shall
furnish to the Certificate Insurer all information requested by the
Certificate Insurer that is reasonably necessary to determine compliance
with this paragraph.
(d) Successors. None of the Servicer, the Sponsor or the Depositor
shall terminate or designate, or consent to the termination or designation
of, any successor Servicer, Paying Agent, Custodian, Trustee, Master
Servicer or Securities Administrator without the prior written approval of
the Certificate Insurer.
(e) [Reserved].
(f) Restrictions on Liens. None of the Servicer, the Sponsor, the
Trust or the Depositor shall (i) create, incur or suffer to exist, or
agree to create, incur or suffer to exist, or consent to cause or permit
in the future (upon the happening of a contingency or otherwise) the
creation, incurrence or existence of any Lien or Restriction on
Transferability on the Trust Fund or (ii) sign or file under the Uniform
Commercial Code of any jurisdiction any financing statement which names
the Sponsor or the Depositor as a debtor, or sign any security agreement
authorizing any secured party thereunder to file such financing statement,
with respect to the Trust Fund, except in each case any such instrument
solely securing the rights of the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer.
Section 2.04. Representations, Warranties and Covenants of the Certificate
Insurer.
The Certificate Insurer represents, warrants and covenants to the Sponsor,
the Servicer and the Depositor as follows:
(a) Organization and Licensing. The Certificate Insurer is a duly
organized, validly existing and in good standing New York stock insurance
company duly qualified to conduct an insurance business in the State of
New York.
(b) Corporate Power. The Certificate Insurer has the corporate power
and authority to issue the Certificate Insurance Policy and execute and
deliver this Insurance Agreement and to perform all of its obligations
hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for the
issuance and execution of the Certificate Insurance Policy and the
execution, delivery and performance of this Insurance Agreement have been
taken and licenses, orders, consents or other authorizations or approvals
of any governmental boards or bodies legally required for the
enforceability of the Certificate Insurance Policy and the conduct by the
Certificate Insurer of the business and activities contemplated by the
Transaction have been obtained; any proceedings not taken and any
licenses, authorizations or approvals not obtained are not material to the
enforceability of the Certificate Insurance Policy.
(d) Enforceability. The Certificate Insurance Policy, when issued,
and this Insurance Agreement will each constitute a legal, valid and
binding obligation of the Certificate Insurer, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting creditors'
rights generally and to general principles of equity and subject to
principles of public policy limiting the right to enforce the
indemnification provisions contained therein and herein, insofar as such
provisions relate to indemnification for liabilities arising under federal
securities laws.
(e) Financial Information. The audited consolidated financial
statements of the Certificate Insurer and its subsidiaries as of December
31, 2006 and 2005, and for each of the three years in the period ended
December 31, 2006, together with an opinion thereon of Ernst & Young LLP,
independent registered public accounting firm, and the unaudited
consolidated financial statements of the Certificate Insurer and
subsidiaries as of March 31, 2007 and for the three month periods ended
March 31, 2007 and March 31, 2006, a copy of which has been delivered to
the Depositor to be included in the Free Writing Prospectus and to be
incorporated by reference into the registration statement relating to the
Prospectus Supplement, present fairly in all material respects the
financial condition of the Certificate Insurer as of such dates and for
the periods covered by such statements in accordance with generally
accepted accounting principles consistently applied. Since March 31, 2007,
there has been no material change in such financial condition of the
Certificate Insurer that would materially and adversely affect its ability
to perform its obligations under the Certificate Insurance Policy. As of
the date of the Free Writing Prospectus, the Closing Date and as of the
date that the Certificate Insurer Information was incorporated by
reference in the Registration Statement relating to the Prospectus
(including through filing of an Exchange Act Report), the Certificate
Insurer Information complied with the requirements of Item 1114(b) of
Regulation AB.
(f) Certificate Insurer Information. The Certificate Insurer
Information, as of the date of the Prospectus Supplement and as of the
date hereof is true and correct in all material respects and does not
contain any untrue statement of a material fact.
(g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Certificate Insurer's
knowledge, threatened against it at law or in equity or before or by any
court, governmental agency, board or commission or any arbitrator which,
if decided adversely, would materially and adversely affect its ability to
perform its obligations under the Certificate Insurance Policy or this
Insurance Agreement.
(h) Confidential Information. The Certificate Insurer agrees that it
and its shareholders, directors, agents, accountants and attorneys shall
keep confidential any proprietary information disclosed to it by the
Sponsor or Depositor (i) as a result of financial statements, reports or
other information furnished pursuant to Section 2.02(c), (ii) during the
inspections conducted or discussions had pursuant to Section 2.02(e), or
(iii) prior to the Closing Date, to the extent that proprietary
information was furnished pursuant to the Certificate Insurer's request in
connection with its evaluation of the Certificates for credit purposes,
unless such information is readily available from public sources or is
disclosed to the Certificate Insurer by any Person or source other than
the Sponsor, or the Depositor, which Person or source is not actually
known to the Certificate Insurer to be subject to a confidentiality
obligation to the Sponsor or the Depositor, or except as may be otherwise
required by regulation, law or court order or requested by appropriate
governmental authorities or as necessary or expedient to preserve its
rights or security under or to enforce any of the Operative Documents or
any other agreement executed in connection with the transactions related
to the Operative Documents to which the Certificate Insurer is a party or
of which the Certificate Insurer is a third party beneficiary, or in
connection with the defense of any legal proceeding in which the
Certificate Insurer is a party; provided, however, that the foregoing
shall not limit the right of the Certificate Insurer to make such
information available to its regulators, securities rating agencies,
reinsurers, credit and liquidity providers, counsel and accountants. If
the Certificate Insurer is requested or required (by oral questions,
interrogatories, requests for information or documents subpoena, civil
investigative demand or similar process) to disclose any information of
which it becomes aware through such inspections or discussions, the
Certificate Insurer will promptly notify the Sponsor of such request(s) so
that the Sponsor may seek an appropriate protective order and/or waive the
Certificate Insurer's compliance with the provisions of this Insurance
Agreement, unless the Certificate Insurer, in the opinion of its counsel,
is prohibited from providing such notice by any tribunal, court or
governmental agency or other governmental or quasi-governmental authority.
If, in the absence of a protective order or the receipt of a waiver
hereunder, the Certificate Insurer is, nonetheless, in the opinion of its
counsel, compelled to disclose such information to any tribunal or else
suffer a penalty or liability, the Certificate Insurer may disclose such
information to such tribunal that the Certificate Insurer is compelled to
disclose; provided, however, that a copy of all information disclosed is
provided to the Sponsor promptly upon such disclosure; provided, further,
however, that no such copy must be delivered or supplied if the
Certificate Insurer, in the opinion of its counsel, is prohibited from
providing such a copy by any tribunal, court or governmental agency or
other governmental or quasi-governmental authority.
(i) Compliance with Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Certificate Insurer in the
conduct of its business violates any law, regulation, judgment, agreement,
order or decree applicable to the Certificate Insurer that, if enforced,
could result in a Material Adverse Change with respect to the Certificate
Insurer.
(j) Delivery of Financial Statements of Certificate Insurer. As soon
as reasonably practicable after the release of its unaudited financial
statements for each of the June and September 2007 fiscal quarters and the
release of its audited financial statements for the 2007 fiscal year, the
Certificate Insurer shall furnish to the Servicer, the Securities
Administrator and the Depositor such unaudited or audited financial
statements, as appropriate (the "Certificate Insurer Financial
Statements") for the related period in the form required by Item
1114(b)(2)(ii) of Regulation AB. The Certificate Insurer Financial
Statements shall be delivered in electronic form via electronic mail to
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx and xxxxx.x.xxx@xxxxxxxxxxxxx.xxx, or
such other address that has been designated by the Securities
Administrator or the Depositor, as the case may be, and provided in
writing to the Certificate Insurer. To the extent that the Certificate
Insurer shall have been notified in writing on or before February 15, 2008
that the Trust's reporting obligations under the Securities Exchange Act
have not been suspended in accordance with the Securities Exchange Act and
the related rules and regulations thereto, the Certificate Insurer shall
continue to furnish such quarterly and annual financial statements as set
forth above for so long as such financial statements may be required for
the Trust to comply with its reporting requirements under the Securities
Exchange Act and the rules and regulations thereto. All written notices
under this section shall be sent to the Certificate Insurer via electronic
mail at XxxXX@xxxx.xxx. The requirement for the delivery of any
Certificate Insurer Financial Statements pursuant to this Section 2.04(j)
shall be satisfied to the extent that the Certificate Insurer has
delivered the required Certificate Insurer Financial Statements pursuant
to any similar transaction in which Xxxxxx Xxxxxxx Mortgage Capital Inc.
is acting as "Sponsor", "Co-Sponsor" or "Seller." The Certificate Insurer
shall use commercially reasonable efforts to identify each transaction to
which the delivery relates, provided that the failure to denote such
transactions shall not be deemed a failure to deliver such Certificate
Insurer Financial Statements pursuant to this Section 2.04(j).
Section 2.05. Representation of the Master Servicer and the Securities
Administrator.
The Master Servicer and the Securities Administrator represent and warrant
to perform all of the duties and obligations applicable to them as set forth in
the Pooling and Servicing Agreement.
ARTICLE III
THE POLICY; REIMBURSEMENT
Section 3.01. Issuance of the Certificate Insurance Policy.
The Certificate Insurer agrees to issue the Certificate Insurance Policy
on the Closing Date subject to satisfaction of the conditions precedent set
forth below on or prior to the Closing Date:
(a) Payment of Initial Premium and Expenses. The Certificate Insurer
shall have been paid, by or on behalf of the Sponsor, a nonrefundable
Premium in the amount of $35,033.00 and shall have been reimbursed, by or
on behalf of the Depositor, for other fees and expenses identified in
Section 3.02 below as payable at closing;
(b) No Material Adverse Change. There shall not have been (a) a
Material Adverse Change with respect to the Servicer, the Sponsor, the
Trust or the Depositor and (b) a Material Adverse Change with respect to
the Transaction;
(c) Operative Documents. The Certificate Insurer shall have received
a copy of each of the Operative Documents, in form and substance
reasonably satisfactory to the Certificate Insurer, duly authorized,
executed and delivered by each party thereto;
(d) Certified Documents and Resolutions. The Certificate Insurer
shall have received (i) a copy of the applicable organizational documents
of the Servicer, the Sponsor, the Trust and the Depositor and (ii) a
certificate of the Secretary or Assistant Secretary of the Servicer, the
Depositor or the Sponsor dated the Closing Date stating that attached
thereto is a true, complete and correct copy of resolutions duly adopted
by the Board of Directors, Board of Managers or other governing body, as
applicable, of the Servicer, the Sponsor and the Depositor authorizing the
issuance of the Certificates, the execution, delivery and performance by
the Servicer, the Sponsor and the Depositor of the Operative Documents to
which it is a party and the consummation of the Transaction and that such
applicable organizational documents and resolutions are in full force and
effect without amendment or modification on the Closing Date;
(e) Incumbency Certificate. The Certificate Insurer shall have
received a certificate of the Secretary or an Assistant Secretary of each
of the Servicer, the Sponsor and the Depositor certifying the names and
signatures of the officers or members of the Servicer, the Sponsor and the
Depositor, as applicable, authorized to execute and deliver the Operative
Documents to which it is a party and that shareholder or beneficial owner
consent to the execution and delivery of such documents is not necessary
or has been obtained;
(f) Representations and Warranties. The representations and
warranties of the Servicer, the Sponsor and the Depositor dated the
Closing Date set forth or incorporated by reference in this Insurance
Agreement shall be true and correct on and as of the Closing Date as if
made on the Closing Date and the Certificate Insurer shall have received a
certificate from each of such Persons to such effect;
(g) Opinions of Counsel. The Certificate Insurer shall have received
all opinions of counsel (except for any letter from counsel to the Sponsor
or the Depositor relating to Rule 10b-5 under the Securities Exchange Act)
addressed to any of the Rating Agencies, the Trustee, the Securities
Administrator, the Servicer, the Master Servicer, the Sponsor, the Trust,
the Depositor and the Underwriter, in respect of the Servicer, the
Sponsor, the Trust and the Depositor or any other parties to the Operative
Documents and the Transaction dated the Closing Date in form and substance
reasonably satisfactory to the Certificate Insurer, addressed to the
Certificate Insurer and addressing such matters as the Certificate Insurer
may reasonably request;
(h) Approvals, Etc. The Certificate Insurer shall have received true
and correct copies of all approvals, licenses and consents, if any,
including any required approval of the shareholders or beneficial owners,
as applicable, of the Servicer, the Sponsor, the Trust and the Depositor,
required in connection with the Transaction;
(i) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or threatened before any court, governmental or administrative
agency or arbitrator in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with any of the Operative
Documents or the consummation of the Transaction;
(j) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transaction illegal or
otherwise prevent the consummation thereof;
(k) [Reserved];
(l) Issuance of Ratings. The Certificate Insurer shall have received
confirmation that the Insured Certificates insured by the Certificate
Insurance Policy are rated at least "AA" by S&P and Fitch and "A1" by
Moody's, in each case without regard to the Certificate Insurance Policy,
and that the Insured Certificates, when issued, will be rated "AAA" by S&P
and Fitch and "Aaa" by Moody's.
(m) No Default. No Default or Event of Default shall have occurred;
(n) Satisfactory Documentation. The Certificate Insurer and its
counsel shall have reasonably determined that all documents, certificates
and opinions to be delivered in connection with the Certificates conform
to the terms of the Pooling and Servicing Agreement, the Representations
and Warranties Agreement, the Registration Statement, the Offering
Document and this Insurance Agreement;
(o) [Reserved];
(p) Indemnification Agreement. The Certificate Insurer shall have
received from the Underwriter an executed counterpart of the
Indemnification Agreement; and
(q) Additional Items. The Certificate Insurer shall have received
such other documents, instruments, approvals or opinions reasonably
requested by the Certificate Insurer as may be reasonably necessary to
effect the Transaction, including evidence reasonably satisfactory to the
Certificate Insurer that the conditions precedent, if any, in the
Operative Documents have been satisfied.
Section 3.02. Payment of Fees and Premium.
(a) Legal and Accounting Fees. The Sponsor shall pay or cause to be
paid to the Certificate Insurer, at the Closing Date, legal fees and
accounting fees in the amount of $43,000.00. Any additional fees of the
Certificate Insurer's auditors payable in respect of any amendment or
supplement to the Offering Document incurred after the Closing Date shall
be paid by the Sponsor on demand.
(b) Rating Agency Fees. The Sponsor shall promptly pay the initial
fees of S&P, Xxxxx'x and Fitch with respect to the Certificates and the
Transaction. All periodic and subsequent fees of S&P, Moody's and Fitch
with respect to, and directly allocable to, the Certificates shall be for
the account of, and shall be billed to, the Sponsor. The fees for any
other Rating Agency shall be paid by the party requesting such other
agency's rating unless such other agency is a substitute for S&P or
Moody's in the event that S&P or Xxxxx'x is no longer rating the Insured
Certificates, in which case the fees for such agency shall be paid by the
Sponsor.
(c) Premium.
(i) In consideration of the issuance by the Certificate
Insurer of the Certificate Insurance Policy, the Certificate Insurer
shall be entitled to receive the Premium for the Certificate
Insurance Policy, as and when due on each Distribution Date in
accordance with Section 4.02 of the Pooling and Servicing Agreement.
(ii) The Premiums paid under the Pooling and Servicing
Agreement in respect of the Certificate Insurance Policy shall be
nonrefundable without regard to whether the Certificate Insurer
makes any payment under the Certificate Insurance Policy or any
other circumstances relating to any Certificates or provision being
made for payment of any Certificates prior to maturity.
Section 3.03. Reimbursement Obligation.
(a) As and when due in accordance with and from the funds specified
in Section 4.02 of the Pooling and Servicing Agreement, the Certificate
Insurer shall be entitled to reimbursement for any payment made by the
Certificate Insurer under the Certificate Insurance Policy, which
reimbursement shall be due and payable on the date that any amount is paid
thereunder, in an amount equal to the amount to be so paid and all
Aggregate Reimbursement Amounts that remain unreimbursed, together with
any indemnity amount described in Section 3.04 below, and in each case
together with interest on any and all such amounts remaining unreimbursed
(to the extent permitted by law, if in respect of any unreimbursed amounts
representing interest) from the date such amounts became due until paid in
full (after as well as before judgment), at a rate of interest equal to
the Late Payment Rate.
(b) Anything herein or in any Operative Document to the contrary
notwithstanding, the Sponsor agrees to pay to the Certificate Insurer, and
the Certificate Insurer shall be entitled to reimbursement from the
Sponsor and shall have full recourse against the Sponsor for, (i) any
payment made under the Certificate Insurance Policy arising as a result of
the Sponsor's failure to substitute for or deposit an amount in respect of
any defective Mortgage Loan as required pursuant to the Pooling and
Servicing Agreement or the Representations and Warranties Agreement,
together with interest on any and all such amounts remaining unreimbursed
(to the extent permitted by law, if in respect of any such unreimbursed
amounts representing interest) from the date such amounts became due until
paid in full (after as well as before judgment), at a rate of interest
equal to the Late Payment Rate, and (ii) any payment made under the
Certificate Insurance Policy arising as a result of the Sponsor's failure
to pay or deposit any amount required to be paid or deposited pursuant to
the Operative Documents, together with interest on any and all such
amounts remaining unreimbursed (to the extent permitted by law, if in
respect to any such unreimbursed amounts representing interest) from the
date such amounts became due until paid in full (after as well as before
judgment), at a rate of interest equal to the Late Payment Rate.
(c) Anything herein or in any Operative Document to the contrary
notwithstanding, the Servicer agrees to pay to the Certificate Insurer,
and the Certificate Insurer shall be entitled to reimbursement from the
Servicer and shall have full recourse against the Servicer for any payment
made under the Certificate Insurance Policy arising as a result of the
Servicer's failure to pay or deposit any amount required to be paid or
deposited pursuant to the Operative Documents, together with interest on
any and all such amounts remaining unreimbursed (to the extent permitted
by law, if in respect to any such unreimbursed amounts representing
interest) from the date such amounts became due until paid in full (after
as well as before judgment), at a rate of interest equal to the Late
Payment Rate
(d) The Sponsor agrees to pay to the Certificate Insurer any and all
charges, fees, costs and expenses that the Certificate Insurer may
reasonably pay or incur, including reasonable attorneys' and accountants'
fees and expenses, in connection with (i) the enforcement, defense or
preservation of any rights in respect of any of the Operative Documents,
including defending, monitoring or participating in any litigation or
proceeding (including any insolvency proceeding in respect of any
Transaction participant or any affiliate thereof) relating to any of the
Operative Documents, any party to any of the Operative Documents (in its
capacity as such a party) or the Transaction, (ii) any action, proceeding
or investigation affecting the Trust Fund or the rights or obligations of
the Certificate Insurer under the Certificate Insurance Policy or the
Operative Documents, including, without limitation, any judgment or
settlement entered into affecting the Certificate Insurer or the
Certificate Insurer's interest or (iii) any amendment, waiver or other
action with respect to, or related to, any Operative Document, whether or
not executed or completed. Such payment or reimbursement shall be due on
the dates on which such charges, fees, costs or expenses are paid or
incurred by the Certificate Insurer so long as seven (7) Business Days
written notice of the intended payment or incurrence shall have been given
to the Sponsor by the Certificate Insurer.
(e) The Sponsor agrees to pay to the Certificate Insurer interest
(without duplication) on any and all amounts described in Subsections
3.03(b), 3.03(d) and 3.03(f) and Sections 3.02 and 3.04 from the date such
amounts become due or, in the case of subsection 3.02(b) or Section 3.04,
are incurred or paid by the Certificate Insurer until payment thereof in
full (after as well as before judgment), at the Late Payment Rate.
(f) The Sponsor agrees to pay to the Certificate Insurer as follows:
any payments made by the Certificate Insurer on behalf of, or advanced to,
the Sponsor, the Depositor, including any amounts payable by the Sponsor
or the Depositor pursuant to any of the Operative Documents that would
otherwise be required to be made by the Sponsor, the Depositor or the
Trust pursuant to the Operative Documents, as amended from time to time,
on the date any such payment is made or advanced by the Certificate
Insurer. Notwithstanding the foregoing, in no event shall the Certificate
Insurer have any recourse under this subsection against the Sponsor, the
Depositor or the Trust with respect to any payments the Certificate
Insurer has made in respect of principal or interest distributions on the
Insured Certificates (except pursuant to Section 3.03(b) above).
(g) The Certificate Insurer shall have no right to set-off payments
to be made under the Certificate Insurance Policy against payments to be
made to the Certificate Insurer by the Sponsor, the Depositor, the Trust,
the Trustee, the Servicer, the Securities Administrator, the Master
Servicer, the Insured Certificateholders or any affiliate, officer or
director of any of them.
Section 3.04. Indemnification.
(a) In addition to any and all of the Certificate Insurer's rights
of reimbursement, indemnification, subrogation and to any other rights of
the Certificate Insurer pursuant hereto or under law or in equity, the
Servicer, the Sponsor and the Depositor agree, jointly and severally, to
pay, and to protect, indemnify and save harmless, the Certificate Insurer
and its officers, directors, shareholders, employees, agents and each
Person, if any, who controls the Certificate Insurer within the meaning of
either Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act from and against, any and all claims, losses, liabilities
(including penalties), actions, suits, judgments, demands, damages, costs
or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) of any
nature arising out of or relating to the breach by the Servicer, the
Sponsor or the Depositor of any of the representations or warranties
contained in Section 2.01 or arising out of or relating to the
transactions contemplated by the Operative Documents by reason of:
(i) any omission or action (other than of or by the
Certificate Insurer) in connection with the offering, issuance, sale
or delivery of the Certificates by the Servicer, the Sponsor, the
Depositor or the Trustee other than those covered by subparagraph
(v) below;
(ii) the negligence, bad faith, willful misconduct,
misfeasance, malfeasance or theft committed by any director,
officer, employee or agent of the Servicer, the Sponsor, the
Depositor or the Trustee in connection with the Transaction or
arising from or relating to the Operative Documents to which it is a
party or the negligence, bad faith, willful misconduct, misfeasance,
malfeasance or theft committed by any director, officer, employee or
agent of the Servicer, the Sponsor, the Depositor or the Trustee in
the performance, or reckless disregard of the obligations, of such
Persons in connection with the Transaction or arising from or
relating to the Operative Documents;
(iii) the violation by the Servicer, the Sponsor, the Trust or
the Depositor of any domestic or foreign law, rule or regulation, or
any judgment, order or decree applicable to it, which violation
reasonably could be expected to result in a Material Adverse Change;
(iv) the breach by the Servicer, the Sponsor or the Depositor
of any representation, warranty or covenant under any of the
Operative Documents, any failure of the Sponsor or the Depositor to
perform their duties in compliance with each of the Operative
Documents to which they are a party or the occurrence, in respect of
the Servicer, the Sponsor or the Depositor, under any of the
Operative Documents of any "event of default" or any event which,
with the giving of notice or the lapse of time or both, would
constitute any "event of default" thereunder; or
(v) any untrue statement or alleged untrue statement of a
material fact contained in any Offering Document or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
except insofar as such claims, losses, liabilities (including
penalties), actions, suits, judgments, demands, damages, costs or
expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations)
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission
of a material fact in information included in the Certificate
Insurer Information.
(b) The Certificate Insurer agrees to pay, and to protect, indemnify
and save harmless, the Servicer, the Sponsor and the Depositor and their
respective officers, directors, shareholders, employees, agents and each
Person, if any, who controls the Servicer, the Sponsor and the Depositor
within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act from and against, any and all claims,
losses, liabilities (including penalties), actions, suits, judgments,
demands, damages, costs or expenses (including reasonable fees and
expenses of attorneys, consultants and auditors and reasonable costs of
investigations) of any nature arising out of or by reason (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Certificate Insurer Information or the Certificate Insurer Financial
Statements or any omission or alleged omission to state in the Certificate
Insurer Information or the Certificate Insurer Financial Statements a
material fact necessary in order to make the statements contained in the
Certificate Insurer Information or the Certificate Insurer Financial
Statements, in light of the circumstances under which they were made, not
misleading, (ii) any failure of the Certificate Insurer to make a payment
required to be made under the Insurance Certificate Insurance Policy or
(iii) a breach of any of the representations, warranties and covenants of
the Certificate Insurer contained in Section 2.04.
(c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person
(individually, an "Indemnified Party" and, collectively, the "Indemnified
Parties") in respect of which the indemnity provided in Section 3.04(a) or
(b) may be sought from the Servicer, the Sponsor or the Depositor, on the
one hand, or the Certificate Insurer, on the other (each, an "Indemnifying
Party") hereunder, each such Indemnified Party shall promptly notify the
Indemnifying Party in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
omission so to notify the Indemnifying Party will not relieve it from any
liability which it may have to any Indemnified Party except to the extent
the Indemnifying Party is prejudiced by such failure. The Indemnified
Party shall have the right to employ separate counsel in any such action
and to participate in the defense thereof at the expense of the
Indemnified Party; provided, however, that the fees and expenses of such
separate counsel shall be at the expense of the Indemnifying Party if (i)
the Indemnifying Party has agreed to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed within a reasonable period of time to
assume the defense of such action or proceeding and employ counsel
reasonably satisfactory to the Indemnified Party in any such action or
proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnified Party and
the Indemnifying Party, and the Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the
Indemnifying Party (in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not
have the right to assume the defense of such action or proceeding on
behalf of such Indemnified Party, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for the
Indemnified Parties, which firm shall be designated in writing by the
Indemnified Party and shall be reasonably satisfactory to the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of
any such action or proceeding effected without its written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, but,
if settled with its written consent, or if there is a final judgment for
the plaintiff in any such action or proceeding with respect to which the
Indemnifying Party shall have received notice in accordance with this
subsection (c), the Indemnifying Party agrees to indemnify and hold the
Indemnified Parties harmless from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding anything in this
paragraph to the contrary, the consent of such Indemnified Party shall not
be required if such settlement fully discharges, with prejudice against
the plaintiff, the claim or action against such Indemnified Party.
(d) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other
than due to application of this Section), each Indemnifying Party shall
contribute to the losses incurred by the Indemnified Party on the basis of
the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand.
(e) No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) Upon the incurrence of any losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to
contribution promptly upon establishment by the party entitled to
contribution to the contributor of the losses incurred.
Section 3.05. Payment Procedure.
In the event of any payment by the Certificate Insurer, the Trustee, the
Securities Administrator, the Servicer, the Sponsor and the Depositor agree to
accept the voucher or other evidence of payment as prima facie evidence of the
propriety thereof and the liability, if any, described in Section 3.03 therefor
to the Certificate Insurer. All payments to be made to the Certificate Insurer
under this Insurance Agreement shall be made to the Certificate Insurer in
lawful currency of the United States of America in immediately available hands
at the notice address for the Certificate Insurer as specified in the Pooling
and Servicing Agreement on the date when due or as the Certificate Insurer shall
otherwise direct by written notice to the other parties hereto. In the event
that the date of any payment to the Certificate Insurer or the expiration of any
time period hereunder occurs on a day that is not a Business Day, then such
payment or expiration of time period shall be made or occur on the next
succeeding Business Day with the same force and effect as if such payment was
made or time period expired on the scheduled date of payment or expiration date.
Section 3.06. Joint and Several Liability.
The Servicer, the Sponsor and the Depositor shall be jointly and severally
liable for all amounts due and payable to the Certificate Insurer hereunder by
any such parties.
Section 3.07. Subrogation.
The parties hereto acknowledge that, to the extent of any payment made by
the Certificate Insurer pursuant to the Certificate Insurance Policy, the
Certificate Insurer shall be fully subrogated to the extent of such payment and
any interest due thereon, to the rights of the holders of the Insured
Certificates to any moneys paid or payable in respect of the Insured
Certificates under the Operative Documents or otherwise. The parties hereto
agree to such subrogation and further agree to execute such instruments and to
take such actions as, in the sole judgment of the Certificate Insurer, are
necessary to evidence such subrogation and to perfect the rights of the
Certificate Insurer to receive any moneys paid or payable in respect of the
Insured Certificates under the Operative Documents or otherwise.
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of the Insurance Agreement.
This Insurance Agreement shall take effect on the Closing Date and shall
remain in effect until the later of (a) such time as the Certificate Insurer is
no longer subject to a claim under the Certificate Insurance Policy and the
Certificate Insurance Policy shall have been surrendered to the Certificate
Insurer for cancellation and (b) all amounts payable to the Certificate Insurer
by the Servicer, the Sponsor, the Trust or the Depositor hereunder or from any
other source hereunder or under the Operative Documents or the Certificate
Insurance Policy and all amounts payable under the Insured Certificates have
been paid in full; provided, however, that the provisions of Sections 3.02, 3.03
and 3.04 hereof shall survive any termination of this Insurance Agreement.
Section 4.02. Further Assurances and Corrective Instruments.
(a) Except at such times as a default in payment under the
Certificate Insurance Policy shall exist or shall have occurred, none of
the Servicer, the Sponsor, the Master Servicer, the Securities
Administrator or the Depositor nor the Trustee shall grant any waiver of
rights under any of the Operative Documents to which any of them is a
party without the prior written consent of the Certificate Insurer and any
such waiver without prior written consent of the Certificate Insurer shall
be null and void and of no force or effect.
(b) To the extent permitted by law, each of the Servicer, the
Sponsor and the Depositor agrees that it will, from time to time,
following good faith negotiations in connection therewith, execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as the
Certificate Insurer may reasonably request and as may be required in the
Certificate Insurer's reasonable judgment to effectuate the intention of
or facilitate the performance of this Insurance Agreement.
Section 4.03. Obligations Absolute.
(a) The obligations of the Servicer, the Sponsor and the Depositor
hereunder shall be absolute and unconditional and shall be paid or
performed strictly in accordance with this Insurance Agreement or the
relevant Operative Document, as applicable, under all circumstances
irrespective of:
(i) any lack of validity or enforceability of, or any
amendment or other modifications of, or waiver, with respect to any
of the Operative Documents or the Certificates that have not been
approved by the Certificate Insurer;
(ii) any exchange or release of any other obligations
hereunder;
(iii) the existence of any claim, setoff, defense, reduction,
abatement or other right that the Servicer, the Sponsor or the
Depositor may have at any time against the Certificate Insurer or
any other Person;
(iv) any document presented in connection with the Certificate
Insurance Policy proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) any payment by the Certificate Insurer under the
Certificate Insurance Policy against presentation of a certificate
or other document that does not strictly comply with terms of the
Certificate Insurance Policy;
(vi) any failure of the Servicer, the Sponsor or the Depositor
to receive the proceeds from the sale of the Certificates;
(vii) any breach by the Servicer, the Sponsor, the Trust or
the Depositor of any representation, warranty or covenant contained
in any Operative Document to which it is a party; or
(viii) any other circumstances, other than payment in full,
that might otherwise constitute a defense available to, or discharge
of, the Servicer, the Sponsor or the Depositor in respect of any
Operative Document.
(b) The Servicer, the Sponsor and the Depositor and any and all
others who are now or may become liable for all or part of the obligations
of the Servicer, the Sponsor or the Depositor under this Insurance
Agreement renounce the right to assert as a defense to the performance of
their respective obligations each of the following: (i) to the extent
permitted by law, any and all redemption and exemption rights and the
benefit of all valuation and appraisement privileges against the
indebtedness and obligations evidenced by any Operative Document or by any
extension or renewal thereof; (ii) presentment and demand for payment,
notices of nonpayment and of dishonor, protest of dishonor and notice of
protest; (iii) all notices in connection with the delivery and acceptance
hereof and all other notices in connection with the performance, default
or enforcement of any payment hereunder, except as required by the
Operative Documents; and (iv) all rights of abatement, diminution,
postponement or deduction, or to any defense other than payment, or to any
right of setoff or recoupment arising out of any breach under any of the
Operative Documents, by any party thereto or any beneficiary thereof, or
out of any obligation at any time owing to the Servicer, the Sponsor or
the Depositor.
(c) The Servicer, the Sponsor and the Depositor and any and all
others who are now or may become liable for all or part of the obligations
of the Servicer, the Sponsor or the Depositor under this Insurance
Agreement, to the extent permitted by law, agree to be bound by this
Insurance Agreement and, to the extent permitted by law (i) agree that its
liabilities under this Insurance Agreement shall, except as otherwise
expressly provided in this Section 4.03, be unconditional and without
regard to any setoff, counterclaim or liability of any other Persons for
the payment hereof, (ii) agree that any consent, waiver or forbearance
hereunder with respect to an event shall operate only for such event and
not for any subsequent event; (iii) consent to any and all extensions of
time that may be granted by the Certificate Insurer with respect to any
payment hereunder or other provisions hereof and to the release of any
security at any time given for any payment hereunder, or any part thereof,
with or without substitution, and to the release of any Person or entity
liable for any such payment; and (iv) consent to the addition of any and
all other makers, endorsers, guarantors and other obligors for any payment
hereunder, and to the acceptance of any and all other security for any
payment hereunder, and agree that the addition of any such obligors or
security shall not affect the liability of the parties hereto for any
payment hereunder.
(d) Nothing herein shall be construed as prohibiting the Servicer,
the Sponsor or the Depositor from pursuing any rights or remedies it may
have against any Person in a separate legal proceeding.
Section 4.04. Assignments; Reinsurance; Third-Party Rights.
(a) This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Each
of the Servicer, the Sponsor and the Depositor may not assign its rights
under this Insurance Agreement or the Certificate Insurance Policy, or
delegate any of its duties hereunder, without the prior written consent of
the Certificate Insurer. Any assignments made in violation of this
Insurance Agreement shall be null and void.
(b) The Certificate Insurer shall have the right to give
participations in its rights under this Insurance Agreement and to enter
into contracts of reinsurance with respect to the Certificate Insurance
Policy upon such terms and conditions as the Certificate Insurer may in
its discretion determine; provided, however, that no such participation or
reinsurance agreement or arrangement shall relieve the Certificate Insurer
of any of its obligations hereunder or under the Certificate Insurance
Policy nor shall the Servicer, the Sponsor, the Trust or the Depositor be
required to deal directly with any such parties.
(c) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right,
remedy or claim, express or implied, upon any Person, including,
particularly, any Insured Certificateholder, other than the Certificate
Insurer against the Servicer, the Sponsor, the Trust or the Depositor, or
the Servicer, the Sponsor, the Trust or the Depositor against the
Certificate Insurer and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of
the parties hereto and their successors and permitted assigns. Neither the
Trustee nor any Insured Certificateholder shall have any right to payment
from any Premiums paid or payable hereunder or under the Pooling and
Servicing Agreement or from any amounts paid by the Sponsor the pursuant
to Section 3.02 or 3.03.
Section 4.05. Liability of the Certificate Insurer.
Neither the Certificate Insurer nor any of its officers, directors,
shareholders, employees or agents shall be liable or responsible for: (a) the
use that may be made of the Certificate Insurance Policy by the Trustee or the
Securities Administrator or for any acts or omissions of the Trustee or the
Securities Administrator in connection therewith, (b) the validity, sufficiency,
accuracy or genuineness of documents delivered to the Certificate Insurer in
connection with any claim under the Certificate Insurance Policy, or of any
signatures thereon, even if such documents or signatures should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged, or (c)
any acts or omissions of the Servicer, the Sponsor, the Master Servicer, the
Depositor, the Trustee or the Securities Administrator in connection with the
Transaction or the Operative Documents to which it is a party. In furtherance
and not in limitation of the foregoing, the Certificate Insurer may accept
documents that appear on their face to be in order, without responsibility for
further investigation.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Defaults.
The occurrence of any of the following shall constitute an Event of
Default hereunder:
(a) Any representation or warranty made by the Sponsor (other than
representations and warranties relating to the individual Mortgage Loans),
the Depositor or the Servicer hereunder or under the Operative Documents,
or in any certificate furnished hereunder or under the Operative
Documents, shall prove to be untrue or incorrect in any respect which is
material to the rights and interests of the Certificate Insurer
(including, without limitation, any representation or warranty made by the
Sponsor or the Depositor as to the Trust Fund);
(b) (i) The Servicer, the Sponsor or the Depositor shall fail to pay
when due any amount payable by the Servicer, the Sponsor or the Depositor
hereunder or under any of the Operative Documents or (ii) a legislative
body has enacted any law that declares or a court of competent
jurisdiction shall find or rule that this Insurance Agreement or any other
Operative Document is not valid and binding on the Servicer, the Sponsor
or the Depositor,
(c) The occurrence and continuance of an "event of default" under
any Operative Document;
(d) Any failure on the part of the Sponsor, the Depositor or the
Servicer to duly to observe or perform in any material respect any other
of the covenants or agreements on the part of the Sponsor, the Depositor
or the Servicer contained in this Insurance Agreement or in any other
Operative Document which continues unremedied beyond any cure period
provided therein, or, in the case of this Insurance Agreement, for a
period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Sponsor,
the Depositor or the Servicer by the Certificate Insurer (with a copy to
the Trustee) or by the Trustee (with a copy to the Certificate Insurer);
(e) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
or the appointment of a conservator or receiver or liquidator or other
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer, the Sponsor, or the Depositor and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
consecutive days;
(f) The Servicer, the Sponsor, or the Depositor shall consent to the
appointment of a conservator or receiver or liquidator or other similar
official in any bankruptcy, insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Servicer, the Sponsor, or the Depositor or of or relating to all or
substantially all of their respective property;
(g) The Servicer, the Sponsor, or the Depositor shall become
insolvent or admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of or otherwise
voluntarily commence a case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;
(h) [Reserved]; or
(i) Either the Trust Fund or the Trust shall become subject to an
entity level tax or to registration as an investment company under the
Investment Company Act.
Section 5.02. Remedies; No Remedy Exclusive.
(a) Upon the occurrence of an Event of Default, the Certificate
Insurer may exercise any one or more of the rights and remedies set forth
below:
(i) declare all indebtedness of every type or description then
owed by the Servicer, the Sponsor, the Trust or the Depositor to the
Certificate Insurer with respect to the Transaction to be
immediately due and payable, and the same shall thereupon be
immediately due and payable;
(ii) exercise any rights and remedies under the Operative
Documents in accordance with the terms thereof, in its own capacity,
as the Person entitled to exercise the rights of the Insured
Certificateholders or direct the Securities Administrator, the
Trustee, the Master Servicer, the Servicer or other appropriate
party to exercise such remedies in accordance with the terms of the
relevant Operative Document; or
(iii) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts, if
any, then due under this Insurance Agreement or any other Operative
Document or to enforce performance and observance of any obligation,
agreement or covenant of the Servicer, the Sponsor or the Depositor
under this Insurance Agreement or other Operative Documents.
(b) Unless otherwise expressly provided, no remedy herein conferred
or reserved is intended to be exclusive of any other available remedy, but
each remedy shall be cumulative and shall be in addition to other remedies
given under this Insurance Agreement, the other Operative Documents or
existing at law or in equity. No delay or omission to exercise any right
or power accruing under this Insurance Agreement or the other Operative
Documents upon the happening of any event set forth in Section 5.01 or any
event set forth in the Operative Documents shall impair any such right or
power or shall be construed to be a waiver thereof; but any such right and
power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Certificate Insurer to exercise any
remedy reserved to the Certificate Insurer in this Article, it shall not
be necessary to give any notice, other than such notice as may be required
by this Article.
(c) If any proceeding has been commenced to enforce any right or
remedy under this Insurance Agreement, and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely
to the Certificate Insurer, then and in every such case the parties hereto
shall, subject to any determination in such proceeding, be restored to
their respective former positions hereunder, and, thereafter, all rights
and remedies of the Certificate Insurer shall continue as though no such
proceeding had been instituted.
Section 5.03. Waivers.
(a) No failure by the Certificate Insurer to exercise, and no delay
by the Certificate Insurer in exercising, any right hereunder or under any
Operative Document shall operate as a waiver thereof. The exercise by the
Certificate Insurer of any right hereunder shall not preclude the exercise
of any other right, and the remedies provided herein to the Certificate
Insurer are declared in every case to be cumulative and not exclusive of
any remedies provided by law or equity.
(b) The Certificate Insurer shall have the right, to be exercised in
its complete discretion, to waive any Event of Default hereunder, by a
writing setting forth the terms, conditions and extent of such waiver
signed by the Certificate Insurer and delivered to the Sponsor. Unless
such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence which gave rise to
the Event of Default so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Amendments, Etc.
This Insurance Agreement may be amended, modified, supplemented or
terminated only by written instrument or written instruments signed by the
parties hereto. The Sponsor agrees to provide a copy of any amendment to this
Insurance Agreement promptly to the Trustee and rating agencies maintaining a
rating on any of the Certificates. No act or course of dealing shall be deemed
to constitute an amendment, modification, supplement or termination hereof.
Section 6.02. Notices.
All demands, notices and other communications to be given hereunder shall
be in writing (except as otherwise specifically provided herein) and shall be
mailed by registered mail or personally delivered and telecopied to the
recipient as follows:
(a) To the Certificate Insurer:
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-NC4,
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
Email: XXXxxxxxxxxxxx@xxxx.xxx
(in each case in which notice or other communication to the
Certificate Insurer refers to an Event of Default, a claim on
the Certificate Insurance Policy or with respect to which
failure on the part of the Certificate Insurer to respond
shall be deemed to constitute consent or acceptance, then a
copy of such notice or other communication should also be sent
to the attention of the general counsel of each of the
Certificate Insurer, the Sponsor and the Trustee and, in all
cases, both any original and all copies shall be marked to
indicate "URGENT MATERIAL ENCLOSED.") Any notice regarding
delivery of the Certificate Insurer Financial Information
shall be sent via electronic mail to the Certificate Insurer
at XxxXX@xxxx.xxx and shall reference the deal name and policy
number
(b) To the Sponsor:
Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Notice to the Sponsor shall also constitute notice to the
Depositor to the extent the party providing such notice is
required to provide notice to all such parties in each case in
which notice or other communication to the Sponsor refers to a
claim against the Sponsor or the Depositor or with respect to
which failure on the part of the Sponsor or the Depositor to
respond shall be deemed to constitute consent or acceptance,
then a copy of such notice or other communication should also
be sent to the attention of the general counsel of each of the
Certificate Insurer, the Securities Administrator and the
Trustee and, in all cases, both any original and all copies
shall be marked to indicate "URGENT MATERIAL ENCLOSED."
(c) To the Trustee:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration-MS07C4
Tel: 000-000-0000
Fax: 000-000-0000
(d) To the Securities Administrator or Master Servicer:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Client Services Manager MSAC 2007-NC4
Tel: 000-000-0000
Fax: 000-000-0000
(e) To the Servicer:
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, President
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to:
0000 Xxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.
Section 6.03. Severability.
In the event that any provision of this Insurance Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, the parties
hereto agree that such holding shall not invalidate or render unenforceable any
other provision hereof. The parties hereto further agree that the holding by any
court of competent jurisdiction that any remedy pursued by any party hereto is
unavailable or unenforceable shall not affect in any way the ability of such
party to pursue any other remedy available to it.
Section 6.04. Governing Law.
This Insurance Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to the conflict of
laws provisions thereof other than Sections 5-1401 and 5-1402 of the General
Obligations Law, which the Parties hereto expressly rely upon as the governing
law hereunder)
Section 6.05. Consent to Jurisdiction.
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and any court in the State of New York
located in the City and County of New York, and any appellate court from
any thereof, in any action, suit or proceeding brought against it and to
or in connection with any of the Operative Documents, the Certificate
Insurance Policy or the Transaction or for recognition or enforcement of
any judgment, and the parties hereto hereby irrevocably and
unconditionally agree that all claims in respect of any such action or
proceeding may be heard or determined in such New York state court or, to
the extent permitted by law, in such federal court. The parties hereto
agree that a final unappealable judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. To the
extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that the related documents or
the subject matter thereof may not be litigated in or by such courts.
(b) To the extent permitted by applicable law, the parties hereto
shall not seek and hereby waive the right to any review of the judgment of
any such court by any court of any other nation or jurisdiction which may
be called upon to grant an enforcement of such judgment.
(c) Service on the Sponsor, the Servicer and the Depositor may be
made by mailing or delivering copies of the summons and complaint and
other process which may be served in any suit, action or proceeding to the
applicable party at the related addresses listed in Section 6.02 herein.
Such address may be changed by the applicable party or parties, with the
prior written consent of the Certificate Insurer, by written notice to the
other parties hereto. The provision of notice to change the address set
forth in Section 6.02 shall constitute notice for purposes of the
preceding sentence, unless such notice shall expressly state to the
contrary.
(d) Nothing contained in this Insurance Agreement shall limit or
affect any party's right to serve process in any other manner permitted by
law or to start legal proceedings relating to any of the Operative
Documents or the Certificate Insurance Policy against any other party or
its properties in the courts of any jurisdiction.
Section 6.06. Consent of the Certificate Insurer.
In the event that the consent of the Certificate Insurer is required under
any of the Operative Documents, the determination whether to grant or withhold
such consent shall be made by the Certificate Insurer in its sole discretion
without any implied duty towards any other Person, except as otherwise expressly
provided therein, and such consent is only effective when and if given by the
Certificate Insurer in writing.
Section 6.07. Counterparts.
This Insurance Agreement may be executed in counterparts by the parties
hereto, and all such counterparts shall constitute one and the same instrument.
Section 6.08. Headings.
The headings of Articles and Sections and the Table of Contents contained
in this Insurance Agreement are provided for convenience only. They form no part
of this Insurance Agreement and shall not affect its construction or
interpretation.
Section 6.09. Trial by Jury Waived.
Each party hereby waives, to the fullest extent permitted by law, any
right to a trial by jury in respect of any litigation arising directly or
indirectly out of, under or in connection with any of the Operative Documents or
a Certificate Insurance Policy or any of the transactions contemplated
thereunder. Each party hereto (A) certifies that no representative, agent or
attorney of any party hereto has represented, expressly or otherwise, that it
would not, in the event of litigation, seek to enforce the foregoing waiver and
(B) acknowledges that it has been induced to enter into the Operative Documents
to which it is a party (or, in the case of a Certificate Insurance Policy, the
Certificate Insurer so acknowledges) by, among other things, this waiver.
Section 6.10. Limited Liability.
No recourse hereunder shall be had against, and no personal liability
shall attach to, any officer, employee, director, affiliate or shareholder of
any party hereto, as such, by the enforcement of any assessment or by any legal
or equitable proceeding, by virtue of any statute or otherwise in respect of any
of this Insurance Agreement or the Certificate Insurance Policy, it being
expressly agreed and understood that this Insurance Agreement and the
Certificate Insurance Policy are solely corporate obligations of each party
hereto, and that any and all personal liability, either at common law or in
equity, or by statute or constitution, of every such officer, employee,
director, affiliate or shareholder for breaches of any party hereto of any
obligations hereunder is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Insurance Agreement.
Section 6.11. Entire Agreement.
This Insurance Agreement and the Certificate Insurance Policy set forth
the entire agreement between the parties with respect to the subject matter
hereof and thereof, and this Insurance Agreement supersedes and replaces any
agreement or understanding that may have existed between the parties prior to
the date hereof in respect of such subject matter.
Section 6.12. Offering Documents.
Each offering document delivered with respect to the Certificates shall
clearly disclose that the Certificate Insurance Policy is not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law. In addition, each offering document delivered with respect
to the Certificates that includes financial information of the Certificate
Insurer prepared in accordance with generally accepted accounting principles
shall include the following statement immediately preceding such financial
information:
The New York State Insurance Department recognizes only statutory
accounting practices ("SAP") for determining and reporting the financial
condition and results of operations of an insurance company, for determining its
solvency under the New York Insurance Law, and for determining whether its
financial condition warrants the payment of a dividend to its stockholders.
Although the Certificate Insurer prepares both GAAP and SAP financial
statements, no consideration is given by the New York State Insurance Department
to financial statements prepared in accordance with GAAP in making such
determinations. A discussion of the principal differences between SAP and GAAP
is contained in the notes to the Certificate Insurer's SAP financial statements
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Insurance
Agreement, all as of the day and year first above mentioned.
FINANCIAL GUARANTY INSURANCE XXXXXX XXXXXXX MORTGAGE CAPITAL
COMPANY, as Certificate Insurer HOLDINGS LLC, as Sponsor
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------- -------------------------
Name: Xxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
Title: Director Title: Vice President
SAXON MORTGAGE SERVICES, INC., XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Servicer as Depositor
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx Xxxxxxx
------------------------- -------------------------
Name: Xxxxx X. Xxxx Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer Title: Vice President
and President
XXXXX FARGO BANK, NATIONAL DEUTSCHE BANK NATIONAL TRUST
ASSOCIATION, as Master Servicer and COMPANY, solely as Trustee and not
Securities Administrator in its individual capacity
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
------------------------- -------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Vice President Title: Authorized Signer
